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DEPARTMENT O F TRANSPORTATION F E D E R A L A V I A T I O N A D M I N I S T R A T I O N SUBJ: AUDITS BY THE OFFICE OF INSPECTOR GENERAL 1. PURPOSE. T h i s o r d e r e s t a b l i s h e s t h e F e d e r a l 4 v i a t i o n A d m i n i s t r a t i o n ' s (FAA) p o l i c y , r e s p o n s i b i l i t i e s , and p r o c e d u r e s re la tin^ t o : ( a ) a u d i t s of FAA a c t i v i t i e s by t h e D e p a r t m e n t a l O f f i c e of I n s p e c t o r G e n e r a l (OIG); and ( b ) h a n d l i n g O I G a u d i t r e p o r t s . It a l s o implements O r d e r DOT 8000.1A, Audit and I n v e s t i g a t i o n R e p o r t F i n d i n g s , Recommendations, and Followup A c t i o n , Chapter I , A u d i t s , e x c e p t f o r m a t t e r s r e l a t i n g t o a u d i t followup.
2. DISTRIBUTION. T h i s o r d e r is b e i n g d i s t r i b u t e d t o t h e branch l e v e l a t FAA h e a d q u a r t e r s , AMA, r e g i o n s , and c e n t e r s ; t o a l l G A O / O I G Audit L i a i s o n O f f i c e s ; and a n i n f o r m a t i o n copy t o t h e O I G .
3. CANCELLATION. FAA Orders 2970.1B, A u d i t s by t h e OST- O f f i c e of A u d i t s , d a t e d December 20, 1978, and 2970.2A, Followup A c t i o n and R e s o l u t i o n of Audit Recommenda- t i o n s Yade by t h e O f f i c e of I n s p e c t o r Geeneral, d a t e d F e b r u a r y 1 8 , 1983, a r e c a n c e l l e d .
4. BACKGROUND. I n a c c o r d a n c e w i t h t h e I n s p e c t o r G e n e r a l Act of 1978, t h e O I G was e s t a b l i s h e d on F e b r u a r y 2 5 , 1979, a s an i n d e p e n d e n t and o b j e c t i v e u n i t w i t h i n t h e O f f i c e of t h e S e c r e t a r y of T r a n s p o r t a t i o n (OST) t o conduct and s u p e r v i s e a u d i t s and i n v e s t i g a t i o n s r e l a t i n g t o t h e programs and o p e r a t i o n s of t h e Department.
P r e v i o u s l y , a u d i t s were performed by t h e OST O f f i c e of Audits and a u d i t o r s l o c a t e d i n each of t h e modal a d m i n i s t r a t i o n s . The Act a u t h o r i z e d t r a n s f e r t o t h e OIG of a l l t h e a u d i t o r p o s i t i o n s i n t h e Department.
l 5. EXPLANATION OF CHANGES.
a. The m i s s i o n and r e s p o n s i b i l i t i e s of t h e O I G have been added ( p a r a g r a p h s 8 t h r o u g h 1 1 ) . A l l a u d i t s w i t h i n t h e Department w i l l be performed under t h e c e n t r a l - i z e d d i r e c t i o n of t h e O I G r a t h e r t h a n by i n d i v i d u a l D e p a r t m e n t a l o r g a n i z a t i o n a l e l e m e n t s .
b. ,FAA Order 2970.1B, which implemented Order DOT 2920.1A, Audit S e r v i c e i n t h e Department of T r a n s p o r t a t i o n , d e a l t p r i m a r i l y w i t h i n t e r n a l a u d i t s performed by t h e f o r m e r OST O f f i c e of Audits. Order DOT 2920.18 h a s been c a n c e l l e d . T h i s r e v i s e d o r d e r c o v e r s b o t h i n t e r n a l and e x t e r n a l a u d i t s .
c . The h a n d l i n g of a u d i t r e p o r t s a d d r e s s e d t o M e t r o p o l i t a n Washington A i r p o r t s (AMA) o f f i c i a l s h a s been c l a r i f i e d ( p a r a g r a p h 15d).
d. The m a t e r i a l c o n t a i n e d i n FAA Orders 2970.1B and 2970.2A h a s been updated and combined i n t o one o r d e r . Thus, all. m a t t e r s r e l a t i n g t o t h e O I C a u d i t a c t i v i - t i e s , e x c e p t a u d i t f o l l o w u p , c a n be l o c a t e d i n t h i s o r d e r .
Distribution: A-WXYZ-3; ZAA-435; J - l ( 1 ) I n ~ t l a t e d By: AAA-6O e . A u d i t f o l l o w u p p r o c e d u r e s have been d e l e t e d from t h i s o r d e r and w i l l be i n c l u d e d i n a s e p a r a t e o r d e r .
f . P r o c e d u r e s f o r r e s o l u t i o n of d i f f e r e n c e s between t h e O I G and FAA a r e e x p l a i n e d i n p a r a g r a p h 16.
6. FOM AND REPORT. FAA Form 2900-3, GAO/OIC Audit A c t i v i t y Report (RIS: AA 2900-3), s h a l l be s u b m i t t e d by t h e e i o n s , c e n t e r s , and AMA a s r e q u i r e d rt by p a r a g r a p h 17f below.
