Federal Aviation Administration 1 Biennial Fraud Awareness Conference July 2010 1 Stewardship and...

Federal AviationAdministration

1Biennial Fraud Awareness ConferenceJuly 2010

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Stewardship and Oversight of the Airport Improvement Program (AIP)


Prepared for: Biennial Fraud Awareness ConferenceArlington, Virginia

Presented by: Elliott BlackDeputy DirectorOffice of Airport Planning and ProgrammingFederal Aviation Administration

Date: Wednesday, July 28, 2010



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Track Title

“Implication of Fraud on the Safety of Infrastructure Projects”



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Overview

• Overview of the FAA Office of Airports

• Focus on the Airport Improvement Program (AIP)

• Relationship between AIP and other FAA programs and functions

• How the FAA leverages limited Federal resources to protect the traveling public

• Best practices in stewardship and oversight



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FAA Office of Airports—key program areas

• Planning support

• Environmental review

• Financial assistance programs

• Planning, engineering and construction standards

• Airport certification program(CFR Part 139)

• Compliance with grant assurances



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Planning Support

• National planning standards and guidance

• National Plan of Integrated Airport Systems (NPIAS)— Ensure sponsors are eligible— Identify eligible and justified projects

• Work with state aeronautical agencies on state system plans

• Support metropolitan system plans

• Work with individual airport sponsors to review activity forecasts, draft airport master plans and Airport Layout Plans (ALPs)



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Environmental Review

• Review proposed development (regardless of funding source) in accordance with the National Environmental Policy Act (NEPA)

• Ensure proper coordination including public consultation and interagency review

• Evaluate ability of proposed actions to secure other environmental permits



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Financial Assistance Programs

• Airport Improvement Program (AIP)

• Passenger Facility Charge (PFC) program



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Airport Improvement Program (AIP)



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Airport Improvement Program (AIP)

• Ticket taxes flow into the Airport & Airway Trust Fund.

• Congress appropriates funds for the FAA to award grants to eligible airport sponsors.

• Requires local match (varies based on airport size).

• Strict eligibility rules based on different AIP funding categories, facility types, airport sizes and functions and other criteria.

(continued)



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Airport Improvement Program (AIP) (cont’d)

• Strict implementation rules.

• Federal procurement regulations.

• Grant assurances and obligations.

• Use of electronic clearinghouse to maximize electronic funds transfer.



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Capacity-Safety-Security-Noise (CSSN)

7.9%Noise6.1%

Reliever0.1%

MAP0.7%

Remaining Discretionary10.6%

Primary Entitlements25.1%

State Apportionment7.9%

Protected Entitlements18.4%

Cargo Entitlements3.5%

Nonprimary Entitlements12.1%

Alaska Supplemental0.6%

Small Airport Fund14.9%

Structure of Airport Improvement Program (AIP)FY-2009 ($3.4 billion in new grants) (excludes ARRA funds)

Data Source: Internal FAA data (pending publication of FY-2009 Annual Report to Congress).



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Program Structure and Administration of the AIP

• More than 2,000 annual grants awarded nationwide.

• Broad variety of grants and grant recipients:

— Size and type of airport organizations.

— Variety of relationships with state and local governments.

— Range of capabilities and resources of the state aeronautical agencies.

— Variability of internal staff resources and expertise.

— Variety of project sizes, types and implementation timeframes.

— Variability of consultant support.

— Tremendous geographic distribution.

— Different state laws affecting capital planning and grant administration.



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Complex system of diverse airports

Airport TypeNumber of

Airports% of U.S.

Enplanements Examples

Large Hub (>1.0% of all enplanements) 29 68.0% JFK, Chicago O’Hare, LAX, DFW, Atlanta, etc.

Medium Hub (0.25 - 1.0% of all enplanements) 37 20.0% Anchorage, Kansas City, Cleveland, Reno, etc.

Small Hub (0.05 - 0.25% of all enplanements) 72 8.0% Richmond, Des Moines, Akron-Canton, Fresno, etc.

Non-Hub (>10,000 enplanements, but less than 0.05% of all enplanements)

244 3.0% Nantucket, Charleston, Duluth, Phoenix Mesa, etc.

