FAA FULFILLED MOST ARRA REQUIREMENTS IN 

AWARDING AIRPORT GRANTS

Federal Aviation Administration

Report Number: AV-2011-053

Date Issued: February 17, 2011
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: FAA Fulfilled Most ARRA 

Requirements in Awarding Airport Grants

Federal Aviation Administration

Report Number AV-2011-053

Date: February 17, 2011

From: Jeffrey B. Guzzetti

Assistant Inspector General 

 for Aviation and Special Program Audits

Reply to 

Attn. of: JA-10

To: FAA Administrator

On February 17, 2009, the President signed into law the American Recovery and 

Reinvestment Act (ARRA),

1 designating $1.1 billion for the Federal Aviation

Administration (FAA) to invest in Airport Improvement Program (AIP) projects. 

These funds were intended for airport projects that could achieve several key 

goals, including investing in transportation infrastructure to provide long-term 

economic benefits, create jobs, and promote economic recovery. ARRA 

established tight timeframes for distributing and expending funds and emphasized 

preference for projects that could be completed in 2 years. 

In August 2009, we issued an advisory to the Office of the Secretary outlining our 

concerns with FAA’s process for awarding ARRA grants.2

 We questioned the 

economic merit of some lower scoring projects and highlighted several ARRA 

recipients with grant management problems identified in prior single audit 

reports.3 Based on these preliminary findings, we initiated this audit to determine 

the extent to which FAA’s process for awarding ARRA grants complied with 

ARRA requirements and other associated guidance.4

 We conducted this audit 

from September 2009 through December 2010 in accordance with government 

 1 American Recovery and Reinvestment Act of 2009, Pub. L. No. 111–5 (2009). 2 OIG Advisory Number AA-2009-003, “FAA’s Process for Awarding ARRA Airport Improvement Program Grants,” 

August 6, 2009. OIG reports are available on our website: www.oig.dot.gov. 3 Single audit is a mechanism relied upon by Executive Branch agencies to oversee financial compliance and grant 

assurances. 4 For the purpose of this report, we define “requirements” as a collective term to refer to ARRA statutory 

requirements, Presidential direction, and Office of Management and Budget (OMB) and FAA guidance related to 

ARRA implementation.
2

auditing standards prescribed by the Comptroller General of the United States.5

 

Exhibit A details our scope and methodology. 

RESULTS IN BRIEF

FAA’s process for awarding $1.1 billion in AIP grants complied with five key

ARRA requirements but fell short on two others—being fully transparent and 

optimizing economic activity.6

 As shown in table 1, FAA used its existing project 

selection process to meet ARRA milestones for awarding half of the funds in 

120 days and all funds within 1 year of the law’s effective date of 

February 17, 2009. FAA also took steps to avoid supplanting other expenditures 

with ARRA funds.7

 Additionally, the Agency increased its oversight of grant 

recipients, although continued effort will be needed to comply with March 2010 

OMB guidance requiring use of single audit reports to monitor ARRA recipients.8

 

Table 1. FAA’s Compliance with Key ARRA Requirements

ARRA Requirements Fulfilled Partially 

Fulfilled

Not 

Fulfilled

Use discretionary grant process to deliver programmatic 

results and achieve long-term public benefits.

Award 50 percent of funds within 120 days and remaining 

funds not later than 1 year after enactment.

Give priority to those projects that can be completed by 

February 2011.

Ensure projects supplement and not supplant planned 

expenditures.

Increase oversight beyond normal levels.

Design transparent merit-based selection criteria.

Design selection process to optimize economic activity 

relative to Federal dollars obligated.9

Source: OIG analysis

 5 This review is one of a series of audits we are conducting of FAA’s implementation of ARRA. 6 On March 20, 2009, the President directed executive agencies to design merit-based selection criteria to support 

particular projects with ability to (i) deliver programmatic results, (ii) optimize economic activity relative to Federal 

dollars obligated, (iii) achieve long-term public benefits, and (iv) satisfy transparency objectives. 7 ARRA required that Recovery funds supplement and not supplant planned expenditures from airport-generated 

revenues or other state and local sources. 8 In addition to assessing FAA’s compliance with ARRA selection requirements, we elected to follow up with the 

Agency on its efforts to comply with OMB guidance on increasing oversight by using single audits as a tool to

monitor ARRA grant recipients; we also raised this issue in our August 2009 advisory to FAA. 9 The President also directed agencies to select projects that would create or save jobs. We did not include this in our 

review since this topic is being addressed in a separate OIG audit, announced on November 19, 2009: 

http://www.oig.dot.gov/library-item/5232.
3

However, FAA was not fully transparent in justifying its selection of some lower 

priority projects or reporting actual grant amounts. For instance, FAA set a goal 

of funding higher priority projects through ARRA but did not publicly disclose on 

its website the justifications for choosing more than 80 lower-scoring projects 

(more than 20 percent of those selected).10 Until FAA provides these disclosures 

to the public, it will not be transparent to the Congress and taxpayers why lower 

scoring projects were funded. Moreover, FAA initially published the ARRA 

recipient names and grant estimates on its Recovery Act website. However, we 

found that most of the estimates (243 of 319) were not updated to reflect the actual

amounts later awarded. In particular, 25 of these project cost estimates were off 

by more than 50 percent. After we brought this to FAA’s attention, it published 

the actual amounts obligated for each grantee. 

FAA also did not ensure its selected projects would optimize economic activity, as

required by Presidential direction. FAA maintains it met this requirement because 

it considered economic factors (such as airport growth and long-term usage) when 

developing its Airport Capital Improvement Plan (ACIP)—a rolling plan of 

AIP-eligible projects. However, we found no evidence that FAA applied these 

factors when developing its list of potential ARRA grant candidates, or in 

determining whether the projects selected would provide maximum economic 

impact. Moreover, FAA’s ability to select projects that would optimize economic 

activity was limited by Agency policies that went beyond congressional and 

Presidential requirements (e.g., widespread geographic distribution, accelerated 

timelines, and caps on award amounts). While these policies helped FAA 

distribute ARRA funds quickly to every state, they also resulted in the selection of 

some questionable projects, including five small airfields in Alaska. In total, these 

five airfields received as much funding as the entire State of Texas ($59 million) 

and more than the States of Florida ($55 million), Illinois ($46 million), and New 

York ($29 million). Only California received more ARRA funding at $85 million.

While FAA’s ARRA grant award process is finished, both the Agency’s successes 

and areas for improvement should serve as lessons learned for FAA as well as the 

Department. We are making recommendations to further improve FAA’s public 

transparency and oversight of existing ARRA grant selections. 

BACKGROUND

The Congress, the President, OMB, and FAA all imposed requirements for 

implementing ARRA. The ARRA legislation established tight timeframes for 

distributing and expending funds and emphasized preference for projects that 

could be completed in 2 years. ARRA also required that FAA make grants for 

 10 For ARRA purposes, higher priority projects are those scoring equal to or higher than 62 in FAA’s National Priority 

Rating (NPR) system.
4

discretionary projects using its established AIP process and ensure that grants did 

not supplant planned expenditures from other sources. Subsequently, the 

President directed agencies to develop transparent, merit-based selection processes 

that would fund projects with a demonstrated or potential ability to achieve 

economic stimulus. OMB guidance required that agencies increase grantee 

oversight beyond normal levels.11 Finally, FAA issued guidance to its regional 

officials that placed additional restrictions on the Agency’s selection process. See 

Exhibit B for a listing of key ARRA requirements and associated criteria.