7. AUTHORITY T O CHANGE THIS DIRECTIVE. The D i r e c t o r of Accounting, AAA-1, i s a u t h o r i z e d t o i s s u e changes t o t h i s d i r e c t i v e which do n o t change o r e s t a b l i s h p o l i c y , a s s i g n r e s p o n s i b i l i t i e s , o r d e l e g a t e a u t h o r i t y .
8. MISSION OF THE OFFICE OF INSPECTOR GENERAL. The T n s p e c t o r G e n e r a l ( I G ) , i n a c c o r d a n c e w i t h t h e I n s p e c t o r G e n e r a l Act of 1978, d i r e c t s an independent and o b j e c t i v e o r g a n i z a t i o n whose purposes a r e t o : ( a ) a s c e r t a i n t h e need f o r , formu- l a t e , and recommend D e p a r t m e n t a l p o l i c y , p l a n s , and programs f o r a u d i t s and i n v e s t i g a t i o n s ; ( b ) conduct and s u p e r v i s e a u d i t s and i n v e s t i g a t i o n s r e l a t i n g t o programs and o p e r a t i o n s of t h e Department; ( c ) p r o v i d e l e a d e r s h i p and c o o r d i n a t i o n and recomnend p o l i c i e s f o r a c t i v i t i e s d e s i g n e d t o (1) promote economy, e f f i c i e n c y , and e f f e c t i v e n e s s i n t h e a d m i n i s t r a t i o n o f , , a n d ( 2 ) p r e v e n t and d e t e c t f r a u d and a b u s e i n such programs and o p e r a t i o n s ; and ( d ) p r o v i d e a means f o r k e e p i n g t h e S e c r e t a r y and t h e Congress f u l l y and c u r r e n t l y informed about problems and d e f i - c i e n c i e s r e l a t i n g t o t h e a d m i n i s t r a t i o n of such programs and o p e r a t i o n s , and t h e n e c e s s i t y f o r and t h e p r o g r e s s of c o r r e c t i v e a c t i o n s .
9. RESPONSIBILITIES OF THE O I G .
a. The O I G w i l l i s s u e a d r a f t r e p o r t f o r a l l a u d i t s which c o n t a i n s i g n i f i c a n t f i n d i n g s . The d r a f t r e p o r t is u s e d t o c o n f i r m t h e f a c t s p r e s e n t e d , f o s t e r u n d e r s t a n d i n g of t h e f i n d i n g s and recommendations, and p r o v i d e management w i t h an o p p o r t u n i t y t o p r e p a r e a w r i t t e n r e s p o n s e t o t h e O I G ' s p o s i t i o n o r t o o u t l i n e a p l a n f o r c o r r e c t i n g t h e d e f i c i e n c y . The r e s p o n s e t o t h e d r a f t r e p o r t is r e q u i r e d ' w i t h i n 45 d a y s and w i l l be i n c l u d e d i n t h e f i n a l r e p o r t . I f a r e s p o n s e is not r e c e i v e d i n a t i m e l y manner, t h e f i n a l r e p o r t may be i s s u e d by t h e O I G w i t h a s t a t e - ment t h a t a r e s p o n s e t o t h e d r a f t r e p o r t was r e q u e s t e d b u t not r e c e i v e d .
b. The O I G w i l l i n d i c a t e i n t h e f i n a l r e p o r t , o r r e p o r t t r a n s m i t t a l l e t t e r , which f i n d i d g s r e q u i r e followup a c t i o n and which f i n d i n g s a r e r e s o l v e d . For t h o s e f i n d i n g s r e s o l v e d , t h e f i n a l r e p o r t w i l l c o n t a i n t h e agreed-upon a c t i o n and a time f r a m e f o r implementation. I f f i n d i n g s remain u n r e s o l v e d o r a more d e t a i l e d r e s p o n s e is needed, a f o r m a l r e s p o n s e w i l l be r e q u e s t e d w i t h i n 90 d a y s of i s s u a n c e of t h e f i n a l r e p o r t .
c. The O I G w i l l r e v i e w management's r e s p o n s e s t o recommendations on a l l f i n a l r e p o r t s and a t t e m p t t o r e s o l v e any d i f f e r e n c e s . The OIG w i l l n o r m a l l y r e p l y t o management's r e s p o n s e w i t h i n 15 working days.
Page 2 d. The O I G w i l l maintain a record of f i n d i n g s and recommendations on a l l a u d i t r e p o r t s u n t i l t h e f i n d i n g s have been resolved. The information maintained w i l l be a s follows: ( 1 ) Record of each recommendat ion.
( 2 ) Response t o each recommendation.
( 3 ) C o r r e c t i v e a c t i o n planned and e s t i m a t e d d a t e ( s ) f o r implementation o r t h e reason f o r nonconcurrence with t h e recommendation.
Decisions r e s u l t i n g from r e f e r r a l of unresolved matters t o higher ( 4 ) management.
(5) C o r r e c t i v e a c t i o n taken.
e. I n t h o s e i n s t a n c e s when t h e management o f f i c i a l and t h e OIG do not agree on a proposed r e s o l u t i o n of t h e a u d i t f i n d i n g , t h e O I G w t l l attempt t o resolve t h e matter with t h e next higher l e v e l of management d i r e c t l y concerned.
