What We Looked At The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided the Federal Aviation Administration (FAA) with $10 billion in funding, including about $525 million for airport development expenses. FAA distributed these funds through its Airport Improvement Program (AIP), which requires grant recipients to comply with various Federal procurement requirements, including Buy American Preferences. Previous Office of Inspector General (OIG) audits identified weaknesses in FAA’s processes for awarding and administering AIP grants and its oversight of CARES Act funds. Given the size of the funding allocation, its expeditious distribution, and related findings in prior reports, we initiated this audit. Our objectives were to evaluate FAA’s processes for (1) awarding and administering CARES Act-funded airport development grants and (2) overseeing associated recipient contracts to ensure compliance with Federal and Agency grant and procurement requirements. What We Found FAA did not always follow its processes for awarding and administering its CARES Act airport development grants. Specifically, FAA did not carefully review development grant applications before it distributed CARES Act funds over 20 percent of the time and did not always require sponsors to submit annual financial reports on time. Although the Agency strengthened its oversight of CARES Act-funded invoices, it did not effectively communicate and adhere to these changes. These oversight gaps prevent FAA from assuring that the program operates as intended and in a fiscally responsible manner. FAA’s CARES Act-funded airport development contracts also did not meet several key Federal requirements. The Agency did not ensure that sponsors met the requirements for completing cost or price analyses in more than 55 percent of contracts we reviewed. FAA also did not always ensure that Buy American waivers met all requirements prior to approval. Thus, FAA cannot be certain that project costs were reasonable or that sponsors complied with Made in America Laws. These issues result in a total of $106 million in funds at risk for better use. Our Recommendations We made eight recommendations to strengthen FAA’s oversight of CARES Act funds for airport development projects. FAA concurred with all eight recommendations and provided appropriate completion dates. We consider all recommendations resolved but open pending completion of the planned actions.
Open Recommendations
| Recommendation Number | Significant Recommendation | Recommended Questioned Costs | Recommended Funds for Better Use | Additional Details | |
|---|---|---|---|---|---|
| 1 | Yes | $0 | $0 | ||
| Revise procedures for reviewing and approving grant application packages to add steps to verify that the applications are complete and accurate. | |||||
| 2 | Yes | $27,000,000 | $0 | ||
| Assess the CARES Act-funded airport development grants identified in this report that did not meet award requirements and recover the $27 million or identify the rationale for acceptance of these costs. | |||||
| 4 | Yes | $0 | $0 | ||
| Strengthen internal controls to verify that all reimbursement requests comply with FAAs two-tier manual review process for CARES Act funds. This may include requiring Delphi controls are correctly established and maintained. | |||||
| 5 | Yes | $18,700,000 | $0 | ||
| Assess the 35 invoices"comprising $18.7 million in questioned costs"that did not receive sufficient review under the CARES Act guidance and seek recovery of any portion that is determined to be improper and/or unallowable or provide justification for approving the payments. | |||||
| 6 | Yes | $0 | $10,600,000 | ||
| Require FAA field offices to collect, review, and maintain required price and cost analyses before making grant awards. Implementation of this recommendation could result in funds put to better use of $10.6 million. | |||||
| 7 | Yes | $0 | $49,600,000 | ||
| Revise the Agencys policies for collecting, reviewing, and approving Buy American Preferences waivers to require the waiver requests to be timely, complete, and accurate, and define the extraordinary circumstances that would allow grant recipients to deviate from Buy American requirements. Implementation of this recommendation could result in funds put to better use of $49.6 million. | |||||
| 8 | Yes | $0 | $0 | ||
| After revising Buy American policies, develop and implement Buy American Preferences waiver training for field offices. | |||||