In following its established AIP process, FAA utilizes a 3- to 5-year rolling plan of 

potential projects developed in cooperation with airport sponsors, planning 

agencies, and the States. Known as the ACIP, this plan prioritizes projects for 

funding based on such factors as safety, security, capacity, and environmental 

mitigation.12 Each year, FAA develops a discretionary candidate list of projects 

from the ACIP based first on quantitative and then qualitative factors. 

Quantitatively, FAA uses its National Priority Ratings (NPR) to assign projects a 

rating score from 0 to 100—the higher the rating, the higher the priority.13 After 

assigning NPR scores, FAA applies qualitative factors to further differentiate

between candidate projects. Qualitative factors include, but are not limited to, a 

sponsor’s past performance in meeting grant requirements and whether the airport 

has completed a required environmental review.

FAA’S SELECTION PROCESS FULFILLED MOST ARRA 

REQUIREMENTS BUT WAS NOT FULLY TRANSPARENT OR 

DESIGNED TO OPTIMIZE ECONOMIC ACTIVITY

FAA’s project selection process effectively fulfilled most ARRA requirements. 

These include meeting tight timeframes for distributing and expending funds, and 

giving preference to projects that could be completed within 2 years. FAA also 

increased oversight of ARRA projects as directed by OMB but will need to take 

additional actions to comply with updated OMB guidance. In addition, FAA 

pointed out that using ARRA funds on airport projects provided both 

programmatic results and long-term benefits. While we agree, FAA should have 

used a more transparent project selection process and given more consideration to 

projects’ potential economic impact before awarding grants to fully meet 

Presidential direction. Meeting these last two objectives would have provided 

greater assurance that ARRA funds went to the best candidates.

 11 OMB Memo M-09-10, “Guidance on the American Recovery and Reinvestment Act,” February 18, 2009, and OMB 

Memo M-10-14, “Updated Guidance on the American Recovery and Reinvestment Act,” March 22, 2010. 12 In our report, “Prioritization of Airport Improvement Program Funding,” we found that FAA follows its ACIP 

process to ensure the Agency’s highest aviation priorities are funded (Report No. AV-2008-002, October 26, 2007). 13 The NPR is based on a mathematical formula that takes into account the type of facility (e.g., runway, taxiway, or 

terminal), the type of development (e.g., new construction, extension, or rehabilitation), and airport size.
5

FAA Met a Number of Key ARRA Requirements in Awarding and 

Overseeing $1.1 Billion in Airport Grants 

FAA fulfilled key ARRA requirements in distributing $1.1 billion in airport grants 

to 360 projects nationwide. FAA used its normal AIP discretionary grant process 

as required by ARRA. Having an established process enabled FAA to meet the 

ARRA deadline for awarding half of the $1.1 billion within the first 120 days and 

the remainder within 1 year of the law’s effective date.14 FAA also ensured that 

most projects selected could be completed within the ARRA timeframe of 2 years 

and grants would not supplant planned expenditures from other sources. In 

addition to meeting these ARRA requirements, FAA increased its oversight of 

ARRA-funded projects, but will need to take further steps to comply with OMB 

guidance issued in March 2010. This guidance requires Federal agencies to 

review and act on single audit findings pertaining to ARRA grant recipients. 

FAA Selected Projects That Could Be Completed Within ARRA 

Timeframes and Did Not Supplant Other Funds

We reviewed 114 ARRA-funded projects and found that 111 were scheduled to be 

completed by the ARRA goal of February 2011.15 To provide assurance that

selected projects would meet this goal, FAA gave preference to funding pavement 

rehabilitation projects (e.g., runways, taxiways, and aprons) that could be 

completed in one construction season. In fact, FAA invested more than 80 percent 

of ARRA funds for these types of projects (see figure 1).

 14 As of August 2010, ARRA recipients have expended approximately 77 percent of the $1.1 billion. 15 The 114 ARRA grants were issued by the 6 FAA Airport District Offices that comprised our statistical sample.

Figure 1. ARRA Funding by Project

81%

8%

4% 3% 4%

Pavement

Terminal

Fire, Equip, & Bldgs

New airport

Other

Source: OIG analysis
6

Of the three remaining projects from our sample, one is scheduled to be completed 

shortly after the ARRA target date. The other two, described below, will not be 

completed until much later in 2011:

• FAA awarded a $13.9 million ARRA grant for new airport construction in 

Akiachak, Alaska. The ARRA grant will fund only the first phase, which is 

site preparation. The new airport is actually not scheduled to be completed 

until October 2011 and will require a separate non-ARRA (AIP) grant 

estimated at $12 million. 

• FAA will not meet the completion goal for a $14 million project at AtlantaHartsfield for a portion of a new apron. This project was delayed due to 

scheduling and staging issues and will not be completed until September 2011. 

While ARRA does require that FAA give priority to those projects that can be 

completed by February 2011, it does not prohibit funding projects that exceed 

this timeframe.

FAA met another statutory requirement by ensuring ARRA grant awards 

supplemented, not supplanted, other planned expenditures. Specifically, FAA 

required airports to commit all available AIP funds to other fiscal year (FY) 2009 

projects before qualifying for ARRA grants. Nonetheless, we identified 

12 airports that carried over FY 2009 AIP funds to FY 2010.

• In 10 of the cases,16 the airports requested and FAA approved that the funds be 

carried over prior to passage of the ARRA Act. 

• The remaining two airports were allowed to carry over funds post-ARRA 

because of extenuating circumstances (i.e., a low bid received at the end of the 

fiscal year at one airport and unforeseen project delays at Chicago O’Hare, 

resulted in a more significant FY 2009 carryover). 

Based on our review of all 12 cases, we determined that supplanting did not occur 

since no ARRA funds replaced FY 2009 planned funding.

FAA Increased Its Oversight of ARRA Grantees, but Continued Effort Is

Needed To Meet Updated OMB Guidance

To ensure adequate oversight of ARRA funds, OMB issued two guidance 

memoranda. The first, issued in April 2009, required Executive Branch agencies 

to increase oversight for ARRA grantees to meet transparency and accountability 

requirements. The second, issued in March 2010, directed agencies to use single 

 16 Moreover, in 9 of the 10 cases, the amounts were considered insufficient to fund any other 2009 projects. The only 

exception was Los Angeles, which elected to carry over about $4.6 million because the project for which these funds 

were committed was delayed. 
7

audit results as a tool to identify ARRA grantees at higher risk and resolve audit 

findings. In response to the first memoranda, FAA took the following actions: 

• Acquiring additional program and engineering expertise. FAA added eight 

ARRA-related positions to provide needed program and engineering expertise 

at selected field locations. FAA determined that these locations had 

insufficient staffing to handle the increased ARRA workload.

• Conducting site visits of ARRA recipients. According to FAA, it conducted 

site visits at the 97 airports in our sample (see exhibit E). We note, however, 

that these site visits focus primarily on engineering and technical aspects, such 

as construction status of projects, and not on the sponsors’ compliance with 

financial requirements (e.g., allowable costs, cash management, and eligibility 

of expenditures). 

• Hiring an accounting firm to sample ARRA payments. To increase its 

oversight regarding sponsors’ compliance with financial requirements, FAA 

hired an accounting firm, Deloitte/Touche, to sample payment requests from 

24 of the more than 300 airports that received ARRA funds. In the long term, 

FAA intends to use the results of the Deloitte/Touche sample payment audit to 

improve its risk-based approach to grantee oversight.

Although FAA has taken steps to improve it oversight of ARRA grant recipients, 

the Agency will need to continue efforts to meet OMB’s March 2010 requirements

to make better use of single audit reports. In its guidance, OMB stated that single 

audit reports are important tools for monitoring accountability in Recovery Act 

programs. While FAA acts on single audit reports, its reviews are limited to 

resolving findings that our office brings to its attention. For ARRA recipients, 

OMB has increased agency responsibilities to include the following:

• Reviewing single audit reports for all ARRA recipients for FY 2009 and later,

• Analyzing findings across grantees and programs to identify high-risk areas, 

• Resolving all audit findings within 6 months and disallowing extensions,

17 and

• Considering additional monitoring and inspections of ARRA recipients.

