Federal Aviation

Administration

FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

Preparing for tomorrow, today
The aviation sector will be an important factor in the Nation’s economic recovery. According to the FAA’s calculations using the U.S. International 

Trade Commission’s reported trade data statistics, at $61 billion, aerospace products and parts contributed more to the positive balance of trade than 

any other sector—$32 billion more than the next highest contributor.

Credit: FAA Image Gallery

On the cover—Recently installed runway status lights at Los Angeles International Airport (LAX) are connected to the ground radar system. 

The lights turn red if the ground radar detects a potential conflict between two aircraft or an aircraft and a vehicle. The lights—the latest safety 

enhancement at LAX—are available on eight taxiways and one runway. The FAA also installed the most technologically advanced ground radar 

system, known as Airport Surface Detection Equipment-X, or ASDE-X, in the air traffic control tower at LAX. ASDE-X collects data from more 

sources than the previous ground radar system, and provides air traffic controllers with color map displays showing the location of all aircraft and 

vehicles on the runways and taxiways.

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MISSION, VISION, AND VALUES—FAA REGIONAL MAP i

FEDERAL AVIATION ADMINISTRATION

FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

Mission

To provide the safest, most efficient aerospace system in the world. 

Vision

To improve the safety and efficiency of flight. 

We are responsive to our customers and accountable to the flying public.

Values

Safety is our passion. We are world leaders in aerospace safety. 

Quality is our trademark. We serve our country, our stakeholders, our customers, and each other. 

Integrity is our character. We do the right thing, even when no one is looking. 

People are our strength. We treat people as we want to be treated. 

Regional map

WA

WY

NE

KS

MO

IA

IL

IN OH

WI

MI

MN

ND

SD

UT

CO

OR

CA

NV

AZ

NM OK AR

MS AL GA

SC

NC

TN

KY

WV VA

MD DE

PA NJ

NY

VT

NH

ME

MA

CT

RI

FL

LA

TX

ID MT

ANM

 (Northwest 

Mountain)

ACE

(Central)

AWP

(WesternPacific)2

ASW

(Southwest)

AEA

(Eastern)

ANE

(New England)

AAL

(Alaskan) 1 Includes Puerto Rico, the 

 Republic of Panama, and 

 the Virgin Islands

2 Includes Wake American, 

 Samoa, and Guam

Atlanta

Ft. Worth

Oklahoma City

Los Angeles

Seattle

Kansas

City

Jamaica, NY

 Atlantic City

Washington, DC

LEGEND

Regional Office

Mike Monroney Aeronautical Center

William J. Hughes Technical Center

National Headquarters (DC)

Boston

Chicago

AGL

(Great Lakes)

ASO

(Southern)1

HI

AK

Anchorage
FEDERAL AVIATION ADMINISTRATION

ii FAA AT A GLANCE—FOREWORD

FAA AT A GLANCE

Established 1958

Headquarters 800 Independence Avenue, SW

 Washington, DC 20591

http://www.faa.gov

FY 2009 Budget (enacted) $16.770 billion 

Total Employees 48,156 

Headquarters 5,351 employees 

Regional and Field Offices 37,925 employees

Technical Center 1,145 employees

Atlantic City, NJ

Aeronautical Center 3,735 employees

Oklahoma City, OK

FY 2009 Passengers on 700.6 million (estimate)

U.S. Carriers

FY 2009 Tower Operations 52.5 million arrivals and departures (estimate)

FOREWORD

The Federal Aviation Administration (FAA) is part of the U.S. Department of Transportation (DOT). By directives, 

the Office of Management and Budget (OMB), which implements the Chief Financial Officers Act of 1990 (CFO 

Act), requires us to prepare financial statements separate from those of the DOT. Key FAA data and information 

are provided to the DOT and consolidated into the required DOT Performance and Accountability Report (PAR). 

Although we are not required to prepare a separate PAR, we recognize that to demonstrate accountability we should 

present performance, management, and financial information using the same statutory and guidance framework. To 

demonstrate that accountability, since fiscal year (FY) 2002 we have elected to produce our own PAR. In some cases, 

however, we may depart from the format required of CFO Act agencies. 

Last year, we were proud to receive our fifth Association of Government Accountants’ prestigious Certificate of 

Excellence in Accountability Reporting award. This award is indicative of the progress we have made in reporting 

financial and program performance and in candidly assessing our results.

We will continue our efforts to become a more results-oriented organization, focus on performance and financial 

accountability, and do our part to help the DOT and Federal Government excel in providing high-quality services and 

products to the taxpayers we serve.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

TABLE OF CONTENTS iii

TABLE OF CONTENTS

MISSION, VISION, AND VALUES STATEMENTS ........................................................................................i

FAA REGIONAL MAP .....................................................................................................................................i

FAA AT A GLANCE ........................................................................................................................................ii

FOREWORD ...................................................................................................................................................ii

A MESSAGE FROM THE ADMINISTRATOR...............................................................................................1

MANAGEMENT’S DISCUSSION AND ANALYSIS.......................................................................................7

FAA Organization........................................................................................................................................... 7

A Year in Highlights........................................................................................................................................ 7

NextGen Accomplishments........................................................................................................................... 9

Other Major Accomplishments................................................................................................................... 10

Improving Financial Management.............................................................................................................. 11

Implementing Expense Controls................................................................................................................. 13

Performance Highlights................................................................................................................................ 14

DOT Strategic Initiatives ............................................................................................................................ 18

FY 2009 FAA Accomplishments.................................................................................................................. 19

Management Integrity: Controls, Compliance, and Challenges.............................................................. 23

Management Assurances ............................................................................................................................. 24

Grant Management Policies and Practices.................................................................................................. 25

Financial Highlights...................................................................................................................................... 25

PERFORMANCE RESULTS ..........................................................................................................................33

Safety............................................................................................................................................................. 33

Capacity ....................................................................................................................................................... 40

International Leadership .............................................................................................................................. 47

Organizational Excellence............................................................................................................................ 51

Verification and Validation of Performance Information........................................................................... 60

Completeness and Reliability of Performance Data................................................................................... 60

Assessing Programs....................................................................................................................................... 60

FY 2009 Inspector General’s Summary of Challenges and FAA Actions ................................................. 63

FINANCIAL STATEMENTS .........................................................................................................................77

A Message from the Chief Financial Officer............................................................................................... 77

Office of the Inspector General (OIG) Quality Control Review .............................................................. 79

Independent Auditors’ Report..................................................................................................................... 83

Financial Statements.................................................................................................................................... 96

Notes to the Financial Statements ........................................................................................................... 101

Required Supplementary Stewardship Information................................................................................ 128

Required Supplementary Information...................................................................................................... 131

Administrative Services Franchise Fund ................................................................................................... 134

OTHER ACCOMPANYING INFORMATION............................................................................................139

Inspector General’s Top Management Challenges for FY 2010 .............................................................. 139

Management Response ................................................................................................................ 139

Summary of Audit Results and Management Assurances...................................................................... 142

Financial Statement Audit Summary......................................................................................... 142

Management Assurances Summary ........................................................................................... 143

Improper Payments Information Act of 2002 .......................................................................................... 143

Glossary of Acronyms............................................................................................................................................................. 145

We Welcome Your Comments........................................................................................................................Inside Back Cover

This report and reports from prior years are available on the FAA Web site at 

http://www.faa.gov/about/plans_reports/#performance.
Safety continues to be the FAA’s top priority, with approximately 70 percent of the agency’s FY 2009 budget supporting our mission to safely operate 

and maintain the air traffic control system, inspect aircraft, certify new equipment, ensure the safety of flight procedures, and oversee the safety of 

commercial space transportation. 

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

A MESSAGE FROM THE ADMINISTRATOR 1

A MESSAGE FROM THE ADMINISTRATOR

The FAA is making good on its promise to deliver a return on the taxpayer’s investment in aviation.

The American Recovery and Reinvestment Act (ARRA) helped us put those plans in high gear. As a result, 2009 has 

been a building year—literally and figuratively. This fiscal year, the ARRA allocated $1.3 billion to the FAA. We have 

invested that money at hundreds of airports and air traffic facilities throughout the United States to build a variety of 

capacity-building and safety-enhancing projects. 

The investments did not begin or end there. The FAA’s plan to overhaul 

the air traffic control system continues to move forward. The goal 

of the Next Generation Air Transportation System (NextGen) is to 

transform the entire national air transportation system. We are putting 

new technology and procedures in place that are both safer and more 

efficient—and green from top to bottom. 

The immediate dividend of a system that takes safety to a new level is 

an increase in public trust.

The agency is pushing industry to raise its standards as well. In a 

“Call to Action” made shortly after I was sworn into office in June, we 

announced an aggressive timeframe for developing recommendations 

on a new flight time and rest rule to reduce pilot fatigue, as well as 

other initiatives to strengthen regional and major airline safety.

I met personally with airline executives and their chief pilots. 

My message focused on the need for greater professionalism and 

accountability—throughout government and industry. 

We made similar advances in financial management for fielding new air traffic technology. This resulted in the U.S. 

Government Accountability Office (GAO) dropping the FAA’s air traffic control modernization program from its 

High-Risk List for the first time since 1995. 

We faced many challenges during the past year, but continued to work tirelessly to achieve our established goals on 

time and on budget. Following are our major accomplishments from the past year.

FY 2009 HIGHLIGHTS

• Safety. Safety remains our top priority. We implemented several key initiatives to raise the bar. Close calls on 

runways in 2007 at some of the busiest U.S. airports prompted us to take immediate action to reduce the risk of 

runway incursions and wrong runway departures. To address the issue, we met with aviation leaders to encourage 

them to take action in areas that would result in safety improvements. As a result, we accelerated the installation 

of new technology at airports, completed the installation of proper signage and markings at airports, and retrained pilots. Our efforts have paid off. This year, the number of serious runway incursions dropped 50 percent 

compared to last year. To reduce emerging aviation risks using national safety data, we launched a new Accident 

Prevention Office. The new organization will consolidate resources so we can better understand current and 

emerging risks across the aviation community through the use of data from accident and incident investigations, 

historical accidents and incidents, and voluntarily submitted information from industry programs. We started 

the rulemaking process requiring aviation operators and businesses to implement a Safety Management System 

(SMS), which will detect and correct problems before they cause an accident. We strengthened and improved 

J. Randolph Babbitt

Administrator
FEDERAL AVIATION ADMINISTRATION

2 A MESSAGE FROM THE ADMINISTRATOR

pilot hiring, training, and testing practices for commercial operators. We expanded the runway status lights 

(RWSL) program to 22 major U.S. airports (See related story on page 5). We also are evaluating bird-detecting 

radar systems. 

• Capacity. Our most complex challenge today and in the future is meeting capacity needs. NextGen technologies 

and procedures will enable us to meet the long-term need to reduce congestion, improve efficiency, and meet 

projected demand in an environmentally sound manner. In the shorter term, concrete remains one of the most 

effective methods of increasing arrival and departure rates. On November 20, 2008, we dedicated three new 

runways (See related story on page 18). The new runways at Dulles and O’Hare International Airports have the 

potential to accommodate more than 150,000 additional operations per year. At Seattle-Tacoma International 

Airport, the new runway is expected to significantly reduce weather-related delays that have plagued the airport. 

• International Leadership. The FAA provides assistance to more than 100 countries to help improve aviation 

systems and ensure that the flying public is able to travel as safely and efficiently abroad as at home. As part of 

this effort, in FY 2009 we signed a data exchange agreement with Panama and completed all the groundwork for 

opening a new FAA office there in November 2009. In April, we held the U.S.-China Aviation Symposium, which 

highlighted U.S. aviation security, safety, and environmental technologies. In June, the Asia Pacific Economic 

Cooperation held a workshop in Bangkok, Thailand, which focused on the transition to NextGen concepts. We 

continue our support of the International Civil Aviation Organization (ICAO) Global Safety Roadmap Program, 

as well as other efforts to strengthen aviation safety oversight. In FY 2009, the FAA also led U.S. delegations in the 

ICAO effort to develop a global approach to address international aviation greenhouse gas emissions. The results 

of this effort, largely reflecting U.S. views, will inform the global climate negotiations in Copenhagen in December 

2009.

• Organizational Excellence. We exceeded our staffing goal for air traffic controllers by 1.2 percent and 

maintained our aviation safety workforce at a level slightly above our target of 7,184 employees. We filled 

81 percent of our job announcements within 45 days, exceeding our FY 2008 results. The FAA and the National 

Air Traffic Controllers Association (NATCA) signed a 3-year contract on September 25, 2009. The agreement 

covers compensation, leave, and work conditions for air traffic controllers, traffic management, and Notice to 

Airmen Specialist bargaining units. It took effect October 1, 2009, and provides covered employees with greater 

flexibility in their work schedules, childcare support, and a new grievance review process, among other provisions. 

The agreement also revises the pay standard for new hires and veterans nearing retirement. Notwithstanding, 

we still have work to do to improve employee morale. As the new Administrator for the FAA, I am committed to 

creating a better workplace environment for FAA employees and improving morale by listening to what employees 

want and need to change their negative attitudes toward our organization into a “can do” spirit. 

• NextGen. At the request of both Congress and industry, the FAA is moving aggressively to field early components 

of NextGen and maximize immediate benefits for air traffic controllers, pilots, aircraft operators and, most 

importantly, the flying public. We are rapidly transitioning from ground-based navigation to an operation that 

makes greater use of satellites. One such effort, Automatic Dependent Surveillance-Broadcast (ADS-B), has been 

deployed in southern Florida. ADS-B is being deployed in the Gulf of Mexico as well, where there is no radar 

coverage. The System Wide Information Management (SWIM) program, Data Communications, and National 

Airspace System (NAS) Voice Switch achieved major acquisition milestones, and NextGen Network Enabled 

Weather (NNEW) demonstrated the integration of weather data into automated decision support tools. This is a 

necessary step in realizing improved management of weather in the NAS. We entered into an agreement 

to transfer control of 55 acres adjacent to the William J. Hughes Technical Center near Atlantic City, NJ, to 

the South Jersey Economic Development District. At no cost to the FAA, the District will build an aviation 

research and technology park; groundbreaking was in October 2009. NextGen Research Park will perform research, 

development, testing, integration, and verification of the technologies, concepts, and procedures required by 

NextGen and will enable us to work more closely with industry and academic partners to advance all facets 

of NextGen. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

A MESSAGE FROM THE ADMINISTRATOR 3

FUTURE CHALLENGES

• Improve Safety Record. Recent commerical fatal accidents are tragic reminders that we must be more vigilant 

to reinforce the fundamentals that will take the FAA to the next level of safety. Systems like the SMS will help us 

get there. In addition, we continue to strengthen mutually beneficial international partnerships.

• NextGen Workforce Capabilities. We must develop the competencies in our human capital to implement the 

complex technology and new processes that are inherent in NextGen. We must streamline our internal processes 

to be able to deliver NextGen’s near-term capabilities that rely on cross-departmental cooperation. 

• Embracing NextGen. NextGen spurs contribution to the U.S. economy from the aviation sector. Keeping the 

NAS vibrant and viable is important to our national economic strength. But, it remains clear that we cannot 

deliver NextGen without the investment of airline operators. To bolster industry buy in across the board, the FAA 

asked an advisory group, the Radio Technical Commission for Aeronautics (RTCA), to pull stakeholders together 

for an assessment of NextGen. The result is a list of clear, concise, and actionable recommendations, giving an 

unequivocal message to the FAA about what NextGen needs to accomplish and how to do it. Setting priorities is 

an important step toward taking NextGen from the drawing board and putting it in the cockpit.

• FAA Reauthorization. The Vision 100—Century of Aviation Reauthorization Act expired at the close of 

FY 2007. Subsequently, the FAA has been operating under a series of short-term extensions. Current aviation taxes 

and expenditure authority were authorized through December 31, 2009. The FY 2010 budget assumes some basic 

elements of a reauthorization proposal. The current financing system is based largely on aviation excise taxes 

that depend on the price of a passenger’s airline ticket rather than the actual cost of controlling flights through 

our Nation’s aviation system. The Administration believes the FAA should move toward an approach where 

funds required for operating and modernizing the FAA’s air traffic control system are more related to its costs, the 

financing burden is distributed more equitably among users, and funding of services and improvements are more 

targeted to users’ needs. The Administration recognizes that there are several alternative ways to achieve these 

objectives, and is committed to working with Congress and stakeholders to enact legislation that moves toward a 

more sustainable system.

Our FY 2009 PAR provides a detailed accounting of our performance and financial management to both the flying 

public and the aviation industry. Our strategic plan—the Flight Plan—focuses our performance on the top 31 agency 

targets that position us to meet the future successfully. We achieved 28 out of the 31 goals listed in the Flight Plan. 

We are proud to have received an unqualified opinion with no material weaknesses from our auditors on our 

FY 2009 financial statements. Internally, we assess the vulnerability of our programs and systems through the Federal 

Managers’ Financial Integrity Act (FMFIA) of 1982. I am pleased to report that, taken as a whole, the management 

controls and financial management systems in effect from October 1, 2008, through September 30, 2009, provide 

reasonable assurance that the objectives of both sections 2 and 4 of FMFIA are being met. Effective management 

controls are in place and our financial systems conform to Government-wide standards. We issued an unqualified 

statement of assurance and can state that the financial and performance data are reliable and complete.

The FAA is on the precipice of one of the largest transformations and most expensive periods in its history. This is not 

something we take lightly. We recognize that to be good stewards of the money entrusted to us by Congress, we must 

be efficient and provide an exceptional return on investment for the American taxpayer. As this report provides in great 

detail, we are meeting that expectation.

J. Randolph Babbitt

Administrator

November 12, 2009
FEDERAL AVIATION ADMINISTRATION

4

The ARRA was signed into law in February 2009. The purpose 

of this legislation is to do the following:

• Preserve and create jobs

• Promote economic recovery

• Invest in transportation, environmental protection, and 

other infrastructure that will provide long-term economic 

benefits

• Stabilize State and local government budgets to minimize 

and avoid reductions in essential services

• Ensure that recovery spending is transparent and 

accountable

The FAA was provided $1.1 billion to Grants-in-Aid to 

Airports—with the following expectations: 

• 50 percent of funds to be awarded within 120 days; the 

remaining 50 percent within 1 year

• Priority given to projects that can be completed within 

2 years of enactment

The FAA was provided $200 million to Facilities and Equipment 

(F&E)—with the following rules: 

• $50 million to upgrade power systems; $50 million to 

modernize en route air traffic control centers; $80 million 

to replace air traffic control towers; $20 million to install 

airport lighting, navigation, and landing equipment

• Priority given to projects that can be completed within 

2 years of enactment

Grants-in-Aid to Airports

Under the ARRA, $1.1 billion was provided to the FAA to be 

distributed for “shovel-ready” projects. These projects address 

airport safety and security, infrastructure, runway safety, 

increased capacity, and mitigation of environmental impacts. 

The FAA has provided funding for more than 300 airport 

projects covering all 50 states, Puerto Rico, Guam, and 

American Samoa.

The FAA was required to obligate $550 million of the 

$1.1 billion within 120 days from the day the ARRA became 

law, or by June 17, 2009. Obligation of funds is the final step 

in the award of a grant to an airport. By close of business 

June 17, 2009, the FAA had obligated $725 million or 

66 percent, exceeding the statutory requirement. 

F&E

In FY 2009, the FAA allocated $200 million for F&E projects 

across the four program areas cited in the ARRA.

THE FAA AND THE AMERICAN RECOVERY AND REINVESTMENT ACT

THE FAA AND THE ARRA

Fifty million dollars each will go 

to upgrading air traffic control 

centers and power systems. 

Projects involving navigation/

landing facilities will receive 

$20 million. The tower and 

Terminal Radar Approach Control 

(TRACON) program will receive 

$80 million for the replacement 

of three tower facilities and the 

modernization of three others.

The projects were identified based 

on operational priorities. The FAA’s 

Air Traffic Organization (ATO) is coordinating with FAA regions and service 

centers to execute contracts and deliver the anticipated economic stimulus 

funding as quickly as possible. More than 300 sites in 42 states will benefit 

from the FAA’s F&E stimulus injection. For instance, Oklahoma City will 

have a new power service center constructed, while Atlanta will get a new 

engine generator and critical power distribution systems. Other projects 

will include lightning protection, battery replacement, and uninterruptible 

power supplies.

Navigation projects include 4 runway lighting systems, 3 instrument 

landing systems, 10 replacement lamp monitoring systems, and the 

replacement of heating, ventilating and air conditioning (HVAC) systems 

at approximately 128 project locations.

The air route traffic control centers, which were built 40 or more years ago, 

will be renovated at 18 project locations. Fifteen centers will have their 

exterior walls replaced and 12 centers will get new elevators.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

5 RUNWAY STATUS LIGHTS SYSTEM GETS GREEN LIGHT TO EXPAND

RUNWAY STATUS LIGHTS SYSTEM GETS GREEN LIGHT TO EXPAND

Beginning June 2009, Los Angeles International Airport became the third U.S. airport to operate a runway status lights (RWSL) system, 

expanding the technology that alerts pilots to potential runway safety hazards. Earlier tests at Dallas/Fort Worth and San Diego International 

airports proved that the lights are effective in helping prevent potential runway conflicts. The lights also alert vehicle drivers when it is unsafe 

to enter a runway.

RWSLs are rows of red lights placed along runways and taxiways in a way that is noticeable to pilots without being confused with other types 

of runway lights. Operating much like traffic signals, red means danger —stop!—another plane is using the runway. When the red lights are 

not lit, pilots still require clearance from air traffic control to move onto a runway.

The FAA is installing the lights at the same airports where a ground-based radar system known as the Airport Surface Detection Equipment 

Model X (ASDE-X) is being installed. The RWSL system will use the ASDE-X surveillance data to operate. The lights turn red if the ASDE-X 

detects a potential conflict between two aircraft on a runway. 

The FAA also plans to deploy RWSLs at Atlanta, Baltimore Washington International, Boston, Charlotte, Chicago O’Hare, Denver, Detroit, 

Washington Dulles, Fort Lauderdale, Houston Intercontinental, New York John F. Kennedy and La Guardia, Las Vegas, Minneapolis, Newark, 

Orlando, Philadelphia, Phoenix, and Seattle. These systems are scheduled to be deployed by 2012.

The red runway lights seen in this picture could go a long way to enhancing runway safety. 

RWSL systems are fully automatic and designed to reduce the 

number and severity of runway incursions.

RWSLs are used to hold takeoffs, as well as to signal when aircraft 

may or may not enter a runway.

Adapted from an article in Focus FAA, the FAA’s employee news service.
Capacity and efficiency problems such as delays, excess fuel burn and emissions, and increased travel distances develop when demand for the use of 

runways and airspace outstrips available resources. NextGen technology and procedures will improve operations by enabling aircraft to get into and 

out of the airport faster, and by increasing the overall efficiency of the system, making better use of available airspace.

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 7

MANAGEMENT’S DISCUSSION AND ANALYSIS

FAA ORGANIZATION

The mission of the FAA, an agency of the U.S. DOT, is 

to provide the safest, most efficient aerospace system in 

the world. The FAA provides air traffic control services, 

establishes and enforces regulations, and oversees 

inspections that maintain the integrity and reliability of 

that system, which has fueled our economy and helped 

ensure our Nation’s prosperity for more than 50 years.

We operate 24 hours a day, 7 days a week, 365 days a 

year. We have a system composed of more than 63,000 

facilities and pieces of equipment with FAA-operated or 

contract towers at 501 airports, and we are responsible 

for inspecting and certifying about 227,900 aircraft and 

748,000 pilots. With almost 6,045 takeoffs and landings 

per hour, and more than 701 million passengers and 30 

billion cargo revenue ton miles of freight a year, we safely 

guide approximately 38,000 flights through the world’s 

preeminent NAS every day.

We fulfill our mission through the following four lines of 

business (LOBs) that work together to create, operate, 

and maintain the NAS:

•	 Air Traffic Organization (ATO): Responsible 

for moving air traffic safely and efficiently. The 

customers of this performance-based organization 

are commercial, private, and military aviation. The 

ATO is aligned around the services delivered to these 

customers. Approximately 35,000 ATO employees 

provide these services—the controllers, technicians, 

engineers, researchers, and support and management 

personnel whose daily efforts keep aircraft moving. 

•	 Aviation Safety (AVS): Approximately 7,200 AVS 

employees oversee the safety of aircraft and the 

credentials and competency of pilots and mechanics, 

develop mandatory safety rules, and set the 

standards that have helped make air travel one of the 

safest modes of transportation in history. 

•	 Airports (ARP): Provides leadership in planning 

and developing a safe, secure, and efficient airport 

system; manages the Airport Improvement Program 

(AIP), which provides grants to State and local 

governments; enhances environmental quality 

related to airport development; develops standards 

for the design and construction of airport facilities; 

establishes regulations for the safe operation of 

commercial service airports; and inspects airports for 

compliance. 

•	 Commercial Space Transportation (AST):

Oversees the safety of commercial space launches; 

regulates the U.S. commercial space industry, 

including human space flight; and encourages, 

facilitates, and promotes U.S. commercial space 

transportation.

From 1926, when President Calvin Coolidge initiated 

Federal oversight of air safety in the United States by 

signing the Air Commerce Act, to the creation of the 

Federal Aviation Agency in 1958, to our modern-day 

incarnation, the FAA and the aviation community have 

grown and worked together. We have shaped an industry 

that—like shipping and rail before it—conquered 

distance in a new way, lowered transportation costs, 

and created new opportunities that transformed the 

commercial landscape.

Today’s FAA faces the challenge of expanding the 

capacity of our aviation system to meet future 

demand without compromising safety or harming 

our environment. With aviation and related industries 

supporting 12 million jobs and contributing $1.3 trillion 

to our total annual economy, our success is critical. 

A YEAR IN HIGHLIGHTS

Our workforce of more than 48,000 professionals 

operates and maintains the most complex air traffic 

control system in the world with an annual budget 

of approximately $16.8 billion. More than half of the 

world’s air traffic is managed by more than 15,700 

controllers, who ensure ever-increasing levels of safety. 

We conduct research to improve aviation safety and 

efficiency and provide grants to improve 3,339 eligible 

public-use airports in the United States. We also regulate 

commercial space launch activities to ensure public 

safety. 
FEDERAL AVIATION ADMINISTRATION

8 MANAGEMENT’S DISCUSSION AND ANALYSIS

GATEWAY TO SPACE

Touchdown on the runway. Look out the window.

All of the basic elements are in place: hangar, terminal, lounge, a long stretch of tarmac. Except, your flight is not a red-eye from Los Angeles; 

you have just returned from space. 

With the groundbreaking of Spaceport America near Las Cruces, NM, in July 2009, we are within just a couple of years of this scenario 

becoming reality for members of the public who want to experience space flight. 

However, before the countdown begins, the site must be approved for an FAA license by the Office of Commercial Space Transportation. Today 

there are seven licensed spaceports in the United States, including Spaceport America, with as many as four more expected in the next couple 

of years.

When a spaceport license application is considered, the FAA assesses 

the risk to nearby people and the environment. Launch sites for more 

conventional vehicles carrying satellites or science experiments usually 

exist only on the coastline for safety and logistical reasons. Traditional 

designs that require expendable parts to be jettisoned after launch 

require a vacant disposal area—the ocean.

But, now that private companies are making spacefaring ships that have 

largely reusable parts, dry land is often more convenient, available, and 

easier to recover equipment. For entrepreneurs focused on space tourism, 

the location of the launch site is less important than support through 

financial incentives by State and local governments.

Although commercial space flight is still in its infancy compared to 

the more than 70-year-old commercial aviation industry, regulatory 

lessons learned from airports have proven to be valuable. Compared 

with the very early days of airports, when there were no paved runways 

and no regulatory regime to ensure the public’s safety, the evolution of 

spaceports has gone much more smoothly.

While the Office of Commercial Space Transportation 

has had the benefit of history’s lessons, it still must 

balance safety regulation with flexibility. Part of the 

challenge is to allow companies the freedom to grow 

and experiment within a set of safety parameters.

The benefits of a local spaceport would likely include 

new jobs with good pay, educational opportunities, 

and a chance to join a new transportation network. 

Space travel is not yet recognized as a mode of 

transportation, but government and industry leaders 

expect it to be when spacecraft begin to land at 

spaceports other than the one from which they 

launched. Business travelers—think New York to 

Sydney in 45 minutes.

Adapted from an article in Focus FAA, the FAA’s employee 

news service.

Spaceport America design concept. The groundbreaking for the 

New Mexico facility, which will be the base for Virgin Galactic’s 

space tourism effort, took place in July 2009.

Image courtesy of Spaceport America
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 9

NEXTGEN ACCOMPLISHMENTS

NextGen is a wide-ranging transformation of the entire 

national air transportation system. It is the FAA’s plan 

to meet future demand and support the economic 

viability of the system while reducing congestion, noise, 

and emissions; expanding capacity; and improving the 

passenger experience. With Congress pushing for a faster 

transformation of the NAS, we continue to accelerate 

initiatives that yield the greatest and most immediate 

benefits to our stakeholders. 

