1 federal aviation administration airport improvement program program status and key issues and...

1Federal AviationAdministrationAirport Improvement Program

Airport Improvement Program

Program Status and Key Issues and Policies

Presented to: Eastern Region Airports Conference

By: Matthew Thys, Manager, Airport Improvement Program

Date: March 2, 2011


Presentation Overview

• Grant Payments System

• Audits

• ACIP

• FY11 Program Status


Key Policies and Issues – Grant Payments

• New DOT Wide Grant Payment System – Multi-year DOT Department-wide program to improve financial

management. Grant Payments processing the first out of 11 Key Process Areas to be reengineered DOT-wide.

– Implementation of a new Oracle Financials E-Business Suite platform

– Streamlining of policies, processes, and related systems across DOT

– Opportunity for DOT to recognize significant cost savings and efficiencies



Why I -Supplier?– DOT issues $50 billion of grants payments annually

– Non-standard processes resulting in numerous audit findings

– Process, material impact on financial statements

– Cost savings/avoidance

– Financial processing at DOT is evolving to take advantage of improvements inherent in new IT capabilities

– Reduce processing time

– Increase accuracy in grants payments and reporting

– Ability to monitor, track, and reconcile grants payments enhanced


• Benefits to be realized by I-Supplier– Electronic Payment Request Submission– Grantee Self Service– Email notifications for request approval or rejection based on funds check– Document Attachment– Unified Platform across all DOT Modal Administrations


• Key process improvements of I-Supplier– ECHO (current grants payment system) is being replaced by I-Supplier– Electronic submissions for all grant payment requests– FAA will perform payment request reviews and approvals electronically, as

necessary– Roll out of the new functionality should begin by late 2011 (subject to change)



Payment RequestFundsCheck

Review/Approval

PaymentTransmission

Payment

Grantee submitsGrantee submitspayment requestpayment request

Grantee Grantee submits payment submits payment request including request including

supporting informationsupporting information

Current Process

New Process

ECHOECHO

Manual Paper Manual Paper SubmissionSubmission

I-Supplier

FAA FAA InputsInputs

Pay RequestPay RequestManual Approval Manual Approval

at Regional at Regional or District Officeor District Office

Auto-Approval in Auto-Approval in some cases withsome cases with

post-payment post-payment verificationverification

Electronic FAAElectronic FAAapproval approval

within the systemwithin the system

DELPHI

Electronic payment


• Up Coming Communications• Stakeholders will be kept informed• Lines of communication will be kept open via the web

• http://www.faa.gov/airports/news_information/conferences_events• Provide feedback; address questions and concerns


• Training on the New Payment Process• Blended learning approach will be used• Web-based training, supplemental support documents, help desk support• Training program logistics available once finalized and approved by FAA and

DOT• Prior to training testing will be conducted with identified testers nation-wide


Key Policies and Issues - Audits• OIG’s 2008-2010 Improper Payment Audit – Final

Report issued on December 1, 2010– OIG began an improper payment audit of FAA in 2008

• Survey phase – 5 locations• Full audit in 2009 – 18 location

– An “improper payment” is defined in the Improper Payment Information Act of 2002 and the Improper Payments Elimination and Recovery Act of 2010 as:

• (A) means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and

• (B) includes any payment to an ineligible recipient, any payment for an ineligible service, any duplicate payment, payments for services not received, and any payment that does not account for credit for applicable discounts.


Key Policies and Issues - Audits• The OIG Final Report Made 7 Recommendations:

1) Reinforce FAA guidance to AIP grantees for preparing “construction” payment requests, including supporting documentation to be maintained for both the quantity and quality of the work/materials reimbursed under AIP

2) Identify the funds that can be recovered from the improper payments identified in this report and develop and implement a plan to maximize the recovery of these payments

3) Develop a procedure to prevent duplicate AIP payments to grantees that submit manual payment requests and draw-down funds electronically under the same grant

– CONTINUED>


Key Policies and Issues - Audits

4) Revise risk-management procedures to require:• ADO program managers to review annually the risk-

assessments for their grantees.

• ADO program managers to review and approve payment supporting documents submitted by moderate-risk grantees within 30 days of payment

• All low-risk grantees requesting payment to prepare a summary listing of invoices and other eligible charges for each payment to include: (1) a brief work summary, (2) vendor names, (3) dates of service, (4) billed amounts, (5) applicable payment dates, and (6) a calculation of the Federal share

• ADO program managers to review on a periodic basis the invoices or a summary listing of invoices and eligible charges for AIP payments to low-risk grantees

– CONTINUE>


Key Policies and Issues - Audits5) Initiate a review to determine if the final contract price for

the third runway embankment contract at the Seattle-Tacoma International Airport was fair and reasonable. Within 30 days, provide a report to the Office of the Inspector General detailing the results of this review and planned actions.

6) Revise the AIP Handbook to clarify what information is required to assist grantees in determining contract cost or price reasonableness, and further outline the responsibility for FAA ADO program managers to verify that contract costs are reasonable. Develop training for grantees and program managers to reinforce these provisions, if needed.

7) Re-emphasize to ADO management the AIP Handbook requirements for contacting OIG when conditions warrant a “Review for Bid Improprieties”



• Regular Ongoing FAA Audits– Financial Statements Audits

• Review of various accounting, operational, and procedural documents

– OMB Circular A-123 Audit • Evaluation of agency internal controls

– FAA Internal Improper Payment Audit• Annual reviews on the susceptibility of AIP and related

activities as well as identifying improper payment amounts.



• ARRA Audits

– OIG has initiated an ARRA Improper Payment Audit

– OIG Completed an ARRA Project Selection Audit

– GAO completed a ARRA Project Description Study

– GAO is initiating a review of the use and impact of Recovery Act Transportation funding


Key Polices and Issues – ACIP

• Preparation for the FY 2012 – FY 2014 ACIP is underway– Your RO/ADO has probably been working with you to

collect updated information over the last few months.

• Up Coming Changes to the ACIP Order – ACIP Order (FAA Order 5100.39A)– Combining with NPIAS Order (FAA Order 5090.3C)


AIP Program Status

• P.L. 111- 322, Continuing Appropriations and Surface Transportation Extensions Act of 2011– Part A: $1.4 Billion through March 4th

• P.L. 111-329, Airport and Airway Extension Act of 2010, Part IV– Authorization through March 31st


AIP Program Status

• FY 11 ‘Part A’ Apportionments are allocated and are ready to be programmed– Report Intentions on Entitlement Funds by February 22, 2011– Last day to obligate funds is March 17, 2011 ( 76 FR 6178)

Part A Program

3%

26%

13%

5%1%20%

17%

15%

Cargo

Passenger Entitlement

Non-Primary Entitlement

State and Insular

Alaska Supplemental

Protected Entitlements

Small Airport Fund

Discretionary


AIP Program Status

• Quick Reminder: Central Contracting Registration (CCR) Required for All FY 2011 Grant Recipients– Any sponsor receiving a grant in FY 2011 and

beyond must be registered in the Central Contracting Registration (CCR) system prior to the grant offer letter.


AIP Program Status

• Over 6,250 outstanding grants with 10,117 active projects.

• Approximately $3.5 billion of AIP funding remaining in outstanding grants.


ARRA Program Status

• Awarded $1.1 billion to fund 372 projects.

• Grant recipients expended 94% of obligated funds—$1.031 billion by February 2011 on work completed.

• Approximately 95% of the 372 projects are substantially complete

• Created thousands of jobs with grant recipients reporting over 6 million job hours funded through ARRA projects


Closing Remarks - Questions

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