Our prior work supports OMB’s conclusion about the importance of single audits 

as a tool for overseeing a recipient’s grant management. Our 2009 ARRA 

advisory recommended that FAA increase oversight of ARRA recipients with 

histories of single audit findings. In particular, we noted that Owensboro, 

 17 According to FAA, the Agency has more stringent requirements, calling for resolution within 30 days and final

action in 6 months.
8

Kentucky, and Guam have long histories of single audit grant compliance issues. 

In response, FAA raised its risk assignment level for Owensboro. FAA also 

increased its oversight of Guam after the airport’s 2009 single audit report 

questioned Davis-Bacon Act compliance18 and costs of $1.2 million. While these 

actions are responsive to our advisory, we note that FAA awarded ARRA grants to 

20 other high-risk sponsors, which received $126 million of the $1.1 billion in 

ARRA funds (or 11 percent). Given the sizeable investments and risks associated 

with these 20 sponsors (as well as other grant recipients), it is important that FAA 

use single audits to focus its oversight and ensure proper use of ARRA funds.

FAA’s Grant Selection Process Was Not Fully Transparent and Did 

Not Consider Economic Optimization

While FAA fulfilled five key ARRA requirements, it did not modify its AIP 

selection process to fully meet requirements related to transparency and 

optimizing economic activity. FAA was not fully transparent when it did not 

disclose justifications for choosing lower-scoring projects or actual grant amounts

on its public website. In addition, FAA could have done more to ensure its grant 

selections optimized economic activity by considering additional rating factors 

when selecting grantees. Instead, FAA overemphasized geographic distribution 

and adopted an accelerated timeline. By doing so, FAA limited consideration of 

other potential candidates that could have provided greater economic stimulus.

FAA’s Selection Process Was Not Fully Transparent

FAA should have been more 

transparent about the results of 

its selection process. According 

to the Agency’s planning 

process guidance, “FAA must 

distribute funds to the regions in 

a way that ensures that, 

nationally, highest priority 

projects are funded.” Moreover, 

FAA emphasized in public 

testimony its goal to select the 

highest priority projects, defined 

by FAA as an NPR score of at 

least 62.

19 Yet, FAA awarded over 80 grants to lower-scoring projects. See figure 

2 for a breakout of these projects by construction category and associated NPR 

 18 As ARRA requires, the Davis-Bacon Act (Pub. L. No. 74-403 [1931]) directs grant recipients to pay laborers wages 

at rates not less than those prevailing on similar local projects as determined by the Secretary of Labor. 19 Hearing before the House Committee on Transportation and Infrastructure, June 25, 2009, “Implementation of the 

American Recovery and Reinvestment Act of 2009” (statement of J. Randolph Babbitt, Administrator, FAA).

Figure 2. Lower Scoring ARRA Projects

10

3

14

24

29

$0 $50 $100

Other (Score 42-58)

New Airport Score 40)

Taxiway (Score 42-61)

Terminal (Score 31-47)

Apron (Score 43-61)

Dollars in Millions

Source: OIG analysis
9

scores. Overall, lower-scoring projects comprised $289 million or almost

26 percent of total ARRA dollars. Until FAA is more transparent about its reasons 

for selecting each low scoring project—as required by the President’s direction—

concerns will remain that it did not maximize efforts to ensure that only the 

highest priority projects received ARRA funding. 

As table 2 illustrates, we also found wide disparities in regions’ decisions to award 

grants to lower-scoring projects. Nearly half of ARRA funding in Alaska went to 

lower-scoring projects. Also, FAA’s Great Lakes, Southern, and Central regions 

distributed over a third of their ARRA funds to lower-scoring projects. In 

comparison, only 6 percent of Western Pacific region’s ARRA funds went to such 

projects.

Table 2. Regional ARRA Funding for Lower-Scoring Projects

FAA Region Total Obligations Low NPR 

Obligations

% Low 

NPR

Alaska $81,804,301 $40,003,747 49%

Great Lakes $187,869,740 $76,786,816 41%

Southern $179,109,822 $67,106,217 37%

Central $62,318,990 $22,540,304 36%

NW Mountain $135,743,900 $40,416,963 30%

Eastern $117,783,118 $16,998,351 14%

New England $52,820,785 $6,401,021 12%

South West $118,401,787 $10,000,000 8%

Western Pacific $157,698,523 $8,711,669 6%

 Grand Total $1,093,550,966 $288,965,088 26%

Source: OIG analysis

Further, FAA was not transparent in the process used to select the 24 non-hub 

terminal projects that were included in the 80 low-scorers. Terminal projects are 

not normally funded due to their low NPR scores (i.e., less than 40). Yet, FAA

did not provide justifications for selecting the 24 terminal projects for ARRA 

funding even though it required regional officials to document their justification of 

all other low scoring projects. Instead, for ARRA purposes, FAA classified 

terminal projects as “special focus area initiatives” with an NPR equivalent rating 

of 62─noting that many of the older facilities no longer meet current building 

standards. It also exempted regions and Airport District Offices from providing 

justifications to support these selections. 
10

Finally, FAA was not fully transparent in 

reporting the grant amounts it awarded. 

Rather than reporting actual amounts, the 

Agency only reported estimated amounts 

on its public website, which is in keeping 

with FAA’s normal AIP process.20 FAA 

should have modified this process to meet 

the President’s direction to be fully 

transparent in reporting ARRA grant 

award amounts. Our analysis (see table 3) 

found significant differences between 

estimated and approved ARRA grant 

amounts. For example, 243 of the 

319 grants were not updated to reflect the 

actual grant amounts. In addition, for 25 

of the 319 listed on FAA’s website, the 

estimates differed from the actual amounts 

by more than 50 percent. Publishing the 

actual award amount provides a clearer picture as to how much money each 

project received. Soon after bringing this issue to FAA’s attention in December 

2009, the Agency revised its ARRA website to provide actual award amounts.

FAA Did Not Enhance Its Selection Process To Optimize Economic Activity

FAA did not enhance its normal AIP process to consider projects on the basis of 

their potential to optimize economic activity, as required by Presidential direction. 

According to FAA, no additional steps were needed because long-term economic 

benefits are inherent in its AIP selection and planning process. In particular, FAA 

maintains that its planning process considers economic factors, such as airport 

growth and long-term usage. In addition to these factors, FAA also funds state 

aviation planning efforts, including airport economic impact studies. 

Nevertheless, the Agency did not consider economic factors or the results of 

economic studies in prioritizing and selecting projects for ARRA funding. Such 

economic information should have been considered given the Presidential 

direction that agencies design selection processes and affirmatively determine in 

advance that each project could optimize economic activity.

Consequently, FAA selected some projects that do not appear—without 

supporting analysis—to optimize economic activity. For example, we identified

14 airports receiving ARRA funding that serve communities with limited demand 

 20 ARRA requires that agencies publicly report on their websites a range of information relating to recovery funds, 

such as award recipients, actual dollar amounts obligated, and project descriptions.

Table 3. Awarded ARRA Grants Under

or Over Approved Estimate

(as of November 5, 2009)

Percent 

Above/Below 

Estimate

Number 

of 

Projects

Under Estimate 1-24% 99

25-50% 50

51%+ 17

Sub-Total: 166

On Estimate Sub-Total: 76

Over Estimate 1-24% 52

25%-50% 10

51%+ 8

Sub-Total: 70

Unclear Sub-Total 7

Grand Total 319

Source: OIG analysis
11

for flight services (see table 4). Overall, these 14 airports received a total of about 

$72 million in ARRA grants. 