In November 2008, in southern Florida, we deployed 

ADS-B, the system that forms the cornerstone of 

NextGen by allowing aircraft to be tracked by satellite 

rather than radar. Pilots use ADS-B cockpit displays 

to view the same live traffic seen by controllers. 

Pilots also receive real-time weather updates from 

the National Weather Service, as well as critical flight 

information such as temporary flight restrictions and 

special-use airspace. These services reduce the risk of 

midair collisions and weather-related accidents, provide 

more efficient routes in adverse weather, and improve 

situational awareness for pilots. 

We published the latest version of the NextGen 

Implementation Plan in January 2009. This edition 

focuses on answering five fundamental questions: What 

does NextGen look like in 2018? What aircraft avionics 

are needed to support operations in 2018? What benefits 

will be delivered by 2018? What is the FAA specifically 

committed to deploy in the near term that makes the 

most of existing resources? What activities are underway 

to support future capabilities?

The Implementation Plan, coupled with the NAS 

Enterprise Architecture (EA), provides a picture of 

NextGen’s near term (2009–2013) deliverables, which are 

targeted across three broad areas: airfield development, 

air traffic operations, and aircraft capabilities. Our 

approach maximizes the use of untapped capabilities 

in today’s aircraft and ground infrastructure, while 

working aggressively to develop and deploy new systems 

and procedures that will form a foundation for the 

capabilities necessary for midterm transformation. 

We believe this approach allows both government and 

industry to extract the greatest value from existing 

investments, while positioning the industry to gain 

exponential benefits in the midterm and beyond. 

For example:

• New runways provide significant capacity and 

operational improvements. In the next 5 years, 

the FAA has additional runway and taxiway 

improvement projects planned at a number of 

airports including Charlotte, Dulles, Houston, 

Denver, Philadelphia, and Chicago.

• In November 2008, we published a national order 

that allows us to safely reduce separation between 

aircraft approaching parallel runways at Boston, 

Cleveland, Philadelphia, St. Louis, and Seattle. We 

are already seeing positive results in Seattle and 

Boston. In the future, this could lead to more design 

flexibility so that runways could be built closer 

together, increasing their capacity within their 

existing boundaries, and providing better service 

to their communities without requiring additional 

land.

• Advances in performance-based navigation 

procedures and routes, such as Required Area 

Navigation (RNAV) and Required Navigation 

Procedures (RNP), allow equipped aircraft to fly 

more direct and precise paths and reduce flight time 

and fuel use. During this fiscal year, we continued 

work with RNAV procedures in the New York area 

by relocating and expanding airways, reconfiguring 

airspace, and creating optimal descent procedures. 

In Chicago, we added departure routes and changed 

procedures to allow for triple arrivals. In southern 

Nevada, we optimized existing airports and airspace. 

Overall, we published more than 429 performancebased navigation procedures and routes, compared to 

our goal of 100. 

In February 2009, we established the NextGen 

Implementation Task Force, a government-industry task 

force, which serves as the catalyst for the collaboration 

essential to transforming the promise of NextGen into 

reality. Specifically, the FAA requested that this group 

forge a community-wide consensus on the recommended 

NextGen operational improvements between now and 

2018, and recommend ways to ensure that the necessary 

actions are taken to guarantee delivery of intended 

benefits in a timeframe that results in a positive business 

case to support the requisite and timely equipage. The 

Task Force delivered its recommendations to the FAA in 

August 2009. 
FEDERAL AVIATION ADMINISTRATION

10 MANAGEMENT’S DISCUSSION AND ANALYSIS

We moved forward on a research consortium called 

Continuous Low Emissions, Energy, and Noise (CLEEN), 

which will allow us to work with industry to accelerate 

the maturation of technology that will lower energy, 

emissions, and noise. CLEEN also seeks to advance 

renewable alternative fuels for aviation. These fuels not 

only improve air quality and reduce life cycle greenhouse 

emissions, but also enhance energy security and supplies. 

A crucial step for aviation alternative fuel approval and 

deployment was achieved in August 2009 with the 

approval by the standard-setting organization, ASTM 

International, of a new fuel specification for a synthetic 

jet fuel blend.

OTHER MAJOR ACCOMPLISHMENTS

Pushing Safety Initiatives Ahead

Following the Colgan Air Flight 3407 crash, senior 

officials from U.S. airlines, pilot unions, and the FAA 

agreed on several major actions to improve safety 

programs and pilot training at the Nation’s airlines. 

Initiatives include the following:

• FAA inspectors will review airline procedures for 

identifying and tracking pilots who fail evaluations 

or repeatedly need additional training.

• Inspectors will validate that an airline’s training and 

qualification programs meet regulatory standards.

• U.S. airlines and unions should commit to an 

increased level of safety by insisting on all pilot 

records during the hiring process.

In late FY 2009, an aviation rulemaking committee, 

composed of FAA, labor, and industry representatives, 

presented recommendations for an FAA “flight time 

and rest” rule to address concerns about pilot fatigue. 

The proposed rules incorporate recent scientific research 

about the factors that lead to fatigue. 

The forced landing of US Airways Flight 1549 into 

the Hudson River last January focused the Nation’s 

attention on the risks wildlife poses to aircraft. The 

number of strikes has increased consistently since 1990, 

largely due to increased reporting, air traffic, and wildlife 

populations. The FAA has a robust wildlife mitigation 

research program that develops new techniques to make 

airports unattractive to wildlife. We are conducting 

assessments of low-cost portable radars for detecting and 

tracking birds on or near airports. A radar assessment 

is underway at Seattle-Tacoma International Airport 

and additional radars will be installed for assessment 

this summer at John F. Kennedy and Chicago O’Hare. 

Although we have learned that these radars can detect 

and track birds, it is still not clear if they are practical 

for use as a real-time bird alerting system at commercial 

airports. In the short term, we believe the radars will 

be used by the airport operators to determine daily 

and seasonal bird transit routes and behaviors. This 

information will help them implement mitigation 

measures both on and off the airport.

Air Traffic Controller and Safety Inspector Hiring 

and Training

Thanks to the expertise of air traffic controllers and the 

support of technology, tens of thousands of aircraft are 

guided safely and expeditiously every day through the 

NAS to their destinations. With more than 60 percent 

of the controller workforce eligible to retire during the 

next 10 years, the FAA is recruiting aggressively, and our 

efforts are working. During the past 3 years, we have 

hired more than 5,500 new air traffic controllers. We 

plan to hire 3,442 controllers in the next 2 years against 

expected losses of 3,133. By capitalizing on innovations 

in pre-employment processing, an increase in training 

capacity at the Air Traffic Controller Academy in 

Oklahoma City, OK, and new simulation equipment 

at the academy and at some of the busiest air traffic 

facilities, bringing a controller on board and getting that 

recruit through the training process is now more efficient 

than ever. In fact, these key improvements to training 

methods and technologies lowered the time it takes to 

become a certified controller from an average of 3 to 

5 years to an average of 2 to 3 years. Yet, the rigorous 

standards required to become a Certified Professional 

Controller remained unchanged. Most importantly, our 

controller workforce strategy allows us to put the right 

number of trained controllers in the right place at the 

right time.

Key to the AVS organization’s success in maintaining 

the safety of an aviation system that is experiencing 

the safest period in its history—is its workforce. With 

more than 24 percent of AVS inspectors eligible to retire 

and separations occurring at approximately 6 percent 

annually, the agency is continually soliciting and hiring 

new inspectors. During the past 3 years, the AVS has 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 11

hired more than 1,175 inspectors. We plan to hire 551 

inspectors in the next 2 years against expected losses of 

482. The AVS is prepared to staff appropriately based on 

expected changes in the aviation industry and attrition 

within our workforce. 

In FY 2008, we increased our aviation safety staffing 

by 264 positions, to a total of 7,002, which enabled 

us to increase safety oversight and surveillance of 116 

air carriers, increase production certification services 

for applicants, and expand our safety oversight of 

the ATO. This year, we increased staffing to 7,195, 

enhancing activities such as safety attribute inspections 

and manufacturer inspections. One of the primary 

challenges we face is hiring, training, and retaining a 

highly qualified workforce with the skills necessary to 

implement the SMS needed to keep the U.S. aviation 

system the safest in the world. To guide this effort, 

in May we published an updated Workforce Plan that 

lays out the strategies that will allow us to successfully 

meet these challenges. The new plan contains updated 

aviation industry forecasts as well as revised workforce 

losses and hiring targets. As we move to a system safety 

approach for oversight and surveillance, staffing levels 

will not increase at the same rate as industry traffic. We 

will therefore focus resources on the areas of highest risk, 

expand the use of designees, and increase our use of data 

to drive decisionmaking.

The Gateway for Commercial Human Space Flight

The New Mexico Spaceport Authority broke ground 

for Spaceport America in July 2009. While the FAA 

has licensed seven other spaceports, this is the first 

to be built from scratch rather than converted from a 

former airport. Spaceport America, the home for Virgin 

Galactic, is expected to be operational in 2 years, and 

test flights for taking private citizens into space are 

expected to begin in 2 to 3 years. The FAA is responsible 

for governing, licensing, regulating, and promoting these 

flights (See related story on page 8).

Prepared for Pandemics

The DOT and the FAA, together with several other 

Government agencies, have worked hard to ensure that 

our aviation system is prepared to handle the kinds of 

concerns raised by the 2009 H1N1 flu outbreak. The 

DOT has been participating in an interagency working 

group led by the Homeland Security Council since 

2006. We prepared and exercised a DOT-wide pandemic 

influenza plan. Our operating administrations also 

prepared and exercised their own plans. Consequently, 

when the 2009 H1N1 outbreak occurred, a response 

scheme was already in place, and we were ready to 

take immediate action. The planning components and 

exercises previously conducted ensured that DOT staff 

could rapidly and appropriately respond as the situation 

warranted. During the weeks following the initial 

outbreak, as more information about the virus became 

available, we scaled up and then down the measures 

taken and the communications initiated. 

Financial Management

We continue our efforts to better execute and manage 

the budget resources that Congress provides. Our 

transformation over the past 6 years has been steady 

and sure. By implementing improved management 

tools, including better cost accounting systems, and 

by instituting a pay-for-performance program, we 

have made efficient use of our resources. We continue 

to improve business practices to help control costs 

and increase efficiency, as described in the section that 

follows.

IMPROVING FINANCIAL MANAGEMENT

Cost-Effectiveness and Efficiency

The FAA’s Flight Plan includes a strategic objective to 

improve financial management while delivering quality 

customer service. Since FY 2005, the FAA has included a 

cost-control target among the Flight Plan goals we track 

each month. As a result of this emphasis, we have been 

able to achieve $192 million in recurring savings from 

efforts put in place from FY 2005 to FY 2008, as well as 

$84 million from efforts initiated during FY 2009. Our 

efforts in this area are described in this section.

Workers’ Compensation Consolidation. We 

centralized responsibility for management of workers’ 

compensation claims and achieved estimated cost 

avoidance of $22.6 million in FY 2009 and total savings 

of $63 million since FY 2003. 

Information Technology. As in most businesses, 

information technology (IT) investments can be 

expensive and quickly become obsolete. To address this, 

we are becoming more proactive about IT decisions by 
FEDERAL AVIATION ADMINISTRATION

12 MANAGEMENT’S DISCUSSION AND ANALYSIS

AS TECHNOLOGY IMPROVES, FEWER PEOPLE DEAL WITH NOISE

Substantially fewer people across the country are dealing with the noise impact from roaring jet engines.

In the late 1970s, significant noise from aircrafts affected about 7 million people. That number has dropped to fewer than 500,000, according 

to the FAA’s Office of Environment, Noise Division. The number has decreased, despite the fact that enplanements have risen considerably 

during that time.

The assessment is based on computing the areas surrounding U.S. airports that on average receive a 24-hour noise exposure level of 65 

decibels or more. This noise exposure is called DNL, or day-night sound level, which takes into account the number of aircraft noise events, the 

noise level of each event, and whether the event occurred in the daytime or at night.

Since the late 1960s and the advent of jet engines, aircraft noise levels have dropped 20 decibels. That translates to airplanes being four times 

quieter than 50 years ago.

In FY 2009, the FAA moved forward on a research consortium called CLEEN, which will allow the 

agency to work with industry to encourage technology to lower energy, emissions, and noise.

While the impact of noise has been 

greatly reduced, it remains an issue. 

While a vast number of people are now 

spared the noise levels of the past, the 

FAA predicts the number will start to 

rise again from its lowest point and 

continue climbing as air traffic recovers 

and resumes growth. More traffic means 

more noise.

The FAA continues to investigate ways 

to prevent that number from bouncing 

back up.

The CLEEN initiative provides funding 

that shares the cost with manufacturers 

to develop technology that will lower 

decibel levels from airplanes.

NextGen technologies may contribute 

further to noise reduction, and help 

counter the predicted rise in the number 

of people affected by noise. New 

Continuous Descent Approaches (CDAs), 

which allow pilots to glide the plane to landing, will eliminate the throttle noise produced during stepdowns while near the airport. RNP will 

allow planes not only to fly the CDAs, but also pilots to maneuver around sensitive areas on the ground, again reducing noise impact.

In the coming months and years, more studies will be done. The FAA is currently reexamining the level of “comfort” at which people experience 

noise. There will be greater opportunities for the public to voice concerns and ask questions. All facets of noise impact—including its impact 

on children’s learning—will be considered.

Adapted from an article in Focus FAA, the FAA’s employee news service.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 13

implementing agency-wide IT initiatives to consolidate 

resources and improve efficiency. This endeavor has 

yielded IT savings of $105 million since inception of the 

Cost Control Program (FY 2005–FY 2008).

Competitive Sourcing. The single largest effort by the 

FAA, and the largest nonmilitary outsourcing initiative 

in the Federal Government, involved the A-76 sourcing 

of 58 flight service stations to Lockheed Martin in 2005. 

This initiative is expected to result in a cost savings 

and cost avoidance of more than $2.1 billion from 2003 

through 2015. As a result of this transaction, the FAA 

saved approximately $35.8 million in FY 2008. We expect 

an additional savings of approximately $55.2 million in 

FY 2009.

SAVES Program. The Strategic Sourcing for the 

Acquisition of Various Equipment and Supplies 

(SAVES) initiative is an ambitious effort begun in FY 

2006 to implement private sector best practices in the 

procurement of administrative supplies, equipment, IT 

hardware, commercial off-the-shelf (COTS) software, 

and courier services.

Eight national contracts in five different categories 

are managed through the SAVES program. Since the 

initiation of these contracts, we have exceeded our 

expected compliance rate. We now purchase 90 percent 

of our office supplies through our contracts, well above 

our target of 70 percent. 

The SAVES Program has enabled the FAA to have better 

financial oversight in addition to significant cost savings. 

Through the SAVES contracts, the FAA achieved more 

than $22 million in cost savings for FY 2008 and a total 

savings of more than $46 million since implementation. 

Overall we continue to save approximately the 

following: 

• 22 percent for office supplies 

• 26 percent for office equipment 

• 33 percent for IT hardware 

• 12 percent for COTS software

• 10 percent for courier/overnight services 

• 16 percent for financial systems support 

Dell Blanket Purchase Agreement. The Office 

of Information Technology at the Mike Monroney 

Aeronautical Center manages a Blanket Purchase 

Agreement (BPA) with Dell Corporation for IT 

equipment including desktops, laptops, servers, printers, 

and monitors. We have realized cost savings of 

$36.4 million since inception of the BPA.

In addition to cost control, each FAA organization 

develops, tracks, and reports quarterly on a 

comprehensive measure of its operating efficiency 

or financial performance. Our efforts in this area are 

described below.

Cost Per Controlled Flight. This cost-based metric 

provides a broader historic picture of overall cost 

efficiency at the facility level, service level, and ATO 

level. Cost per controlled flight is reviewed as part of 

periodic benchmarking initiatives within the global air 

navigation service community.

Air Traffic Overhead Rate. To provide insight into 

cost-effectiveness of General and Administration (G&A) 

and Mission Support resources needed to support 

the Air Traffic mission, we capture overhead rates. 

We regularly review current and historic performance 

and selected benchmarking with other air navigation 

service providers. The performance indicator informs 

management decisions on the mix, level, and allocation 

of G&A and Mission Support resources.

IMPLEMENTING EXPENSE CONTROLS

The FAA has improved its oversight of the acquisition 

process to ensure that the agency is a responsible steward 

of the taxpayer’s money. The FAA has established 

requirements to better manage the agency’s resources 

and to ensure that we make sound business decisions.

Procurements. In 2005, the Administrator directed 

the CFO to exercise greater oversight and fiscal control 

over all agency procurements costing $10 million or 

more. Since that time, the CFO has evaluated more 

than 199 proposed acquisitions with an estimated 

contract value of $18 billion. With this process in place, 

we have established proper controls to effectively 

monitor contractor performance, enhanced our ability 

to accurately estimate and substantiate cost estimates, 

and improved our ability to articulate and define program 

requirements. 

The FAA Chief Acquisition Officer established an 

Acquisition Executive Board during 2009 to oversee 

procurement policy. The board is working to streamline 
FEDERAL AVIATION ADMINISTRATION

14 MANAGEMENT’S DISCUSSION AND ANALYSIS

the acquisition process and standardize the processes by 

which acquisitions are approved and managed. As part 

of this effort, a Support Contract Review Board is being 

established to review and approve any proposed support 

contract that has a value of $10 million or more. This 

board is made up of executives from the CFO’s office, the 

Office of Contract and Acquisition Policy, and the Office 

of the Chief Counsel, and will make recommendations to 

the CFO regarding his approval of the acquisition.

IT. To better coordinate IT efforts, any IT-related 

spending in excess of $250,000 must be approved by 

the Chief Information Officer (CIO). This requirement 

ensures that our IT investments are coordinated and fit 

into the agency-wide IT strategy.

Alignment of FAA Costs and Goals

The alignment of the FAA’s costs with its four strategic 

goal areas is captured in the Cost Accounting System 

(CAS)1. Projects entered into CAS by every organization 

are linked to one or more goals, and the percentage of 

funds that support each goal is identified. At the end 

of each fiscal year, the total net costs for the FAA’s 

four LOBs and for its combined staff offices and other 

programs are allocated among each of the agency’s 

goals: Increased Safety, Greater Capacity, International 

Leadership, and Organizational Excellence.

More than $11.3 billion, or about 70 percent of the FAA’s 

total net cost of nearly $16.4 billion for FY 2009, was 

devoted to our primary goal, ensuring the safety of the 

NAS. The ATO spent more than $7.9 billion, largely to 

maintain the safe separation of aircraft in the air and on 

the ground. The ARP directed more than $2.1 billion to 

establishing safe airport infrastructure. The AVS used 

nearly $1.2 billion on its programs to regulate and certify 

aircraft, pilots, and airlines, directly supporting the safety 

of commercial and general aviation. The FAA staff offices 

and other programs spent the remaining total—just 

more than $109 million—to further support the agency’s 

safety mission.

Approximately $4.7 billion, or 29 percent of total 

net costs, was assigned to support the FAA’s goal of 

expanding the capacity of the NAS, particularly through 

its pursuit of programs contributing to the NextGen 

1

 For the source of the totals referred to in this section, see Note 11 to the FAA’s 

Financial Statements, titled Net Cost by Program and Other Statement of Net 

Cost Disclosures on page 117. 

initiative. The ATO spent about $2.8 billion, largely 

to finance its facilities and equipment projects. The 

ARP spent more than $1.9 billion to enhance the 

capacity of the country’s airports through runway 

projects and other efforts. The AST directed more than 

$3.0 million on its efforts to expand capacity and the 

AVS contributed approximately $1.0 million. The bulk 

of the FAA’s remaining net costs, approximately 

$275 million, supported its Organizational Excellence 

goal, to which nearly all the LOBs and staff offices 

contributed. The FAA committed the remainder, 

approximately $43.5 million, to promoting its 

International Leadership goal.

PERFORMANCE HIGHLIGHTS 

The FAA is charged with promoting the safety and 

efficiency of the Nation’s aviation system. With broad 

authority to enforce safety regulations and conduct 

oversight of the civil aviation industry, we maintain the 

system’s integrity and reliability. A strategic plan, annual 

business plans, human capital plans, and the annual PAR 

create a recurring cycle of planning, program execution, 

measurement, verification, and reporting. This strong 

link between resources and performance shows our 

accomplishments and reinforces accountability for the 

way we spend taxpayer money.

Managing Performance 

The FAA manages performance by using a four-step 

framework based on best practices from a number of 

private and public sector organizations (See chart below). 

and 

Set 

Goals

Monitor 

Work

Assess 

Results

Cascade

Management uses data to 

determine if initiatives are 

delivering intended results, 

and that there is a 

connection between the 

work and the overall 

success of the organization.

Success for each critical 

initiative must be defined in measurable terms.

The Monitor Work 

measures become the 

targets for the next level 

of the organization.

Goals must be clear, 

measurable, time-bound, 

and be outcome focused.

Management must identify 

and prioritize the most critical 

work, allocate limited 

resources, and find new resources through efficiencies and reprioritization.

Plan Work 

and 

Budget

PERFORMANCE MANAGEMENT FRAMEWORK

As we use this framework and instill management 

discipline into the processes, we anticipate a multiyear 

journey of learning and change.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 15

YEAR-TO-YEAR PERFORMANCE GOALS ACHIEVED

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Performance Targets Met (Number) 9 of 12 24 of 30 28 of 31 27 of 30 24 of 30 26 of 29 28 of 31

Performance Targets Met (Percentage) 75% 80% 90% 90% 80% 90% 90%

The first step in the process, Set Goals, includes 

consulting with management, stakeholders, and 

customers to identify areas for improvement. 

The second step, Plan Work and Budget, focuses on 

the critical work and resources required to achieve 

the goals. Following the framework, the FAA created 

a performance-based budget that links resource 

requirements to the Flight Plan and the DOT Strategic 

Plan. Our FY 2009 Budget in Brief is available at http://

www.faa.gov/about/budget and our Flight Plan

is available at http://www.faa.gov/about/plans_

reports.

The third step, Monitor Work, develops measurement 

of the work required to achieve our goals. The FAA has 

developed organizational business plans for each LOB 

and staff office. These plans outline the initiatives, 

activities, and performance targets that link our work 

directly to the Flight Plan. FY 2009 Business Plans for all 

organizations are available at http://www.faa.gov/

about/plans_reports. 

The Flight Plan, the FAA’s strategic plan, consists of 

31 strategic performance measures in FY 2009. It is 

carefully designed to make sure that we focus on what is 

important, and that taxpayer resources are used with the 

strictest care. The Flight Plan measures are categorized 

into four strategic goal areas—Increased Safety, Greater 

Capacity, International Leadership, and Organizational 

Excellence. When setting the goals, the agency strives to 

increase the challenge each year.

Assess Results is the last and most important step in 

the performance management process. This year, we 

continued our practice of reviewing and discussing 

annual performance goals every month. In addition, 

we continued to focus more on discussing performance 

results, root causes of performance issues, and 

reallocation of resources to correct underperformance. 

Our performance measures and targets support the 

FAA’s mission to provide citizens with a safe, secure, 

and efficient global aviation system. The chart above 

provides a summary of our year-to-year performance goal 

achievement trend.

As indicated in the chart above, the FAA has expanded 

its strategic focus since 2002. As we continue to mature 

in our strategic management processes and our focus 

becomes sharper, the number and mix of performance 

targets shift. On a yearly basis, we review the plan to 

ensure that we are on track to meet future challenges and 

to ensure that aviation remains an engine of economic 

growth.

When we first started preparing our annual PAR in 

FY 2002, the FAA had 10 performance goals in the 

strategic areas of Safety, System Efficiency, and 

Organizational Excellence. In 2003, the FAA refined its 

strategic plan and launched the first Flight Plan

(FY 2004–2008). The Flight Plan provides the framework 

to match resources with initiatives for long-term change. 

The new Flight Plan was designed around our current 

four strategic goals. These goals detail how we will move 

forward into the future. 

In FY 2004, to reflect the increasing emphasis on 

accountability within the FAA organizations, we added 

18 new performance targets. Six of the new performance 

targets were associated with International Leadership 

and placed greater emphasis on our role as a leader in 

the global civil aviation system. In the Safety strategic 

goal area, we introduced Commercial Space Launch 

Accidents, marking a new era in space travel, with FAA 

licensing of the first private manned space vehicle—

SpaceShipOne. 

In FY 2009—the sixth year of the Flight Plan’s

implementation—the FAA has 31 performance measures 

and targets that focus our efforts to achieve enhanced 

aviation safety, increase system capacity, provide 

international leadership, and ensure organizational 

success. We met 28—a 90 percent success rate.
FEDERAL AVIATION ADMINISTRATION

16 MANAGEMENT’S DISCUSSION AND ANALYSIS

Safety. Safety is not only a top priority, but also an 

economic necessity. People will fly only if they feel safe. 

They must trust the system and that trust must be 

earned. In FY 2009, we introduced a new fatal accident 

rate for general aviation. This new measure, which 

replaces an unadjusted accident count, reflects fleet 

activity levels and their relationship to the number of 

accidents. Flight hour information is derived from the 

FAA’s annual General Aviation and Part 135 Activity 

Survey. This highly accurate survey has a standard error 

of less than 1 percent, thanks to superior data collection 

methodologies developed in cooperation with the 

general aviation community. We achieved five of eight 

safety goals, missing our targets for General Aviation 

Fatal Accident Rate, Alaska Accidents, and Operational 

Errors. For a more complete discussion of all of our safety 

measures, performance, and steps we plan to take in FY 

2010, see page 33. 

Capacity. Capacity is the backbone of air travel. 

Aviation can grow only if capacity grows. We aim to 

achieve increases in capacity in an environmentally 

sound manner. In FY 2009, we achieved seven out of 

seven capacity goals and, for the sixth year, exceeded our 

target for aviation noise exposure. For a more complete 

discussion of all of our capacity measures, performance, 

and steps we plan to take in FY 2010, see page 40.

International Leadership. The FAA’s goal is to make 

the international aviation system as safe and efficient 

as the one enjoyed in the United States. In FY 2009, we 

achieved all four international leadership goals. For a 

complete discussion of all of our International Leadership 

measures, performance, and steps we plan to take in FY 

2010, see page 47.

Organizational Excellence. FAA employees are 

our most valuable resource. Together, we operate the 

largest and safest aerospace system in the world. To do 

this efficiently, we must continually provide stronger 

leadership, a better-trained and safer workforce, 

enhanced cost-control measures, and improved 

decisionmaking. In FY 2009, we achieved all 11 of 

our Organizational Excellence goals. We added a new 

Continuity of Operations goal, designed to measure our 

ability to respond to crises rapidly and effectively. For 

a more detailed discussion of all of our organizational 

measures, performance, and steps we plan to take in FY 

2010, see page 51.

FY 2009 PERFORMANCE AT A GLANCE

Performance Measure FY 2009 Target FY 2009 Results FY 2009 Status FY 2010 Target1

SAFETY

Commercial Air Carrier Fatality Rate 8.4 6.82 8.1

General Aviation Fatal Accident Rate 1.11 1.172 1.10

Alaska Accidents 99 1042 1.86 3

Runway Incursions (Category A and B—rate) 0.472 0.2284 0.450

Total Runway Incursions (Percentage Reduction) -1% -5.75%4 - 2%

Commercial Space Launch Accidents 0 0 0

Operational Errors (Category A and B—rate) 2.10 2.434 2.05

Safety Management System 9 SMS Activities 

Completed

9 SMS Activities 

Completed

SMS Implemented 

in 3 LOBs

CAPACITY

Average Daily Airport Capacity 

(35 Operational Evolution Partnership [OEP] airports) 100,7075 101,6914 102,648

Average Daily Airport Capacity 

(7 metropolitan areas) 39,484 42,9252 39,484

1.00% 1.02% 1.00%

Annual Service Volume (5 runway/ (6 runway/ (2 runway/ 

taxiway projects)5 taxiway projects) taxiway projects)
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 17

FY 2009 PERFORMANCE AT A GLANCE

Performance Measure FY 2009 Target FY 2009 Results FY 2009 Status FY 2010 Target1

Adjusted Operational Availability

(35 OEP airports) 99.70% 99.78%4 99.70%

NAS On-Time Arrivals 88.00%5 88.98%4 88.00%

Noise Exposure -16.00% -48.00%6 - 20.00%

Aviation Fuel Efficiency -7.00% -10.17% - 8.00%

INTERNATIONAL LEADERSHIP

Commercial Aviation Safety Team (CAST) Safety Enhancements 6

 

(SEs) 5 CAST SEs 5 CAST SEs 4 CAST SEs

International Aviation Development Projects 7 projects 8 projects 7 projects

Aviation Leaders 2 countries/ 

regional orgs.

7 countries/ 

regional orgs.

3 countries/ 

regional orgs.

