Quality Control Review of the Independent Auditor's Report on the Federal Aviation Administration's Audited Consolidated Financial Statements for Fiscal Year 2025

Date Issued

Friday, January 16, 2026

Submitting OIG

Department of Transportation OIG

Agencies Reviewed/Investigated

Department of Transportation

Components

Federal Aviation Administration

Report Number

QC2026010

Report Description

Our Objective(s)To perform a quality control review (QCR) of KPMG, LLP's audit of the Federal Aviation Administration's (FAA) financial statements as of and for the fiscal year ended September 30, 2025. We reviewed KPMG's report, dated January 13, 2026, and related documentation.
About This ReportWe contracted with the independent public accounting firm KPMG, LLP to audit FAA's financial statements, provide an opinion on those financial statements, report on internal control over financial reporting, and report on compliance with laws and other matters.
What We FoundThe independent auditor, KPMG, found two significant deficiencies in FAA's internal controls over financial reporting:

Weakness in the non-letter of intent grant accrual estimate methodology, and
Weakness in the accounting for Category C (future fiscal years) apportionments.

Our QCR disclosed no instances in which KPMG did not comply, in all material respects, with U.S. generally accepted Government auditing standards.
RecommendationsWe agree with KPMG's four recommendations to help strengthen FAA's internal controls.

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Report updated under NDAA 5274

External Link

https://www.oig.dot.gov/library-item/47049

Open Recommendations

This report has 4 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	Yes	$0	$0
Update its annual retrospective review through a grant recipient survey, review of invoice documentation, and/or other means for a lookback period greater than 4 months to analyze the results of the prior year accrual and determine if the 4-month lookback period remains sufficient to validate the grant accrual methodology in subsequent periods.
2	Yes	$0	$0
Analyze the reasons for the changes in the calculated average billing cycle and grant recipient billing patterns in recent periods and document the impact on its grant accrual methodology as part of its annual retrospective review prior to year-end.
3	Yes	$0	$0
Design and implement procedures to document the analysis performed to support any future changes to the grant accrual methodology prior to implementing such changes.
4	Yes	$0	$0
Implement a procedure, as part of its process for recording SF-132 activity, to reconcile the SF-132 line number to the applicable United States Standard General Ledger account to verify that the transaction is recorded accurately and in accordance with OMB Circular No. A-11.