Table 4. ARRA Recipients Serving Communities

with Low Daily Operations

Grant Recipient City

Population21

Daily

Operations ARRA Amount

Akiachak, AK 659 8 $13,953,325 

Allakaket, AK 100 6 $10,000,000

Huslia, AK 265 N/A $7,000,000

Fort Yukon, AK 585 23 $13,659,708

Ouzinkie, AK 170 1 $14,707,949

Taylor, AZ 4,139 10 $1,640,523

Cook County (Adele), GA 5,396 22 $656,000

Bacon County (Alma), GA 3,490 19 $734,000

Telfair-Wheeler (McRae), GA 4,378 11 $890,000

Arco-Butte County, ID 977 23 $931,878

Driggs-Reed Memorial, ID 1,362 21 $3,750,128

Shoshone County (Kellogg), ID 2,228 21 $801,917

Grant County (John Day), OR 1,512 26 $366,419

Wilbur, WA (received two grants) 878 25 $3,083,293

Total $72,211,140

Source: OIG analysis

Moreover, of these 14 airports, FAA awarded $59 million to 5 village airfields in 

Alaska serving a total population of less than 1,800 residents. As figure 3 shows, 

these five airfields received as much as all ARRA airport recipients in the State of

Texas and more than any other state except California.

Figure 3. Top 10 States Receiving ARRA Grants

Source: OIG analysis

 21 Although we provide city population figures, all the airports outside of Alaska are readily accessible to surrounding 

communities.
12

Considering other factors during its selection process—such as surrounding 

population and flight operation statistics as well as airport growth and long-term 

usage—would have allowed FAA to evaluate the relative economic merits of 

candidate airports. Similarly, FAA could have considered using Agency-funded 

airport economic impact studies. For example, studies of airports in Galveston, 

Texas,

22 and Klamath Falls, Oregon,23 show that these airports produce sizeable 

annual economic impacts (both direct and indirect) of $113 million and 

$85.9 million a year. In comparison, Wilbur, Washington,24 and La Grande, 

Oregon,25 respectively, had impacts of only $1.1 million and $3.3 million. At the 

other end of the economic scale, Dallas/Fort Worth, Texas, has an annual 

economic impact of $16.6 billion.26 While all of these airports received ARRA 

grants, it is unclear without supporting analyses, whether and to what extent 

FAA’s ARRA-funded projects optimized economic activity.

FAA’s Selection Process Limited the Candidate Pool by Overemphasizing 

Geography and Adopting an Accelerated Timeline

FAA’s ability to optimize economic activity was further limited because FAA 

applied restrictions not required by ARRA or Presidential direction. These 

restrictions include (1) allocating ARRA funds geographically according to their 

historical AIP funding distribution, (2) setting an internal goal to have all funds 

obligated by the end of FY 2009, and (3) establishing caps of $15 million per 

project/$20 million per sponsor (see exhibit B for a listing of FAA’s ARRArelated criteria). Although these restrictions served several FAA purposes (e.g., 

encouraged widespread and accelerated distribution of funds), they worked against 

optimizing economic activity.

According to FAA, it allocated ARRA funds based on historical AIP discretionary 

funding to each of its regions and the states in accordance with its normal 

process.27 To distribute ARRA funds widely, FAA limited the amount of funds 

that any one airport or sponsor could receive. However, our analysis of FAA’s 

distribution shows that its focus on regions and states resulted in some smaller 

airports receiving far greater support from ARRA than they historically received 

in the past. Using FAA grant history data, we identified 10 small airports in 

9 states that received more in a single ARRA grant than each received in AIP 

funding from 1999 through 2009 combined. In total, ARRA provided almost five 

 22 “The Economic Impact of Scholes International Airport at Galveston,” Wilbur Smith Associates, Texas Department 

of Transportation, 2005. 23 “Economic Impact of Oregon Airports,” Oregon Aviation Plan. State of Oregon Department of Aviation, 2007. 24 “Economic Impact of Washington Airports,” Bucher Willis and Ratliff Corporation, Washington Department of 

Transportation, 2001. 25 Economic Impact of Oregon Airports,” Oregon Aviation Plan. State of Oregon Department of Aviation, 2007. 26 “The Economic Impact of Dallas/Fort Worth Airport,” Wilbur Smith Associates, Texas Department of 

Transportation, 2005. 27 FAA’s nine regional offices are Alaska, Central, Eastern, Great Lakes, New England, Northwest Mountain, 

Southern, Southwestern, and Western-Pacific.
13

times as much funding (i.e., $53 million vs. $11 million) for these 10 airports than 

they received in regular AIP funding in the last 11 years (see table 5). Thus, 

FAA’s overemphasis on allocating funds by region and state limited the 

consideration of other potential projects that could have provided greater 

economic activity.

Table 5. Comparison of Prior AIP Funding to ARRA Grant Amounts

Grant Recipient Total AIP

1999 through 2009 Total ARRA

Fort Yukon, AK $1,890,542 $13,659,708

Allakaket, AK $700,000 $10,000,000

Compton/Woodley, CA $2,198,315 $8,000,000

Mitchell Municipal, SD $2,451,045 $6,700,000

Ticonderoga, NY $699,429 $3,215,206

Wilbur, WA $752,775 $3,083,293

Dexter Regional, ME $886,395 $2,785,000

G. V. Montgomery, MS $854,372 $2,243,919

Quakertown, PA $0 $1,834,420

Vaiden Field, AL $456,408 $1,261,298

 Total $10,889,281 $52,782,844

Source: OIG analysis

FAA also set an objective to obligate all grant funds by the end of FY 2009,28

5 months ahead of the February 2010 ARRA deadline. FAA’s accelerated 

timeline limited airport sponsors’ ability to meet some of the Agency’s eligibility 

requirements for receiving ARRA grants (e.g., design substantially complete and 

would be bid prior to grant award). For example, Merrill Field in Alaska had a 

project that did not receive an ARRA runway grant because when FAA made its 

Alaska selections, the airport sponsor needed a few more months before the 

runway design would be complete.29 Merrill Field is the largest general aviation 

airport in Alaska with almost 1,000 aircraft and over 40 businesses based at the 

airport. In addition, the airport receives an average of more than 500 flights and 

1 medical flight per day (Anchorage Regional Hospital is physically connected to 

the airport via taxiway). Consequently, Merrill Field is an economic and medical 

lifeline to many Alaskan villages. Because of FAA’s restrictions, projects such as 

these, even if they had greater economic potential, did not compete effectively in 

FAA’s selection process.

 28 FAA Stakeholder Guidance, June 2009. 29 Merrill Field was awarded ARRA grants of $1.87 million to rehabilitate an apron and $3.68 million to rehabilitate a 

taxiway for a total of just $5.5 million, while smaller village airfields received much more ARRA funding.
14

CONCLUSION

ARRA has proven a critical component in helping many of the Nation’s airports 

maintain or expand their existing infrastructure—whether in the form of repaving 

worn-out taxiways and aprons, building new terminal facilities, or expanding 

existing runways. FAA’s focus on complying with ARRA’s direction to use its 

normal discretionary process allowed the Agency to meet the ARRA requirement 

to distribute $1.1 billion within the Act’s timeframes. Yet, FAA should have also 

focused on complying with Presidential direction to ensure greater transparency 

and optimize economic activity. Additionally, FAA should have determined the 

impact of the self-imposed criteria, beyond what ARRA required, that reduced the 

pool of potential ARRA projects, and in turn, restricted the Agency’s ability to 

optimize economic activity. Although FAA has completed its selection of ARRA 

grant recipients, the Agency still needs to ensure that it adheres to transparency 

requirements and OMB guidance for increased oversight. 