NextGen Technologies 1 country 1 country 1 country

ORGANIZATIONAL EXCELLENCE

Office of Personnel Management (OPM) Hiring Standard 65.00%5 80.88% 80.00%

Reduce Workplace Injuries 2.60 per 100 1.77 per 1008 2.52 per 100

Grievance Processing Time -25.00%5 -73.97% -30.00%5

Air Traffic Controller Workforce Plan 0% to 2% over Plan 1.19% over plan 0% to 2% over Plan

Aviation Safety Critical Positions Workforce Plan +/- 1% of 

annual target

0.15% over

annual target9

+/-1% of 

annual target

Cost Control 

1 activity per 

approved org 

& achievement 

of 90% of

 targeted savings5

1 activity per 

approved org 

& achievement 

of 123.38% of 

targeted savings

1 activity per approved org 

& achievement 

of 90% of 

targeted savings

Unqualified Audit (with no material weaknesses [NMW]) Unqualified Audit 

w/NMW

Unqualified Audit 

w/NMW

Unqualified 

Audit w/NMW

Critical Acquisitions on Schedule 90.00% 93.75% 90.00%

Critical Acquisitions on Budget 90.00% 97.06% 90.00%

Customer Satisfaction (ACSI) 61 69.32

Government average for regulatory 

organizations

Information Security 0 0 0

Continuity of Operations 5% ahead of FEMA 

requirements

8.33% ahead of 

FEMA requirements

5% ahead of FEMA 

requirements

 Green: Goal Achieved 

 Red: Goal Not Achieved

Notes: 

For a detailed description of each performance measure, see performance goal tables in the Performance Results section.

For information on data sources and estimating and finalization of 

results, see Completeness and Reliability of Performance Data.

TBD: To be determined

1 FY 2010 targets are from the FY 2009–2013 Flight Plan. 2

 Preliminary data. Final data will be available in March 2011.

3

 In FY 2010, the Alaska Accidents measure will be converted to a rate.

4

 Preliminary data. Final data will be available in January 2010. 

5

 Target revised in FY 2009–2013 Flight Plan. 6

 Projection from trends. Final data will be available in May 2010.

7

 Name changed for FY 2009—formerly known as Aviation Safety Leadership.

8

 Projection from trends. Final data will be available in November 2009.

9

 Preliminary data. Final data will be available in December 2009.
FEDERAL AVIATION ADMINISTRATION

18 MANAGEMENT’S DISCUSSION AND ANALYSIS

PAVING OUR WAY TO THE FUTURE

In an historic event on November 20, 2008, the FAA dedicated 

three new runways at airports across the country in one 

day—Washington Dulles, Chicago O’Hare, and Seattle-Tacoma 

International Airports.

Spanning a total of more than 25,000 feet, the new runways 

at Dulles and O’Hare have the potential to accommodate more 

than 150,000 additional operations in the NAS. Meantime, 

the Seattle-Tacoma runway is expected to significantly reduce 

weather-related delays that have plagued the airport.

American Airlines Flight 149 becomes the first aircraft to 

take off from the new Dulles runway.

The runways represent a nearly $2 billion investment in 

America’s aviation system, of which more than a third —

$644 million—was provided by the FAA’s AIP.

The real gains, of course, will be measured by fewer and shorter 

delays, and the number of additional flights the airports can 

handle. The average delay per operation at Dulles is expected to 

drop by 2.5 minutes, while the average number of annual delays 

at Chicago O’Hare is expected to fall.

The biggest impact on delays could come at Seattle-Tacoma. 

Because of low clouds, which occur about 44 percent of the 

time, the airport is often confined to using one arrival stream 

instead of two. The introduction of a third runway will allow 

them to handle two simultaneous staggered arrival streams in 

poor weather. As many as eight additional on-time arrivals per 

hour could be handled. 

The opening of the Dulles runway has the potential to add 

100,000 annual operations to that airport, and could serve as 

many as 3 million more passengers per year. In Chicago, the 

new runway could accommodate more than 52,000 annual 

operations. This is the first time that O’Hare will have three 

parallel east-west runways.

Adapted from an article appearing in Focus FAA, the FAA’s employee 

news service.

The DOT also independently verifies some of our 

performance data. In addition, several performance 

measures, such as the Commercial Air Carrier Fatality 

Rate and General Aviation Fatal Accident Rate, require 

independent verification by the National Transportation 

Safety Board (NTSB) and the Bureau of Transportation 

Statistics. Data for this measure are not considered 

final until NTSB gives its approval (See http://www.

faa.gov/about/plans_reports to review our FY 2009 

Portfolio of Goals).

A critical component of managing our performance is the 

periodic independent evaluation of FAA programs. While 

performance measures can show if intended outcomes 

are being achieved and can reveal trends, program 

evaluations use analytic techniques to assess the extent 

to which programs contribute to the desired outcomes 

and trends. Program evaluations can be completed by 

DOT staff, contractors, academic institutions, the DOT 

Office of Inspector General (OIG), or the GAO.

Reviews such as the OIG’s summary of management 

challenges (beginning on page 63) provide focus and 

opportunities for improvement, and help us maintain the 

public’s trust. In response to these reviews, we work with 

each FAA organization to address concerns and improve 

the way we conduct business.

DOT STRATEGIC INITIATIVES

DOT Strategic Initiatives are a set of tools for improving 

the management and performance of the Federal 

Government. The objective is a Federal Government that 

is citizen-centered, not bureaucracy-centered; resultsoriented, not output-oriented; and market-based, actively 

promoting innovation through competition.

This tool set contains five Government-wide and two 

agency-specific goals to improve Federal management 

and deliver results that matter to the American people. 

Together, these goals are referred to as the DOT Strategic 

Initiatives. The five Government-wide initiatives are 

Strategic Management of Human Capital, Commercial 

Services Management, Improved Financial Performance, 

Expanded Electronic Government, and Performance 

Improvement. In addition to these five initiatives, 

the FAA as an agency within the DOT, participates in 

two additional agency-specific initiatives: Eliminating 

Improper Payments and Federal Real Property Asset 

Management.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 19

FY 2009 FAA ACCOMPLISHMENTS 

Strategic Management of Human Capital

Strategic Management of Human Capital involves an 

ambitious range of initiatives to ensure that planning 

and management of agency human capital is strategic, 

supports organizational performance, and ensures 

mission accomplishment. For the fifth consecutive 

year, DOT/FAA human capital accomplishments have 

met the Government-wide requirements for strategic 

management of human capital and advanced innovative 

workforce solutions. 

Workforce Planning. Recruiting a highly qualified, 

high-performing workforce in today’s competitive 

environment remains an important FAA human 

capital challenge. We are implementing comprehensive 

recruitment, marketing, and outreach strategies to 

broaden agency applicant pools and meet the hiring 

needs of our air traffic controller, safety critical, and other 

essential workforces. The increased outreach is reflected 

in FAA manager feedback with 66 percent agreeing 

that the hiring process is effectively attracting the right 

applicants. 

Several joint initiatives with the Department of Veterans 

Affairs are expanding job opportunities for veterans. 

The FAA is able to offer veterans with disabilities access 

to on-the-job training to become air traffic controllers 

or airway transportation system specialists thanks to 

a new FAA Veteran’s Training Program helping them 

transition into the civilian workforce. The agency also 

can offer eligible developmental controllers Montgomery 

GI Bill education benefits. These new veterans’ 

training initiatives help to contribute toward meeting 

future agency hiring goals for controllers and airway 

transportation system specialists. 

As our controllers and other employees become eligible to 

retire during the coming decade, the FAA is building our 

next generation workforce. Agency workforce planning 

helps us prepare for and manage our shifting workforce 

demographics and ensure our future workforce viability. 

The annual updates of the FAA Air Traffic Controller 

Workforce Plan and Aviation Safety Workforce Plan 

present current staffing levels and forecast attrition and 

hiring of controllers and aviation safety personnel. To 

ensure strategic alignment between people, goals, and 

mission accomplishment, we concurrently updated FAAwide workforce and business plans.

The FAA continually assesses mission-critical workforces, 

prioritizes, and invests in closing skill gaps necessary to 

improve organizational performance and effectiveness. 

In 2009, the FAA participated in Government-wide 

competency assessments for leaders and continued 

its efforts to close skill gaps for key mission-critical 

occupations including human resource specialists, 

leaders, information technologists, and acquisition 

specialists. 

Leadership and Succession Management. The 

FAA Flight Plan, Executive Leadership Succession Plan, 

and Managerial Leadership Succession Plan set forth 

specific expectations for ensuring the continuity of 

agency leadership through succession planning and 

development. In FY 2009, the FAA piloted new processes 

to expand leadership succession planning to all levels 

of management, implemented formal programs to 

develop future executives and prospective managers, 

and continued to modernize managerial and executive 

training at our Center for Management and Executive 

Leadership (CMEL). 

The Senior Leadership Development Program will 

continue into 2010. This program provides opportunities 

during a 1 to 2 year period for assessment, coaching, 

training, and developmental assignments focused on the 

FAA Executive Success Profile. Participants were selected 

in September 2009. The 28 participants selected in 2007 

completed the capstone Leadership Dynamics course at 

the Federal Executive Institute and other developmental 

activities prior to graduation. The FAA also launched 

a new Program for Emerging Leaders (PEL) to address 

continuing turnover in managerial ranks. Targeted to 

nonsupervisory employees who aspire to management, 

PEL provides opportunities during an 18-month period 

for assessment, mentoring, training, and developmental 

assignments. Seventy-two participants from across the 

agency were selected in March for the initial cohort. A 

second cohort of 64 was selected in August. The program 

will continue in FY 2010. 

Commercial Services Management

In FY 2009, the ATO, Technical Operations Services, 

Aviation System Standards Program Office, began 

implementing its High Performing Organization (HPO) 
FEDERAL AVIATION ADMINISTRATION

20 MANAGEMENT’S DISCUSSION AND ANALYSIS

plan. Within the first three quarters of the first year of 

implementation, the HPO has realized a benefit of 

3.9 percent savings. More than $1.5 million of this 

savings is the result of business process reengineering and 

streamlining of the printing operation. This includes the 

reduction of staffing and the elimination of costly film 

and processing supplies through the implementation of 

new computer-to-plate automated technologies. 

In FY 2009, the program implemented a new pricing 

model and pricing strategy for maximizing the 

recovery of cost through public and government sales 

of navigational products. A new Chart Agent Business 

Model also was implemented that will result in a 

projected annual savings beginning in FY 2010 of more 

than $1 million. 

The complete HPO organizational realignment was 

implemented in October 2009, and will foster further 

business process reengineering, and new investments in 

geographic information systems for chart production. 

These initiatives will eliminate duplicate and inefficient 

processes and improve the quality of products and 

services. Additionally, these initiatives will allow for 

resources to be shifted toward the development of new 

digital navigation products and to support the FAA’s 

NextGen initiative. In summary, Aviation System 

Standards is well on its way to realizing the benefits 

outlined in the HPO plan.

Improved Financial Performance 

During FY 2009, we continued to closely monitor the 

effectiveness of capitalization improvement efforts 

and the timely processing of construction in progress 

transactions. We also implemented organizational 

changes and added resources at the managerial and staff 

levels.

The FAA designed and tested an improved accounting 

process for reimbursable agreements. The redesign, which 

was implemented in FY 2009, simplifies the accounting 

transaction flow and the monthly reconciliation process.

Expanded Electronic Government 

The FAA’s participation in the DOT E-Government 

initiative last year led to several important 

accomplishments this year including Capital Planning, 

IT Security, EA, and Government-wide initiatives. 

Capital Planning. In January 2009, the GAO removed 

the FAA Air Traffic Control Modernization Program from 

its High-Risk List. This accomplishment is attributed 

to the FAA’s progress in addressing most of the main 

causes of its past project cost overruns, schedule delays, 

and performance shortfalls. The FAA is committed 

to sustaining this progress by having the Information 

Technology Executive Board (ITEB) as an investment 

decision authority, and by instituting Earned Value 

Management (EVM) best practices.

The FAA ITEB investment portfolio currently consists 

of more than 50 IT investments, with an FY 2009 

value exceeding $250 million. The ITEB, a senior-level 

investment decisionmaking board is chaired by the 

CIO, and makes decisions on the investments within 

their portfolio. Prior to 2009, the ITEB was only a 

recommendation board, without decision authority. As 

part of the agency-wide effort to demonstrate oversight 

of our IT investments, the ITEB adopted management 

processes based on the GAO’s IT Investment 

Management Framework. As the portfolio management 

capabilities mature, the FAA expects to improve 

investments performance by completing projects in less 

time, receiving a return/cost savings percentage of the 

total portfolio budget, and managing the FAA more like 

a business.

The FAA also continued to establish EVM practices. 

Some of the FAA’s activities in FY 2009 included 

sharing the FAA’s standard set of EVM templates with 

other Government agencies; establishing an EVM 

methodology for “service-for-fee” programs; training new 

program staff and managers in EVM; and increasing its 

internal EVM oversight, including data validation and 

analysis. FAA EVM oversight includes surveillance and 

certification of EVM systems, supporting the Flight Plan

goal of having more of our systems delivered on time 

and within budget. The FAA also certified a contractor’s 

EVM system, as the FAA became just one of two civilian 

agencies to do such certifications, reducing both Federal 

and contractor costs. The FAA’s leadership in EVM was 

another factor that contributed to the agency’s Air 

Traffic Control Modernization Program progress.

IT Security. The FAA must incorporate information 

security into its management culture to protect against, 

detect, and respond to information security threats 

affecting critical DOT and FAA IT assets. During 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 21

FY 2009, the FAA initiated a number of activities to 

ensure this cultural transformation. 

The Cyber Security Management Center (CSMC) offers 

tracking and early warning services along with viable 

responses to modern cyber concerns that threaten Federal 

agencies. To that end, the CSMC has expanded its vision 

(100 percent increase), impact, and cyber information 

gathering and sharing on behalf of the FAA. As well 

as performing network security scans, forensics, and a 

range of protection and response measures, it currently 

handles and reacts to more than 7.8 million cyber alerts 

per day. As a result of these activities, the FAA’s CSMC 

has become the cyber security focal point and agent for 

the DOT, and a recognized leader in the cyber security 

industry—offering its cyber security services to Federal 

agencies throughout the Government.

Personally Identifiable Information (PII) continues to be 

a vulnerable target for cyber attacks. While the FAA has 

risen to the challenge of safeguarding PII, it has learned 

hard lessons in the process. In February 2009, a serious 

breach resulted in the loss of two files containing PII of 

approximately 45,000 FAA employees. For the FAA, this 

was a call to action.

In response to the breach and the ever-increasing 

threat, the FAA ramped up its program. New tools and 

procedures are being developed to protect data, and new 

privacy specialists will be hired to oversee and coordinate 

implementation that has full and broad management 

support. Automated tools will be procured to scan FAA 

networks to locate and protect unencrypted PII.

EA. The FAA continues to improve the EA. In 

FY 2009, the FAA updated the EA, expanding the 

scope of information to better support investment 

decisionmaking. The architecture and technology boards 

are fully institutionalized and hold regular meetings to 

share information and make decisions on architecture 

and technology issues. The scope of the FAA EA 

roadmap was increased to add non-NAS regulatory 

support and administrative roadmaps, and a non-NAS 

IT configuration management board was chartered. This 

increased scope will help the FAA improve planning, 

investing, and managing the agency’s IT assets that 

support Administrative systems. In December 2008 for 

its internal EA methodologies, the FAA formally adopted 

a slightly modified version of the Federal Segment 

Architecture Methodology. This updated methodology 

promotes increased use of segment architecture. It 

gives the FAA the ability to manage IT investments, 

information system development, and share resources 

across organizations within the FAA. The FAA LOBs 

increased emphasis on completion and use of the EA, 

hiring more staff as the EA program continues to gain 

momentum. Also, the FAA deployed a new EA tool. To 

ensure up-to-date EA information, a plan to update the 

tool on a regular schedule is being developed. This creates 

a single authoritative source for information and the 

systems related to it, increasing consistency and accuracy 

across the agency.

Government-Wide Initiatives. The FAA continues to 

participate in Government-wide initiatives such as the 

Federal EA, and E-Government, specifically e-grants. The 

FAA also is participating in data.gov, IT Scorecard, and 

e-records management development with the National 

Archives and Records Administration. The FAA also 

has positioned itself for full participation in the OMB’s 

segment architecture initiative.

Performance Improvement

The Performance Improvement initiative encourages 

agencies to develop efficiencies in executing programs, 

implementing activities, and achieving results while 

avoiding wasted resources, effort, time, and money. 

To achieve this objective, we continue to ensure 

transparency about performance and the steps we 

are taking to correct deficiencies. We regularly and 

systematically measure program performance against 

predetermined targets to track program viability. We 

continue to integrate performance information into 

budgetary decisionmaking to ensure that resources 

are properly aligned with the FAA’s mission and goal 

activities, and the results of those activities are linked 

back to the annual budget planning process. 

FAA Flight Plan. In years past, the FAA’s Management 

Board conducted an annual update to the Flight Plan, 

our 5-year strategic plan. The Flight Plan establishes 

strategic goals, corporate initiatives, and performance 

targets in the FAA’s four strategic goal areas—Safety, 

Capacity, International Leadership, and Organizational 

Excellence. This plan is directly linked to performance 

results. The FAA Administrator holds regular Flight Plan

meetings on the status of our performance goals and 
FEDERAL AVIATION ADMINISTRATION

22 MANAGEMENT’S DISCUSSION AND ANALYSIS

NEW SIMULATOR LAB TO HELP THE FAA FLY 

INTO NEXTGEN

The new Airbus 330/340 full-flight simulator installed at 

the Mike Monroney Aeronautical Center in Oklahoma City, 

in December 2008, takes the FAA’s research and analysis 

capabilities a quantum leap into a safer, more efficient future.

The new simulator, which the FAA had modified to support 

NextGen research initiatives, can simulate either the A330 (twoengine) or the A340 (four-engine) aircraft. Combined with the 

Boeing 737-800 simulator, which the FAA acquired in 2006, the 

new simulator—along with two air traffic control monitors—

provides the agency with a platinum research platform to 

support NextGen.

The FAA’s Airbus 330/340 simulator equipped with NextGen 

technology allows new safety and efficiency concepts to be 

researched and tested.

NextGen modifications include: head-up display for lowvisibility operations, an enhanced flight vision system to 

turn night into day and enhance pilot situational awareness, 

electronic flight bags to display own-ship position to improve 

runway safety, and initial ADS-B infrastructure to advance 

ADS-B implementation.

By linking both simulators with air traffic control monitors, this 

virtual terminal allows the FAA to study a host of new concepts 

including evaluating closely-spaced operations with pilots, 

controllers, and aircraft. The biggest benefit of the new lab is to 

provide the tools the FAA needs to get maximum performance 

out of the NAS. 

Adapted from an article appearing in Focus FAA, the FAA’s employee 

news service.

the results are posted on the FAA’s homepage. This year 

the update process has been delayed due to a change in 

administration.

Pay for Performance. Accountability for results is 

widespread throughout our organization, with 

84 percent of our staff and executives under the 

pay-for-performance system. Agency achievement of 

Flight Plan performance targets are considered when 

annual pay raises are calculated. In addition, executives 

and managers have discretion in rewarding highperforming employees with incentives for quality work 

and innovation. Executives also are eligible for short-term 

incentive bonuses when specific performance thresholds 

are met or exceeded. 

Eliminating Improper Payments 

In FY 2009, the FAA continued its compliance with the 

Improper Payments Information Act of 2002 (IPIA), 

which requires that agencies: (1) review programs 

and identify those susceptible to significant improper 

payments, (2) report to Congress on the amount and 

causes of improper payments, and (3) develop approaches 

for reducing such payments. The FAA’s compliance 

efforts involved developing and executing a sampling 

plan for the AIP, designed to satisfy the foregoing 

requirements. The FAA review covered the 15-month 

period March 1, 2008–May 31, 2009. 

The FAA found improper payments totaling $2,152,202 

in the sample of 431 tested items. These are known 

improper payments. The projection of known improper 

payments to the population of program payments for 

the 15-month period results is an improper payment 

estimate of $37.8 million, and an estimated improper 

payment rate of less than 1 percent. 

This percentage does not meet the OMB’s definition of 

significant improper payments ($10 million and 

2.5 percent of total program payments). 

Notwithstanding the definition of significance, the 

FAA believes a corrective action plan is essential to 

the prevention, detection, and reduction of improper 

payments in the AIP program and to improved program 

management.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 23

Federal Real Property Asset Management

The FAA, on behalf of the DOT, continues to provide 

inventory information and OMB data element updates 

(e.g., mission criticality, facility condition index, 

utilization rate, operating cost) to the Federal Real 

Property Council. The data includes metrics for the 

approximately 67,300 DOT real property assets and 

reported performance information on the following 

elements for each real property asset:

• Mission criticality

• Facility condition index

• Utilization rate

• Annual operating costs

Since the establishment of this initiative, DOT activities 

have resulted in disposals of more than $250 million 

worth of real property assets. Savings resulting from 

the disposition of property have been applied to future 

disposition efforts, as well as updates, upgrades, repairs, 

and renovations of current assets. 

The data and performance measures are maintained in 

the DOT Real Estate Management System application 

that serves as the single-point inventory database for 

DOT real property assets. During FY 2009, the FAA 

conducted a physical inventory of approximately 

22,000 real property assets. The data associated with 

these assets were then transmitted to the Federal Real 

Property Profile for inclusion in the General Services 

Administration Federal Real Property Inventory 

Database, which includes data from all Federal agencies.

In accordance with the Asset Management Plan and 

the Three-Year Timeline for Real Property, the FAA 

participated in periodic reviews of the real property asset 

data and disposed of more than 2,405 unneeded assets 

with a value of approximately $75 million in FY 2009. 

The FAA team will continue to represent the DOT in the 

Federal Real Property Council workgroups for disposals, 

lease management, and repair needs to set the real 

property priorities for the next 4 years.

MANAGEMENT INTEGRITY: CONTROLS, 

COMPLIANCE, AND CHALLENGES

In an October 13, 2009, memorandum, the 

Administrator reported to the Secretary an unqualified 

statement of assurance under the FMFIA. Every year, 

FAA program managers in the LOBs and staff offices 

assess the vulnerability of their program and activity 

management controls. On the basis of these assessments, 

reviews are conducted to determine their compliance 

with sections 2 and 4 of the FMFIA. The head of the 

LOB or staff office then identifies in writing to the 

Administrator any potential material internal control 

weakness or system nonconformance. Those deemed 

material are consolidated in a memorandum with a 

Statement of Assurance signed by the Administrator and 

sent to the Secretary of the DOT. Our response becomes 

a part of the DOT Statement of Assurance sent to the 

President. 

In addition to the FMFIA, the FAA reports its compliance 

with the Federal Financial Management Improvement 

Act (FFMIA). The FFMIA requires an assessment of 

adherence to financial management system requirements, 

accounting standards, and U.S. Standard General Ledger 

(USSGL) transaction-level reporting. For FY 2009, we are 

reporting overall substantial compliance.
FEDERAL AVIATION ADMINISTRATION

24 MANAGEMENT’S DISCUSSION AND ANALYSIS

MANAGEMENT ASSURANCES

Federal Managers’ Financial Integrity Act Assurance Statement— 

Fiscal Year 2009

The FAA is responsible for establishing and maintaining effective internal control and financial management 

systems that meet the objectives of the FMFIA; OMB Circular A-123, Management’s Responsibility for Internal 

Control; and the 2009 ARRA. These objectives are to ensure the following:

• Effective and efficient operations

• Compliance with applicable laws and regulations

• Reliable financial reporting

Internally, we assess the vulnerability of our programs and systems through FMFIA of 1982. We are pleased to 

report that, taken as a whole, the management controls and financial management systems in effect from 

October 1, 2008, through September 30, 2009, provide reasonable assurance that the objectives of both sections 

2 and 4 of the FMFIA are being met. Management controls are in place and our financial systems conform to 

Government-wide standards.

In addition, the FAA conducted its assessment of the effectiveness of internal control over financial reporting, 

which includes internal control related to the preparation of its annual financial statements as well as safeguarding 

of assets and compliance with applicable laws and regulations governing the use of budgetary authority and 

other laws and regulations that could have a direct and material effect on the financial statements, in accordance 

with the requirements of Appendix A of OMB Circular A-123. The results of this evaluation provide reasonable 

assurance that the FAA’s internal control over financial reporting was operating effectively as of September 30, 

2009. Due to unlimited scope of processes tested this year and no material weaknesses reported on our financial 

statements, the FAA is issuing an unqualified statement of assurance. 

J. Randolph Babbitt 

Administrator 

November 12, 2009
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 25

GRANTS MANAGEMENT POLICIES AND PRACTICES 

Decisions on distributing AIP funds are centralized at the 

FAA headquarters, with significant input from regional 

offices. While most of the day-to-day decisions for AIP 

project formulation are delegated to regional offices, the 

FAA headquarters develops the policy to ensure that 

grants are implemented appropriately and that grantees 

are treated consistently. Policies for administering 

the program are included in an AIP handbook that is 

regularly updated through policy guidance letters issued 

to regional offices and available to grant recipients. The 

FAA also ensures the consistent implementation of AIP 

by participating in airport industry trade conferences 

and training, posting statutory and policy changes on 

our public Web site, and requiring employees to attend 

annual training that focuses on improving business 

processes and updating personnel on policy changes.

We meet regularly with eligible airport sponsors to 

identify planning and development needs. Through this 

process, we develop the Airport Capital Improvement 

Plan, a 3 to 5-year plan that identifies the planning 

and development needs for airports nationwide, and 

prioritize eligible projects. Only projects identified 

in this plan are awarded grants. After a project has 

been identified, the airport sponsor can apply to 

the FAA regional or district office for a grant. We 

continue to support the development of an electronic 

grant application process. Typically, large grants 

are coordinated with other Federal, State, and local 

government agencies, such as the Environmental 

Protection Agency, the Department of Defense (DoD), 

and State aviation agencies.

AIP administration, including the requirements for 

sponsor and project eligibility, is based on multiyear 

authorizing legislation. The current authority expired 

under its own term on September 30, 2007. However, 

Congress has passed a series of short-term extensions 

until such time as they consider a longer, multiyear 

program.

FINANCIAL HIGHLIGHTS

Discussion and Analysis of the Financial 

Statements

The FAA prepares annual financial statements in 

conformity with accounting principles generally accepted 

in the United States. The financial statements are subject 

to an independent audit to ensure that they are free from 

material misstatement and that they can be used to 

assess FAA performance.

FY 2009 Financial Statement Audit

The CFO Act of 1990 (Public Law 101–576), as amended 

by the Government Management Reform Act of 1994, 

requires that financial statements be prepared by certain 

agencies and commercial-like activities of the Federal 

Government, and that the statements be audited in 

accordance with Government auditing standards. The 

FAA is required to prepare its own financial statements 

under OMB Bulletin No. 07–04, Audit Requirements for 

Federal Financial Statements. DOT’s OIG is statutorily 

responsible for the manner in which the audit of the 

FAA’s financial statements is conducted. The OIG 

selected Clifton Gunderson, LLP, an independent certified 

public accounting firm, to audit the FAA’s FY 2009 

financial statements. 

In 2002, DOT’s OIG and CFO, along with the FAA’s 

CFO, established an Audit Coordination Committee to 

promote and encourage open communication among the 

OIG, FAA management, and the independent auditors to 

resolve issues that arise during the audit and to monitor 

the implementation of audit recommendations. The 

committee is chaired by the Director of the Office of 

Financial Management and includes representatives 

from the OIG, DOT’s Office of Financial Management, 

FAA’s Assistant Administrator for Regions and Center 

Operations, and ATO’s Chief Operating Officer. In 

2006, committee participation was expanded to include 

representatives from the Chief Counsel’s Office, 

the Assistant Administrator for Human Resources 

Management, Information Services, and Airports. 

Clifton Gunderson, LLP, has rendered an unqualified 

opinion on the FAA’s FY 2009 financial statements.
FEDERAL AVIATION ADMINISTRATION

26 MANAGEMENT’S DISCUSSION AND ANALYSIS

Understanding the Financial Statements

The FAA’s Consolidated Balance Sheets, Statements 

of Net Cost, Changes in Net Position, and Combined 

Statements of Budgetary Resources (beginning on 

page 96), have been prepared to report the financial 

position and results of operations of the FAA, pursuant 

to the requirements of the CFO Act of 1990 and the 

Government Management Reform Act of 1994. The 

following section provides a brief description of: 

(a) the nature of each financial statement and its 

relevance to the FAA; (b) significant fluctuations from 

FY 2008 to FY 2009; and (c) certain significant balances, 

where necessary, to help clarify their link to FAA 

operations.

Balance Sheet

The balance sheet presents the amounts available for 

use by the FAA (assets) against the amounts owed 

(liabilities) and amounts that comprise the difference 

(net position). 

Assets

Total assets were $27.9 billion as of September 30, 

2009. The FAA’s assets are the resources available 

to pay liabilities or satisfy future service needs. The 

Composition of Assets chart depicts major categories 

of assets as a percentage of total assets. The Assets 

Comparison chart presents comparisons of major asset 

balances as of September 30, 2008 and 2009. 

Fund Balance with Treasury represents 15 percent of 

the FAA’s current period assets and consists of funding 

available through Department of Treasury accounts from 

which the FAA is authorized to make expenditures to 

pay liabilities. It also includes passenger ticket and other 

excise taxes deposited to the Airport and Airway Trust 

Fund (AATF), but not yet invested. Fund Balance with 

Treasury increased slightly from $3.9 billion to 

$4.1 billion. 