The OIG w i l l , on a q u a r t e r l y b a s i s , submit t o FAA f o r r e s o l u t i o n , unresolved f i n d i n g s over 90 days old.
f . The O I G w i l l i n c l u d e i n i t s Semiannual Report t o Congress each s i g n i f i c a n t condition described i n previous semiannual r e p o r t s on which c o r r e c t i v e a c t i o n has not been completed.
g. I n a d d i t i o n , t h e Senate Committee on Appropriations, i n i t s r e p o r t on P u b l i c Law 96-304 and P u b l i c Law 96-400, d i r e c t e d t h e I n s p e c t o r s General t o include a s p a r t of t h e i r p e r i o d i c r e p o r t t o Congress a summary of unresolved a u d i t s a t t h e beginning of and completed during t h e r e p o r t i n g period.
10. NATURE O F AUDIT SERVICE.
l a. Audit. An a u d i t is a s y s t e m a t i c review or a p p r a i s a l t o determine and
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r e p o r t on whether: ( 1 ) f i n a n c i a l o p e r a t i o n s a r e properly conducted; ( 2 ) f i n a n c i a l r e p o r t s a r e presented f a i r l y ; ( 3 ) a p p l i c a b l e laws and r e g u l a t i o n s have been complied with; ( 4 ) r e s o u r c e s a r e managed and used i n an economical and e f f i c i e n t manner; and ( 5 ) d e s i r e d r e s u l t s and o b j e c t i v e s a r e being achieved i n an e f f e c t i v e manner. The above elements of an a u d i t a r e most commonly categorized a s f i n a n c i a l / c o m p l i a n c e , economy/efficiencv, and program r e s u l t s .
(1) F i n a n c i a l and compliance a u d i t s determine: ( a ) whether t h e finan'cial statements of an a u d i t e d e n t i t y p r e s e n t f a i r l y t h e f i n a n c i a l p o s i t i o n and the r e s u l t s of f i n a n c i a l o p e r a t i o n s i n accordance with g e n e r a l l y accepted accounting p r i n c i p l e s ; and ( b ) whether t h e e n t i t y has complied with laws and r e g u l a t i o n s t h a t may have a m a t e r i a l e f f e c t upon t h e f i n a n c i a l statements.
( 2 ) Economy and e f f i c i e n c y a u d i t s determine: ( a ) whether the e n t i t y i s managing and u t i l i z i n g i t s resources (such as p r o p e r t y , space, and personnel) economically and e f f i c i e n t l y ; ( b ) t h e causes of i n e f f i c i e n c i e s or uneconomical p r a c t i c e s ; and ( c ) whether t h e e n t i t y has complied with laws and r e g u l a t i o n s concerning m a t t e r s of economy and e f f i c i e n c y .
Par 9 Page 3 ( 3 ) Program r e s u l t s a u d i t s determine: ( a ) whether t h e d e s i r e d r e s u l t s o r b e n e f i t s e s t a b l i s h e d by t h e Congress o r o t h e r a u t h o r i z i n g body a r e being achieved; and ( h ) whether t h e agency has considered a l t e r n a t i v e s t h a t might y i e l d d e s i r e d r e s u l t s a t a lower c o s t .
b. Types of Audits. Audits performed by t h e O I G a r e c l a s s i f i e d a s : ( 1 ) i n t e r n a l ( p r o g r a m / f u n c t i o n a l ) ; and ( 2 ) e x t e r n a l ( g r a n t l c o n t r a c t ) .
c. Fraud P r e v e n t i o n and Detection Surveys.
( 1 ) General. The I n s p e c t o r General Act of 1978 s t a t e s t h a t a primary purpose and f u n c t i o n of t h e O I G i s p r e v e n t i n g and d e t e c t i n g f r a u d and abuse i n Departmental programs and o p e r a t i o n s . To more e f f e c t i v e l y meet t h i s mandate, t h e O I G u t i l i z e s j o i n t a u d i t and i n v e s t i g a t i v e teams t o conduct narrowly scoped surveys of h i g h l y v u l n e r a b l e program a r e a s f o r t h e purpose of p r e v e n t i n g and d e t e c t i n g f r a u d . The most important aspect of t h e s e surveys is t h a t they a r e n e i t h e r a u d i t s n o r i n v e s t i g a t i o n s . These surveys draw upon t h e p o s i t i v e f e a t u r e s of such e x i s t i n g - t o o l s a s r i s k a n a l y s e s , v u l n e r a b i l i t y assessments, a u d i t surveys, and f r a u d preven- t i o n surveys. They examine p a r t of a program t o determine i f e s t a b l i s h e d proce- d u r e s a r e being followed, i f c o n t r o l s a r e adequate, and i f any e x i s t i n g weaknesses a r e being e x p l o i t e d w i t h a r e s u l t a n t adverse impact on t h e i n t e r e s t s of t h e Government.