RECOMMENDATIONS

To enhance compliance with ARRA presidential direction and OMB guidance, we 

recommend that the Agency:

1. Increase transparency by posting on its Recovery Act website specific 

justifications for lower scoring projects (including special emphasis). 

Justifications should include a description of the actual or anticipated 

economic activity derived from each project.

2. Increase transparency of its normal AIP process by requiring public reporting 

of actual as well as estimated grant amounts.

3. Comply with OMB guidance by (a) ensuring each Airport District Office

applies sufficient levels of oversight to ARRA grantees, particularly those 

which FAA has identified as being at higher risk, and (b) using FY 2009 

single audit reports to identify high risk areas, consider additional monitoring 

or inspections, and expedite resolution of report findings for all ARRA 

grantees.

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE

We discussed the results of our review with officials from FAA’s Office of 

Airports on November 4, 2010, and provided FAA with our draft report on 

December 17, 2011. We received the Agency’s formal response on 

January 31, 2011, which is included in its entirety as the appendix to this report. 

FAA concurred with all three of our recommendations and has either taken or 
15

planned sufficient actions to resolve each recommendation. In its response, 

however, FAA maintains that its project selections were fully compliant with 

statutory requirements and consistent with Executive Branch guidance and that our 

report should not have applied the collective term “requirements” to both ARRA 

statutory elements and Executive Branch guidance. According to FAA, ARRA 

statutory elements are clearly requirements, while Executive Branch ARRA 

guidance reflected goals to be implemented “to the extent permitted by law and 

practicable.” Finally, in its response, FAA stated that in weighing these goals, we 

overemphasized the goal of economic optimization.

We agree that FAA needed to comply with all elements of the ARRA statute and 

acknowledge that it did so. However, FAA also needed to comply with 

Presidential direction and OMB guidance. Our report clearly identifies which 

requirements are statutory and which are direction or guidance, with all given 

equal consideration. As such, we do not agree that we overemphasized the 

importance of “optimizing economic activity” in the context of ARRA, an Act 

which was expressly directed at economic stimulus. 

ACTIONS REQUIRED 

We consider recommendations 1 and 2 as resolved but open pending 

implementation of FAA’s planned actions. In accordance with Department of 

Transportation 8000.1C, we request that FAA inform us when it has completed its 

remaining planned actions. FAA has already taken sufficient actions to address 

the intent of our third recommendation. Accordingly, we consider 

recommendation 3 closed. 

We appreciate the courtesies and cooperation of FAA and airport representatives 

during this audit. If you have any questions concerning this report, please contact 

me at (202) 366-0500 or Darren Murphy, Program Director, at (206) 220-6503.

#

cc: Acting Associate Administrator for Airports

Anthony Williams, AAE-001

Martin Gertel, M-100
16

Exhibit A. Scope and Methodology

EXHIBIT A. SCOPE AND METHODOLOGY

We conducted this performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform 

the audit to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objective. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions. 

We conducted the audit between September 2009 and December 2010 and 

included such tests of procedures and records as we considered necessary, 

including those providing reasonable assurance of detecting abuse and illegal acts.

To assess the extent to which FAA complied with ARRA requirements and 

Agency policies, procedures, and criteria for selecting AIP projects for Recovery 

Act funding, we interviewed officials from FAA’s Headquarters and regional 

offices as well as 6 randomly selected Airport District Offices (of 24 total). For 

the Airport District Offices in our sample, we examined all 114 projects that 

received ARRA funding, which comprised nearly 32 percent of the total number 

of FAA-funded ARRA projects.30 For each of the 114 projects, we reviewed the 

Airport District Office files to verify that projects met ARRA requirements. We 

also reviewed regional ARRA candidate lists, AIP discretionary grant lists, and 

carryover reports to ensure that ARRA funds did not supplant planned funding 

from other sources. Our scope, however, did not include assessing the engineering 

or technical value of each project. 

To assess FAA’s efforts to fulfill OMB guidance, including increased oversight 

and consideration of single audit findings, we discussed project selection and grant 

oversight responsibilities with Airport District Office and regional officials. We 

also examined single audit report histories for ARRA grant recipients in our 

sample. Finally, we visited 24 airports with ARRA projects in our sample during 

the course of our review. See exhibits C and D for a complete list of facilities 

visited or contacted during the audit.

To evaluate whether projects that may have had a greater potential to optimize 

economic activity went unfunded, we obtained economic impact data for airports 

selected for ARRA funding. To identify ARRA grantees that may not have 

optimized economic activity, we compared flight operations and population 

statistics for ARRA grantees in our sample.

 30 Subsequent to our audit work, FAA selected several additional projects for ARRA grants. Because these grants do 

not materially affect our findings, conclusions, or recommendations, we did not update our analysis, tables, and 

figures with the additional grants. 
17

Exhibit B. Key ARRA Requirements and Criteria

EXHIBIT B. KEY ARRA REQUIREMENTS AND CRITERIA

ARRA Act

February 16, 2009

Presidential Memorandum

“Ensuring Responsible 

Spending of ARRA Funds” 

March 4, 2009

FAA

Stakeholder Guidance

June 200931

Distribute funds as discretionary grants 

to airports.

Develop transparent merit-based 

selection criteria.

May be tailored to the particular 

funding activity.

Recovery Act funds should be 

distributed on the merits of 

proposed projects.

Used its normal AIP 

discretionary program to fund 

ARRA projects.

Allocates ARRA funds based 

on historical distributions to 

regions. 

Limits the maximum amount 

of any ARRA funding to a 

single project to $15 million, 

and to a single sponsor to 

$20 million to achieve 

equitable distribution across 

regions, states, and service 

levels.

Award grants totaling not less than 

50 percent of the funds within 120 

days and the remaining funds not later 

than 1 year after enactment of this Act.

Directs regional officials to 

give priority consideration to 

projects that can be awarded 

within 120 days (June 17, 

2009) and all funds by the end 

of FY 2009.

Give priority to those projects that can 

demonstrate ability to be completed 

within 2 years.

Give preference to projects that 

are “ready to go (i.e., all AIP 

prerequisites are complete); 

meet grant issuance 

requirements within 120 days 

or prior to the close of 

FY 2009; and can be 

completed within 2 years 

(February 11, 2011). 

ARRA funds shall serve to 

supplement, not supplant planned 

expenditures from airport-generated 

revenues or other State or local 

sources.

Projects that were previously 

identified for FY 2009 

entitlement funding or 

discretionary funding were 

deemed ineligible for ARRA 

funding. 

 31 FAA considers stakeholders to be both internal and external to the Agency. For instance, FAA regional offices and 

airport sponsors received copies of this stakeholder guidance.
18

Exhibit B. Key ARRA Requirements and Criteria

ARRA Act

February 16, 2009

Presidential Memorandum

“Ensuring Responsible 

Spending of ARRA Funds” 

March 4, 2009

FAA

Stakeholder Guidance

June 2009

Sponsors were required to 

commit all currently available 

entitlements to FY 2009 

normal AIP projects.

To preserve and create jobs and 

promote economic recovery. 

To invest in transportation, 

environmental protection, and other 

infrastructure that will provide longterm economic benefits.

Commence expenditures and activities 

as quickly as possible consistent with 

prudent management.

Ensure ARRA funds are 

expended for projects that further 

job creation and economic 

recovery and are not used for 

imprudent projects. 

Design merit-based selection 

criteria to support particular 

projects with ability to:

(i) deliver programmatic results; 

(ii) achieve economic stimulus 

by optimizing economic activity 

and the number of jobs created 

or saved in relation to the 

Federal dollars obligated; 

(iii) provide long-term public 

benefits by... investing in 

transportation infrastructure that 

will provide long-term economic 

benefits; and

(iv) satisfy the Recovery Act’s 

transparency and accountability 

objectives.