At $9.2 billion, Investments represent 33 percent of the 

FAA’s current period assets, and are principally derived 

from passenger ticket and other excise taxes deposited to 

COMPOSITION OF ASSETS

as of September 30, 2009

Investments

33%

Other

3%

Property, Plant, & Equipment

49%

Fund Balance with Treasury

15%

ASSETS COMPARISON

Dollars in Thousands

Investments

Other

Property, Plant,

& Equipment 

Fund Balance

with Treasury

$0 $4,000,000 $8,000,000 $12,000,000 $16,000,000

2009

2008
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 27

the AATF. These amounts are used to finance the 

FAA’s operations to the extent authorized by Congress. 

Investments increased by $323.8 million. 

At $13.8 billion, General Property, Plant, & Equipment 

represents 49 percent of the FAA’s assets as of 

September 30, 2009, and primarily comprises 

construction-in-progress related to the development 

of NAS assets, and capitalized real and personal property. 

There was a slight decrease of $24.9 million in the 

total composition of Property, Plant, & Equipment as 

purchases of equipment and additions to constructionin-progress through the normal course of business were 

offset by retirements and depreciation.

Liabilities

As of September 30, 2009, the FAA reported liabilities of 

$4.4 billion. Liabilities are probable and measurable future 

outflows of resources arising from past transactions or 

events. The Composition of Liabilities chart depicts the 

FAA’s major categories of liabilities as a percentage of 

total liabilities. 

The Liabilities Comparison chart presents comparisons 

of major liability balances between September 30, 2008, 

and September 30, 2009. Below is a discussion of the 

major categories. 

At $1.4 billion, Employee-Related & Other Liabilities 

represents 32 percent of the FAA’s total liabilities. 

These liabilities increased slightly by $14.1 million 

as of September 30, 2009, and are composed mainly of 

$135.7 million in advances received, $211.0 million in 

Federal employees’ compensation act payable, 

$337.2 million in accrued payroll and benefits, 

$481.5 million in accrued leave and benefits, 

$41.0 million in legal claims liability, and $115.8 million 

in capital lease liability. 

At $901.3 million, Federal Employee Benefits represents 

20 percent of the FAA’s current year liabilities, and 

consists of the FAA’s expected liability for death, 

disability, and medical costs for approved workers’ 

compensation cases, plus a component for incurred but 

not reported claims. The Department of Labor calculates 

the liability for the DOT, and the DOT attributes a 

COMPOSITION OF LIABILITIES

as of September 30, 2009

Employee-Related & Other Liabilities

32% 

Environmental Liabilities

18%

Grants Payable

18%

Accounts Payable

12%

Federal Employee Benefits

20%

LIABILITIES COMPARISON

Dollars in Thousands

$0 $500,000 $1,000,000 $1,500,000

Federal Employee Benefits

Grants Payable

Environmental Liabilities

Employee-Related &

Other Liabilities

Accounts Payable

2009

2008
FEDERAL AVIATION ADMINISTRATION

28 MANAGEMENT’S DISCUSSION AND ANALYSIS

proportionate amount to the FAA based upon actual 

workers’ compensation payments to FAA employees 

during the preceding 4 years. This liability is updated an 

on annual basis at year end. 

Environmental Liabilities represents 18 percent of the 

FAA’s total liabilities, $810.8 million as of September 

30, 2009, compared with $637.8 million a year earlier. 

Environmental liabilities includes a component for 

remediation of known contaminated sites and the 

estimated environmental cost to decommission assets 

currently in service. The increase of $173.0 million is due 

primarily to an increase in the number of assets labeled 

“Areas of Concern,” extending the time for onsite and 

program management by approximately 10 years. 

The FAA’s Grants Payable are estimated amounts 

incurred but not yet claimed by AIP grant recipients 

and represent 18 percent of liabilities. Grants payable 

increased $133.7 million primarily due to an accrual of 

$109.7 million for new grants awarded through the FY 

2009 ARRA. Accounts Payable increased $173.9 million 

and are amounts the FAA owes to other entities for 

unpaid goods and services. 

Statement of Net Cost

The Statement of Net Cost presents the cost of 

operating FAA programs. The gross expense less any 

earned revenue for each FAA program represents the net 

cost of specific program operations. The FAA has used its 

cost accounting system to prepare the annual Statement 

of Net Cost since FY 1999. 

As of September 30, 2009, and September 30, 2008, the 

FAA’s net costs were $16.4 billion and $15.5 billion, 

respectively. The Composition of Net Cost chart 

illustrates the distribution of costs among the FAA’s 

LOBs.

The Net Cost Comparison chart compares September 30, 

2008, and September 30, 2009, net costs. 

With a net cost of $10.9 billion, the ATO is the FAA’s 

largest LOB, composing 67 percent of total net costs. 

The ATO’s net costs increased by $474.9 million, on 

a comparative basis, primarily from increases in labor 

costs of $190.0 million, and environmental cleanup and 

remediation of $173.0 million, which was partially offset 

COMPOSITION OF NET COST

as of September 30, 2009

Air Traffic Organization

67% 

Regional and Center Operations, & All Other

1%

Aviation Safety

7%

Airports

25%

NET COST COMPARISON

Dollars in Thousands

2009

2008

$0 $3,000,000 $6,000,000 $9,000,000 $12,000,000

Airports

Aviation Safety

Air Traffic Organization

Regional and Center Operations

& All Other
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 29

by an increase in reimbursable revenue from work in the 

NAS Defense Program of $62.0 million. 

Airports is the FAA’s second largest LOB with a net 

cost of $4.0 billion as of September 30, 2009, which 

is 25 percent of the FAA’s total net costs. Net costs 

increased $280.9 million from the prior year and are 

composed mostly of Aviation Insurance Program grant 

disbursements.

The net cost of Aviation Safety represents 7 percent of 

the FAA’s total net costs, while Regional and Center 

Operations and All Other compose 1 percent of total net 

costs. 

Statement of Changes in Net Position

The Statement of Changes in Net Position presents those 

accounting items that caused the net position section of 

the balance sheet to change from the beginning to the 

end of the reporting period. Various financing sources 

increase net position. These financing sources include 

appropriations received and nonexchange revenue, 

such as excise taxes and imputed financing from costs 

absorbed on the FAA’s behalf by other Federal agencies. 

The agency’s net cost of operations and net transfers to 

other Federal agencies serve to reduce net position. 

The FAA’s cumulative results of operations for the period 

ending September 30, 2009, decreased $1.2 billion, on 

a comparative basis, due primarily to a combination of 

increases in net cost of $858.6 million and by decreases 

in beginning balances of $299.0 million and financing 

sources of $47.9 million. Unexpended appropriations 

increased $1.2 billion primarily as a result of an increase 

in appropriations received of $2.8 billion offset by an 

increase in appropriations used of $1.3 billion. 

Statement of Budgetary Resources

This statement provides information on the budgetary 

resources available to the FAA as of September 30, 

2009, and September 30, 2008, and the status of those 

budgetary resources. 

Budget Authority is the authority provided to the FAA 

by law to enter into obligations that will result in 

outlays of Federal funds. Obligations Incurred results 

from an order placed, contract awarded, service received, 

or similar transaction, which will require payments 

during the same or a future period. Gross Outlays 

reflects the actual cash disbursed by Treasury for FAA 

obligations. The FAA reported total budget authority 

of $20.7 billion on September 30, 2009, compared to 

$19.5 billion on September 30, 2008. Obligations Incurred 

increased $391.5 million to $22.7 billion. Gross 

Outlays decreased $402.7 million from $22.0 billion 

to $21.6 billion. 

Stewardship Investments

Stewardship investments are substantial investments 

made by the FAA for the benefit of the Nation, but do 

not result in physical ownership of assets by the FAA. 

When incurred, these amounts are treated as expenses in 

the Consolidated Statements of Net Cost. Our Required 

Supplementary Stewardship Information includes 

disclosure of stewardship investments during the last 

5 years. These are disclosures of AIP grants by State/

Territory, and research and development investments. 

The distribution of total grants expense by State/

Territory has been relatively stable during the past 4 

years. However, expenses began to increase in FY 2005 

largely as a result of a significant increase in grant 

STATEMENT OF BUDGETARY RESOURCES COMPARISONS

Dollars in Thousands

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000

Obligations Incurred

Gross Outlays

Budget Authority

2009

2008
FEDERAL AVIATION ADMINISTRATION

30 MANAGEMENT’S DISCUSSION AND ANALYSIS

funding levels in FY 2001. Because these AIP projects are 

typically long-term, and the FAA recognizes the grants 

expense as the recipient accomplishes the improvement 

work, the substantial expansion of this program in FY 

2001 is resulting in increased expenses in more recent 

years.

The FAA’s research and development expenses increased 

in FY 2009 by $9.4 million primarily in the category of 

applied research. Some areas of focus this year included 

the Commercial Aviation Alternative Fuel Initiative, 

developing enhanced weather forecasting models for 

quickly identifying hazardous ceiling and visibility 

conditions that impact air traffic capacity and the 

evaluation of replacing incandescent lamps for airfield 

lighting with light-emitting diodes to save on energy and 

maintenance costs.

Limitations of the Financial Statements

The FAA has prepared its financial statements to report 

its financial position and results of operations, pursuant 

to the requirements of the CFO Act of 1990 and the 

Government Management Reform Act of 1994.

While the FAA statements have been prepared from 

its books and records in accordance with the formats 

prescribed by the OMB, the statements are in addition 

to the financial reports used to monitor and control 

budgetary resources, which are prepared from the same 

books and records.

FAA ENACTED BUDGET--FY 2009

Dollars in Thousands

Facilities & Equipment

$2,942,095

Grants-in-Aid for Airports

$4,614,500

Operations

$9,042,467

Research, Engineering, & 

Development

$171,000

These statements should be read with the understanding 

that they are for a component of the U.S. Government, 

a sovereign entity. Liabilities not covered by budgetary 

resources cannot be liquidated without the enactment 

of an appropriation by Congress, and payment of all 

liabilities, other than for contracts, can be abrogated by 

the Federal Government.

Budgetary Integrity: FAA Resources and 

How They Are Used 

In FY 2009, the AATF provided approximately 

69.6 percent of the FAA’s enacted budget. Created by 

the Airport and Airway Revenue Act of 1970, the AATF 

derives its funding from excise taxes and earned interest. 

It provides a source of revenue to finance investments 

in the airport and airway system. To the extent funds 

are available, the fund also covers the operating costs of 

the airway system. Aviation excise taxes, which include 

taxes on domestic passenger tickets, freight waybills, 

general and commercial aviation fuel, and international 

departures and arrivals, are deposited into the fund. The 

Department of the Treasury maintains the fund and 

invests in Government securities. Interest earned 

is deposited into the fund. Funding is withdrawn as 

needed and transferred into each FAA appropriation to 

cover obligations.

The FAA is funded through annual and multiyear 

appropriations authorized by Congress. The FY 2009 

enacted budget of $16.77 billion was 12.4 percent 

higher than the FY 2008 enacted level. This includes 

$11.7 billion from the AATF and $5.1 billion from the 

General Fund. The Combined Statement of Budgetary 

Resources reflects $15.5 billion enacted by the Omnibus 

Appropriations Act of 2009 (PL 111-8) and $1.3 billion 

enacted from the ARRA (PL 111-5).

The FAA has four appropriations. The largest, 

Operations, is funded by both the Treasury’s General 

Fund and the AATF. In FY 2009, the AATF provided 58 

percent of the revenue for Operations. The AATF is the 

primary revenue source for the FAA’s following three 

capital investment appropriations:

• Grants-in-Aid for Airports (AIP)

• F&E

• Research, Engineering, and Development (R,E,&D)
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS 31

Operations. The Operations appropriation finances 

operating costs, maintenance, communications, 

and logistical support for the air traffic control and 

air navigation systems. It funds the salaries and 

costs associated with carrying out the FAA’s safety 

inspection and regulatory responsibilities. The account 

also covers administrative and managerial costs 

for FAA’s international, medical, engineering, and 

development programs and for policy oversight and 

overall management functions. The FY 2009 Operations 

appropriation was $9.042 billion, approximately 

3.5 percent more than in FY 2008, an increase primarily 

attributable to payroll and inflation costs.

AIP. The Secretary of Transportation is authorized to 

award grants for planning and development to maintain 

a safe and efficient nationwide system of public airports. 

These grants fund approximately one-third of all capital 

development at the Nation’s public airports. Grants 

are issued to maintain and enhance airport safety, 

preserve existing infrastructure, and expand capacity 

and efficiency throughout the system. The program also 

supports noise compatibility and planning, the military 

airport program, reliever airports, and airport program 

administration. Total FY 2009 funding was slightly 

more than $4.6 billion. Of this amount, just more than 

$3.5 billion was from the AATF—the same as the FY 

2008 level. An additional $1.1 billion of General Fund 

supplemental funding was provided by the ARRA. FY 

2009 funding for the Small Community Air Service 

Development program was $8.0 million, 20 percent less 

than the FY 2008 level of $10 million.

F&E. The programs funded by the F&E appropriation 

are the FAA’s principal means of modernizing and 

improving air traffic control and airway facilities, 

particularly through programs supporting NextGen. The 

account also finances other major capital improvements 

in air navigation and experimental facilities required by 

other programs. F&E was funded at $2.9 billion in 

FY 2009. Of this amount, $2.7 billion was from 

the AATF, approximately 9.1 percent more than FY 

2008. Major systems contributing to the NextGen 

effort included ADS-B, SWIM, En Route Automation 

Modernization, Airport Surface Detection Equipment—

Model X (ASDE-X), NNEW, the NextGen Very High 

Frequency (VHF) Air/Ground Communications System, 

and NAS Voice Switch. An additional $200 million of 

General Fund supplemental funding was provided by 

the ARRA to make improvements to power systems, air 

route traffic control centers (ARTCCs), air traffic control 

towers, terminal radar approach control facilities, and 

navigation and landing equipment.

R,E,&D. The FY 2009 appropriation for R,E,&D was 

nearly $171 million—16.5 percent more than in FY 

2008. R,E,&D funds were applied to research programs 

to improve the safety and effectiveness of the air traffic 

control system. In FY 2009, programs focused on the 

environment and energy, weather initiatives, Joint 

Planning and Development Office (JPDO) activities, 

human factors, and aircraft safety. The increase over 

FY 2008 was largely due to new research initiatives 

in support of NextGen, as well as expansion of 

existing programs in Advanced Materials/Structural 

Safety, Aviation Safety Risk Analysis/System Safety 

Management, and Wake Turbulence.
In October 2009, the FAA published new regulations for manufacturers of aircraft and aviation products that update, standardize, and better align 

FAA requirements with the current global manufacturing environment. The new regulations continue to promote aviation safety by ensuring that 

aircraft—and products and articles designed specifically for use in aircraft, wherever manufactured—meet appropriate minimum standards for design 

and construction.

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 33

PERFORMANCE RESULTS

SAFETY

GOAL: Achieve the lowest possible accident rate and constantly improve safety.

America continues to set the world standard for aviation, and safety is the hallmark of the FAA. As the stewards of 

aviation safety in the United States, the agency and its industry partners have built a system that has reduced the 

risks of flying to alltime lows. In FY 2009, the FAA continued to focus its resources—financial, human, and physical—

primarily on safety. 

The FAA oversees the world’s largest, most complex aviation system, and serves millions of people who travel on 

commercial airlines, hundreds of thousands who make aviation their livelihood, and thousands more who fly for 

recreation. The level of public confidence in the safety of air travel has a huge impact on the U.S. economy. 

In 2006, Public Law 109-115 was enacted, which requires all commercial service airports to improve runway safety 

areas to the extent practicable by December 31, 2015. To meet this goal, the FAA identified 26 airport safety areas to be 

improved in FY 2009. The FAA exceeded this goal by completing 28 safety area projects, using more than $226 million 

in AIP funds.

FY 2009 SAFETY PERFORMANCE MEASURES AND RESULTS

Performance Measure FY 2009 

Target

FY 2009 

Results

FY 2009 

Status

FY 2010 

Target1

Commercial Air Carrier Fatality Rate

Cut the rate of fatalities per 100 million persons on board in half by 2025. 8.4 6.82 8.1

General Aviation Fatal Accident Rate

Reduce the fatal accident rate per 100,000 flight hours by 10% over a 10-year period (2009–2018). 1.11 1.172 1.10

Alaska Accidents

By the end of FY 2009, reduce accidents in Alaska for general aviation and all Part 135 operations 

from the 2000–2002 average of 130 accidents per year to no more than 99 accidents per year. This 

measure will be converted from a number to a rate at the beginning of FY 2010.

99 1042 1.863

Runway Incursions (A and B)

By 2010, reduce Category A and B (most serious) runway incursions to a rate of no more than 0.45 

per million operations, and maintain or improve through FY 2013.

0.472 0.2284 .450

Total Runway Incursions

By the end of FY 2013, reduce total runway incursions by 10% from the FY 2008 baseline.

-1.00%

(999)

-5.75%

(951)4 -2%

Commercial Space Launch Accidents

No fatalities, serious injuries, or significant property damage to the uninvolved public during 

licensed or permitted space launch and reentry activities.

0 0 0

Operational Errors

Limit Category A and B (most serious) operational errors to a rate of no more than 1.95 per million 

activities by FY 2012 and maintain through FY 2013.

2.10 2.434 2.05

Safety Management System

In FY 2010, implement the SMS in the ATO, AVS, and Office of Airports. In FY 2012, implement SMS 

policy in all appropriate FAA organizations.

9 9 3

1

 FY 2010 targets are from the FY 2009–2013 Flight Plan. 2

 Preliminary data until March 2011.

3

 In FY 2010, the Alaska Accidents measure will be converted to a rate.

4

 Preliminary data until January 2010.

For information on data sources and estimating and finalization of results, see Completeness and Reliability of Performance Data.

 Goal Achieved 

 Goal Not Achieved
FEDERAL AVIATION ADMINISTRATION

34 PERFORMANCE RESULTS

Since 2001, there have been more than 92.9 million 

successful flights on U.S. commercial aircraft. This 

represents more than 6.5 billion passengers who have 

flown safely. As the stewards of aviation safety in the 

United States, the FAA and its industry partners have 

built a system that operates some 34,000 scheduled 

commercial flights daily and has reduced the risks of 

flying to alltime lows. By 2025, there will be added 

demands on the capacity of the system and the FAA 

must steadily progress its plans and activities to be ready 

for the additional safety challenges. 

COMMERCIAL AIR CARRIER 

FATALITY RATE

COMMERCIAL AIR CARRIER FATALITY RATE

TARGET In FY 2009, the commercial air carrier fatality rate will not 

exceed 8.4 fatalities per 100 million people on board.

RESULT

6.8(preliminary data)

We met our target with a result of 6.8 fatalities per 

100 million people on board.

Note: This measure was new in FY 2008—no trend 

data are available.

PUBLIC

BENEFIT

As fatal air carrier accidents have declined in terms of average 

fatalities per accident, this measure will sharpen the FAA’s 

focus on helping air travel to become even safer.

In FY 2009, there were two commercial fatal accidents 

with 52 fatalities. However, the FAA was still successful 

in maintaining the commercial air carrier rate below 

8.4 fatalities per 100 million people on board. During 

this time, the FAA implemented many safety critical 

initiatives that helped to keep this rate below our target.

These initiatives helped to augment established 

initiatives, focus on recently identified risks, and 

maintain a higher level of safety throughout the NAS. 

Achievements in these areas include the following:

• Implemented a roadmap for PerformanceBased Navigation (PBN) through the continued 

development and implementation of PBN approach 

procedures. The goal of this initiative is to achieve 

improved minima and precision-like capability.

• Continued implementation of Commercial Aviation 

Safety Team (CAST). These initiatives provided best 

practices, policies, procedures, and training used to 

mitigate human error.

• Maintained ISO:9001 registration to certify that 

FAA’s Aviation Safety Organization meets the same 

standards expected of those we regulate.

• Developed guidance for third-party sources to 

develop public RNP Special Aircraft and Aircrew 

Authorization Required (SAAAR) approach 

procedures.

• Applied FAA standards and criteria in the helicopter 

RNP/RNAV procedure development process.

• Collected safety data at a national level and 

consolidated this data under the Aviation Safety 

Information Analysis and Sharing (ASIAS) program.

• Developed and implemented a strategic plan to 

address IG recommendations.

While these achievements have brought aviation to an 

unprecedented level of safety, identified sources of risk 

within aviation provide the basis for moving forward 

to the next level of safety. One major key to the FAA’s 

successful safety efforts is its work with stakeholders to 

stimulate cooperation for the open reporting of safety 

concerns. Each member of the aviation community 

contributes to a safer airspace system through 

technology, communications, and its own unique 

expertise.

Our safety record indicates that we have addressed 

predicted risk factors that have caused accidents 

or incidents. Our challenge now is to identify any 

remaining risks and eliminate, minimize, or manage 

them. In its safety oversight capacity, the FAA 

is establishing its own SMS while working with 

stakeholders to establish their own SMS to identify 

potential risk areas. With these systems in place, the FAA 

and the aviation industry will work together to address 

these risks.

GENERAL AVIATION FATAL ACCIDENTS 

GENERAL AVIATION FATAL ACCIDENT RATE

TARGET Limit the general aviation fatal accident rate to no more than 

1.11 fatal accidents per 100,000 flight hours.

RESULT

1.17(preliminary data)

The FAA did not meet this target. 

Note: This measure was new in FY 2009—no trend 

data are available.

PUBLIC

BENEFIT

By tracking the rate of fatal accidents per flight hours, the 

FAA can more accurately pinpoint safety concerns or trends 

indicating potential safety concerns.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 35

More people perish from general aviation accidents 

each year than those who perish in U.S. commercial 

air carriers. Therefore, reducing the rate of fatal general 

aviation accidents is a top priority for the FAA. 

The FAA did not meet the target this year for reducing 

the general aviation fatal accident rate per 100,000 flight 

hours. We ended the year with a rate of 1.17. 

The primary reasons for the FY 2009 shortfall are 

in the area of amateur-built aircraft and humanfactors influence. Amateur-built aircraft accounted 

for approximately 27 percent of general aviation fatal 

accidents in FY 2009 while only contributing 3.5 percent 

of general aviation hours. In addition, approximately 

80 percent of general aviation fatal accidents are directly 

related to some form or combination of human factors.

The FAA continues to investigate, develop, and 

implement new strategic initiatives to address the 

challenges of creating a safe environment for on-demand 

and general aviation flights. The FAA has several 

initiatives underway to address both the human-factors 

influence and to mitigate the risks associated with 

amateur-built aircraft. 

The agency continues to identify human factors that 

may contribute to accidents. This information will be 

used to develop and implement strategies, methods, and 

technologies that reduce safety risks. The FAA’s General 

Aviation Joint Steering Committee and its subteams 

produce numerous products and aids to help improve 

pilot performance and decisionmaking. The FAA also is 

developing a new amateur-built aircraft subteam under 

the General Aviation Joint Steering Committee. This 

subteam will focus on the development of additional 

measures to help reduce fatal accidents in amateur-built 

aircraft. 

The FAA works with various members of the general 

aviation community, including aeromedical evacuation, 

charter services, and other members of the community 

to promote education and training on night landings, 

weather, and other areas of concern. 

ALASKA ACCIDENTS

ALASKA ACCIDENTS

TARGET Reduce accidents in Alaska for general aviation and all Part 

135 operations to no more than 99 in FY 2009.

RESULT

104(preliminary data)

We did not meet our target this year, resulting in 5 

accidents above our target of 99 in FY 2009.

PUBLIC

BENEFIT

Aviation is the primary source of transportation for the 

majority of the residents in Alaska. However, the State’s 

topography and weather present unique safety challenges. 

This measure allows the FAA to follow trends and focus risk 

mitigation efforts in Alaska. Therefore, the FAA is improving 

safety for a great number of the residents in this State.

In FY 2009, we did not meet our performance target of 

99 Alaska accidents. This year there were 104 accidents, 

5 above the target. Of these, 5 were fatal accidents 

(none were Part 135). At least 79 of the accidents were 

attributed to takeoff (26) or landing (53). In addition, 

Public Use Aircraft (State or local government-owned 

aircraft) accidents, which represent 8 percent of all 

Alaska accidents, are the largest contributing factor to 

the number of Alaska accidents. Because the FAA has 

no regulatory authority to provide safety oversight on 

Public Use Aircraft, it is difficult for the FAA to positively 

impact accidents involving these aircraft. However, 

during FY 2009, the FAA continued its safety efforts and 

added new emphasis to several key initiatives.

The Medallion (Aviation Safety Action Program)

In FY 2009, the FAA continued to work jointly with 

the Alaska aviation community through a number of 

50

100

150

98 128 101

110

92

125 120 115

2007

104

1091

2008

99

1042

2009

Rate TBD

N/A

2004 2005 2006 2010

1

 Preliminary data until March 2010–revised from original estimate of 108. 2

 Preliminary data until March 2011. 3

 Measure to be replaced in FY 2010 with GA Fatal Accident Rate.

Fiscal Year

Actual 

Target

Number 

NUMBER OF GENERAL AVIATION ACCIDENTS IN ALASKA

Fatal and Nonfatal Accidents
FEDERAL AVIATION ADMINISTRATION

36 PERFORMANCE RESULTS

organizations and safety programs such as the Medallion 

Foundation, Circle of Safety, FAA Safety Team, Alaska 

Air Carriers Association, Alaska Aviation Safety 

Foundation, and Alaska Airman’s Association. This joint 

industry-FAA cooperative effort supports the Flight Plan

strategy for sharing safety information.

The Medallion Foundation seeks to improve Alaskan 

aviation safety by developing and implementing 

voluntary aviation safety standards that exceed 

regulatory requirements and are based on accepted 

system safety concepts. This year, in conjunction with 

the FAA, the foundation produced television and radio 

ads emphasizing the need to practice short-field landings 

before embarking on a hunting trip. They encouraged 

pilots to work with a Certified Flight Instructor (CFI) in 

the Medallion PA-18 Basic Airplane Training Device.

The Circle of Safety program educates passengers, 

contractors of aviation services, and commercial 

air operators in their shared responsibility for flight 

safety. In FY 2009, the FAA Safety Team collaborated 

with external Circle of Safety stakeholders, including 

certificate management teams, commercial operators, 

and passenger groups to revise and implement program 

materials relating to flight safety in Alaska.

Other groups including the Alaska Airmen’s Association, 

Alaska Aviation Safety Foundation, and industry groups 

worked to publicize safety issues through television 

shows, newsletters, and a landing clinic at Palmer 

Airport.

Other Initiatives

This year, the FAA has placed increased emphasis on 

implementing an improved statewide public RNP/RNAV 

Wide-Area Augmentation System (WAAS) enabled route 

structure. 

The RNP/RNAV initiative has been in the FAA Flight 

Plan since 2004 in support of the congressionally 

mandated Alaskan Capstone program. The NTSB 

published a safety study in November 1995 that 

identified deficiencies in the current Instrument Flight 

Rules (IFR) system such as inadequate low-altitude 

navigation infrastructure and instrument approaches. 

In conjunction with the Capstone program, the FAA’s 

ATO enabled the operational use of Global Positioning 

System (GPS) and WAAS for navigation and access to 

uncontrolled airports by developing GPS airways and 

instrument approach/departure procedures. The RNP/

RNAV initiative provides an avenue for the ATO and 

FAA’s AVS organizations to work closely to manage 

an integrated schedule to operationally enable a GPS/

RNAV WAAS Route structure in Alaska. Implementation 

is in process at this time. This will improve operator 

efficiency, increased access across Alaska, and safety 

improvements such as increased situational awareness, 

while incrementally reducing dependency on groundbased navigation facilities.

In FY 2010, the FAA will change the Alaska Accidents 

Performance Measure methodology, to measure the 

number of fatal and serious injury accidents per 100,000 

flight hours. The new methodology provides clarity 

and focus by using a rate and measuring only the fatal 

and serious injury accidents. This change will increase 

the FAA’s ability to mitigate risks to the Alaskan flying 

public in the areas of most concern.

RUNWAY INCURSIONS (A AND B) 

RUNWAY INCURSIONS (A AND B)

TARGET Limit Category A and B (most serious) runway incursions to a 

rate of no more than 0.472 per million operations.

RESULT

0.228 (preliminary data)

We exceeded our goal, limiting category A and B 

runway incursions to less than the 0.472 runway 

incursions per million operations.

PUBLIC

BENEFIT

The public will benefit by having a decreased probability that 

they will be injured or killed in an accident resulting from a 

serious runway incursion.

Runway incursions create dangerous situations that 

can lead to serious accidents. A runway incursion is any 

occurrence at an airfield involving the incorrect presence 

of an aircraft, vehicle, or person on the protected area 

of a surface designated for the landing and takeoff of 

aircraft. They are grouped into three general categories: 

operational errors, pilot deviations, and vehicle/

pedestrian deviations. Reducing the number of runway 

incursions reduces the risk of accidents that potentially 

involve fatalities, injuries, and significant property 

damage. 