( 2 ) Concept. A team approach s i m i l a r t o t h e Fraud Prevention and D e t e c t i o n Survey was used p r e v i o u s l y i n t h e O I G t o conduct v u l n e r a b i l i t y assessments. The survey is unique i n t h a t it extends the s t u d y g o a l s beyond t h e ..
i d e n t i f i c a t i o n of weaknesses and v u l n e r a b i l i t i e s t o i n c l u d e t h e d e t e c t i o n of fraud. k -, T h i s j o i n t concept, which u t i l i z e s a u d i t experience f o r f i n a n c i a l , o r g a n i z a t i o n a l , and r e c o r d reviews and i n v e s t i g a t i v e e x p e r t i s e i n t h e i d e n t i f i c a t i o n and p u r s u i t of weaknesses and f r a u d i n d i c a t i o n s , permits t h e simultaneous development and eval- u a e i o n of information from two perspectives--audit and i n v e s t i g a t i o n s .
( 3 ) P r o j e c t S e l e c t i o n . I d e n t i f i c a t i o n and s e l e c t i o n of p r o j e c t s may be , based on information developed out of p r i o r i n v e s t i g a t i v e o r a u d i t experience o r from r e q u e s t s by FAA program o f f i c i a l s . P r o j e c t s may i n i t i a l l y he d i r e c t e d a t a g e n e r a l program a r e a or a c t i v i t y and subsequently narrowed t o focus on a t a r g e t of l i m i t e d scope.
( 4 ) P r o j e c t Team. Each survey team w i l l be comprised of a mix of audi- J t o r s and i n v e s t i g a t o r s .
11. AUTHORITY O F THE O I G . The I n s p e c t o r General Act of 1978 sets f o r t h t h e a u t h o r i t y given t o t h e O I G f o r t h e performance of its mission. The O I G i s a u t h o r i z e d : a. Access t o a l l r e c o r d s , r e p o r t s , a u d i t s , reviews, documents, papers, recom- mendations, o r o t h e r m a t e r i a l s which r e l a t e t o t h e programs and o p e r a t i o n s of the Department ; Par 10 Page 4 b. To r e q u e s t such information or a s s i s t a n c e , a s may be necessary, from any F e d e r a l , s t a t e , o r l o c a l governmental agency o r u n i t ; c. To r e p o r t t o thi S e c r e t a r y , without d e l a y , whenever requested information o r a s s i s t a n c e i s , i n t h e judgment of t h e I G , unreasonably r e f u s e d o r not provided.
d. To make s u r e i n v e s t i g a t i o n s and r e p o r t s r e l a t i n g t o t h e a d m i n i s t r a t i o n of t h e ~ e p a r t m e n t 's programs and o p e r a t i o n s a r e , i n t h e judgment of t h e I G , n e c e s s a r y and d e s i r a b l e .
e. To r e q u i r e by subpoena t h e production of a l l information, documents, r e p o r t s , answers, r e c o r d s , a c c o u n t s , papers, and o t h e r d a t a and documentary evidence n e c e s s a r y i n t h e performance of t h e f u n c t i o n s assigned bv the Act. T t is e n f o r c e a b l e by o r d e r of any United S t a t e s d i s t r i c t c o u r t provided t h a t procedures o t h e r than subpoenas s h a l l be used t o o b t a i n documents and information from F e d e r a l agencies.
12. ACCESS T O RECORDS. The agency w i l l c o o p e r a t e with O I G a u d i t o r s i n t h e p e r f o r - mance of t h e i r assigned f u n c t i o n s . Upon s p e c i f i c r e q u e s t , agency personnel w i l l make a v a i l a b l e documents, f i l e s , and o t h e r r e c o r d s required f o r a u d i t purpoges suh- j e c t t o t h e following: a. Agency d i r e c t i v e s d e a l i n g with t h e g e n e r a l s u b j e c t of handling information do not p r e c l u d e r e l e a s e of information but do set f o r t h c e r t a i n requirements t o b e m e t p r i o r t o r e l e a s e of c l a s s i f i e d data. The main d i r e c t i v e is FAA Order 1600.2B, National S e c u r i t y Information. Any q u e s t i o n s r e l a t i n g t o Order 1600.2B should be d i r e c t e d t o t h e O f f i c e of C i v i l Aviatlon S e c u r i t y o r t h e a p p r o p r i a t e C i v i l Aviation S e c u r i t y D i v i s i o n .
b. FAA Order 1600.15D, Control and P r o t e c t i o n of "For O f f i c i a l Use Only" I n f o r m a t i o n , governs t h e e x t e r n a l r e l e a s e of p r i v i l e g e d and o t h e r s e n s i t i v e d a t a .
O I G a u d i t o r s w i l l be advised c l e a r l y of t h e o f f i c i a l and c u r r e n t s t a t u s of the d a t a a t t h e t i m e i t is r e l e a s e d . I 13. COOPERATION WITH O I G ELEMENTS.
a . A l l o r g a n i z a t i o n s , elements, and p e r s o n n e l i n F A A a r e expected t o cooperate with t h e O I G t o t h e f u l l e s t p r a c t i c a l e x t e n t and t o respond promptly t o a l l reasonable r e q u e s t s .
b. Cooperation and/or a s s i s t a n c e t o t h e OIG may be prevented because of t h e t i m e frame o r degree of a s s i s t a n c e requested by t h e O I G . When t h i s occurs, i n f o r - mation r e g a r d i n g t h e impact on FAA o p e r a t i o n s and resources should be f u r n i s h e d t o t h e O I G . The e f f e c t on personnel and d o l l a r c o s t s must be considered. Replies t o t h e r e q u e s t i n g O I G element should be i n w r i t i n g and should i n c l u d e t h e reasons f o r noncompliance with t h e r e q u e s t and should o f f e r reasonable a l t e r n a t i v e s .
c. I f mutually s a t i s f a c t o r y arrangements cannot be reached a t t h e l o c a l l e v e l , t h e next h i g h e r l e v e l of a u t h o r i t y and AAA-1 s h a l l be advised promptly.