Non-Primary Commercial Service (>2,500 enplanements and scheduled service)

121 0.1% Cold Bay (AK), Saranac Lake (NY), Cedar City (UT)

Relievers (>100 based aircraft or 25,000 annual itinerant operations—other criteria apply as well)

269 0.0% Teterboro, Oakland-Pontiac Van Nuys, etc.

General Aviation 2,560 0.0% Akiachak (AK), Allentown Queen City (PA), etc.

NPIAS airports = 3,332 99.1%

+ Low Activity Landing Areas 16,402 0.9%

= Grand Total 16,732



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Relationships with State and Local Governments

• Airports may be owned and operated by:—States—Counties —Municipalities—Independent authorities—Joint government agencies (e.g., multiple towns or cities)

• Channeling Act provisions

• Block-grant provisions



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State Block Grant Program

• Core element is to give states greater control over where to apply AIP State Apportionment funds, in return for taking on greater responsibility for the associated capital planning, grant administration and related legal and administrative requirements.

• Limited to ten (10) states.

• Nature of partnership between FAA and block-grant states:

— Block-grant state takes on Federal responsibilities, including all legal responsibilities.

— Careful balance to be achieved in other relationships (i.e., with individual airports and other state agencies).

— Federal funds are still Federal funds, even in a block grant.



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State Block Grant Program (cont’d)



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Stewardship and Oversight

• Education, publication and guidance— Internal FAA staff— State aeronautical agencies— Airport sponsors— Planning and engineering consultant communities

• Pre-application process

• Application and review process

• Grant approval process

• Risk-based approach to grant administration

• Grant closeout



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Education, Publication and Guidance

• Internal FAA staff

• State aeronautical agencies

• Airport sponsors

• Consultant communities—Airport planning—Airport engineering—Construction management—Financial planning and advisory firms—Accounting firms



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Recent Points of Additional Emphasis to Airports

“Re-familiarize yourself and your staff with all Federal grant requirements.”

“Ensure airport staff and consultant personnel understand the importance of complete, clear and timely documentation.”

“If you are not prepared to be held accountable in every regard, then consider carefully before requesting and accepting Federal funds.”

“AIP certification requires grantees to certify that they will not be giving grants to debarred or suspended parties.”



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Pre-Application Process

• Ensure projects proposed for grants are consistent with established national criteria.

• Ensure amounts and types of entitlement funding are accurate for each sponsor.

• Ensure budgetary sub-allotments are duly authorized and entered correctly in the agency’s accounting system of record.



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Application and Review Process

• FAA reviews grant applications for completeness and consistency with the established Airports Capital Improvement Plan (ACIP) process.

• Ensure FAA does not offer grants to sponsors that have been determined to be noncompliant with grant assurances.

• Ensure sponsor risk level is properly established and/or updated before recommendation for funding is initiated.



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Risk Level Assignment



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Grant Approval Process

• Ensure that grants programmed (for either new or amended grants) do not exceed available funds.

• Ensure Grant Offer letter (and any amendments) meet all AIP grant requirements.

• Ensure sponsor certifies that it has the legal authority to accept the grant and all associated conditions.

• Ensure that only authorized obligations are entered into Delphi.



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Risk-Based Approach to Grant Administration

• Ensure that only sponsors in good standing get access to ECHO, and only after specific authorization.

• For non-ECHO payments, ensure that only approved payments are made.

• For ECHO payments, ensure that sponsors with repeated drawdown irregularities lose ECHO access.

• Ensure any sponsor that is suspended cannot access the ECHO system.

• Ensure sponsors submit quarterly performance reports.

• Standardized nationwide documentation requirements.



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Internal Reviews and Evaluations



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Grant Closeout and Documentation

• Ensure final project documentation requirements are fulfilled.

• Ensure FAA notifies sponsors of grant closeout.

• Ensure grant closeout is entered in both accounting system of record and grant planning system.

• Ensure sponsor cannot draw or reimburse funds through ECHO once grant is closed.

• Ensure that funds recovery procedures (if applicable) are followed.