Issue grants for high priority 

projects that can proceed to 

construction quickly to 

preserve and create jobs and 

promote economic recovery.

Undertake unprecedented efforts 

to ensure the responsible 

distribution of funds and provide 

public transparency and 

accountability of expenditures.

Requires ARRA-funded 

project work to result in a final 

useable unit (no partial 

projects).

ARRA funds will be tracked 

separately and cannot be mixed 

with AIP funds. 
19

Exhibit C. Facilities Visited or Contacted

EXHIBIT C. FACILITIES VISITED OR CONTACTED

FAA Headquarters, Washington, DC

• Office of Airports, Program and Planning, Washington, D.C.

FAA Regional Office

• Alaska Regional Office, Anchorage, AK

• Great Lakes Regional Office, Des Plaines, IL

• Northwest Mountain Region, Renton, WA

• Southern Region, College Park, GA

• Western Pacific Region, Hawthorne, CA

FAA Airport District Offices

• Alaska Airport District Office, Anchorage, AK

• Seattle Airport District Office, Renton, WA

• Atlanta Airport District Office, College Park, GA

• Chicago Airport District Office, Des Plaines, IL

• Los Angeles Airport District Office, Los Angeles, CA

• Texas Airport District Office, Ft. Worth, TX

State Aviation Offices

• State of Alaska Department of Transportation, Anchorage, AK

• State of California Department of Transportation, Sacramento, CA 

• State of Illinois Department of Transportation, Springfield, IL

• State of Georgia Department of Transportation, Atlanta, GA

• State of Texas Department of Transportation, Austin, TX 

• State of Washington Aviation Department, Arlington, WA
20

Exhibit D. Airports Visited

EXHIBIT D. AIRPORTS VISITED

• Kenai Municipal Airport, AK

• Merrill Field, AK

• Cook County Airport, GA

• McKinnon-St. Simons Airport, GA

• Bacon County Airport, GA

• Chicago O’Hare International Airport, IL

• Chicago/Rockford International Airport, IL

• Whiteside County Airport, IL

• Greater Peoria Regional Airport, IL

• Gary/Chicago International Airport, IN

• Elkhart Municipal Airport, IN

• Dixon Municipal Airport, IL

• Los Angeles International Airport, CA

• Bob Hope/Burbank Airport, CA

• Compton/Woodley Airport, CA

• Gillespie Field, CA

• San Diego International Airport, CA

• Sierra Vista Municipal Airport. AZ

• Tucson International Airport, AZ

• Dallas/Ft. Worth International Airport, TX

• Monroe Regional Airport, LA

• Winston Field Airport, TX

• Sulphur Springs Municipal Airport, TX

• Paine Field, WA
21

Exhibit E. Airport Recipients in Our Sample

EXHIBIT E. AIRPORT RECIPIENTS IN OUR SAMPLE32

No State Airport Recipient ARRA 

Obligation

Airport 

Category33

Average

Daily 

Operations

1 AK Ouzinkie $14,707,949 GA 1

2 AK Akiachak $13,953,325 GA 8

3 AK Fort Yukon $13,659,708 CS 23

4 AK Allakaket $10,000,000 CS 6

5 AK King Salmon $8,454,220 Non-Hub 140

6 AK Huslia $7,000,000 CS -

7 AK Merrill Field (2 Grants) $5,546,000 CS 524

8 AK Fairbanks International $3,500,000 Small 365

9 AK Kenai Municipal $2,888,253 Non-Hub 205

10 AK Ted Stevens Anchorage International $2,094,846 Medium 793

11 AZ Phoenix Sky Harbor International $10,356,135 Large 1,376

12 AZ Kingman $5,103,575 GA 143

13 AZ Sierra Vista Municipal-Libby AAF $4,474,546 GA 365

14 AZ Tucson International $1,848,700 Medium 534

15 AZ Avi Suquilla $1,800,000 GA 28

16 AZ Taylor $1,640,523 GA 10

17 CA Los Angeles International $10,832,000 Large 1,115

18 CA Compton/Woodley $8,000,000 Reliever 181

19 CA San Diego International $4,875,537 Large 609

20 CA Bob Hope $3,985,000 Medium 301

21 CA Meadows Field $2,725,219 Non-Hub 344

22 CA Gillespie Field $1,612,774 Reliever 669

23 CA Camarillo $986,237 Reliever 430

24 GA Hartsfield-Jackson Atlanta International $13,977,695 Large 2,959

25 GA Malcolm McKinnon $5,846,000 GA 123

26 GA Peachtree City-Falcon Field $2,064,198 GA 205

27 GA Savannah/Hilton Head International $1,620,034 Small 267

28 GA Telfair-Wheeler $634,904 GA 11

29 GA Bacon County $734,000 GA 205

30 GA Cook County $686,898 GA 22

31 ID Driggs-Reed Memorial $3,750,128 GA 21

32 ID Pocatello Regional $1,850,000 Non-Hub 95

33 ID Arco-Butte County $931,878 GA 23

34 ID McCall Municipal $897,000 GA 119

35 ID Shoshone County Airport $801,917 GA 21

36 ID Buhl Municipal $615,068 GA 41

37 IL Chicago O’Hare International (2 Grants) $17,294,387 Large 2,317

 32 ARRA Grant Obligation Information obtained from FAA’s Obligation and Disbursement Data as of June 11, 2009. 33 FAA classifies “primary” commercial service airports on the basis of their percentage of annual passenger boardings 

nationwide (e.g., large--1 percent or more; medium--between 0.25 and 1 percent; small--between .05 and 

.25 percent; and nonhub--less than 0.05 percent, but more than 10,000 passengers). FAA categorizes all remaining 

airports as “nonprimary” (e.g., airports that receive between 2,500 and 10,000 passenger are classified as 

commercial service (CS); airports handling excess air traffic from primary airports are classified as relievers; and 