This measure tracks the following two categories of 

runway incursions—A and B—which are the most 

serious categories tracked:
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 37

• Category A: Separation decreases to the point that 

participants take extreme action to narrowly avoid a 

collision.

• Category B: Separation decreases where there is a 

significant potential for a collision.

In August 2007, the FAA Administrator initiated a Call 

to Action for the FAA and industry to improve runway 

safety. Since that time, the FAA has implemented 

numerous initiatives resulting in reduced risk of a serious 

runway incursion. The success of these initiatives can 

be observed in FY 2009 by the fact that there were no 

category A and B runway incursions during the first 

3 months of FY 2009. The year-to-date serious (A and 

B) incursion rate is well below the FY 2009 target and 

a significant reduction from previous years. These 

initiatives include the following:

• Enhanced airport surface markings

• A review of pilot taxi procedures and distractions

• Additional pilot and driver training

• Revised FAA air traffic control procedures

• Formation of the Runway Safety Council

• Increased emphasis on education and awareness

The Call to Action also identified several midterm and 

long-term initiatives including the following:

• Additional Air Traffic Control procedural changes

• Deployment of RWSL

• Development of Low-Cost Ground Surveillance 

(LCGS)

• Enhanced cockpit systems to improve pilot 

situational awareness

These initiatives, as well as the Runway Safety Council’s 

effort to identify and mitigate the root causes of runway 

incursions, are expected to continue to reduce the rate of 

serious runway incursions.

Since the FAA Administrator’s Call to Action, the FAA 

and the industry have worked together to implement 

improvements; raise awareness; and educate pilots, 

drivers, and controllers on the risks of runway incursions. 

These efforts are having a positive impact, resulting in a 

reduced risk to the flying public.

TOTAL RUNWAY INCURSIONS

TOTAL RUNWAY INCURSIONS

TARGET 1% reduction (999) in total number of runway incursions 

from the FY 2008 baseline of 1,009 runway incursions.

RESULT

-5.75%(preliminary data)

We met our goal, limiting total runway incursions 

to 951 (-5.75%) in FY 2009.

Note: This measure was new in FY 2009—no trend 

data are available.

PUBLIC

BENEFIT

The public will benefit by having a decreased probability that 

they will be injured or killed in an accident resulting from a 

serious runway incursion.

In August 2007, the FAA Administrator initiated a Call 

to Action for the FAA and industry to improve runway 

safety. During the last 2 years, numerous initiatives 

have been implemented resulting in the reduced risk 

of a runway incursion. These initiatives have included 

enhanced airport surface markings, additional pilot and 

driver training, revised FAA air traffic control procedures, 

formation of the Runway Safety Council, and increased 

emphasis on education and awareness.

The FY 2009 year-to-date rate of incursions is well under 

the proposed target. We were successful in halting an 

annual increasing trend of approximately 13 percent and 

have reduced the total incursion level from last year by 

1 percent. The FAA and industry have worked together 

to implement improvements. These efforts are now 

having a positive impact, resulting in a reduced risk to 

the flying public of a runway incursion.

Rate

RUNWAY INCURSION RATE

Per Million Operations

Highest Severity—Category A and B 

0.35

0.30

0.40

0.45

0.50

0.55

0.25

0.20

0.444

N/A

2004

0.460

2005

0.507

0.5510.557

2006

0.393

0.530

2007

0.4271

0.509

2008

0.2282

0.472

2009

N/A

0.450

2010

Fiscal Year

1 Revised from preliminary estimate of 0.428.

2 Preliminary estimate until January 2010.

Actual 

Target

0.60
FEDERAL AVIATION ADMINISTRATION

38 PERFORMANCE RESULTS

Additionally, the FAA adopted the ICAO’s definition 

of a runway incursion. This new definition is the 

unauthorized entry onto the runway of any aircraft, 

regardless of the level of risk it generates, or regardless of 

whether or not another aircraft is present. With this new 

definition, the FAA captures a broader spectrum of events.

The following four categories are included in this 

measure:

• Category A: Separation decreases to the point that 

participants take extreme action to narrowly avoid a 

collision.

• Category B: Separation decreases, and there is a 

significant potential for collision.

• Category C: Separation decreases, but there is ample 

time and distance to avoid a collision.

• Category D: There is little or no chance of collision, 

but the definition of a runway incursion is met.

The Call to Action initiative also identified several 

midterm and long-term initiatives to reduce the risk 

of runway incursions, including additional Air Traffic 

Control procedural changes, deployment of RWSL, 

development of LCGS, and enhanced cockpit systems 

to improve pilot situational awareness. We also have 

initiated a pilot special emphasis program (Summer 

Initiative) that targets general aviation within the Great 

Lakes and Northwest Mountain Regional boundaries. 

These initiatives, as well as the Runway Safety Council’s 

effort to identify and mitigate the root causes of runway 

incursions, are expected to continue to reduce the rate and 

number of total runway incursions.

COMMERCIAL SPACE LAUNCH 

ACCIDENTS

COMMERCIAL SPACE LAUNCH ACCIDENTS

TARGET

No fatalities, serious injuries, or significant property damage 

to the uninvolved public during licensed or permitted space 

launch and reentry activities.

RESULT

No fatalities, serious injuries, or significant 

property damage to the uninvolved public during 

licensed or permitted space launch and reentry 

activities.

Note: This measure has resulted in the same 

outcome each year—no trend chart necessary.

PUBLIC

BENEFIT

FAA oversight of the commercial space launch activities 

resulted in no loss of life or significant property damage to 

the uninvolved public.

Commercial space transportation is the means by which 

payloads such as satellites and remote sensing devices 

are carried to orbit. These payloads have tremendous 

benefit to our society. However, commercial space launch 

or reentry accidents potentially have major catastrophic 

consequences, involving large losses of life and property. 

Protecting the uninvolved public during commercial 

launch operations is an FAA safety mission objective. 

In FY 2009, the FAA met its target of zero fatalities, 

serious injuries, or significant property damage. This 

target was maintained with four licensed launches, 

and five permitted launches. Permitted launches are 

test launch permits primarily in the area of research 

and development. This year, the launch industry saw 

a decrease in the number of planned payload missions. 

Therefore, fewer licenses were approved and launch 

flight activity decreased from 11 in FY 2008. The agency 

currently has 18 active licenses.

Since 1989, the U.S. commercial space launch industry 

has conducted 218 launches. During the past 25 years 

there have been no fatalities, serious injuries, or significant 

property damage. These achievements demonstrate a 

robust commitment to safety by the U.S. space launch 

industry and FAA. However, the emerging space tourism 

market, advances in technologies, and inaccurate licensee 

applications have increased the necessity for the FAA to 

explore new ways to enhance current safety practices. 

Increased safety inspections, improved qualification and 

training methods of FAA personnel, and enforcement of 

common safety requirements are just a few of the ways 

that the FAA is working to ensure the global viability and 

safety of commercial space transportation. Further, we 

partner with other Government agencies such as NASA 

and the Departments of State and Defense to ensure 

that licensed operations perform in accordance with U.S. 

national security and foreign policy interests.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 39

OPERATIONAL ERRORS

OPERATIONAL ERRORS

TARGET Limit Category A and B (most serious) operational errors to a 

rate of no more than 2.10 per million activities.

RESULT

2.43(preliminary data)

We did not meet this target, reaching an 

operational errors rate of 2.43 per million.

Note: This measure was redefined in FY 2008—no 

trend data are available.

PUBLIC

BENEFIT

Reduced probability that the public will be injured or killed as 

a result of fewer operational errors.

One of the fundamental principles of aviation safety 

is separation—the need to maintain a safe distance 

from other aircraft, terrain, obstructions, and restricted 

airspace. Air traffic controllers employ rules and 

procedures that define separation standards for this 

environment. An operational error occurs when 

controllers fail to apply or follow the procedures that 

enforce separation and allow aircraft to end up too 

close to each other or to an obstruction. As air traffic 

continues to increase, reducing the risk of operational 

errors remains one of the FAA’s top priorities.

Through the fourth quarter of FY 2009, the rate of 

Category A and B operational errors is 2.43 per million 

activities. This rate is over the performance target of 2.10 

per million activities for FY 2009. This rate should be 

considered as the preliminary result for FY 2009 because 

a number of operational errors remain to be finally 

categorized as A or B, or reclassified as nonoccurrences, 

and because traffic activity counts for September have 

not yet been finalized. Both FAA’s En Route and Terminal 

Facilities service units are reviewing all incidents to 

identify causal factors necessary to develop appropriate 

mitigations to positively impact FY 2010 performance.

The FAA’s ATO continues to concentrate its efforts on 

improving the safety reporting culture throughout its 

workforce and increasing its ability to passively detect 

safety events such as A and B operational errors. As a 

result of these efforts, the ATO has been able to identify 

more A and B operational errors than the number 

previously forecasted when these goals were initially set. 

This preliminary FY rate is based on 329 reported 

Category A and B errors, which is approximately 46 more 

than the 283 error limit required to meet the FY 2009 

target; or fewer than 4 additional errors per month. This 

improved reporting and detection accounts for some of 

the numbers over the FY 2009 target rate.

In FY 2009, to further eliminate risks associated with 

losses of separation such as operational errors, the FAA 

developed an updated metric. The FAA intends to 

introduce this new metric, Loss of Separation Standards 

(LoSS), in FY 2010. The metric will expand our safety 

measure to include all losses of standard separation. 

Through the use of this new metric, the FAA will 

improve understanding of the precursors of all losses of 

separation, including those reported today as operational 

errors by increasing the amount of data collected and 

analyzed, and also will better align the FAA’s approach to 

safety with our international partners.

The FAA also seeks to reduce Vehicle/Pedestrian 

Deviations (VPDs). This year the FAA set a target of not 

to exceed 194 with no more than two A or B incursions. 

The FY 2009 number of VPDs dropped by 3.5 percent to 

185 deviations with no A or B deviations.

The FAA also is developing an SMS-based approach to 

separation loss mitigation. This system is intended to 

replace the current management action plan approach 

to A and B operational errors. This will improve analysis 

and increase our ability to mitigate risks associated with 

operational errors.

Additionally, the FAA is coordinating efforts between 

the ATO Safety Services and the operational service 

units to clearly identify respective quality assurance and 

quality control roles and responsibilities to better focus 

corrective activities on the causal factors of separation 

loss such as those that contribute to A and B operational 

errors.

All three of these actions will give the FAA a better 

understanding of the events involved in the occurrence 

of operational errors. Thereby, improving our ability to 

prevent such occurrences.
FEDERAL AVIATION ADMINISTRATION

40 PERFORMANCE RESULTS

SAFETY MANAGEMENT SYSTEM

SAFETY MANAGEMENT SYSTEM

TARGET

Complete 9 key activities in preparation for full 

implementation of the SMS in all appropriate FAA 

organizations in FY 2010.

RESULT

9

We succeeded in completing 9 key activities in FY 

2009.

Note: This measure was redefined in FY 2009—no 

trend data are available.

PUBLIC

BENEFIT

Implementation of the SMS will assure increased levels of 

safety for the flying public.

The FAA SMS is a formal, top-down, business-like 

approach to managing safety risk. The SMS relies on 

developing standardized language, processes, and tools 

to manage safety risk across the aviation industry. 

Successful implementation of the SMS is critical to 

meeting the challenges of a rapidly changing and 

expanding aviation system. The traditional methods of 

analyzing the causes of an accident or incident, after the 

fact, are not enough. To achieve the next level of safety, 

a more forward thinking approach is required to analyze 

trends, data, and systems to manage issues before they 

become incidents or accidents. 

The SMS process ensures that safety-related changes are 

documented; risk is assessed, analyzed, and mitigated; 

hazards are identified and tracked to resolution; and the 

performance of any change is monitored throughout 

its life cycle. Applying the SMS prior to implementing 

changes to the NAS ensures that unacceptable risk is 

not introduced into the system. It also improves the 

documentation of the processes used to ensure the safety 

of the NAS. 

To fully implement the SMS at the FAA in FY 2010, key 

preparatory activities were required to be completed in 

FY 2009. These activities represent the continuous effort 

in implementing the SMS as stipulated in the approved 

FAA ATO’s Implementation Plan. They are key to 

achieving full implementation.

In FY 2009, we completed the following nine key 

activities as planned:

• Established the SMS Committee

• Designed and implemented the SMS for airport 

regulation and certification

• Analyzed safety culture surveys

• Developed SMS training materials

• Provided training to personnel involved with 

implementing changes to the NAS

• Monitored the integration of processes into new 

system acquisitions

• Developed audit process and conducted audits on 

the operational service units

• Issued an Advance Notice of Proposed Rulemaking

• Provided safety surveillance and oversight and 

conducted system audits 

During the next few years, the FAA plans to continue 

to work on full FAA SMS integration activities. These 

activities will support and augment the goal of full 

implementation.

CAPACITY

GOAL: Work with local governments and airspace users to provide increased capacity and better operational 

performance in the U.S. airspace system that reduces congestion, improves efficiency, and meets projected demand 

in an environmentally sound manner.

Our biggest challenge today and in the future is meeting capacity needs. While the long-term solution to increasing 

capacity and reducing delays depends largely on expanding capacity through the NextGen system, it is not targeted 

until the 2025 timeframe. In the meantime, several near-term initiatives—airfield construction, redesigning airspace, 

and revising air traffic control procedures—have potential for meeting short-term capacity needs. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 41

In early FY 2009, the agency opened an unprecedented three new runways simultaneously at three of the country’s 

busiest airports—Washington Dulles, Seattle-Tacoma, and Chicago O’Hare—accommodating approximately 327,300 

more aircraft operations annually, decreasing delay per operation by an average of 2.5 minutes, and accommodating 

additional on-time arrivals, even in poor weather. In addition, projects funded by the ARRA are protecting and 

promoting jobs through new construction projects including runways, taxiways, and aprons, which increase capacity 

and improve safety.

The FAA is committed to further improve safety, increase capacity, and reduce congestion and aviation’s 

environmental impact in order to better accommodate traffic growth and to support the economic viability of those 

who use the system, now and in the future. The FAA’s goal is to work with local governments and airspace users to 

provide increased capacity and better operational performance in the U.S. airspace system that reduce congestion and 

meet projected demand in an environmentally sound manner.

FY 2009 CAPACITY PERFORMANCE MEASURES AND RESULTS

Performance Measure FY 2009 

Target

FY 2009 

Results

FY 2009 

Status

FY 2010 

Target1

Average Daily Airport Capacity (35 OEP Airports)

Achieve an average daily airport capacity for the 35 OEP airports of 103,068 arrivals 

and departures per day by FY 2011 and maintain through FY 2013.

100,707 101,6912 102,648

Average Daily Airport Capacity (7 Metro Areas)

Achieve an average daily airport capacity for the 7 major metropolitan areas of 

39,484 arrivals and departures per day by FY 2009, and maintain through FY 2013.

39,484 42,9252 39,484

Annual Service Volume

Commission 9 runway/taxiway projects, increasing the annual service volume of 

the 35 OEP airports by at least 1% annually, measured as a 5-year moving average, 

through FY 2013.

1.00% 

(5 runway/

taxiway 

projects)

1.02% 

(6 runway/

taxiway 

projects)

1.00% 

(2 runway/

taxiway 

projects)

Adjusted Operational Availability

Sustain adjusted operational availability at 99.70 percent for the reportable facilities 

that support the 35 OEP airports through FY 2013.

99.70% 99.78%2 99.70%

NAS On-Time Arrivals

Achieve a NAS on-time arrival rate of 88.00% at the 35 OEP airports and maintain 

through FY 2013.

88.00% 88.98%2 88.00%

Noise Exposure

Reduce the number of people exposed to significant noise by 4% per year through 

FY 2013, as measured by a 3-year moving average, from the 3-year average for 

calendar years 2000–2002.

-16.00% -48.00%3 -20.00%

Aviation Fuel Efficiency

Improve aviation fuel efficiency by another 1% over the FY 2008 level (for a total of 

7%) through FY 2009, and 1% each subsequent year through FY 2013 to 11%, as 

measured by a 3-year moving average of the fuel burned per revenue mile flown, 

from the 3-year average for calendar years 2000–2002.

-7.00% -10.17% -8.00%

1 FY 2010 targets are from the FY 2009–2013 Flight Plan. 2

 Preliminary data until January 2010. 

3

 -48.00% preliminary result will be finalized in May 2010.

For information on data sources and estimating and finalization of results, see Completeness and Reliability of Performance Data.

 Goal Achieved 

 Goal Not Achieved
FEDERAL AVIATION ADMINISTRATION

42 PERFORMANCE RESULTS

AVERAGE DAILY AIRPORT CAPACITY 

(35 OEP AIRPORTS)

AVERAGE DAILY AIRPORT CAPACITY (35 OEP)

TARGET Achieve an average daily airport capacity for the 35 OEP 

airports of 100,707 arrivals and departures per day.

RESULT

101,691 (preliminary data)

We achieved an average daily airport capacity of 

101,691 for the 35 OEP airports.

PUBLIC

BENEFIT

The public benefits from increased capacity by experiencing a 

decrease in delays and improved on-time performance.

Growth in air travel has generally been accomplished 

by increasing the number of flights. Measuring the 

growth of available airport capacity indicates the limit 

at which airports can accommodate increased service 

without increased delays. Annual targets are set using 

historical trend data for the previous 3 years, information 

on upcoming construction impacts, and input from 

individual Air Traffic Control facilities.

Called rates at airports, which are adjusted in real time 

throughout the day, are primarily impacted by weather, 

construction/maintenance issues, procedural changes, 

and equipment outages. The year-end result for FY 2009 

is well above the goal, even though the number is lower 

than the previous 2 years. This is primarily because 

the construction-related impacts on facility departure 

and arrival rates were not as significant as expected. 

For example, Las Vegas rates remained higher than the 

facility originally estimated during the major runway 

construction project in the first two quarters of the year. 

The FAA expects the capacity target to increase next year 

based on the opening of a new runway at Charlotte and 

completion of runway construction/refurbishment at 

Washington Dulles, Portland, and Detroit. New York JFK 

also is undergoing numerous construction projects which 

will enhance operations at that constrained airport. The 

FAA also expects that the continued deployment of the 

Traffic Management Advisor (TMA) decision support 

tool will optimize the flow of aircraft into capacityconstrained airports.

AVERAGE DAILY AIRPORT CAPACITY 

(7 METROPOLITAN AREAS) 

AVERAGE DAILY AIRPORT CAPACITY (7 METRO)

TARGET Achieve an average daily airport capacity for the 7 major 

metropolitan areas of 39,484 arrivals and departures per day.

RESULT

42,925 (preliminary data)

We achieved an average daily airport capacity well 

above the stated target.

Note: This measure was redefined in FY 2008—no 

trend data are available.

PUBLIC

BENEFIT

The public benefits from increased capacity by experiencing a 

decrease in delays and improved on-time performance which 

saves time and money.

This measure is similar to the (35 OEP) measure. 

However, it focuses more specifically on the seven 

metropolitan areas that contain both the most 

congested airspace and the greatest constraints on 

airport expansion. These seven metropolitan areas are 

New York, Philadelphia, Charlotte, Chicago, Las Vegas, 

the Los Angeles Basin, and the San Francisco Bay area. 

Improvement at these airports is likely to contribute the 

most to reducing the causes of system delay.

Measuring the growth of airport capacity at 

these airports indicates the limit at which we can 

accommodate increased service without increasing delays 

in the seven metropolitan areas. Each airport facility 

within the seven metropolitan areas in this measure 

determines the number of arrivals and departures it 

can handle for each hour of each day, depending on 

conditions, including weather. These numbers are the 

called arrival and departure rates of the airport for that 

hour. Called rates at airports, which are adjusted in real 

time throughout the day, are primarily impacted by 

weather, construction/maintenance issues, procedural 

changes, and equipment outages. 

Capacity

AVERAGE DAILY AIRPORT CAPACITY

Arrivals and Departures at the 35 OEP Airports

92,000

96,000

100,000

104,000

108,000

Fiscal Year

100,041 101,463 101,932 N/A

N/A 99,892 101,191 102,648

2004 2005 2006 2010

102,545

101,562

2007

103,2221

101,868

2008

101,6912

100,7073

2009

Actual 

Target

1

 Revised from preliminary estimate of 103,218. 2

 Preliminary data until January 2010. 3

 Target revised from 103,328 in FY 2009–FY 2013 Flight Plan.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 43

The year-end result for FY 2009 is well above the goal. 

The average daily airport capacity at the seven most 

capacity-restrained airports exceeded last year’s average 

by more than 7,000. Success in FY 2009 is due in part 

to facilities continuing to improve the accuracy of their 

rate-calling as they gain more experience in that area. 

The FAA expects the capacity goal to increase next year, 

based on the opening of a new runway at Charlotte. 

New York JFK also is undergoing numerous construction 

projects that will enhance operations at that constrained 

airport. The FAA also expects that the continued 

deployment of the TMA decision-support tool will 

optimize the flow of aircraft into capacity-constrained 

airports.

ANNUAL SERVICE VOLUME

ANNUAL SERVICE VOLUME

TARGET

Increase the Annual Service Volume (ASV) of the 35 OEP 

airports by at least 1% and commission 5 runway/taxiway 

projects.

RESULT

6 projects and 1.02% increase

We met our FY 2009 target, completing six airfield 

projects with a 1.02% increase in ASV. 

PUBLIC

BENEFIT

Increasing the capacity and/or reducing delays at the busiest 

airports provides significant benefits to the local community 

and the NAS. This measure estimates the benefit, in terms 

of additional aircraft operations, from runway construction 

projects.

The ASV measure is intended to estimate and track the 

increase in airport capacity provided by new runways 

and runway extensions. This measure is calculated as 

a 5-year moving average. It is calculated in this way to 

smooth out peaks and valleys associated with yearly 

variability in runway openings.

This target was achieved by maintaining a clear 

schedule for each project and identifying milestones and 

the organization responsible for each milestone. The 

schedule was reviewed monthly at the local level and 

reported regularly to senior management. Six airfield 

projects were commissioned during FY 2009. Three new 

runways, one runway extension, an end-around taxiway, 

and a midfield taxiway were opened providing these 

airports with the ability to accommodate an additional 

328,000 annual operations. They include the following: 

• Seattle—New Runway—November 20, 2008 

• Washington Dulles—New Runway—

November 20, 2008

• Chicago O’Hare—New Runway—

November 20, 2008 

• Dallas Ft. Worth—End-Around Taxiway—

December 4, 2008

• Philadelphia—Runway Extension—

February 12, 2009

• Boston—Midfield Taxiway—

July 30, 2009 (opened 4 months early)

In FY 2010, the FAA will continue to look for meaningful 

projects. Following are just a few planned:

• New taxiway—Boston scheduled to open in 

November 2009, opened July 30, 2009

• Two runways—Charlotte in FY 2010; 

Chicago in FY 2012

• Three Runway Extensions— Portland in FY 2011; 

Ft. Lauderdale and Atlanta (schedule TBD)

We will continue to work with airport sponsors and local 

communities to develop airfield infrastructure at airports.

ADJUSTED OPERATIONAL AVAILABILITY

ADJUSTED OPERATIONAL AVAILABILITY

TARGET Sustain adjusted operational availability at 99.70% for the 

reportable facilities that support the 35 OEP airports.

RESULT

99.78% (preliminary data)

We are currently exceeding our FY 2009 goal for 

sustaining adjusted operational availability at 

99.78%.

PUBLIC

BENEFIT

The safety of air travelers and the ability to get them to 

their destination on time is dependent on the availability 

of navigational and communications equipment, and 

redundant backup systems.

0

.5

1.0

1.5

2.0

1.07% 1.01% 1.67%

1.00%

1.57% N/A

1.00% 1.00% 1.00% 1.00%

2007

1.00%

1.06%

2008

1.00%

1.02%

2004 2005 2006 2009 2010

Fiscal Year

Actual 

Target

Percentage 

ANNUAL SERVICE VOLUME

Percentage Increase Per Year
FEDERAL AVIATION ADMINISTRATION

44 PERFORMANCE RESULTS

The availability of the equipment necessary to provide 

service directly affects the performance of the NAS. Loss 

of radar or communications equipment will affect the 

speed and number of aircraft that can be handled. The 

ability of the NAS to continually provide guidance is 

crucial, and affects both safety and capacity.

Several external factors may affect adjusted operational 

availability. Funding levels may limit availability of 

maintenance personnel. Higher incidences of equipment 

failure, usually due to weather or natural disaster, may 

negatively affect the year-end average.

The target performance level is being met due to 

adherence to FAA maintenance policies and procedures 

for NAS monitoring, control, maintenance, and 

restoration. This strict adherence optimizes service 

availability for the FAA 35 OEP airports. Most of the 

unscheduled downtime for the fiscal year was due to 

equipment and power outages. 

The goal for adjusted operational availability is expected 

to remain at 99.70 percent. The FAA’s ATO analyzes 

various performance data to increase or maintain 

targeted level of performance and determine metric goal 

to provide appropriate Safety and Capacity outcomes for 

the flying public.

NAS ON-TIME ARRIVALS 

NAS ON-TIME ARRIVALS

TARGET Achieve a NAS on-time arrival rate of 88.00% at the 35 OEP 

airports.

RESULT

88.98% (preliminary data)

We met this goal, achieving a NAS on-time arrival 

rate of 88.98 percent.

PUBLIC

BENEFIT

This goal helps the flying public reach their intended 

destinations on time.

This metric measures on-time performance against the 

carriers’ filed flight plan, rather than what may be a 

dated published schedule. This metric allows the FAA 

to measure delivery of service while taking into account 

causation of flight delay. This information is tracked as 

part of the overall comparison. 

The FAA has met this goal for the first time in 3 years. 

In addition, the NAS on-time performance level is the 

highest it has been since the inception of this metric in 

2005. Improved on-time performance this fiscal year is 

most likely due to the drop in scheduled and unscheduled 

operations in many major markets. This has led to less 

congestion in the NAS, less pressure on the Air Traffic 

Control system, and improved on-time performance. In 

addition, new technologies, such as the TMA decisionsupport tool, have contributed to more efficient arrival 

and departure performance at several large airports. 

These include Atlanta, Charlotte, and Newark.

The FAA anticipates on-time performance to 

continue improving, based on lower traffic levels and 

the movement toward new NextGen technologies 

including time-based metering, En Route Automation 

99.2

99.0

98.8

99.4

99.6

99.8

100.0

99.72% 99.76% 99.79%

99.70%

99.83% N/A

99.00% 99.00% 99.50%

2007

99.70%

99.82%

2008

99.70% 99.70%

99.78%1

2004 2005 2006 2009 2010

Fiscal Year

Actual 

Target

Percentage 

ADJUSTED OPERATIONAL AVAILABILITY

Percentage of Service Hours for Facilities

Supporting the 35 OEP Airports

1

 Preliminary data until January 2010.

88.0

88.5

90.0

87.0

87.5

86.5

86.0

88.44% 88.36%

87.67%

86.96%

87.40% 87.40%

2007

88.00%

87.29%

2008

88.00%2

88.98%1

2009

88.00%

N/A

2005 2006 2010

Fiscal Year

Actual 

Target

Percentage

NAS ON-TIME ARRIVALS

Percentage of Flights No More Than 15 Minutes Late

1

 Preliminary data until January 2010. 2

 Target revised from 88.22% in FY 2009–FY 2013 Flight Plan.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 45

Modernization, and ADS-B. Through deployment 

of early NextGen capabilities, the FAA is addressing 

anticipated growth in demand by increasing NAS 

capacity and efficiency while simultaneously improving 

safety, reducing environmental impacts, and increasing 

user access to the NAS.

It is anticipated that the downturn in the aviation 

economy will rebound and demand will return. The 

FAA expects early NextGen capability deployment now 

through 2012. This will produce measurable steps toward 

reducing congestion and enhancing on-time performance.

NOISE EXPOSURE

NOISE EXPOSURE

TARGET

Reduce the number of people exposed to significant noise, 

as measured by a 3-year moving average, to 16% below the 

3-year average for calendar years 2000–2002. 

RESULT

-48.00% 

We exceeded our FY 2009 performance by 

achieving a 48.00% reduction. (Results are 

preliminary and will not be finalized until May 

2010.) 

PUBLIC

BENEFIT

Reduced exposure to unwanted aircraft noise is a direct 

public benefit. In addition, aggressive programs to reduce 

community noise exposure mitigate public resistance to 

airport capacity expansion and airspace redesign projects.

Mitigating noise directly impacts our ability to increase 

capacity. Although building new runways is the best 

way to increase capacity, communities and local 

government are reluctant to build them if they impose 

increased aircraft noise exposure. By mitigating and 

reducing exposure to excessive noise, the FAA can help 

communities accept more runways in their areas.

We exceeded our FY 2009 performance target to reduce 

the number of people exposed to significant noise by 

16 percent as measured by a 3-year moving average 

from the base year average of 2000–2002, achieving a 

48 percent reduction. 

The significant reduction in noise exposure since the base 

year average of 2000–2002 has been driven by air carrier 

fleet and operational changes. Carriers continue to retire 

older, less fuel-efficient aircraft that tend to produce 

more noise. In addition, passenger demand fell due to a 

deepening recession and growing unemployment that 

contributed to a decrease in air traffic. Consequently, the 

actual number of residents exposed to significant noise 

remains well below the current target. 