Par 1 1 ' Page 5 14. POLICY.
a. O I G a u d i t r e p o r t s provide independent e v a l u a t i o n s of t h e manner i n which FAA c a r r i e s out i t s a s s i g n e d r e s p o n s i b i l i t i e s and a d m i n i s t e r s i t s a f f a i r s and r e s o u r c e s . These e v a l u a t i o n s a r e a v a l u a b l e and n e c e s s a r y t o o l of management and s h a l l be viewed a s a c o n s t r u c t i v e s e r v i c e t o FAA managers.
b. O I G f i n d i n g s , c o n c l u s i o n s , and recommendations r e s u l t i n g from a u d i t s s h a l l be given c a r e f u l c o n s i d e r a t i o n by management o f f i c i a l s . FAA comments on d r a f t and f i n a l r e p o r t s s h a l l be o b j e c t i v e , r e s p o n s i v e , and i n d i c a t e t h e correc- t i v e a c t i o n s taken o r a n t i c i p a t e d . They s h a l l be submitted w i t h i n t i m e l i m i t s s p e c i f i e d by t h e O I G and s h a l l provide t a r g e t d a t e s f o r completion of c o r r e c t i v e a c t i o n s . The normal time periods f o r responding t o d r a f t and f i n a l r e p o r t s a r e 45 and 90 d a y s , r e s p e c t i v e l y .
c . O I G a u d i t recommendations may be r e j e c t e d i f they a r e deemed t o be incompatible with program o b j e c t i v e s o r i f they w i l l not, i n management's opinion, c o n t r i b u t e t o t h e e f f e c t i v e n e s s , e f f i c i e n c y , o r economy of o p e r a t i o n s . Reasons f o r nonacceptance of a u d i t recommendations must be c l e a r l y s t a t e d .
d. MA-1 s h a l l p r e p a r e a l l o f f i c i a l FAA responses t o O I G a u d i t r e p o r t s addressed t o management o f f i c i a l s a t FAA headquarters and t h e Aviation Standards N a t i o n a l F i e l d O f f i c e (AVN). I n t h o s e r a r e i n s t a n c e s where t h e a u d i t r e p o r t s i n v o l v e complex l e g a l o r t e c h n i c a l m a t t e r s , AAA-1 may r e q u e s t e i t h e r t h e Chief Counsel o r t h e a p p r o p r i a t e program o f f i c e t o respond d i r e c t l y t o the O I G . Audit r e p o r t s addressed t o management o f f i c i a l s a t t h e r e g i o n s , c e n t e r s , and AMA s h a l l be handled by t h e l o c a l d i r e c t o r ' s designee h e r e i n r e f e r r e d t o a s t h e GAO/OIG Audit L i a i s o n O f f i c e a s i n d i c a t e d by paragraphs 15c and 15d below.
e. On recommendations r e l a t i n g t o e x t e r n a l o p e r a t i o n s , management o f f i c i a l s may t r a n s m i t t h e a u d i t r e p o r t t o t h e g r a n t e e o r c o n t r a c t o r r e q u e s t i n g comments on t h e a u d i t o r ' s f i n d i n g s and recommendations. I n c a s e s of a u d i t f i n d i n g s i n v o l v i n g t h e a p p l i c a t i o n and/or i n t e r p r e t a t i o n of law o r r e g u l a t i o n , c o n s i d e r a t i o n should be given t o o b t a i n i n g a l e g a l opinion when a d e c i s i o n i s made not t o d i s a l l o w o r r e c o v e r questioned c o s t s . Management o f f i c i a l s w i l l e v a l u a t e responses from t h e g r a n t e e s o r c o n t r a c t o r s and inform t h e O I G a s t o what a c t i o n i s planned on t h e a u d i t recommendations. A l e t t e r w i l l be forwarded by management o f f i c i a l s t o the g r a n t e e o r c o n t r a c t o r a d v i s i n g what a c t i o n s a r e t o be taken by t h e Government and what a c t i o n is r e q u i r e d of t h e g r a n t e e o r c o n t r a c t o r .
15. RESPONSIBILITIES O F FAA OFFICIALS.
a. General.
D i r e c t o r of Accounting, AAA-1.
( a ) Serves a s t h e c e n t r a l c o n t r o l and l i a i s o n p o i n t f o r a l l FAA r e l a t i o n s h i p s w i t h t h e O I G on a u d i t m a t t e r s .
( b ) Controls and monitors a l l O I G a u d i t r e p o r t s and correspondence on a u d i t m a t t e r s addressed t o management o f f i c i a l s a t FAA headquarters and AVN and ensures t h a t a l l FAA offices/services/regions/centers t h a t can c o n t r i b u t e t o t h e review and r e p l y t o O I G a u d i t r e p o r t s a r e made aware of such r e p o r t s .