all remaining airports are classified as general aviation (GA). 
22

Exhibit E. Airport Recipients in Our Sample

No State Airport Recipient ARRA 

Obligation

Airport 

Category

Average

Daily 

Operations

38 IL Greater Peoria Regional $6,363,000 Non-Hub 146

39 IL St Louis Downtown $4,703,084 Reliever 365

40 IL Chicago/Rockford International (2 Grants) $4,672,000 Non-Hub 212

41 IL Quad City International $4,057,500 Small 135

42 IL Abraham Lincoln Capital $2,468,534 Non-Hub 93

43 IL Greater Kankakee $1,509,000 GA 137

44 IL Waukegan Regional $1,229,200 Reliever 149

45 IL Dixon Municipal-Charles R. Walgreen Field $926,360 GA 110

46 IL Decatur $791,853 CS 122

47 IL Whiteside County-Joseph H. Bittorf Field $467,100 GA 90

48 IL Litchfield Municipal $704,985 GA 41

49 IL Jacksonville Municipal $306,350 GA 33

50 IL Fairfield Municipal $231,917 GA 21

51 IN Elkhart Municipal $3,939,317 GA 59

52 IN Mount Comfort $3,717,534 Reliever 145

53 IN Indianapolis Executive $3,431,098 Reliever 124

54 IN Terre Haute International $2,722,695 GA 112

55 IN Columbus Municipal $1,320,740 GA 99

56 IN Fort Wayne International $1,221,735 Non-Hub 179

57 IN Indianapolis International $1,174,757 Medium 540

58 IN Smith Field $1,078,670 GA 55

59 IN Gary/Chicago International $845,698 Non-Hub 99

60 IN Purdue University $665,880 GA 315

61 IN Delaware County-Johnson Field $382,707 GA 62

62 NC Asheville Regional $7,629,527 Non-Hub 195

63 NC Pitt-Greenville $7,616,822 Non-Hub 132

64 NC Raleigh-Durham International (2 Grants) $5,883,170 Medium 325

65 NC Piedmont Triad International (2 Grants) $5,595,500 Small 210

66 OR Portland International $7,000,000 Medium 630

67 OR Klamath Falls $3,122,212 Non-Hub 66

68 OR Southwest Oregon Regional $1,294,076 Non-Hub 50

69 OR LaGrande/Union County $1,098,136 GA 44

70 OR Grant County Regional/Ogilvie Field $366,419 GA 26

71 SC Myrtle Beach International $3,491,545 Small 253

72 SC Greenville Spartanburg International 

(2 Grants) $2,510,489 Small 156

73 SC Grand Strand $1,387,385 GA 128

74 SC Jim Hamilton L.B. Owens $1,148,800 Reliever 153

75 SC Mt Pleasant Regional-Faison Field $708,823 GA 80

76 TX Laredo International (2 Grants) $10,565,744 Non-Hub 155

77 TX Dallas/Fort Worth International (3 Grants) $9,684,600 Large 1,808

78 TX North Texas Regional/Perrin Field $5,913,903 GA 146

79 TX McAllen Miller International $5,400,000 Small 144

80 TX Tyler Pounds Regional $4,910,534 Non-Hub 68

81 TX Ellington Field $4,785,226 Reliever 347

82 TX Kerrville Municipal/Louis Schreiner Field $4,190,769 GA 164

83 TX Waco Regional $3,242,000 Non-Hub 85
23

Exhibit E. Airport Recipients in Our Sample

No State Site Name ARRA 

Obligation

Airport 

Category

Average 

Daily 

Operations

84 TX Robert Gray AAF $2,752,473 Non-Hub 36

85 TX Sulphur Springs Municipal $2,288,888 GA 49

86 TX Scholes International at Galveston $2,262,014 Reliever 167

87 TX Winston Field $1,956,420 GA 26

88 TX Curtis Field $914,840 GA 64

89 TX East Texas Regional (2 Grants) $465,702 Non-Hub 245

90 WA Spokane International (2 Grants) $14,039,213 Small 223

91 WA Snohomish County (Paine Field) (2 Grants) $11,002,765 Reliever 311

92 WA Tri-Cities (2 Grants) $9,077,593 Non-Hub 118

93 WA Wilbur (2 Grants) $3,083,293 GA 25

94 WA Bellingham International (2 Grants) $2,280,772 Non-Hub 182

95 WA Richland $2,195,470 GA 79

96 WA Pangborn Memorial (2 Grants) $1,317,000 Non-Hub 116

97 WA Grant County International (2 Grants) $1,178,144 GA 191

Total 97 Airports $393,040,635
24

Exhibit F. Major Contributors to This Report

EXHIBIT F. MAJOR CONTRIBUTORS TO THIS REPORT

Name Title

Darren Murphy Program Director

Chuck Ward Project Manager

Linda Major Senior Auditor

Susan Cohen Senior Analyst

Gloria Echols Auditor

Sue Zimmerman Auditor

Curtis Dow Analyst

Petra Swartzlander Senior Statistician

Andrea Nossaman Writer-Editor
25

Appendix. Agency Comments

APPENDIX. AGENCY COMMENTS

Federal Aviation

Administration

Memorandum

Date: January 28, 2011

To: Jeffery B. Guzzetti, Assistant Inspector General for Aviation and Special 

Program Audits

From: Clay Foushee, Director, Audit and Evaluation, AAE-1

Prepared by: Catherine M. Lang

Subject: Office of Inspector General (OIG) Draft Report, “FAA Fulfilled Most 

ARRA Requirements in Awarding Airport Grants”

In August 2009, the Deputy Secretary signed a memorandum to the Inspector General,34

in response to an OIG Advisory. The memorandum made a clear and direct statement, 

“FAA Project Selection of Airport Improvement Projects Fully Complied with 

Applicable Requirements.” This was a true statement then and remains so. The FAA’s 

project selections were fully compliant with statutory requirements, consistent with 

executive branch guidance, transparent and well understood in accord with programmatic 

criteria, and continue to receive appropriately enhanced oversight.

We appreciate the OIG report’s recognition of FAA’s fulfillment of the American 

Recovery and Reinvestment Act of 2009 (Recovery Act) requirements. As required, 

FAA used the AIP grant processes to achieve long term public benefits through its 

investments in projects of enduring aviation value. The projects were awarded 

expeditiously, and in accord with applicable requirements. Priority was given to those 

projects that could be completed by February 2011, and we are pleased to report that 98 

percent of the projects are expected to be completed by that mark, as intended by 

Congress. Finally, these projects generated a significant number of jobs. Based on 

recipient reporting, we understand these efforts contributed to the employment of more 

than 12,000 people.

While we appreciate the draft report’s recognition of FAA’s accomplishments in this 

important initiative, we differ with the elements of the report’s presentation and analysis. 

 34 See the Departmental Response (August 7, 2009) to OIG ARRA Advisory on “DOT Actions to Ensure Effective 

Project Selection and Oversight of Airport Improvement Program Grants Pursuant to the Recovery Act.” A full 

copy of the response can be found here: http://www.dot.gov/recovery/docs/ARRAAdvisoryAIPresponse.pdf
26

Appendix. Agency Comments

First, we do not agree with the report’s elevation of executive branch guidance to the 

stature of statutory requirements. This elevation of guidance and policy considerations to 

a programmatic requirement leads the OIG analysis to place undue emphasis on a single 

element of economic stimulus. In addition, the report could better recognize the 

transparency of FAA’s program, with well-designed and time-tested programmatic 

selection criteria and clear understanding and participation by stakeholders.

FAA Fulfilled Statutory Criteria and Complied with Executive Branch Guidance

Throughout the duration of this OIG review, the FAA has shared its understanding of the 

complete set of statutory requirements relating to the Recovery Act, the application of the 

AIP program within its context, and how guidance issued by the executive branch 

factored into project selection. In what may be an effort to simplify its presentation, the 

draft report makes a key error of defining “requirements as a collective term to refer to 

Recovery Act requirements, Presidential Direction, Office of Management and Budget 

(OMB), and FAA guidance related to Recovery Act implementation.” This error led the 

OIG report to selectively elevate one element of those policy considerations to the stature 

of a requirement.

Specifically, the OMB guidance called upon agencies implementing the Recovery Act to 

take a number of equally weighted policy goals into account, to the extent permitted by 

law and practicable, when determining how best to use Recovery Act funds.

35 The 

guidance called upon agencies to develop transparent, merit-based selection criteria that 

will guide their use of Recovery Act funds. The guidance continues that agencies should 

ensure that the funding furthers the job creation, economic recovery, and other purposes 

of the Recovery Act. More specifically, the guidance indicates that these merit-based 

selection criteria shall to the greatest extent possible support funding for projects that: (i) 

deliver programmatic results; (ii) achieve economic stimulus; (iii) achieve long term 

public benefits; and (iv) satisfy the Recovery Act’s transparency and accountability 

objectives. FAA has described through the course of the OIG’s review, how the AIP 

programmatic criteria fulfill these policy objectives. 