In FY 2009, the FAA partnered with NASA to develop the 

CLEEN program. The goal of this 5-year program is to 

introduce CLEEN technologies into production aircraft in 

the 2015–2017 timeframe. 

Developing NextGen technologies and having a broad 

array of noise mitigation approaches available allows the 

FAA to continue making significant improvements in 

aviation noise exposure. The FAA continues to pursue 

a program of aircraft noise control, in cooperation with 

the aviation community and local governments, through 

aircraft source noise reduction, soundproofing, and 

buyouts of homes and other noise-sensitive buildings 

near airports, operational flight control measures, and 

land use planning strategies. While the FAA is authorized 

to provide funds for airport noise compatibility projects, 

each project must be locally sponsored and approved by 

the FAA. Percent Reduction (Cumulative)

NUMBER OF PEOPLE EXPOSED TO SIGNIFICANT NOISE

Cumulative Percentage Reduction From Baseline

–25

–30

–35

–40

–45

–20

–15

–10

–5

0

2005 2006

Fiscal Year

2004

–32.00% –35.00% –36.00%

–2.00% –3.00% –4.00%

2007

–37.00% –48.00%2

–8.00%

2008

–42.00%1

–12.00%

2009

–16.00%

2010

N/A

–20.00%

1

 Revised from projection of –38.00%.

2

 Projection to be finalized in May 2010.

Actual 

Target
FEDERAL AVIATION ADMINISTRATION

46 PERFORMANCE RESULTS

The FAA sets the noise exposure target by analyzing the 

historical rate of change of noise exposure and taking 

into account recent events and long-term projections 

of air traffic demand. As air traffic grows over time, 

noise exposure is likely to move upward. The target will 

continue to be reassessed as we take a more integrated 

approach to environmental regulation by assessing the 

relative costs and benefits of noise, local air quality, and 

greenhouse gas emissions, and the tradeoffs in achieving 

reductions in each.

AVIATION FUEL EFFICIENCY

AVIATION FUEL EFFICIENCY

TARGET

Improve aviation fuel efficiency per revenue plane-mile 

by 7%, as measured by a 3-year moving average, from the 

3-year average for calendar years 2000–2002.

RESULT

-10.17%

We exceeded our FY 2009 performance target by 

achieving a 10.17% reduction.

PUBLIC

BENEFIT

This measure supports the development of activities to 

reduce aviation’s impact on the environment and thereby 

improve public health and welfare. In addition, more fuelefficient aircraft should contribute to improving the financial 

well-being of commercial airlines and a growing economy.

Measuring and tracking fuel efficiency from aircraft 

operations allows the FAA to monitor improvements in 

aircraft/engine technology, operational procedures, and 

the airspace transportation system. By monitoring these 

improvements, the FAA can assess the degree of impact 

each factor has on aviation emissions.

FY 2009 performance was calculated to be -10.17 percent. 

A combination of factors is responsible for this result 

including aircraft fleet performance, air traffic growth, 

and air traffic management (ATM) of the airspace 

system. This result demonstrates continued progress in 

maintaining efficiency of commercial aircraft operations 

within the airspace system, thereby minimizing 

environmental impact. 

The FAA works with a number of partners to find new 

ways to improve fuel efficiency. NASA and the FAA 

conduct research and development to identify engine 

and airframe technologies. These new technologies 

offer the potential for reducing fuel burn and emissions. 

The Aerospace Industries Association works with the 

FAA and NASA to commercialize technologies from 

the research phase and develop operational procedures 

to address environmental impacts. The Air Transport 

Association and the FAA partner to identify fleet and air 

traffic procedural changes that improve fuel efficiency.

Looking forward to FY 2010, we do not expect increases 

in fuel burn and/or decreases in distance traveled to 

prevent us from meeting our target of -8.00 percent. 

However, the current metric for measuring and tracking 

fuel efficiency may not adequately capture performance 

to the degree that would allow for future decisions on 

technological and operational considerations. Thus, we 

are continuing to review the impact of improvements 

in ATM procedures and changes in operational trends to 

assess if a revised performance metric would be in order.

AVIATION FUEL BURNED PER MILE

Cumulative Percentage Reduction From Baseline

Percent Reduction (Cumulative)

–6.00

–7.00

–8.00

–9.00

–10.00

–11.00

–5.00

–4.00

–3.00

–2.00

–1.00

0

Fiscal Year

–3.46%

–1.00%

2004

–5.84%

–2.00%

2005

–8.23%

–5.00%

2006

–9.52%

–5.00%

2007

–10.17% –10.17%

–6.00%

2008

–7.00%

2009

N/A

–8.00%

2010

Actual 

Target
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 47

INTERNATIONAL LEADERSHIP

GOAL: Increase the safety and capacity of the global civil aerospace system in an environmentally sound manner.

International leadership is the way the FAA advances safety and efficiency around the world, to wherever Americans 

might travel. The FAA is uniquely positioned for this undertaking in the global aviation community through 

expanded technical assistance to other civil aviation authorities and continued emphasis on bilateral agreements 

to help harmonize aviation safety and environmental quality around the world. Today, the agency has operational 

responsibility for about half of the world’s air traffic, certified more than two-thirds of the world’s large jet aircraft, and 

provided assistance to more than 130 countries to improve their aviation systems.

While safety is the FAA’s top priority domestically and internationally, one cannot overlook the potential that global 

aviation has with respect to trade and commerce. Aviation systems within and among nations are lifelines to the 

future, free trade, accelerated economic growth, and greater cultural exchange. Seamless global aviation is critical to an 

increasingly global economy that hinges on efficient supply chains and just-in-time manufacturing.

FY 2009 INTERNATIONAL LEADERSHIP PERFORMANCE MEASURES AND RESULTS

Performance Measure FY 2009 

Target

FY 2009 

Results

FY 2009 

Status

FY 2010

Target1

Commercial Aviation Safety Team (CAST) Safety Enhancements (SEs)

Work with the Chinese aviation authorities and industry to adopt 27 proven CAST 

SEs by FY 2011. This supports China’s efforts to reduce commercial fatal accidents to 

a rate of 0.030 fatal accidents per 100,000 departures by FY 2012.

5 5 4

International Aviation Development Projects

By 2013, arrange commitment for external funding for at least 35 aviation 

development projects (7 per year).

7 8 7

Aviation Leaders

By 2013, work with at least 18 countries or regional organizations to develop 

aviation leaders to strengthen the global aviation infrastructure.

2 7 3

NextGen Technologies

By FY 2013, expand the use of NextGen performance-based systems and concepts 

to 5 priority countries.

1 1 1

1 FY 2010 targets are from the FY 2009–2013 Flight Plan.

For information on data sources and estimating and finalization of results, see Completeness and Reliability of Performance Data.

 Goal Achieved 

 Goal Not Achieved
FEDERAL AVIATION ADMINISTRATION

48 PERFORMANCE RESULTS

CAST SAFETY ENHANCEMENTS

CAST SAFETY ENHANCEMENTS

TARGET

Assist China with the adoption of a least 5 of the 

mutually agreed upon CAST SEs to maintain China’s safety 

performance during rapid growth of the aviation system.

RESULT

5 CAST SEs 

The FAA met its target to implement 5 CAST SEs.

PUBLIC

BENEFIT

The flying public benefits from the worldwide 

implementation of CAST SEs, which are proven to eliminate 

the precursors of accidents.

CAST was formed in 1997 as a joint Government 

and industry organization dedicated to reducing the 

commercial air carrier fatal accident rate in the United 

States. It focused on the causes of major accidents 

and developed a series of SEs that eliminated their 

precursors. These SEs have contributed significantly to 

the improvement of the U.S. commercial aviation system 

and have had the same results when implemented 

around the world. 

The FAA works with Chinese aviation authorities, as 

well as industry, to adopt these SEs. As the fastestgrowing commercial fleet in the world, China has 

maintained an impressive accident rate. For FY 2009, 

the FAA and China agreed on a target of implementing 

at least five CAST SEs. The Chinese government 

implemented five.

The FAA’s 5-year target was to work with Chinese 

aviation authorities to adopt 27 proven CAST SEs. In 

the last 2 years, China has moved well beyond the 27 

initial CAST SEs, and continues to implement. CAST 

has completed new analysis/reports that have resulted 

in more SEs. Additionally, China is continuing to accept 

these additional SEs based on their safety priorities.

INTERNATIONAL AVIATION 

DEVELOPMENT PROJECTS

INTERNATIONAL AVIATION DEVELOPMENT PROJECTS

TARGET Arrange external funding commitments for at least 7 

international aviation development projects. 

RESULT

8 

We were successful in arranging 8 external 

funding commitments in FY 2009.

Note: This measure was new in FY 2009—no trend 

data are available.

PUBLIC

BENEFIT

U.S. citizens gain increased aviation safety whenever they 

travel abroad. This safety goal is attained by spreading FAA 

safety and efficiency practices in developing countries, 

leveraging FAA expertise and resources, and avoiding 

duplication of international aviation donations.

In FY 2009, the FAA continued to promote improved 

safety and regulatory oversight in cooperation with 

bilateral regional and multilateral aviation partners 

with a redefined initiative. The target shifted to focus 

on worthwhile projects rather than dollar amounts. 

This redefined initiative allowed the FAA to continue to 

work with major international partners such as China, 

India, Indonesia, and Brazil. The FAA committed to 

the arrangement of funding for seven international 

aviation development projects. This shift in focus gave 

the FAA more flexibility and the opportunity to arrange 

financing for projects in smaller countries like Azerbaijan 

and Uganda and with a Caribbean regional aviation 

safety organization. In addition, we were able to provide 

financing for a conference focusing on aviation in Africa.

Projects included infrastructure and capacity-building 

projects relating to aviation safety, ATM, and airports. 

They are funded by sources external to the FAA. 

Following are three categories of sources:

• U.S. Government departments and agencies that 

provide foreign economic assistance

• Multilateral development banks that provide loans 

to developing countries

• Economic assistance agencies of foreign governments

0

2

4

6

8

10

12

7

10

5

5

5 4

5

2007 2008

N/A

2009 2010

Fiscal Year

Actual 

Target

CAST SAFETY ENHANCEMENTS1

Safety Enhancements Implemented by Chinese Government Each Year

1

 Renamed for FY 2009—previously known as Aviation Safety Leadership.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 49

Projects are considered successful once funds are 

committed to the project with an agreement by all 

parties involved. 

This year, the FAA International Team established 

a robust outreach program with U.S. Government 

organizations that provide development financing. This 

team also trained managers, desk officers, and senior 

representatives in-country on how to identify viable 

projects. Throughout FY 2009, the FAA conducted 

information sessions with a number of international 

industry stakeholders such as the U.S. Trade and 

Development Agency (USTDA) and the Millennium 

Challenge Corporation (MCC). Both organizations 

were created to advance economic development in 

impoverished, developing countries.

We successfully arranged eight external funding 

commitments for the following:

• Africa Aviation Safety and Security Conference

• Azerbaijan Aviation Safety Technical Assistance

• China Aviation Symposium

• India Aviation Cooperation Program (ACP)

• Indonesia Technical Assistance

• Uganda Expansion of Meteorological Services

• China Executive Management Development 

Training (EMDT)

• Caribbean Aviation Safety and Security Oversight 

System Definitional Mission

AVIATION LEADERS

AVIATION LEADERS

TARGET Work with at least 2 countries in FY 2009.

RESULT

7 

FAA exceeded its target to work with at least 7 

countries.

Note: This measure was new in FY 2009—no trend 

data are available. 

PUBLIC

BENEFIT

As foreign aviation leaders are exposed to FAA best practices, 

they are better able to effect improvements within their civil 

aviation authorities. Therefore, U.S. citizens are provided the 

benefit of an improved experience when flying abroad.

The FAA has a strategic vision of helping foreign 

countries to independently meet international aviation 

standards. One way to meet this vision is to work 

with countries or regional organizations to develop 

aviation leaders that will strengthen global aviation 

infrastructure.

This measure showcases opportunities for the FAA to 

arrange for foreign civil aviation leaders to strengthen 

their aviation leadership skills through participation in 

specific programs. For example, the U.S. Department of 

State’s International Visitor Leadership Program, FAA’s 

Executive Management Development Training, and 

management courses at the FAA academy are all venues 

providing developmental opportunities for potential 

and current civil aviation leaders. Working with foreign 

aviation professionals to develop solid leadership skills 

is an integral component of developing civil aviation 

administrations worldwide.

In FY 2009, the FAA exceeded its target by working with 

seven countries—China, the United Kingdom, Thailand, 

Indonesia, India, Japan and the Cayman Islands:

• The U.S.-China ACP sponsored Phase III of the 

EMDT program for Chinese midlevel aviation 

professionals within the government, airport 

authorities, and airlines. This phase focused on 

general management principles. The 32 students 

completed coursework in effective leadership and 

program management as well as on-the-job training 

in new air traffic technologies and at the FAA’s 

CMEL. 

• In March, an International Visitor Leadership 

Program was developed and conducted for an 

aviation leader from the United Kingdom. This 

program focused primarily on environmental best 

practices.

• Through the International Visitor Leadership 

Program funded by the Department of State, five 

Thai civil aviation officials visited in August. This 

program focused primarily on international aviation 

safety policies.

• FAA Senior Representative for Southeast Asia 

secured approval for the visit by 10 Indonesian 

Aviation officials through the International Visitor 

Leadership Program. The objective of the program 
FEDERAL AVIATION ADMINISTRATION

50 PERFORMANCE RESULTS

was to bring together U.S. and Indonesian aviation 

officials involved in addressing aviation safety 

standards, accident prevention, and investigation to 

encourage a comprehensive and systematic exchange 

of ideas and information. The program, conducted 

April 19–28, 2009, involved visits to regulators, 

planners, airports, and manufacturers in Seattle and 

Washington, DC.

• The Senior Representative in Delhi secured approval 

under the International Visitor Leadership Program 

for the Indian Director General of Civil Aviation 

to participate in an aviation safety oversight visit 

to the FAA September 1–19, 2009. The program 

focused on discussions and visits to Flight Standards 

District Offices in Texas and Georgia, and intense 

briefings and discussions at the FAA headquarters 

with the Flight Standards Service and the Aircraft 

Certification Service.

• The FAA hosted a member of the Japan Ministry of 

Land, Infrastructure, and Transport January 12–20, 

2009. The program focused on gaining a strong basis 

on the U.S. aviation sector and included meetings 

with the various FAA LOBs, as well as visits to 

FAA facilities and the Transportation Security 

Administration. 

• The FAA developed a specialized on-the-job training 

program for a senior official from the Civil Aviation 

Authority of the Cayman Islands on security and 

hazardous materials. For 3 weeks in May–June 2009, 

the Caymanian official observed FAA hazardous 

materials agents during air operator inspections, 

incident response, outreach, and other activities, 

including briefings on the hazardous materials 

enforcement/investigative process.

FY 2009 was the first year for this target. However, the 

FAA does have historical data that shows a positive 

success rate for this kind of program. The FAA training 

is a much sought-after commodity in the international 

arena. This measure is expected to be a long-term 

measure through at least FY 2013. Future improvements 

to the program will be in the areas of increased foreign 

participation and expansion of the training programs.

NEXTGEN TECHNOLOGIES

NEXTGEN TECHNOLOGIES

TARGET 1 priority country

RESULT

1

The FAA expanded the use of NextGen 

performance-based systems to India.

PUBLIC

BENEFIT

By meeting this target, the FAA influences the development 

of global air traffic flow management requirements and 

operational procedures to be standardized with those 

currently in use in the NAS. The result will be a safer, 

more efficient, and environmentally friendly operating 

environment around the world for U.S. citizens traveling 

abroad.

By working with international civil aviation 

authorities, organizations, and States, the FAA 

enhances its international leadership role and facilitates 

standardization of U.S. NextGen technologies, 

procedures, and concepts with global ATM 

modernization efforts. The FAA provides a wide array 

of technical assistance and support to the international 

civil aviation community to promote NextGen and 

influence countries to take significant steps toward 

implementation.

There are a few external factors that impact this target. 

First, funding is provided by specific FAA program offices, 

international civil aviation authorities, or air navigation 

service providers. These funds are provided via the 

execution of reimbursable bilateral technical assistance 

agreements. Secondly, political will, cultures, foreign 

policy, and other government budgets can be significant 

0

1

2

1

1

1

2

1 1

1

2007 2008

N/A

2009 2010

Fiscal Year

Actual 

Target

NEXTGEN TECHNOLOGIES

Number of Countries Implementing NextGen Technologies,

Procedures, or Concepts Each Year
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 51

factors in the success of this target. Therefore, each year 

the FAA assesses potential priority countries based on 

the ability to secure a firm commitment from them. 

In FY 2009, the FAA continued to support outreach 

of NextGen solutions through assistance to foreign 

governments in the Asia Pacific, Americas, and European 

regions. After an analysis of ongoing assistance 

projects, it was clear that the strongest commitment 

to move toward U.S. NextGen solutions was from the 

Airports Authority of India (AAI). India had previously 

stated that air traffic flow management is one of its 

top priorities to handle the expected large increase 

in the number of commercial air traffic operations 

in India. India recognizes U.S. leadership in this area 

and requested technical assistance with planning for 

and implementing a requirements roadmap for India. 

A cooperative reimbursable project establishing all 

requirements to develop and construct an Indian Central 

Flow Control Center and air traffic flow management 

capability was proposed. This proposal included all 

associated equipment, communications, and necessary 

facilities interfaces. On July 23, 2009, the AAI formally 

accepted the proposal via a letter to the FAA, and 

subsequently signed the technical assistance agreement 

on September 25, 2009. This significant project with 

India will meet the NextGen technologies performance 

target for FY 2009.

While this measure has been an important and useful 

tool, the FAA is currently investigating and formulating 

improvements to this measure and associated target. 

Specifically, the FAA would like to shift away from a 

“one country” target that is subjective and relies on 

many external factors, to a target that is a percentage 

of successfully completed strategic-level activities in 

support of NextGen proliferation that are generated 

from the annual ATO International Strategy document.

ORGANIZATIONAL EXCELLENCE

GOAL: Ensure the success of the FAA’s mission through stronger leadership, a better-trained and safer workforce, 

enhanced cost-control measures, and improved decisionmaking based on reliable data.

Organizational excellence is an ongoing challenge. As the aviation community continues to face a tough economic 

environment, the FAA faces many difficult management challenges as well. The FAA’s central management strategy 

for achieving organizational excellence is to deliver the results described in the Flight Plan and to refine our focus on the 

DOT’s strategic initiatives. Our efforts this year focused on air traffic controller recruitment and placement, as well as 

maintaining the aviation safety workforce to levels commensurate with the Aviation Safety Workforce Plan. 

The FAA also remained vigilant in managing the modernization of the NAS to a satellite-based NextGen system to 

avoid significant cost overruns, scheduled delays, or performance shortfalls. The GAO removed the FAA from its 2009 

High-Risk List because of our progress in addressing some of the root causes of past problems and our commitment to 

sustaining progress. In FY 2009, we achieved our cost and schedule goals, tracking a total of 64 milestones against 40 

different programs. Of the 64 milestones, 60 (93.8 percent) are on or ahead of their scheduled dates. All of our major 

system investments are within 10 percent variance of current baseline total budget estimate at completion. The FAA 

continues to deploy new systems across the country and incur fewer cost overruns. 
FEDERAL AVIATION ADMINISTRATION

52 PERFORMANCE RESULTS

FY 2009 ORGANIZATIONAL EXCELLENCE PERFORMANCE MEASURES AND RESULTS

Performance Measure FY 2009 

Target

FY 2009 

Results

FY 2009 

Status

FY 2010 

Target1

STRATEGIC MANAGEMENT OF HUMAN CAPITAL

Office of Personnel Management (OPM) Hiring Standard

By FY 2010, 80 percent of FAA external hires will be filled within OPM’s 45-day 

standard for Government-wide hiring.

65.00% 80.88% 80.00%

Reduce Workplace Injuries 

Reduce the total workplace injury and illness case rate to no more than 2.44 per 100 

employees by the end of FY 2011, and maintain through FY 2013.

2.60 per 100 1.77 per 1002 2.52 per 100

Grievance Processing Time

Reduce grievance processing time by 30% (to an average of 102 days) by FY 2010 

over the FY 2006 baseline of 146 days, and maintain the reduction through FY 2013.

-25.00% -73.97% -30%

Air Traffic Controller Workforce Plan

Maintain the air traffic controller workforce at, or up to 2% above, the projected 

annual totals in the Air Traffic Controller Workforce Plan.

0% to 2%

 over plan

1.19% 

over plan

0% to 2% 

over plan

Aviation Safety Critical Positions Workforce Plan

Maintain the aviation safety workforce within 1% of the projected annual totals in 

the Aviation Safety Workforce Plan.

+/- 1% of 

annual target

0.15% over

annual target3

+/- 1% of 

annual target

IMPROVED FINANCIAL PERFORMANCE 

Cost Control 

Organizations throughout the agency will continue to implement cost-efficiency 

initiatives such as 10–15% savings for strategic sourcing for selected products and 

services; by the end of FY 2009, reduce leased space for Automated Flight Service 

Stations from approximately 510,000 square feet; annual reduction of $15 million in 

IT operating costs; by FY 2010, reduce overhead costs 5–10% through automation of 

invoice processing.

90.00%

1 activity and 

123.38% of 

targeted 

savings

90.00%

Unqualified Audit

Obtain an unqualified opinion on the agency’s financial statements (with no material 

weaknesses) each fiscal year.

Unqualified

Audit w/NMW

Unqualified

Audit w/NMW

Unqualified

Audit w/NMW

ACQUISITION MANAGEMENT

Critical Acquisitions on Schedule

In FY 2009, 90% of Major System Investments selected annual milestones are 

achieved.

90.00% 93.75% 90.00%

Critical Acquisitions on Budget

By FY 2009, 90% of Major System Investments are within 10% variance of current 

baseline total budget estimate at completion.

90.00% 97.06% 90.00%

CUSTOMER SATISFACTION AND OPERATIONAL CAPABILITY

Customer Satisfaction 

Maintain the annual average of FAA surveys on the ACSI at or above the average 

Federal Regulatory Agency score.

61 69.32 TBD

Information Security

Achieve zero cyber-security events that disable or significantly degrade FAA services. 0 0 0

Continuity of Operations

Exceed Federal Emergency Management Agency (FEMA) continuity readiness

 levels by 5%.

5% ahead of 

FEMA 

requirements

8.33%

5% ahead of 

FEMA 

requirements

TBD: To be determined

1

 FY 2010 targets are from the FY 2009–2013 Flight Plan. 2

 Projection from trends. Final data available in November 2009.

For information on data sources and estimating and finalization of results, see 

Completeness and Reliability of Performance Data.

 Goal Achieved 

 Goal Not Achieved
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 53

STRATEGIC MANAGEMENT OF HUMAN CAPITAL

OPM Hiring Standard

OPM HIRING STANDARD

TARGET In FY 2009, 65% of FAA external hires will be filled within 

OPM’s 45-day standard for Government-wide hiring.

RESULT

80.88% 

At the end of the fourth quarter of FY 2009, 

80.88% of external selections through the FAA’s 

online application system, AVIATOR, are within the 

45-day hiring standard.

Note: This measure was new in FY 2008—no trend 

data are available.

PUBLIC

BENEFIT

It is critical that the FAA’s hiring process is efficient and 

effective to ensure that the best-qualified candidates are 

hired in a timely manner to achieve mission results. By using 

this standard, the lengthy hiring process is decreased and 

mission-critical positions are filled with quality candidates 

who may otherwise be selected by private industry.

Throughout government and industry, there is fierce 

competition to attract a skilled workforce. The FAA 

must hire capable staff with the requisite competencies 

in a timely manner. Using the OPM 45-day hiring 

standard as an organizational excellence performance 

target, we achieved greater efficiencies in hiring 

applicants who are new to the Federal Government. In 

anticipation of the forthcoming retirement bubble, it 

is in the agency’s best interest to ensure that the hiring 

process nets qualified individuals needed to achieve 

mission results in a timely manner. Measuring hiring 

time is a critical step in improving this process. 

The OPM 45-day hiring standard measure was developed 

by the OPM as a Government-wide performance 

standard and is defined as beginning 1 day after a 

vacancy announcement closes and ending the day a 

tentative or firm job offer is made to an applicant. 

This measure applies to all occupational series serviced 

through an automated online application system, 

AVIATOR. Air Traffic Controller (2152), Aviation Safety 

Inspectors ([1825] open continuous announcements), 

and Executive positions are not included in this measure. 

The AVIATOR system tracks the number of business 

days from the closing date of the announcement to the 

date a tentative or firm offer is made.

Recognizing that communication among all stakeholders 

is vital, we monitor the hiring process and work with 

selecting officials. The FAA holds selecting officials 

accountable for using documented FAA merit hiring 

principles during the selection process. Audits are used to 

ensure that selections have been made in good faith and 

in accordance with these principles. Process efficiency 

efforts include an internal review and emphasis on 

data integrity, resulting in a more standardized and 

documented data collection process. These procedures, 

along with continuing assessment and correction of 

process barriers, contributed to our success in achieving 

the FY 2009 target for this performance goal.

Reduce Workplace Injuries

REDUCE WORKPLACE INJURIES

TARGET Reduce the total workplace injury and illness case rate to no 

more than 2.60 per 100 employees.

RESULT

1.77 (projection from trends)

 We met our goal, reducing the workplace injury 

and illness case rate to 1.77.

PUBLIC

BENEFIT

Reductions in employee injuries lead to improved 

productivity and quality of life for the FAA workforce and 

lower costs for the FAA. The public benefits because FAA 

employees are not diverted by injuries from their ongoing 

aviation safety efforts.

The FAA continued to emphasize worker safety through 

training, inspections, hazard abatement, and program 

evaluations. These actions were targeted to the most 

prevalent causes of mishaps, based on analysis of the 

data and research of effective preventive measures. 

2.25

2.75

2.5

3.0

2.17

2.76

2.43

2.85

2007

2.68

2.101

2008

2.60

1.772

2009

2.52

N/A

2006 2010

Fiscal Year

Actual 

Target

Percentage

WORKPLACE INJURIES

Per 100 Employees

2.0

1.75

1

 Revised from projection of 2.25. 2

 Projection to be finalized in D ecember 2009.
FEDERAL AVIATION ADMINISTRATION

54 PERFORMANCE RESULTS

As part of the data analysis, we continue to 

systematically apply Occupational Safety and Health 

Administration (OSHA) recordkeeping criteria, which 

helps identify injury causes quickly and allows us to 

target solutions. This helps to mitigate the risk of injury 

recurrence. 

We met our goal by reducing the workplace injury 

and illness case rate to 1.77, down from last year’s 

rate of 2.10 per 100 employees. One factor impacting 

performance was the emphasis on Automated External 

Defibrillators (AED). AEDs are portable electronic devices 

that automatically diagnose certain cardiac arrhythmias 

(abnormal electrical activity in the heart). An AED treats 

patients by checking the heart rhythm, recognizing 

a rhythm that requires a shock and treating it with 

defibrillation (the application of electrical therapy which 

stops the arrhythmia, allowing the heart to reestablish 

an effective rhythm). The FAA has tracked the incidence 

of at-the-FAA-workplace cardiac events for 10 years 

(October 1998 through September 2008). During this 

period, we have identified 10 workplace events—about 

one per year among more than 46,000 FAA employees. 

Additionally, this life-saving tool added to the confidence 

of the workforce in the agency employee safety program. 

We expect to see continuing improvements in 

performance as employee safety is incorporated into 

the overall safety culture of the FAA. Specific workforce 

safety commitments are in our annual business plans. 

These commitments emphasize employee awareness and 

participation, leadership support for employee safety, 

risk identification and mitigation, training, and employee 

safety program evaluation with top management 

accountability. 

Grievance Processing Time

GRIEVANCE PROCESSING TIME

TARGET Reduce average grievance processing time (GPT) by 25% to 

110 days from the 2006 baseline of 146 days. 

RESULT

-73.97% 

We met our goal, achieving a 38-day average GPT 

for a 73.97% reduction. 

PUBLIC

BENEFIT

Reducing GPT supports better labor-management relations 

and enables faster correction of noncompliance with the 

FAA’s collective bargaining agreements, thus ensuring that 

employees are not distracted from the FAA mission.

To ensure a consistent labor management program, the 

FAA focuses on providing effective and efficient processes 

to train managers and supervisors to handle grievances, 

negotiations, and contract administrations. The agency 

demonstrates a good-faith effort to deal promptly with 

employee complaints, which benefits the public as 

employees’ attention to their duties is not distracted by 

workplace issues. 

In FY 2009, we aggressively tracked and processed 1,902 

grievances, averaging 38 days in processing time for a 

73.97 percent reduction, exceeding the 25 percent target. 

Our continued efforts to reduce processing time for 

grievances supports our objective to resolve employee 

and union complaints at the lowest level possible, with 

the least amount of time, resources, and disruptions to 

the work environment and mission.