Page 6 Par 14 ( c ) E s t a b l i s h e s uniform FAA s t a n d a r d s f o r handling a l l O I G a u d i t m a t t e r s .
preparbs o r provides f o r prompt, f a c t u a l , and responsive ( d l r e p l i e s t o r e q u e s t s f o r comments on O I G a u d i t m a t t e r s addressed t o management o f f i c i a l s a t FAA h e a d q u a r t e r s and AVN.
( 2 ) Chief Counsel, FAA. Provides prompt, l e g a l review, counsel, and o p i n i o n on i s s u e s of law and p o l i c y r a i s e d i n O I G a u d i t r e p o r t s . The Chief Counsel may d e l e g a t e t h i s f u n c t i o n t o r e g i o n a l and c e n t e r counsels when such d e l e g a t i o n is a p p r o p r i a t e .
b. O I G Audit Reports Addressed t o t h e Administrator, Other Headauarters O f f i c i a l s , o r AVN.
(1) D i r e c t o r of Accounting, AAA-1. Develops FAA's o f f i c i a l p o s i t i o n on O I G f i n d i n g s and recommendations and prepares a r e p l y f o r t h e s i g n a t u r e of the Administrator o r o t h e r a p p r o p r i a t e headquarters o f f i c i a l .
( a ) Gathers d a t a on r e p o r t e d f i n d i n g s through meetings and correspon- dence w i t h i n t e r e s t e d o f f i c e s and s e r v i c e s .
( b ) Coordinates proposed r e p l i e s with i n t e r e s t e d o f f i c e s and s e r v i c e s .
( c ) Replies t o O I G r e q u e s t s f o r comments on a u d i t r e p o r t s w i t h i n t h e time frame e s t a b l i s h e d by t h e O I G .
( d ) Ensures t h a t r e p l i e s a r e r e s p o n s i v e , f a c t u a l , and furnished t o O I G i n a timely manner.
( 2 ) O f f i c e , S e r v i c e , Regional, and Center D i r e c t o r s . Submit prompt, fac- t u a l , and f o r t h r i g h t r e p l i e s t o AAA-1 r e q u e s t s f o r comments on O I G a u d i t r e p o r t s .
O I G Audit Reports Addressed t o Regional and Center D i r e c t o r s . ~ e ~ i d n a l c.
and c e n t e r d i r e c t o r s o r designees a r e r e s p o n s i b l e f o r developing t h e o f f i c i a l p o s i t i o n on O I G f i n d i n g s and recommendations contained i n l o c a l O I G a u d i t r e p o r t s . I n p r e p a r i n g r e p l i e s , they: ( 1 ) Gather d a t a on r e p o r t e d f i n d i n g s through meetings and correspondence w i t h , i n t e r e s t e d l o c a l o f f i c i a l s .
( 2 ) Coordinate proposed r e p l i e s with i n t e r e s t e d 1-ocal o f f i c i a l s .
( 3 ) Reply t o O I G r e q u e s t s f o r comments on a u d i t r e p o r t s w i t h i n the time frame e s t a b l i s h e d by t h e O I G .
Par 15 Page 7 Do n o t comment on p o l i c y o r p r o c e d u r a l m a t t e r s t h a t can o n l y be ( 4 ) r e s o l v e d a t FAA h e a d q u a r t e r s , e x c e p t t o s u g g e s t t h a t such m a t t e r s be r e f e r r e d t o FAA h e a d q u a r t e r s f o r a c t i o n . R e p l i e s s h o u l d comment on t h e f a c t u a l i n f o r m a t i o n c o n t a i n e d i n t h e r e p o r t s , jf a p p r o p r i a t e .
( 5 ) E n s u r e t h a t r e p l i e s a r e r e s p o n s i v e , f a c t u a l , and f u r n i s h e d t o O I G i n a t i m e l y manner.
d. O I G A u d i t R e p o r t s Addressed t o t h e D i r e c t o r , M e t r o p o l i t a n Washington A i r p o r t s , AMA-1.
( 1 ) A l l r e p o r t s ( b o t h i n t e r n a l and e x t e r n a l ) a d d r e s s e d s o l e l y t o AMA-1 o r o t h e r AMA o f f i c i a l s . T h i s i n c l u d e s O I G r e g i o n a l a u d i t s and c o n c e s s i o n / c o n t r a c t t y p e a u d i t s . AMA-1 i s a u t h o r i z e d t o r e p l y d i r e c t l y t o t h e O I G . These r e p l i e s s h a l l n o t comment on p o l i c y o r p r o c e d u r a l m a t t e r s t h a t can o n l y be r e s o l v e d a t FAA h e a d q u a r t e r s , e x c e p t t o s u g g e s t t h a t such m a t t e r s be r e f e r r e d t o FAA h e a d q u a r t e r s f o r a c t i o n . R e p l i e s should comment on t h e f a c t u a l m a t t e r s c o n t a i n e d i n t h e a u d i t r e p o r t s , i f a p p r o p r i a t e .
( 2 ) A l l i n t e r n a l a u d i t r e p o r t s i s s u e d t o m u l t i p l e a d d r e s s e e s , i n c l u d i n g AMA-1. T h i s i n c l u d e s O I G h e a d q u a r t e r s program a u d i t s t h a t have p o l i c y i m p l i c a t i o n s .
