Federal Aviation
Administration
Stewardship and
Oversight of the
Airport Improvement
Program (AIP)
Prepared for:
Biennial Fraud Awareness Conference
Arlington, Virginia
Presented by:
Elliott Black
Deputy Director
Office of Airport Planning and Programming
Federal Aviation Administration
Date:
Wednesday, July 28, 2010
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
1 1
Track Title
“Implication of Fraud on the
Safety of Infrastructure Projects”
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
2 2
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
3 3
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
4 4
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)
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
5 5
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
6 6
Financial Assistance Programs
• Airport Improvement Program (AIP)
• Passenger Facility Charge (PFC) program
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
7 7
Airport Improvement Program (AIP)
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
8 8
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)
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
9 9
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
10 10
Structure of Airport Improvement Program (AIP)
FY-2009 ($3.4 billion in new grants) (excludes ARRA funds)
Reliever
0.1%
MAP
0.7%
Capacity-Safety-SecurityNoise (CSSN)
7.9%
Noise
6.1%
Remaining Discretionary
10.6%
Primary Entitlements
25.1%
Small Airport Fund
14.9%
Cargo Entitlements
3.5%
Protected Entitlements
18.4%
State Apportionment
7.9%
Alaska Supplemental
0.6%
Nonprimary Entitlements
12.1%
Data Source: Internal FAA data (pending publication of FY-2009 Annual Report to Congress).
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
11 11
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
12 12
Complex system of diverse airports
Number of
Airports
% of U.S.
Enplanements
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
244
3.0%
Nantucket, Charleston,
Duluth, Phoenix Mesa, etc.
121
0.1%
Cold Bay (AK), Saranac
Lake (NY), Cedar City (UT)
269
0.0%
Teterboro, Oakland-Pontiac
Van Nuys, etc.
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
Airport Type
0.05% of all enplanements)
Non-Primary Commercial Service
(>2,500 enplanements and scheduled service)
Relievers (>100 based aircraft or 25,000 annual
itinerant operations—other criteria apply as well)
General Aviation
Biennial Fraud Awareness Conference
July 2010
Examples
Federal Aviation
Administration
13 13
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
14 14
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
15 15
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
16 16
State Block Grant Program (cont’d)
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
17 17
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
18 18
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
19 19
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.”
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
20 20
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
21 21
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
22 22
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
23 23
Risk Level Assignment
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
24 24
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
25 25
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
26 26
Internal Reviews and Evaluations
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
27 27
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
28 28
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
29 29
Tools and Metrics for Monitoring Grant Drawdown
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
30 30
Tools and Metrics for Monitoring Grant Drawdown
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
31 31
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
32 32
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
33 33
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.
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
34 34
Compliance with AIP Grant Assurances
Acceptance of Federal funding obligates airports to comply with an extensive
list of grant assurances:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
General Federal Requirements
Responsibility and Authority of the Sponsor
Sponsor Fund Availability
Good Title
Preserving Rights and Powers
Consistency with Local Plans
Consideration of Local Interest
Consultation with Users
Public Hearings
Air and Water Quality Standards
Pavement Preventive Maintenance
Terminal Development Prerequisites
Accounting System, Audit, and Record Keeping
Requirements
Minimum Wage Rates
Veteran's Preference
Conformity to Plans and Specifications
Construction Inspection and Approval
Planning Projects
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
Operation and Maintenance
Hazard Removal and Mitigation
Compatible Land Use
Economic Nondiscrimination
Exclusive Rights
Fee and Rental Structure
Airport Revenues
Reports and Inspections
Use by Government Aircraft
Land for Federal Facilities
Airport Layout Plan
Civil Rights
Disposal of Land
Engineering and Design Services
Foreign Market Restrictions
Policies, Standards, and Specifications
Relocation and Real Property Acquisition
Access By Intercity Buses
Disadvantaged Business Enterprises
Hangar Construction
Competitive Access
For complete text of all assurances, see http://www.faa.gov/arp/financial/aip/airport_sponsor_assurances.pdf
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
35 35
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
Biennial Fraud Awareness Conference
July 2010
Federal Aviation
Administration
36 36
Challenges
a
Thank of
you!
Growing Aviation
System
Questions?
Presentation to:
Name:
Date:
Elliott Black
Deputy Director
Office of Airport Planning and Programming
(202) 267-8775
elliott.black@faa.gov
Federal
FederalAviation
Aviation
Administration
Administration