As the GPT continues to approach the ideal, the year-toyear improvements may be less striking than they have 

been to date. However, the FAA will continue efforts to 

maximize the effectiveness of the grievance process.

0

 10

20

30

40

50

60

70

80

–10.00%

–61.64%

–15.00%

–63.69%

–25.00% –30.00%

–73.97%

2007 2008

N/A

2009 2010

Fiscal Year

Actual 

Target

Percentage

GRIEVANCE PROCESSING TIME

Percentage Reduction from Baseline
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 55

Air Traffic Controller Workforce Plan

AIR TRAFFIC CONTROLLER WORKFORCE PLAN

TARGET

Maintain air traffic controller workforce at or up to 2% 

above the projected annual totals in the Air Traffic Controller 

Workforce Plan. 

RESULT 1.19% 

We met our target, achieving 1.29% over the plan.

PUBLIC

BENEFIT

This measure is used as a tool to help manage the dynamic 

staffing needs of the NAS. This gives the FAA the ability 

to effectively handle system-wide air traffic demand and 

provide seamless service to the flying public.

This measure is one of the tools used to effectively 

manage the long-predicted wave of expected controller 

retirements. These retirements are a result of the mass 

hiring after the controller strike of 1981. Maintaining 

this target will mitigate the risk of another major spike 

in retirement eligibility. 

In FY 2009, the FAA achieved its target with an endof-year workforce level at between 0 to 2 percent more 

than the plan. The FAA began the process of adding 

six additional tower cab simulators and upgrading four 

existing tower cab simulators at the Academy to increase 

simulation time in initial courses. This initiative is part 

of ongoing efforts to continually modernize technical 

training, transform its training infrastructure, increase 

its capability for Web-based training and access to 

simulations at all air traffic control facilities. Maturation 

of the National Training Database brought the expansion 

of the enterprise learning management system to support 

both technical and nontechnical training. Controller 

training support also has expanded substantially to meet 

the growing demands in the field as higher numbers of 

trainees have arrived onsite.

Training modernization will continue to expand access 

to training resources such as Web-based training and 

additional simulation. The new contract for air traffic 

controllers includes incentives to retain retirementeligible controllers, which will improve the trainee-tocontroller ratios.

The updated Controller Workforce Plan will be 

published March 2010 with revised hiring targets (See 

the current plan at: http://www.faa.gov/air_traffic/

publications/controller_staffing/media/CWP_2009.

pdf). The new plan will incorporate additional 

information such as facility-by-facility controller 

numbers and a new benchmark for trainee-to-controller 

ratios as directed by Congress. The FAA will expand 

Collegiate Training Initiative (CTI) school participation, 

and increase the number of air traffic-experienced 

candidates. We expect steady State hiring for the next 

5–10 years.

Aviation Safety Critical Positions Workforce Plan

AVIATION SAFETY CRITICAL POSITIONS WORKFORCE PLAN

TARGET

Maintain the aviation safety workforce within 1.00% of the 

projected annual totals contained in the Aviation Safety 

Workforce Plan. FY 2009 target: 7,184 full-time, permanent 

employees.

RESULT

0.15% over annual target

At the end of FY 2009, the AVS staffing level was 

7,195 or .0015% above the targeted staffing level 

of 7,184 employees.

Note: This measure was new in FY 2009—no trend 

data are available.

PUBLIC

BENEFIT

To keep the U.S. aviation system the safest in the world, the 

FAA must maintain a highly skilled professional and technical 

safety workforce.

Key to the FAA’s success in maintaining the safety of an 

aviation system that is experiencing the safest period 

in its history—is its workforce. The primary future 

workforce challenge will be to hire, train, and retain 

a highly qualified, high-performing aviation safety 

workforce with the skills necessary to implement and 

maintain the SMS.

0

1.0

0.5

2.0

1.5

0% to 2%

0.45%

0% to 2% 0% to 2%

1.19%

0% to 2%

1.66%

2007 2008

N/A

2009 2010

Fiscal Year

Actual 

Target

Percentage

AIR TRAFFIC CONTROLLER WORKFORCE PLAN

Percentage Difference Between End-of-Year Levels and

Projected Totals in Plan
FEDERAL AVIATION ADMINISTRATION

56 PERFORMANCE RESULTS

As of September 30, 2009, AVS had 7,195 full-time, 

permanent positions on board versus the September 30, 

2009, target level of 7,184. The FY 2009 staffing target 

represented a growth of 193 positions above the FY 2008 

end-of-year full-time, permanent staffing level of 7,002.

To achieve this performance target, the FAA’s AVS 

routinely surveys its workforce attitudes and agency 

workforce planning practices to assess progress in 

meeting its hiring goals. The organization monitors 

the attrition of its leadership cadre and safety critical 

workforce to sustain talent in the face of increasing 

competition and a decreasing technical labor supply. 

In addition, the AVS analyzes trends in safety critical 

occupations to adjust the recruitment and retention 

strategy to current and future needs. 

IMPROVED FINANCIAL PERFORMANCE

Cost Control

COST CONTROL

TARGET One activity per approved organization and achievement of 

90% of targeted savings.

RESULT

One activity per approved organization and 

achievement of 123.38% of targeted savings. The 

FAA met its goal for the fifth consecutive year.

Note: This measure was redefined in FY 2009—no 

trend data are available. 

PUBLIC

BENEFIT

Funds received by the FAA are being used in a more efficient 

and cost-effective manner. The FAA is taking aggressive steps 

to stem the growth of operating costs. This measure is a tool 

by which increased focus is placed on efficiency and cost 

reduction.

In FY 2009, the FAA’s Cost Control Program met and 

exceeded the end-of-year goal by reaching 123.38 percent 

of cost savings and avoidance. Organizations throughout 

the FAA implemented at least one cost savings or 

avoidance activity. In some cases, organizations offered 

more than one activity in support of this very important 

program. These combined activities accomplished and 

exceeded the 90 percent goal of targeted savings set at 

the beginning of the year. The primary source of these 

savings were from strategic sourcing of selected products 

and services, effective management of the Workers’ 

Compensation 

Program, and reductions in IT help desk operating costs. 

Additionally, unexpected new cost control submissions 

during the year contributed to this significantly 

enhanced result.

The FAA’s ability to exceed this target after increasing it 

from FY 2008 can be attributed to the year-long effort to 

solicit new activities. The new savings totals augmented 

the end-of-year estimates and effectively pushed the 

actual higher than expected. 

The Cost Control Program is a vibrant and mature 

program that continues to challenge the FAA to be more 

cost-efficient. This program will continue to aggressively 

search for opportunities to curb operating costs. In 

FY 2010, the target will again be updated to provide a 

greater challenge to the agency. 

Unqualified Audit 

UNQUALIFIED AUDIT

TARGET Obtain an unqualified opinion on the agency’s financial 

statements (with no material weakness [NMW]).

RESULT Unqualified audit with no material weaknesses. 

FAA met this target in FY 2009.

PUBLIC

BENEFIT

The public benefit is the assurance by independent auditors 

that the agency is being operated in a transparent and 

fiscally responsible manner.

This measure is an indicator of the quality of the FAA’s 

financial accountability. An unqualified audit opinion 

tells the public and Congress that we are transparent 

and accountable in how we are using scarce taxpayer 

resources.

All FAA organizations have the responsibility for 

following accounting policy properly by entering 

accurate source data into the accounting system. This is 

essential to achieving an unqualified audit with NMW.

A strong emphasis on the audit is a priority from the 

highest levels of the organization. The FAA allocates 

ample resources to resolve audit issues, ensure integrity 

of data and business system operations, and to monitor 

ongoing performance.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 57

ACQUISITION MANAGEMENT

Critical Acquisitions on Schedule/ 

Critical Acquisitions on Budget

CRITICAL ACQUISITIONS ON SCHEDULE AND BUDGET

TARGET

Ensure that 90% of critical acquisition programs are on 

schedule and 90% of critical acquisition programs are within 

10% of budget as reflected in the Capital Investment Plan.

RESULT

93.75% on schedule and 97.06% on budget

Note: This measure was redefined in FY 2008—no 

trend data are available.

PUBLIC

BENEFIT

The FAA’s ability to keep acquisitions within budget and 

schedule will allow for a timely transition of NextGen 

programs. The transition to NextGen involves acquiring 

numerous systems to support improved safety, increased 

capacity, and reduced delay for the flying public.

The critical acquisitions on schedule and budget targets 

represent progressive measures for each fiscal year of 

the performance of critical FAA acquisition programs. 

These performance measures began in FY 2003 and will 

continue each fiscal year through the acquisition of the 

selected programs. Both performance targets increased 

each year until it reached 90 percent in FY 2008. This 

progressive increase from 80 percent in FY 2003 to 

90 percent in FY 2008 ensures that the FAA’s acquisition 

performance is consistent with targets set in The DOT 

Strategic Plan 2006–2011. 

In FY 2009, a total of 93.8 percent of the Major System 

Investments remained within their established schedule 

goals. Sixty of a total of 64 milestones were completed as 

scheduled. Three of the four milestones not completed 

on their scheduled dates were completed within the fiscal 

year and had no impact on overall program performance. 

One milestone is projected to be completed in the second 

quarter of FY 2010. The FAA’s internal management 

process and alignment with strategic goals continue to 

result in a higher percentage of milestones meeting their 

schedules. In the GAO’s January 2009 report titled 

High-Risk Series and Update, the GAO determined 

that the FAA’s improved management capabilities on 

major projects warranted removal from the GAO 

High-Risk List. 

Also, a total of 97.06 percent of the Major System 

Investments remained within their established cost 

goals. The increase in funding for one program was 

authorized to continue with sustainment of the system. 

All of the major programs completed their performance 

goals within the established baselines.

Schedule and Budget success can be attributed to 

quarterly reviews implemented within the FAA’s ATO 

with the Senior Vice President for Finance and the ATO 

Service Unit Vice Presidents responsible for management 

of the capital programs within their domains. Financial 

status, acquisition baseline milestones, annual 

milestones, EVM performance data, and technical 

requirements stability are covered in the reviews. 

75

80

85

90

95

100

105

91.50% 92.00% 97.44%

87.50%

97.00%

90.00%

93.88%

80.00% 80.00% 85.00%

2004 2005 2006 2007 2008

Fiscal Year

Actual 

Target

Percentage 

CRITICAL ACQUISITIONS ON SCHEDULE

Percentage of Programs Meeting Scheduled Milestones

90.00%

93.75%

2009

90.00%

N/A

2010

75

80

85

90

95

100

105

100.00% 97.00% 100.00%

87.50%

100.00%

80.00% 80.00% 85.00%

2007

90.00%

96.08%

2008

90.00%

97.06%

2009

90.00%

N/A

2004 2005 2006 2010

Fiscal Year

Actual 

Target

Percentage 

CRITICAL ACQUISITIONS ON BUDGET

Percentage of Programs Within Planned Budget
FEDERAL AVIATION ADMINISTRATION

58 PERFORMANCE RESULTS

Additionally, large or complex capital programs are now 

segmented into manageable phases to improve executive 

oversight and control. Segmenting large capital programs 

into phases such as development, demonstration, 

and production, allows FAA management to review 

incremental progress against cost and schedule baselines 

and approve subsequent program phases based upon 

program performance achieved to date.

For future years, the FAA is addressing the potential of 

combining the separate Acquisition Budget Goal and 

Acquisition Schedule goal into one Acquisition Budget 

and Schedule goal based on a programs total cost and 

schedule baseline performance. GAO report GAO-08-

42 Air Traffic Control FAA Reports Progress in System 

Acquisitions, but Changes in Performance Measurement 

Could Improve Usefulness of Information states: 

“Because ATO’s acquisition performance measures lack 

objectivity, reliability, coverage of core activities, and 

clarity, and focus only on the preceding year, they 

may not provide a valid assessment of performance 

over time.” 

Combining this measure to represent total program 

performance would alleviate confusion, provide better 

clarity and consistency with congressional reporting, 

which is based on total program cost and schedule 

performance. The FAA also will look at increasing the 

measurement threshold from 90 to 95 percent.

CUSTOMER SATISFACTION AND OPERATIONAL 

CAPABILITY 

Customer Satisfaction

CUSTOMER SATISFACTION

TARGET 61 average Federal Regulatory Agency score

RESULT

69.32

We met our target for customer satisfaction, 

achieving an American Customer Satisfaction 

Index (ACSI) score of 69.32.

Note: This measure was redefined in FY 2008—no 

trend data are available.

PUBLIC

BENEFIT

This measure tracks trends in public benefit and perceptions 

regarding the services provided by the FAA. Information 

garnered from these surveys helps the FAA identify and 

rectify public issues.

The ACSI is a uniform and independent measure 

of household consumption experience. The ACSI 

tracks trends in customer satisfaction and provides 

benchmarking insights of the consumer economy for 

companies, industry trade associations, and government 

agencies. This measure provides a recognized, 

independent source of customer satisfaction information 

that can be used to benchmark against other ACSI scores 

for regulatory and Federal Government satisfaction 

indices. The FAA’s survey includes nine customer bases: 

commercial pilots, general aviation pilots, mechanics, 

repair stations, air carriers, and customers of the ATO’s 

services, manufacturers, airports, and Web users. 

All surveys are baselined and validated, and weighted 

within the approved schedule. The annual target is to 

meet or exceed the Federal Regulatory Agency average 

for the prior fiscal year, which is reported by ACSI. This 

target has been a challenging one for the FAA. It will take 

a few more years to accurately baseline this measure.

Public perception is often based on news stories, specific 

incidents, or personal experience, rather than data or 

facts. This has led to inaccurate survey outcomes. For 

example, severely decreased scores on the Commercial 

Pilots Survey in FY 2008 were a reflection of general 

dissatisfaction in the general aviation arena rather than 

specific issues with the FAA. Therefore, the FAA is 

working to ensure that survey questions are appropriate 

and solicit valuable fact-based data.

Two surveys are annual: Air Traffic Services and 

the FAA Web site. All other surveys are biennial: 

Commercial Pilots, General Aviation Pilots, Maintenance 

Technicians, Repair Stations, Air Carriers, Airports, and 

Manufacturers. After each survey, an action plan is 

created to correct specific issues identified. This year, the 

ATO survey result was 68 and weighted at 67 percent 

of the total. The AOC survey was 72 and weighted at 

33 percent of the total. These two surveys combined for 

a final score of 69.32, exceeding our target of 61.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 59

Information Security

INFORMATION SECURITY

TARGET 0 cyber-security events that significantly disable or degrade 

FAA services.

RESULT

0

The FAA met its goal of 0 cyber security events for 

the fifth consecutive year. 

Note: This measure has resulted in the same 

outcome each year—no trend chart necessary.

PUBLIC

BENEFIT

The benefit to the public is a safe and secure NAS with no 

disruption of service due to a cyber event.

Hackers seek to disrupt or exploit critical infrastructure 

across the United States. One critical infrastructure, as 

identified by the President in the Homeland Security 

Presidential Directive (HSPD)-7, is our transportation 

system, including aviation. Accordingly, the FAA, whose 

mission is to provide a safe, efficient, and responsive 

air transportation system that serves the Nation and 

supports the global aviation community, must be 

protected against the threat of cyber attacks. The Office 

of Information Services (AIO) is the agency lead for 

ensuring that these attacks do not significantly disable 

or degrade FAA services.

This year there were no cyber events that disabled or 

seriously degraded FAA services. While the number of 

events detected has increased dramatically during the 

past year, none affected the services offered to the public 

by the FAA. This was due to advances made in the 

infusion of technology into the CSMC as well as the 

quality of the analysts looking at the alerts. Additionally, 

Information System Security Managers within each LOB 

have been able to react quickly to changing events.

The future outlook appears promising. The CSMC 

continues to invest in new technologies that will 

enhance our ability to protect the FAA. Additionally, 

the CSMC continues to partner with world class 

organizations, both on the Federal side and commercial 

side, in an effort to improve our security posture. 

Continuity of Operations

CONTINUITY OF OPERATIONS

TARGET Exceed FEMA continuity readiness levels by 5%.

RESULT

8.33%

We surpassed our target by exceeding the FEMA 

readiness level by 8.33%.

Note: This measure was new in FY 2009—no trend 

data are available.

PUBLIC

BENEFIT

The ability of the FAA to achieve continuity of operations 

quickly in response to a variety of incidents and/or disasters 

ensures that the national airspace remains operational.

Achieving readiness levels earlier than FEMA requires 

enhances our ability to respond to crises, rapidly and 

effectively, including security-related threats and natural 

disasters. In addition, by achieving this measure, we 

demonstrate to other Federal agencies and the public that 

the FAA stands ready to respond in a timely fashion to 

any issue or event. Readiness levels are established and 

designed to place departments and agencies in a readiness 

posture that will ensure minimal disruptions, if any, in 

functions that are essential to its mission. 

In the absence of a real-world event, the FAA routinely 

participates in a continuity of operations (COOP) 

exercise. During this exercise, the FAA is required by 

FEMA to accomplish specified tasks within 12 hours. The 

FAA achieved and exceeded its internal target to exceed 

this level by 5 percent and accomplished all required 

tasks in 11 hours or 8.3 percent less than the FEMA 

requirement. These annual COOP exercises take place 

on a varied schedule and are part of a larger-scale training 

and exercise program.

In FY 2009, we continued to build and improve 

emergency plans and preparedness tools to sustain 

essential services and provide for employee well-being 

during crisis events. For example, Web-based training 

was made available for all FAA employees to encourage 

enhanced preparedness to work and continue essential 

functions during pandemic influenza. 
FEDERAL AVIATION ADMINISTRATION

60 PERFORMANCE RESULTS

In addition, implementations of security measures at 

FAA facilities were validated and facilities were accredited 

in a timely manner. These implementations will help to 

maintain a secure environment for our workforce and 

ensure a stable national airspace for the public. We also 

developed Web-based emergency operation informationsharing tools that create a common operational picture 

and support effective decisionmaking. An annual 

emergency operations conference and two regional 

emergency exercises were successfully completed to 

ensure that FAA’s workforce is trained and responsive to 

emergencies, and to ensure the continuing operation of 

the national airspace. 

VERIFICATION AND VALIDATION OF 

PERFORMANCE INFORMATION

We employ strong management controls to ensure that 

data used to assess performance are accurate, timely, and 

complete. By exercising rigorous internal and external 

reviews, our verification and validation process promotes 

the confidence of FAA managers and the Administrator 

in our performance results. We use several internal review 

processes to ensure accurate data. 

DOT also independently verifies performance data 

for critical Safety, Capacity, International, and 

Organizational Excellence measures. In addition, several 

performance measures, such as the Commercial Air 

Carrier Fatality Rate and General Aviation Fatal Accident 

Rate, require independent verification by the NTSB and 

the Bureau of Transportation Statistics. Data for this 

measure are not considered final until the NTSB gives its 

approval.

COMPLETENESS AND RELIABILITY OF 

PERFORMANCE DATA

Annually, we review and update the FAA Portfolio 

of Goals to ensure that each performance target has 

accurate and detailed documentation. Each metric in the 

FAA’s Portfolio of Goals has a methodology statement. 

The methodology statements communicate why the 

measure was chosen and detail how the measure is 

calculated, the source of the data, and the completeness 

and reliability of the measure. Where the criteria for 

targets have changed, we note and explain the changes. 

(See http://www.faa.gov/about/plans_reports to 

review our FY 2009 Portfolio of Goals.) 

ASSESSING PROGRAMS

Program Evaluation. A critical component of 

managing our performance is the periodic evaluation of 

FAA programs. Performance measures show if intended 

outcomes are occurring, and assess any trends. Program 

evaluations use analytic techniques to assess the extent 

to which our programs are contributing to those 

outcomes and trends. Information on the two program 

evaluations completed in FY 2009—the Operational 

Error Program and the Acquisition Management 

System—follows.

Operational Error Program

An operational error occurs when a controller fails to 

maintain separation between two aircraft. Such an 

occurrence can be an extremely serious incident that 

can lead to a catastrophic accident. Ensuring that all 

events involving a loss of separation are accurately 

reported, investigated, and addressed is critical to the safe 

operation of the NAS and supports the FAA’s safety goal. 

A program evaluation was conducted by the DOT’s 

OIG between November 2007 and December 2008 

in compliance with generally accepted Government 

auditing standards. The purpose of this evaluation 

was to determine if the FAA had adequate policies 

and procedures in place to ensure the accuracy and 

consistency of operational error reporting, and to review 

the roles and responsibilities of the ATO and FAA’s 

aviation safety LOBs in reporting and investigating 

operational errors. 

The OIG statistically reviewed 166 pilot deviations with 

a loss of separation that occurred during FY 2007 at 13 

air traffic facilities and interviewed FAA representatives. 

Additionally, they reviewed the following:

• Radar and voice data

• Preliminary and final pilot deviation reports and 

related documentation

• Quality Assurance Review reports and related 

documentation

• Operational Error Detection Program alert logs and 

related documentation
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 61

• Operational error documentation if the pilot 

deviation was also an operational error 

• FAA guidance

Findings. This audit found that problems identified 

at the Dallas Fort Worth TRACON facility were not 

systemic. However, the audit found that significant 

weaknesses exist in FAA’s processes for reporting and 

investigating incidents involving a loss of separation. 

Recommendations. Recommendations included 

establishing: (1) a followup mechanism to ensure flight 

standards inspectors comply with new guidance for 

investigating pilot deviations, (2) a process to rate the 

severity of pilot deviations and a corresponding goal to 

reduce the most severe incidents, (3) milestones for fully 

implementing the Traffic Analysis and Review Program, 

and (4) an internal audit of the planned changes to the 

ATO’s safety oversight. 

Planned Actions. Office of Safety personnel now 

conduct an independent review of all reported pilot 

deviations involving a loss of separation to ensure that 

any operational errors associated with the event are also 

properly reported. The Office of Safety provides a weekly 

report on the results of these reviews.

The Office of Safety works in coordination with the 

Office of Flight Standards to modify current pilot 

deviation reporting so that all preliminary loss reports are 

coordinated through the ATO’s new Quality Assurance 

Service Area groups, to be established in FY 2010.

In FY 2010, the Office of Safety will conduct risk analysis 

of all losses in which less than 66 percent separation 

was maintained, including both types of separation loss 

which are currently reported as operational errors and 

pilot deviations. 

Acquisition Management System

The FAA’s Acquisition Management System (AMS), 

defines life cycle management policy, activities, and 

roles to plan, select, implement, and manage the FAA’s 

equipment, systems, facilities, and services. 

Established in 2004, the FAA’s ATO significantly altered 

organizational roles and created several challenges to the 

people, processes, and governance structure within the 

AMS. Also, during the past several years, the FAA revised 

AMS processes to respond to GAO and DOT IG reviews 

of the FAA’s acquisition programs.

The purpose of an independent assessment of the AMS 

was to do the following: 

• Collect and analyze data pertaining to the efficiency 

and effectiveness of AMS policy and guidance.

• Understand the current state of AMS life cycle 

phases, with emphasis on investment analysis and 

procurement processes.

• Quantitatively and qualitatively compare the AMS 

against other acquisition systems, industry leading 

practices, and trends.

• Understand to what extent the AMS addresses past 

GAO and IG concerns and recommendations.

• Develop findings and recommendations for future 

improvements to the AMS.

The scope of the evaluation examined the AMS in terms 

of the following: 

• Process—documentation and implementing AMS 

policies and procedures across each AMS life cycle 

phase.

• Governance—decisionmaking authority throughout 

the AMS life cycle.

• People—who execute AMS policies and procedures.

• Systems—automated tools and systems used to 

facilitate the AMS life cycle.

• Performance Metrics—quantitative measures 

evaluating the performance of the AMS.

Findings. The findings from the assessment indicate 

that although the AMS is conceptually sound, the FAA 

often does not take full advantage of the opportunities 

provided by the AMS framework. Given the level, 

frequency, and scope of change at FAA during the past 

several years, AMS governance, processes, systems, roles, 

responsibilities, and performance metrics must continue 

to adapt. Selected findings with the greatest impact on 

implementation of the AMS included the following:

• The AMS was designed to manage the life cycle of 

large, complex major systems acquisitions and may 

not appropriately accommodate other investments.
FEDERAL AVIATION ADMINISTRATION

62 PERFORMANCE RESULTS

• The established FAA governance structure is 

appropriate, but there appears to be an inadequate 

use of subordinate investment review boards.

• Investment analysis involves many reviewing 

organizations whose roles and responsibilities are 

not clearly defined, with insufficient collaboration 

among them.

• The AMS policy does not accurately reflect 

subordinate policies.

• Service organizations may not have the requisite 

skills or resources needed to perform investment 

analysis responsibilities within the AMS.

• Contracting process time is perceived as being 

too long and not proportionate to the size of the 

procurement.

Recommendations. Recommendations from the 

assessment were grouped into the following five major 

themes: 

• Restructure governance process.

• Adopt a portfolio management view to oversee 

investments.

• Streamline investment selection process based on 

type of investment.

• Implement improvements to support full range of 

purchasing activities.

• Enable a high-performing acquisition organization.

Within the above major themes were the following 

three recommendations with a potential for high impact 

that should be singled out for further analysis and 

recommendations: 

• Institute acquisition categories defining a specific 

path and review authorities based on specific 

program criteria.

• Assess the investment selection review process and 

identify an approach to streamline it.

• Establish processes to support development of the 

AMS process schedules for capital investments.

Planned Actions. In late 2009, the FAA began 

implementing one high-impact recommendation to 

establish acquisition categories. This recommendation 

will streamline decisionmaking and documentation 

required for the FAA’s investment selection. 

Also in 2009, the FAA began work to implement 

another high-impact recommendation to streamline the 

investment selection process. Streamlined investment 

analysis processes and reviews are expected to improve 

the time and effort to transition proposed investments 

from concept and requirements definition to detailed 

business case analysis. 

FAA Center for Advanced Aviation System 

Development

Prior to extending a contract and agreement with a 

Federally Funded Research and Development Center 

(FFRDC), the FAA conducts a comprehensive review 

of the use and need for the FFRDC. The FAA FFRDC 

is MITRE Center for Advanced Aviation System 

Development (CAASD). This review contributed to 

the overall comprehensive review of the FAA’s FFRDC 

prior to entering into the next 10-year agreement and 

contract. The next FFRDC agreement and contract will 

augment the FAA workforce with additional expertise, 

skills, and information necessary for the implementation 

of the NextGen Air Traffic System.

Findings. CAASD has been efficient and effective in 

meeting the FAA’s needs during the past 9 years of the 

current sponsoring agreement. The vast majority of 

products were delivered as specified in the Outcome 

and Output statements, and most were delivered 

on or ahead of schedule. In addition, FAA customer 

feedback indicated nearly universal satisfaction with 

CAASD’s performance with respect to meeting the 

customer’s needs, maintaining objectivity, maintaining 

independence, and maintaining expertise over the years, 

as well as currently.

CAASD management ensured a cost-effective operation 

during the 9 years of the sponsoring agreement, as 

demonstrated by CAASD’s consistently high-level 

satisfactory audit results. CAASD demonstrated a 

willingness to improve when weaknesses were identified.

Recommendations. No recommendations were made 

as part of this subject review report. The findings and 

conclusions will serve as supporting documentation 

during the proposed sponsoring agreement Executive 

Decision Team review. Recommendations may be 

addressed at the comprehensive review level (AJP-9).
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

FY 2009 MANAGEMENT CHALLENGES 63

FY 2009 INSPECTOR GENERAL’S SUMMARY OF 

CHALLENGES AND FAA ACTIONS 

THE DOT OIG APPROACH 

Each fiscal year, the OIG issues its annual report on 

DOT’s top management challenges to provide a forwardlooking assessment for DOT agencies during the coming 

fiscal year. The report helps DOT agencies in focusing 

attention on and mapping work strategies for the most 

serious management and performance issues facing 

the DOT. 

In selecting the challenges for each year’s list, the OIG 

continually focuses on the DOT’s key strategic goals to 

improve transportation safety, capacity, and efficiency. 

The OIG’s oversight of DOT programs, draws from 

several dynamic factors to identify key challenges. These 

include new departmental initiatives, cooperative goals 

with other Federal departments, recent changes in the 

Nation’s transportation environment and industry, and 

global issues that could have implications for the U.S. 

traveling public. 

For FY 2009, the OIG identified the following four 

Management Challenges and associated issues for 

the FAA, which are summarized below. (The full 

report can be found at http://www.oig.dot.gov/

StreamFile?file=/data/pdfdocs/FINAL_for_508.

pdf.) For a summary of the draft OIG Management 

Challenges for FY 2010, see page 139.