These w i l l be h a n d l e d by AAA-1 i n a c c o r d a n c e w i t h p a r a g r a p h i 5 b ( l ) above. AMA-1 s h a l l submit prompt, f a c t u a l , and f o r t h r i g h t r e p l i e s t o AAA-I r e q u e s t s f o r comments on O I G a u d i t r e p o r t s a d d r e s s e d t o m u l t i p l e management o f f i c i a l s a t FAA h e a d q u a r t e r s which i n v o l v e AMA o p e r a t i o n s .
16. RESOLUTION OF DIFFERENCES BETWEEN THE O I G AND FAA.
a. I n v o l v e d FAA O r g a n i z a t i o n a l Elements. Any management o f f i c i a l who i s t h e r e c i p i e n t of an a u d i t r e p o r t could be i n v o l v e d i n t h e r e s o l u t i o n of d i f f e r e n c e s be- tween t h e O I G and FAA. Audit r e p o r t s a r e i s s u e d t o management o f f i c i a l s a t v a r i o u s o r g a n i z a t i o n a l l e v e l s w i t h i n FAA. R e p o r t s i s s u e d by O I G r e g i o n a l o f f i c e s a r e u s u a l l y d i r e c t e d t o FAA r e g i o n a l o r c e n t e r d i r e c t o r s . R e p o r t s i s s u e d by t h e O I G h e a d q u a r t e r s s t a f f a r e d i r e c t e d t o o f f i c e / s e r v i c e d i r e c t o r s , a s s o c i a t e a d m i n i s t r a - t o r s , a n d / o r t h e A d m i n i s t r a t o r depending on t h e i m p o r t a n c e of t h e a u d i t f i n d i n g s and recommendations.
b. O I G p r o c e d u r e s f o r r e s o l u t i o n of d i f f e r e n c e s between t h e O I G and FAA s t a t e t h a t , when t h e management o f f i c i a l and O I G do n o t a g r e e on a proposed reso- l u t i o n of t h e a u d i t f i n d i n g , t h e O I G w i l l a t t e m p t t o r e s o l v e t h e m a t t e r w i t h t h e n e x t h i g h & r l e v e l of management d i r e c t l y concerned. T h i s means t h a t r e p o r t s where t h e r e g i o n a l o r c e n t e r d i r e c t o r d i s a g r e e s with t h e O I G , t h e O I G s h o u l d r e f e r t h e m a t t e r t o t h e A d m i n i s t r a t o r . In a c t u a l p r a c t i c e , t h e a p p r o p r i a t e program o f f i c e a t FAA h e a d q u a r t e r s is u s u a l l y c o n t a c t e d i n an a t t e m p t t o r e s o l v e d i f f e r e n c e s between t h e O I G and r e g i o n a l o r c e n t e r d i r e c t o r s . For r e p o r t s i s s u e d by t h e O I G head- q u a r t e r s s t a f f , t h e f i n a l r e p o r t is u s u a l l y i s s u e d t o t h e A d m i n i s t r a t o r w i t h a r e q u e s t f o r comments on t h e r e p o r t ' s f i n d i n g s and recommendations.
P a r 15 Page 8 17. AUDIT LIAISON PROCEDURES.
a. The c o n t a c t p o i n t f o r a l l proposed O I G a u d i t s w i t h i n FAA h e a d q u a r t e r s s h a l l be t h e F i n a n c i a l Programs S t a f f , AAA-60.
The O I G w i l l n o t i f y AAA-60 of a l l s u r v e y s and a u d i t s t o be performed by O I G h e a d q u a r t e r s a u d i t o r s a few days b e f o r e t h e e s t i m a t e d s t a r t i n g d a t e . The c o n t a c t p o i n t f o r a l l f i e l d a u d i t s s h a l l he t h e c o g n i z a n t G A O / O I G Audit L i a i s o n O f f i c e . The d e s i g n a t e d o f f i c i a l should be con- t a c t e d i n advance of any a u d i t work s o t h a t a r r a n g e m e n t s can be made f o r an e n t r a n c e c o n f e r e n c e w i t h an a p p r o p r i a t e l e v e l of FAA management.
b. A t t h e E n t r a n c e Conference.
The O I G a u d i t o r w i l l be e x p e c t e d t o o u t l i n e t h e s c o p e of t h e a u d i t , ( 1 ) t h e a p p r o x i m a t e l e n g t h of time it w i l l r e q u i r e , t h e g e n e r a l sequence of t h e review, and any a t h e r d a t a t h a t t h e a u d i t o r f e e l s would be a p p r o p r i a t e .
The FAA o f f i c i a l who is r e s p o n s i b l e f o r t h e a r e a t o be a u d i t e d s h o u l d ( 2 ) a p t p o i n t a , l i a i s o n p e r s o n f o r t h e f u n c t i o n b e i n g a u d i t e d w i t h whom t h e a u d i t o r w i l l a r r a n g e e n t r a n c e i n t o s p e c i f i c a r e a s , s t a f f a u d i t f i n d i n g s , and g e n e r a l l y coor- d i n a t e t h e a c t i v i t i e s of t h e a u d i t .
c i A f t e r i n i t i a l l i a i s o n and c o n t a c t a r r a n g e m e n t s a t t h e e n t r a n c e c o n f e r e n c e , O I G a u d i t o r s w i l l d e a l w i t h t h e v a r i o u s o f f i c i a l s t h a t have p r i m a r y r e s ~ o n s i b i l i t v f o r t h e a r e a s b e i n g a u d i t e d .
