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Summary

We publicly released our audit report regarding FAA’s cost-accounting system for its Terminal Service line of business. We found that FAA did not: (1) report costs for each facility location, including over $1.3 billion, as required by Federal accounting standards; (2) use appropriate cost-assignment methods; and (3) properly allocate overhead costs. By improperly allocating its costs, FAA understated the cost of operations of FAA's Terminal Service line of business by about $38 million. FAA concurred or partially concurred with our recommendations and plans to take corrective actions after its new financial accounting system is implemented.