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Audit Requirements

• Ensure that sponsors who receive more than $300,000 in Federal funds in a given year satisfy all OMB Circular A-133 audit requirements.

• Ensure FAA follows up on any discrepancies found in an audit report.



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Tools and Metrics for Monitoring Grant Drawdown



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Tools and Metrics for Monitoring Grant Drawdown



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Airport Design Standards

• Establish and promulgate standards and policies

• FAA Advisory Circulars mandatory for all Federally obligated airports:— Planning—e.g., runway length, runway/taxiway separation, Runway

Safety Areas (RSAs), Runway Protection Zones (RPZs), Object-Free Areas (OFAs), airspace review process, signage and marking requirements, etc.

— Engineering—e.g., pavement design standards, drainage, electrical and lighting requirements, surface treatment (grooving), etc.

— Construction—quality control for construction, operational safety during construction, NOTAM process, obstruction lighting, etc.

— Maintenance and operations—e.g., snow and ice control, runway surface condition monitoring, rubber removal, preservation of pavement markings, ARFF communications, etc.



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14 CFR Part 139 Airport Certification

• Periodic inspection of airports (both scheduled and unscheduled surveillance)

• Assist airport operator in meeting regulatory requirements

• Continuous educational outreach to disseminate best practices in airport management

• Inspect certificated airports to:— Ensure compliance with the regulation, including self-inspection and

documentation requirements— Ensure FAA design standards are being followed— Check for operational and construction safety— Verify airport emergency response capability



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Airport Safety Data Program (non-certificated airports)

• State aeronautical agencies inspect non-certificated airports—approximately one-third of the public use, non-Part 139 airports annually.

• Inspectors document and notify airport owners/ operators of any:— Safety deficiencies — Unsafe conditions— Potential problem areas

• FAA trains inspectors through GCR (initial and recurrent training).

• GCR also maintains the publicly accessible 5010 database containing all airport master records.



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Compliance with AIP Grant Assurances

1. General Federal Requirements2. Responsibility and Authority of the Sponsor 3. Sponsor Fund Availability 4. Good Title 5. Preserving Rights and Powers 6. Consistency with Local Plans 7. Consideration of Local Interest 8. Consultation with Users 9. Public Hearings 10. Air and Water Quality Standards 11. Pavement Preventive Maintenance 12. Terminal Development Prerequisites 13. Accounting System, Audit, and Record Keeping

Requirements14. Minimum Wage Rates 15. Veteran's Preference 16. Conformity to Plans and Specifications 17. Construction Inspection and Approval 18. Planning Projects

19. Operation and Maintenance 20. Hazard Removal and Mitigation 21. Compatible Land Use 22. Economic Nondiscrimination 23. Exclusive Rights 24. Fee and Rental Structure 25. Airport Revenues 26. Reports and Inspections 27. Use by Government Aircraft 28. Land for Federal Facilities 29. Airport Layout Plan 30. Civil Rights 31. Disposal of Land 32. Engineering and Design Services 33. Foreign Market Restrictions 34. Policies, Standards, and Specifications 35. Relocation and Real Property Acquisition 36. Access By Intercity Buses 37. Disadvantaged Business Enterprises 38. Hangar Construction 39. Competitive Access

Acceptance of Federal funding obligates airports to comply with an extensive list of grant assurances:

For complete text of all assurances, see http://www.faa.gov/arp/financial/aip/airport_sponsor_assurances.pdf



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Summary

• Complex program requiring unique measures to protect Federal resources.

• Extensive education, publication and guidance

• Oversight and stewardship measures before, during and after grant award

• Risk-based approach to grant management

• Corollary means of monitoring performance, efficiency and effectiveness

• Program administered in conjunction with other programs to ensure safety of the traveling public

Challenges of aGrowing AviationSystem

Presentation to:Name:Date:

Federal AviationAdministrationFederal AviationAdministration

Federal AviationAdministrationThank you!

Questions?

Elliott BlackDeputy DirectorOffice of Airport Planning and Programming(202) [email protected]

Federal Aviation Administration 1 Biennial Fraud Awareness Conference July 2010 1 Stewardship and...

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