d. An e x i t c o n f e r e n c e s h a l l be a r r a n g e d through AAA-60 o r t h e r e g i o n a l l c e n t e r a u d i t l i a i s o n o f f i c e , a s a p p r o p r i a t e . Such c o n f e r e n c e should be h e l d f 011-owing c o m p l e t i o n of t h e a u d i t work w i t h t h e same o f f i c i a l whom t h e e n t r a n c e c o n f e r e n c e was h e l d o r a h i g h e r l e v e l o f f i c i a l , a s a p p r o p r i a t e .
e . F i e l d v i s i t s by O I G h e a d q u a r t e r s p e r s o n n e l . The O I G h a s a g r e e d t o n o t i f y AAA-60 i m m e d i a t e l y when a d e t e r m i n a t i o n is made by O I G h e a d q u a r t e r s p e r s o n n e l t o v i s i t FAA f i e l d l o c a t i o n s . AAA-60 w i l l immediately n o t i f y by t e l e p h o n e t h e , a p p r o p r i a t e r e g i o n a l l c e n t e r a u d i t l i a i s o n o f f i c e of t h e v i s i t s . About 1 t o 2 d a y s l a t e r , t h e O I G h e a d q u a r t e r s p e r s o n n e l w i l l a l s o a d v i s e r e s p o n s i b l e FAA h e a d a u a r t e r s program o f f i c i a l s of t h e v i s i t s s o t h a t t h e l a t t e r may c o n t a c t t h e i r f i e l d c o u n t e r - p a r t s , p r o v i d e s p e c i f i c i n f o r m a t i o n , and make any n e c e s s a r y arrangements. The 1- t o 2-day i n t e r v a l w i l l a l l o w s u f f i c i e n t time f o r t h e f i e l d a u d i t l i a i s o n o f f i c e t o a d v i s e a l l a p p r o p r i a t e r e g i o n a l / c e n t e r p e r s o n n e l of t h e O I G v i s i t s .
f . R e p o r t i n g of L o c a l O I G A c t i v i t y To FAA H e a d q u a r t e r s . Each r e g i o n a l l center/AMA a u d i t l i a i s o n o f f i c e s h a l l a s s i s t t h e O f f i c e of Accounting ( A M ) i n c a r r y i n g o u t i t s c e n t r a l c o n t r o l and followup f u n c t i o n s by: A d v i s i n g of t h e planned scope of O I G a u d i t s a s d e f i n e d a t e n t r a n c e ( 1 ) c o n f e r e n c e s and of t e n t a t i v e f i n d i n g s h a v i n g agencywide i m p l i c a t i o n s a s soon a s t h e y a r e d i s c l o s e d . F A A Form 2900-3, G A O / O I G Audit A c t i v i t y Report (RIS: AA 2900-3), should be used f o r t h i s purpose. Forms f o r r e g i o n s and c e n t e r s a r e s t o c k e d i n t h e FAA Depot, N a t i o n a l S t o c k Number 0052-00-809-5001, Unit of I s s u e ( U / I ) : Sheet (SH).
P a r 17 Page 9 ( 2 ) Forwarding a copy of each O I G f i n a l a u d i t r e p o r t ( o t h e r than on c o n t r a c t s and g r a n t s ) and r e l a t e d r e p l y t o AAA f o r p o s t review and c e n t r a l r e f e r e n c e .
18. AVAILABILITY O F INFORMATION (AUDIT REPORTS) T O TPE PUBLIC.
a. The Freedom of Information Act (FOIA) ( 5 U.S.C. 552) r e q u i r e s each agency t o make i n f o r m a t i o n a v a i l a b l e t o t h e public. It i s t h e p o l i c y 05 t h e Department t o make information w i t h i n t h e Department a v a i l a b l e t o t h e p u b l i c t o t h e g r e a t e s t e x t e n t p o s s i b l e i n keeping with t h e s p i r i t of t h e A c t . C e r t a i n i n f o r m a t i o n , however, may be withheld f o r reasons s p e c i f i e d i n p r e s c r i b e d exemptions t o t h e FOIA.
b. R e s p o n s i b i l i t y . Within t h e O f f i c e of t h e S e c r e t a r y , t h e D i r e c t o r of P u b l i c Information (A-30) h a s been d e l e g a t e d a u t h o r i t y t o implement t h e FOIA. The d e t e r m i n a t i o n a s t o whether or not t o r e l e a s e an a u d i t r e p o r t i s made by A-30.
c. Requests f o r Release of Audit Reports. A l l r e q u e s t s f o r copies of a u d i t r e p o r t s received from t h e p u b l i c s h a l l be forwarded t o AAA-1 f o r t r a n s m i t t a l t o A-30.
19. SUPPLEMENTATION. Two copies of each i n t e r n a l d i r e c t i v e c o n t a i n i n g supplemen- t a l o r implementing i n s t r u c t i o n s s h a l l be forwarded t o M, A t t e n t i o n : AAA-10.
I n s t r u c t i o n s i s s u e d by r e g i o n s l c e n t e r s should d e s i g n a t e an O I G l i a i s o n p o i n t .
Donald D . Engen
Administrator I
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