FAA’s implementation of the AIP with regard to the Recovery Act was fully consistent 

with statutory requirements and executive branch guidance. FAA demonstrated that AIP 

project selections are in accord with these key elements of the guidance. However, by 

equating a single element of the policy guidance describing aspects of achieving 

economic stimulus with a “requirement” to optimize economic activity, the OIG report 

elevates it out of context with the overall policy guidance and also significantly 

overstates its relevance to overall program implementation. Further, the OIG’s report, 

which faults FAA in this area for not considering economic factors or the results of 

economic studies in prioritizing projects, is without discernable basis. FAA’s existing 

and long-standing project prioritization implicitly factors economics into project selection 

criteria, consistent with subchapter 1 of chapter 471 and subchapter 1 of chapter 475 of 

 35 Office of Management Memorandum, Updated Implementing Guidance for the American Recovery and 

Reinvestment Act of 2009, April 3, 2009, question 1.6 at 4 (What other policy goals should an agency consider in 

determining how best to use Recovery Act funds in order to achieve the Act’s objectives?).
27

Appendix. Agency Comments

title 49, United States Code (USC)—the FAA’s authorizing legislation—as required by 

the Recovery Act legislation. However, neither data nor tools exist that would enable the 

level of economic impact consideration that OIG suggests to be applied to the funding of 

individual airport projects or facilities, such as the addition of runways, taxiways, lights,

or aprons. Of greater importance, such data or tools are unnecessary because such 

requirements are based on established regulations, published Advisory Circulars or 

statutory requirements.

FAA Recovery Act Project Selection Was Transparent

As required by statute, the FAA’s project selection process followed the established 

discretionary grant process in use for over a decade, as described and published in FAA 

Order 5100.39A, “Airports Capital Improvement Plan,” available on the FAA website. 

The FAA’s long-established and widely available policies and processes for managing 

the National Plan of Integrated Airport Systems (NPIAS), the Airports Capital 

Improvement Plan (ACIP) and associated processes are well-known to the aviation 

industry and readily available for public review, and were developed specifically to 

advance the purposes called for in the AIP legislation. 

As such, Congress, airport sponsors and others in the air transportation industry are fully 

cognizant of the decision-making process used by FAA. To help the public and airport 

sponsors understand the Recovery Act specific guidelines, including Recovery Act

project selection, FAA also put the Recovery Act specific guidelines on its web site. 

Additionally, the National Priority Rating (NPR) numbers for the Recovery Act projects 

have also been released to the public. In seeking the strongest possible projects for the 

use of Recovery Act funds, FAA raised the threshold NPR score from 41 (which has been 

the threshold for the last several years) to 62. This did not mean that FAA could not or 

would not fund projects with NPR levels below the threshold. It simply established a 

higher threshold, below which special documentation would be required before FAA 

would approve a grant.

Fully 85 percent of FAA’s AIP Recovery Act projects had a NPR of 62 or higher, 

representing more than 80 percent of total funding. Of these, 9 percent were for 

passenger terminal projects at primary non-hub airports with an NPR equivalent to 62 by 

virtue of their special emphasis status. The remaining 15 percent of total Recovery Act 

AIP projects were justified projects with NPR under 62, including new airport 

construction, safety and various other projects. All but three of these Recovery Act

projects had an NPR of 41 or higher, the level normally used in the Discretionary grant 

program for projects not requiring supplemental justification. Each of these three 

projects was in economically disadvantaged Native Alaskan or Native American 

communities. All three of these projects required and received additional documentation 

of their justification. 
28

Appendix. Agency Comments

Project Selections Deliver Programmatic Results and Long Term Public Benefit

FAA-funded Recovery Act projects are achieving program results. Whether they 

rehabilitate runways and taxiways; upgrade airport safety by removing obstructions and 

placing runway incursion markings; or enhance security, the net results are long-term, 

lasting improvements to the nation’s system of airports. The Recovery Act was intended 

as an economic stimulus law with broad benefits, which the FAA has achieved through 

the number of jobs created/funded, program results accomplished, and public benefit of 

usable air transportation infrastructure projects completed on time and within budget. 

FAA-funded Recovery Act projects also offer long-term public benefits. Under the 

Recovery Act, FAA funded 246 runway, taxiway, and apron reconstruction and 

rehabilitation projects that will extend the useful life of those facilities by up to 20 years. 

Similarly, 23 lighting systems and 8 fire and rescue buildings will have a useful life of at 

least 20 years. The 11 Airport Firefighting and Rescue vehicles purchased with Recovery 

Act funds are expected to last at least 10 years.

 

FAA is responsible for the national system of airports, not just large airports. The 

discretionary grant process recognizes the importance of this diverse system of airports,

and therefore includes both large and small airports fulfilling a variety of functions 

critical to economic activity. In light of this, and the Recovery Act’s direction to 

supplement but not supplant, the relevance of the draft report’s discussion of funding for 

a number of projects at small airports is not clear. These projects were in accord with all 

applicable requirements. Every airport project that the FAA funded with Recovery Act 

resources was already in the queue for eventual implementation. The Recovery Act 

resources enabled the FAA to accelerate these projects, which fulfilled the statutory 

requirements, complied with executive branch guidance, and provided the public with 

long term transportation benefits within the context of a diverse system of integrated 

airports, as enumerated in statute.

FAA Recovery Act geographic distribution considerations, accelerated time lines and 

award amount caps were useful tools to assist FAA in its efforts to ensure that 

communities served by airports throughout the entire nation benefitted from FAA AIP 

funding under the Recovery Act. FAA does not agree that the use of these tools limited 

FAA’s ability to optimize economic activity or select projects worthy of Recovery Act 

funding. 

Conclusion

FAA was effective in achieving significant accomplishments pursuant to the Recovery 

Act. The agency complied with all statutory requirements in selecting projects under the 

Act and was in accord with the guidance enumerated by the executive branch. FAA’s 

project selection was also accomplished in a manner that sought to ensure communities 

across the nation benefitted from these investments in transportation infrastructure. 

FAA’s efforts results in 372 airport projects, which are now 84 percent complete. We 

anticipate that these projects will be 98 percent complete by the Recovery Act’s 2-year 
29

Appendix. Agency Comments

mark. Based on recipient reporting, these efforts contributed to the employment of more 

than 12,000 people.

Recommendations and Responses

Recommendation 1: Increase transparency by posting on its Recovery Act website 

specific justifications for lower scoring projects (including special emphasis). 

Justification should include a description of the actual or anticipated economic activity 

derived from each project.

FAA Response: The FAA concurs. To increase transparency, the FAA will post on its 

Recovery Act website additional information on project selection. The FAA will post 

information on the special focus areas and why these projects were funded as equivalent 

to those with an NPR score of 62. Additionally FAA will explain the projects that were 

below a 62 NPR score, but met the normal discretionary grant process requirement of a 

41 NPR score and above. For the three projects below 41 NPR FAA will share the 

written justification as to why these projects were approved including data on the number 

of jobs funded. FAA will include information regarding the economic expectations 

behind the projects to the extent it is available. FAA anticipates completing this action 

by May 31, 2011.

Recommendation 2: Increase transparency of its normal AIP process by requiring public 

reporting of actual as well as estimated grant amounts.

FAA Response: FAA concurs that posting grant amounts as issued is beneficial to the 

AIP process and will incorporate this change for the FY 2011 grant cycle. 

Recommendation 3: Comply with OMB guidance by (a) ensuring each ADO applies 

sufficient levels of oversight to Recovery Act grantees, particularly those which FAA has 

identified as being at higher risk, and (b) using the FY 2009 single audit reports to 

identify high risk areas, consider additional monitoring or inspections, and expedite 

resolution of reports findings for all Recovery Act grantees.

FAA Response: FAA is already in compliance with this recommendation. FAA is 

already providing enhanced oversight to Recovery Act projects and is also reviewing all 

single audit reports that we have received on our Recovery Act grantees. We will 

continue to do this. When additional actions are warranted based on these reports, FAA

will take them expeditiously.