FY 2009 MANAGEMENT CHALLENGE ISSUE

Enhancing Aviation Safety and Maintaining Confidence 

in FAA’s Ability To Provide Effective Oversight of a 

Rapidly Changing Industry

Maintaining Confidence in FAA’s Oversight of Air Carriers and Certification and Production of 

New Segments of the Aircraft Industry

• Enhancing Oversight of Air Carrier Operations

• Improving Certification and Production Oversight of New Segments of the Aircraft Industry

Following Through on Longstanding Commitments To Improve Oversight of 

External Repair Facilities

Improving Runway Safety by Implementing New Technologies, Making Airport-Specific 

Changes, and Reinvigorating FAA Initiatives 

Enhancing Mobility and Reducing Congestion in 

America’s Transportation System

Reducing Delays and Improving Customer Service as the Airlines Struggle 

with Higher Fuel Costs 

Keeping Airport Infrastructure and Airspace Projects on Track 

Operating the NAS While Developing and Transitioning 

to the NextGen Air Transportation System

Hiring and Training 17,000 New Controllers Through 2018 

Keeping Existing Projects on Track and Reducing Risks with NextGen 

Sustaining FAA’s Extensive Network of Aging Facilities

Protecting Against Increasing Cyber Security Risks and 

Enhancing the Protection of PII

Enhancing Security Protection of the Air Traffic Control System as a Critical National 

Infrastructure 
FEDERAL AVIATION ADMINISTRATION

64 PERFORMANCE RESULTS

Management Challenges are not issues that are easily 

solved. In many cases they require investments or 

upgrades to technology or substantial changes in longstanding procedures or program activities. To completely 

address a Management Challenge may take more than 1 

fiscal year. 

The following section provides information on steps the 

FAA took during FY 2009 to remediate the Management 

Challenges identified by the OIG. To provide perspective 

on the FAA’s progress in resolving a particular challenge, 

the DOT has provided an assessment of the FAA’s 

progress in resolving the challenge as currently defined. 

We have displayed the DOT’s assessment in a progress 

meter for each challenge.

CHALLENGE: Enhancing Aviation Safety and Maintaining 

Confidence in FAA’s Ability To Provide Effective Oversight of a 

Rapidly Changing Industry

Airline consolidation and downsizing, as well as the 

introduction of new aircraft and technologies continue 

to dramatically change the aerospace industry. In 

addition, the FAA must continually adapt its oversight 

to further enhance safety. Key challenges involve 

maintaining confidence in the FAA’s oversight of air 

carriers.

The FAA has regulatory and statutory authority to 

provide oversight on air carriers’ safety standards. The 

goal of the FAA’s oversight responsibility is to reflect “one 

level of safety,” requiring all air carriers to operate under 

the same rules and at the same level of safety. 

Maintaining Confidence in FAA’s Oversight of 

Air Carriers and Certification and Production of 

New Segments of the Aircraft Industry

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

Enhancing Oversight of Air Carrier Operations.

The FAA has actively pursued safety program 

enhancements to ensure that relationships with airlines 

are appropriate and professional and that noncompliant 

airlines are fully addressing the underlying safety 

problems. Specifically, the FAA has committed to 

enhancing the current Air Carrier Evaluation Program 

(ACEP) to perform periodic reviews to evaluate air 

carrier regulatory compliance, perform comparative 

analysis of ACEP data to review the effectiveness of 

Air Transportation Oversight System (ATOS) design 

and performance, and to periodically review field office 

compliance with ATOS policy and procedures.

In December 2008, the FAA issued Notice N 1100.322, 

which established the Audit and Evaluation Office 

under the Office of the Chief Counsel. This office 

provides a consolidated venue for FAA employees and 

the aviation industry to report safety-related issues. 

The agency also is closely monitoring ATOS inspections 

that exceed frequencies for inspection and providing 

semiannual reports to Congress. In FY 2009, the FAA 

also focused attention on the development of Flight 

Standard Evaluation Program processes and checklists 

to periodically assess field office compliance with ATOS 

policy and procedures. 

The FAA also developed a risk-based process to target 

ACEP teams to perform periodic reviews of air carrier 

compliance. In support of this effort, the agency 

developed and validated a risk-based scheduling process 

that includes a scoring system and thresholds for 

mandating evaluations. 

The FAA also created Flight Standard Evaluation 

Program job aids to assess the relationship between the 

certificate-holding district office and the operator to 

ensure field office compliance with agency policy. The 

agency developed and beta tested a desk audit process for 

determining the culture of the Certificate Management 

Teams (CMTs) and the Certificate Management Office/

Flight Service District Office. During the beta testing of 

the newly developed audit process, the FAA discovered 

some questions that could not be answered or gave 

anomalous results. As a result of the beta test, the agency 

is revising and strengthening the desk audit process. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 65

Improving Certification and Production Oversight 

of New Segments of the Aircraft Industry. 

Introduction of Very Light Jets (VLJ) into the NAS is a 

key change occurring in the industry and has inherent 

risks. These aircraft use advanced avionics and turbine 

engine technology typical of large transport aircraft and 

are combined with the light weight of smaller, private 

aircraft. Therefore, they do not easily fit into the FAA’s 

existing certification framework and make the current 

general aviation certification requirements inadequate to 

address the advanced concepts introduced on the aircraft. 

In FY 2009, the FAA published a Notice of Proposed 

Rulemaking (NPRM) that addresses updated certification 

regulations for part 23 turbojets. The FAA also published 

a revision to an Advisory Circular that addresses the 

emergence of turbine engine-powered part 23 airplanes. 

Additionally, we established a rulemaking schedule 

to address function and reliability testing for part 23 

turbojets that weigh less than 6,000 pounds. We will 

continue to use special conditions to establish the 

appropriate certification standards until new regulations 

are finalized.

In 2009, the issuance of a new Advisory Circular and 

coordination process provided greater standardization 

and improved communications between the Aircraft 

Certification Service and Flight Standards Service. 

The Flight Standard Evaluation Program processes and 

procedures will be completed in early FY 2010 and ready 

for implementation shortly thereafter. Additionally, in 

early FY 2010, a proposal that includes the risk-based 

scheduling process and recommendations for personnel 

and resource requirements will be presented for Flight 

Standards Service approval. By November 15, 2009, 

the FAA will make necessary adjustments to the process 

and begin validation of the process in January 2010. 

The FAA will begin using this process once validation 

is completed.

In 2010, the FAA will complete the internal coordination 

process for the part 23 turbojet certification regulations 

NPRM and associated policy. In 2011, the FAA expects 

completion of these regulations and implementation of 

the remaining policy will further this standardization 

and communication.

Although the FAA has made progress during the past 

several years in increasing the system’s safety and 

efficiency, our goal is to proactively identify and work to 

implement further safety improvements and to increase 

accountability for the efficient use of resources to meet 

oversight requirements.

Following Through on Longstanding 

Commitments To Improve Oversight of External 

Repair Facilities 

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

The FAA provides safety oversight to both the air carriers 

and repair stations to ensure that they comply with their 

regulatory responsibilities. During the last few years, air 

carriers have been contracting a larger percentage of their 

maintenance work to repair stations rather than 

maintaining their own facilities. In addition, 

U.S.-certificated repair stations are frequently contracting 

with other vendors, both foreign and domestic, to 

perform maintenance functions. These factors add layers 

of complexity and risk to the air carriers’ responsibility to 

oversee all maintenance done on their aircraft, by any 

maintenance provider. The air carrier must ensure that 

the repair station performs the work in accordance with 

the air carriers’ manuals. Further, any U.S.-certificated 

repair station, in the United States or outside, has to 

meet the same safety standards. If a certificated repair 

station contracts with another vendor to perform a 

function, then the repair station must make sure that the 

work has been satisfactorily performed.

The FAA has strengthened air carrier maintenance policy 

and procedures to provide more enhanced oversight. 

The FAA has bolstered its programs to reflect dynamic 

changes in the aviation industry in three specific 

areas of identified risk: (1) air carriers’ increased use of 

maintenance providers or certificated repair stations, 

(2) need to refine and narrow the definition of 

“substantial” or “critical” maintenance, and (3) focus 

on the air carrier’s Continuing Analysis and Surveillance 

System (CASS). 
FEDERAL AVIATION ADMINISTRATION

66 PERFORMANCE RESULTS

In FY 2009, the FAA began work on a major policy 

change that uses the term “air carrier maintenance 

provider” to mean anyone used by an air carrier for work 

on its aircraft or components. This change clarifies the 

difference between maintenance that an air carrier’s own 

maintenance department and employees may perform 

versus work that an air carrier contracts with another 

maintenance provider to perform. Thus, there can be no 

difference between the maintenance performed by an air 

carrier at its own facility, using its own employees, and 

work performed at a repair station by other people. This 

change provides consistency in the FAA’s safety oversight 

of air carriers and repair stations. 

Another improvement that the FAA began in FY 2009 

is a new single definition of “essential maintenance” 

to replace terms used in the past, such as substantial 

maintenance, critical maintenance, and critical parts. 

The FAA has defined essential maintenance and listed 

those particular maintenance functions in a notice due 

for publication in the first quarter of FY 2010. Air carriers 

will be required to list their essential maintenance 

providers on their operations specifications. Operations 

specifications are a contract that an air carrier and the 

FAA agree upon to show how the air carrier will comply 

with regulations that pertain to its business. The new 

operations specification and related policy, guidance, and 

surveillance requirements are currently going through an 

internal agency review process. 

To improve the FAA’s safety oversight of certificated 

repair stations and/or maintenance providers, the 

agency instituted a risk-based oversight system. The 

system provides FAA safety inspectors with the tools to 

ensure air carrier maintenance providers are following 

proper procedures. The FAA verifies this through 

periodic surveillance inspections. New guidance to 

safety inspectors will include a requirement to conduct 

an initial audit within a predetermined timeframe and 

followup onsite inspections of air carriers’ essential 

maintenance providers at intervals not to exceed 3 

calendar years. These inspections will assess if, and to 

what extent, the maintenance providers comply with the 

air carriers’ specified procedures, and if the maintenance 

providers are using the appropriate equipment, tools, 

facilities, and personnel to accomplish the work. The air 

carrier will be responsible for correcting any identified 

deficiencies. 

The agency also is revising a training course for FAA 

safety inspectors on CASS and its requirements. 

The revised course material emphasizes the primary 

responsibility of an air carrier for the performance of 

any maintenance on its aircraft and includes detailed 

information on the concepts and methodology of risk 

assessment and risk management. The FAA expects 

to deliver the revised course to the safety inspector 

workforce during FY 2010. In addition, the FAA will 

continue internal analysis, reviewing carrier input, and 

new industry and technology trends, and will strengthen 

air carrier maintenance policy and guidance as needs 

emerge.

The FAA published changes to the repair station 

regulations, strengthening the requirements for repair 

stations to possess and maintain a quality control 

system when contracting maintenance. The improved 

regulatory requirements, along with our enhanced repair 

station oversight process, provide increased visibility 

of surveillance data to ensure repair station outsource 

maintenance activities are properly controlled by the 

repair stations with effective FAA oversight.

Improving Runway Safety by Implementing 

New Technologies, Making Airport-Specific 

Changes, and Reinvigorating FAA Initiatives. 

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

Although runway incursions are down 53 percent since 

FY 2001, the runway environment remains one of the 

highest-risk areas in the NAS. Runway incidents 

continue to be a substantial threat to safety, and 

reducing the risk of potential runway incursions is one of 

the FAA’s top safety priorities. Implementing new 

technology holds the promise of reducing total runway 

incursions well below current levels.

The FAA’s Call to Action, established in FY 2007 to 

mitigate the continuing risk of runway incursions, has 

made significant progress by focusing on outreach and 

awareness, and improving technology and infrastructure. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 67

The FAA has completed almost all of the identified 

short-term initiatives and exceeded the FY 2009 goal 

of reducing total incursions by 1 percent. Much of the 

progress is attributed to all levels of the aviation industry 

taking a proactive role in mitigating runway incursions.

The majority of runway incursions (approximately 

65 percent) occur when a pilot violates a regulation or 

fails to adhere to air traffic controller’s instructions. 

With nearly 64 million takeoffs and landings every year, 

the FAA has focused attention on preventing mistakes 

and quickly reacting to errors. The FAA has enhanced 

its training and education by publishing a collection of 

runway safety videos and other promotional products to 

increase situational awareness. The runway safety videos 

explore risk and prevention strategies while operating in 

the terminal airspace and on the surface of airports.

The FAA continues to deploy new technologies to 

enhance runway safety by initiating acquisition activities 

to facilitate NAS transition and implementation. The 

ASDE-X is a surface surveillance detection system 

that integrates data from a variety of sources. It 

provides controllers with a more reliable view of airport 

operations that improves situational awareness resulting 

in a reduction of surface deviations, the number of 

runway incursions, and the number of incidents or 

accidents.

Capstone 3, launched in 2008, is a program that 

subsidizes air carriers for the installation of Surface 

Moving Map (SMM) displays on electronic flight bags in 

the cockpit. With SMM displays and Own-Ship Position, 

pilots will see exactly where their aircrafts are on the 

airfield, thus reducing the chances of losing situational 

awareness and being in the wrong place. In FY 2009, the 

FAA reached agreements with seven U.S. airlines to fund 

in-cockpit runway safety systems in exchange for critical 

operational data. The data will help the FAA evaluate 

the safety impact of the technology and is expected 

to accelerate key safety capabilities necessary for the 

transition to NextGen. 

LCGS is a low-cost, commercially available radar 

surveillance system that would reduce the risk of runway 

incursions, especially during periods of low visibility, at 

certain small- and medium-sized airports. The FAA will 

install these systems at airports that do not have either 

ASDE-X or ASDE-3. In FY 2009, the FAA completed 

the pilot program at Spokane International Airport and 

the results show that the system is suitable and costeffective. Contracts have been awarded to install LCGS 

at Manchester Boston Regional, San Jose International, 

Reno/Tahoe International, and Long Beach International.

An RWSL system is a series of runway lights that 

illuminate red, alerting pilots when it is unsafe to 

enter, cross, or begin takeoff on a runway. RWSL assess 

any possible conflicts with surface traffic and reduce 

the likelihood of runway incursions. In 2009, RWSL 

systems are currently installed at San Diego, Dallas/Ft. 

Worth, and Los Angeles. In April 2008, the FAA entered 

a preliminary agreement to install an additional RWSL 

system for evaluation at Boston Logan Airport, and 

engineering studies began in FY 2009.

Installation of RWSL/Runway Intersection Lights test 

bed at Boston Logan Airport is scheduled for completion 

in March 2010. RWSL/Runway Intersection Lights 

shadow operation at Boston Logan Airport is scheduled 

for completion in May 2010. In September 2010, the 

FAA will conduct a Field Operational Evaluation of the 

RWSL/Runway Intersection Lights function at Boston 

Logan Airport. The FAA will establish new test beds at 

Los Angeles and Boston Logan Airports during the 

FY 2009–2010 timeframe. 

Final Approach Runway Occupancy Signal (FAROS) is 

an automated safety system designed to notify pilots 

on approach to land that the runway is occupied or 

otherwise unsafe for landing. This pilot notification 

system addresses the high-priority safety hazards of 

runway incursions and is undergoing long-term testing 

at Long Beach. An enhanced version of FAROS (eFAROS) 

was installed at Dallas/Ft. Worth and the short-term 

operational evaluation indicates the system is effective. 

Final results are expected to be available in late 2009. 

In May 2010, the FAA will procure and install an LCGS 

system at one airport with two more installations 

scheduled for October 2010.

Based on the continued emphasis on runway safety, 

FY 2009 is expected to eclipse FY 2008 as the safest year 

on record regarding serious runway incursions. Further, 

total numbers of runway incursions that have been 

increasing annually, and in the last 2 fiscal years by 
FEDERAL AVIATION ADMINISTRATION

68 PERFORMANCE RESULTS

13 to 14 percent, will be reduced below a baseline 

established in FY 2008. As the advanced technology 

systems are implemented, their expected cumulative 

effect is to further diminish the number of incursions 

and their severity.

CHALLENGE: Enhancing Mobility and Reducing Congestion 

in America’s Transportation System

Reducing Delays and Improving Customer 

Service as the Airlines Struggle with Higher 

Fuel Costs

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

Aviation system delays occur when the demand for air 

transport services exceeds the capacity of the system. 

Congestion and delays cost the traveling public and 

aviation industry billions of dollars each year in added 

expense and lost productivity. One of the largest 

expenses for the aviation industry is the cost of jet fuel. 

When airlines incur taxi delays or airborne delays, they 

use even more fuel, thereby increasing their costs. While 

fuel costs are currently around $2 per gallon, most 

analysts believe the cost of jet fuel will increase again 

after the economy recovers.

While the implementation of NextGen is the long-term 

solution to reducing congestion and increasing capacity 

of the NAS, the FAA continues to work aggressively on 

reducing delays and meeting the anticipated demand 

for air travel. To temporarily ease congestion and 

reduce delays, the FAA and DOT have implemented 

the following short-term initiatives to improve the 

accountability, enforcement, and protection afforded air 

travelers.

Congestion Management at LaGuardia, JFK, and 

Newark Airports. The FAA issued final congestion 

management rules in October 2008 to address continued 

delay problems at New York’s LaGuardia, JFK, and 

Newark airports. However, in late FY 2009, the FAA 

rescinded the New York rules as a result of the impact of 

the Omnibus Appropriations Act on the rules, and the 

state of the economy in general. Despite the decision 

to rescind the rules, the FAA believes some form of 

congestion management is necessary at these airports on 

a long-term basis. In ongoing efforts to reduce delays, the 

FAA continues to keep the limits on scheduled operations 

at LaGuardia, JFK, and Newark while the Administration 

considers next steps for a long-term congestion 

management solution for the New York area airports. 

In 2010, the FAA will reevaluate policy alternatives and 

initiate new congestion management rulemaking for 

LaGuardia, JFK, and Newark airports.

New York Area Operational Improvements. 

The FAA is working to implement several operational 

initiatives that will increase efficiency and reduce 

delays at the Port Authority of New York- and New 

Jersey-run airports. In addition, the Port Authority is 

making improvements and conducting maintenance on 

the airfield at JFK airport. These include widening of 

runways, strengthening of taxiways, new high-speed 

turnoffs, and runway rehabilitation.

Other initiatives to explore operational improvements 

include New York, New Jersey, and Philadelphia Airspace 

Redesign and continued work on the New York Aviation 

Committee’s list of 77 recommended fixes for reducing 

delays. The agency also continues communications 

with DoD to open up airspace over the east coast during 

holidays to civilian operations.

O’Hare International Airport. The FAA requires U.S. 

and foreign air carriers to report their proposed scheduled 

operations at O’Hare in advance. The agency then uses 

the information to anticipate and take action to prevent 

excessive scheduling and delays. 

The Chicago Airspace Project (CAP) is two-thirds 

complete. Design for the final components is 

currently ongoing, and will continue into FY 2010. 

Implementation of the remaining components will 

begin in late 2012 and is expected to be complete, along 

with the O’Hare Modernization Project (OMP), in late 

2014. Benefits from the OMP include reduced delay and 

increased capacity.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 69

The FAA expects to continue bringing operational 

improvements online that will provide for increased 

efficiencies and reduce delays in the New York metro 

area and nationwide, this year and in the future. Other 

objectives of the congestion management initiatives are 

to ensure efficient utilization of scarce resources, as well 

as to foster increased competition.

Keeping Airport Infrastructure and Airspace 

Projects on Track

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

The long-term solution to increasing capacity and 

reducing delays depends largely on expanding capacity 

through NextGen. However, until the full benefits of 

NextGen are realized, several near-term initiatives—

building new runways and redesigning airspace—have 

potential for relieving congestion.

In FY 2009, the FAA’s ongoing effort to meet the needs 

of today’s air traveling public by reducing congestion and 

subsequent delays, culminated with the unprecedented 

opening of three new runways at three of the Nation’s 

busiest airports—on the same day. 

At Washington Dulles, the new runway significantly 

enhanced capacity by accommodating an additional 

100,000 aircraft operations annually while decreasing 

the delay per operation by an average of 2.5 minutes. 

Additionally, this new runway allowed the airport 

to perform much-needed reconstruction on its 

center runway during the summer of 2009 without 

experiencing associated delays.

Seattle-Tacoma Airport’s new runway was critical to 

capacity, given that the two existing runways were 

closely spaced, impeding efficiency during periods of low 

clouds that occur 44 percent of the time. With this new 

runway, Seattle-Tacoma is accommodating as many as 

eight additional on-time arrivals per hour, even in poor 

weather. 

The new Chicago O’Hare runway represented a major 

and necessary milestone in the airport’s modernization 

program, offering new final approach fixes and taxiway 

systems. This runway will enable the airport to 

accommodate more than 52,000 annual operations while 

reducing average annual delays. 

The FAA’s ongoing campaign to increase efficiencies 

had several additional notable successes in FY 2009. 

On December 4, 2008, Dallas/Ft. Worth opened a new 

southeast “end-around taxiway.” End-around taxiways 

increase operational capacity and runway safety by 

allowing aircraft to taxi around the end of the runway. 

Also, in August 2009, a new taxiway opened ahead of 

schedule at Boston Logan Airport, and will reduce ground 

delays by as much as 22 percent. 

In February 2009, Philadelphia International Airport 

opened a 1,040-foot extension to runway 17-35. This was 

accomplished a month ahead of schedule. This runway 

extension alone is projected to save airlines $20 million a 

year in aircraft direct operating costs and generate a net 

savings in passenger time, valued at $29 million annually. 

Collectively, the FY 2009 runway and taxiway projects 

at some of our Nation’s busiest major hub airports 

yielded dramatic efficiencies resulting in 327,000 more 

annual operations. 

These achievements represent the successful culmination 

of FAA efforts to cultivate partnerships and work in 

tandem with local governments and communities to 

achieve lasting benefits. Delays are reduced for millions of 

passengers annually, while saving hundreds of millions of 

dollars per year for travelers and for the airline industry. 
FEDERAL AVIATION ADMINISTRATION

70 PERFORMANCE RESULTS

CHALLENGE: Operating the NAS While Developing and 

Transitioning to the NextGen Air Transportation System

Hiring and Training 17,000 New Controllers 

Through 2018

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

The FAA’s highly trained air traffic controllers play a 

critical role in achieving the outstanding level of aviation 

safety we enjoy in the United States. During the next 

decade, the FAA plans to hire and train nearly 17,000 

controllers to replace those who were hired after the 1981 

strike and are now retiring. Deploying a well-trained air 

traffic controller workforce plays an essential role in 

ensuring that every day tens of thousands of aircraft are 

moved safely and expeditiously through the NAS to their 

destinations. Because the FAA “staffs to traffic,” this 

provides the flexibility to match the number of air traffic 

controllers at its facilities with traffic volume and 

workload. The FAA expects to continue to adjust staffing 

to meet the expected changes in air traffic activity.

To augment the centralized hiring activities, the FAA 

expanded the Pre-Employment Processing Centers 

(PEPCs) where FAA hiring teams conduct interviews for 

qualified candidates and perform required medical and 

security screenings. This process allows the FAA to hire 

and train applicants at a faster pace. Seven PEPCs were 

held during FY 2009 in locations around the country.

Partnerships between the FAA and the colleges and 

universities in the Air Traffic Collegiate Training 

Initiative (AT-CTI) program continue to contribute to 

the success of meeting air traffic controller hiring goals. 

In the past 5 years, AT-CTI schools across 21 States and 

Puerto Rico graduated more than 4,000 students from 

their aviation programs, 3,000 of whom were hired by 

the FAA. In 2009, the FAA selected five new colleges and 

universities to be part of the AT-CTI program, increasing 

the total number of schools to 36. By FY 2010, the FAA 

anticipates maintaining 36 to 40 AT-CTI schools in the 

program graduating 1,000 to 1,500 students per year. 

As the agency brings thousands of new air traffic 

controllers on board, the training of these new employees 

continues to be closely monitored at all facilities. The 

FAA’s goal is to limit the trainee ratio to less than 

35 percent of the total controller workforce, ensuring 

that there are adequate numbers of fully trained 

controllers in all facilities.

The FAA convened a workgroup to identify a percentage 

range or percentage target for developmental controllers. 

This workgroup concluded that there is no single factor 

that should be used to determine what a facility can 

realistically accommodate while accomplishing facility 

training and daily operations.

The workgroup, however, agreed that there are several 

items that should form the starting point for discussions 

around this topic, for example: (1) Controller Workforce 

Plan Staffing Range, (2) Actual Trainee Percentage, 

and (3) Facility Trainee Distribution. Since the current 

average trainee percentage of 28 percent is still well 

below the historical 35 percent guideline discussed above, 

the FAA decided to keep the historical guideline at 

35 percent. One way that the FAA maintains this trainee 

percentage is to transfer veteran controllers to busier, 

higher-level facilities effectively reducing trainee-tocontroller ratios.

Since training affects and is affected by so many other 

factors, the FAA considers trainee percentages and 

ranges along with other facility events and indicators 

over time. The FAA will continue to closely monitor 

facilities to make sure that trainees are progressing 

through each stage of training, while also ensuring the 

safe and efficient operation of the NAS. In the 2009 

Controller Workforce Plan, the FAA included an appendix 

showing by facility, the number of controllers in training 

who were exceeding their respective training time 

benchmarks. The FAA believes that meeting the training 

time benchmarks is a more meaningful goal to track. 

Depending on the complexity of the facility, controllers 

are now being trained in 2 to 3 years.

During this past year, the FAA continued to increase the 

terminal simulation capacity at the training academy by 

installing four new high-fidelity tower cab simulators, 

providing a realistic tower environment in which to 

teach trainees; two more are planned for FY 2011. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 71

The FAA is evaluating the use of state-of-the-art en 

route training labs that simulate the air traffic control 

technology currently in use in en route facilities. The 

FAA also installed another seven tower cab simulators 

in field facilities including key locations such as 

Philadelphia, New York, Boston, and Denver. By 

improving training techniques and using high-fidelity 

simulators, the FAA has reduced the training period from 

an average of 3 to 5 years down to 2 to 3 years. Thirteen 

simulators from the FY 2008 Tower Simulation System 

acquisition effort were successfully installed in field 

facilities.

Technical Training conducted quality management 

reviews at more than 60 terminal and en route facilities 

in FY 2009. The evaluations addressed classroom and lab 

instructors, curriculum, and remote pilots (RPOs). The 

audits have been used to identify local and system issues 

and to recommend corrective actions. Evaluations will 

continue in FY 2010, with additional facilities reviewed. 

In addition, regular surveys of stakeholders, customers, 

and students will commence in FY 2010 to measure their 

perceptions and ideas for improvements of the national 

training program.

Increased use of technology has also enabled the FAA to 

better use existing resources. For example, many facilities 

have four scopes for training. Yet because of the resource 

requirements for RPOs, only one trainee at a time can be 

trained. With the adaption of remote PCs for the RPOs, 

four trainees can work on the scopes simultaneously. 

During FY 2010, the FAA is moving to bring this 

improvement to all TRACONS.

The FAA continues to closely monitor facilities to make 

sure that trainees are progressing through each stage of 

prescribed training, while ensuring the safe and efficient 

operation of the NAS. As veteran controllers retire 

or resign, controllers hired since 2005 are completing 

training and replacing the veteran retirees as Certified 

Professional Controllers. In addition, the FAA is 

bringing in retired FAA air traffic controllers as contract 

instructors to train the new workforce. By harnessing 

their valuable air traffic expertise, these experts can focus 

solely on training the next generation of controllers, 

rather than moving back and forth between working 

traffic and on-the-job training. Similarly, controllers hired 

in the 1990s may move from midlevel facilities into the 

higher-paying, higher-workload facilities. The transition 

through the ranks continues to provide increased career 

growth opportunities for the workforce. Phasing in new 

hires as needed levels out the significant training spikes 

and troughs experienced during the last 40 years.

In FY 2010, the FAA will continue to be proactive in 

its hiring and training programs to bring the controller 

workforce to 15,692. The agency will take action at the 

facility level if adjustments become necessary due to 

changes in traffic volume, unanticipated retirements, or 

other attrition. The Air Traffic Control Workforce Plan, 

a 10-year strategy, will be updated to continually revise 

hiring targets for the fiscal year. In conjunction with 

hiring and staffing, the FAA plans to modify four old 

simulators at the Academy and four old simulators in the 

field to match the configuration of the new simulators in 

FY 2010. Additionally in FY 2010, the Air Traffic Control 

Optimum Training Solution will provide training 

support for all 315 FAA facilities where appropriate for 

cost and efficiency. 

The FAA’s goal is to ensure that the agency has the 

flexibility to match the number of controllers at each 

facility with traffic volume and workload. The current 

hiring plan has been designed to phase-in new hires as 

needed. This will avoid another major spike in retirement 

eligibility like the current one experienced as a result 

of the 1981 controller strike. The FAA is dedicated to 

maintaining and improving the levels of safety achieved 

thus far while continuing to improve.

Keeping Existing Projects on Track and Reducing 

Risks with NextGen

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

The FAA faces a number of challenges associated with 

the implementation of NextGen—an enormously 

complicated undertaking due to the technological 

complexities, numerous stakeholders, and broad scope of 

the effort. As FAA moves forward with NextGen, it must 

continue to establish a framework for improving system 

management capabilities, address weaknesses on selected 

air traffic control systems, implement a cost accounting 
FEDERAL AVIATION ADMINISTRATION

72 PERFORMANCE RESULTS

system, establish a cost estimating methodology, and 

make progress in establishing an organizational culture 

that supports sound acquisitions.

The FAA leveraged the NAS EA to identify critical 

decision points and strategically align our investment 

strategy for NextGen in concert with ongoing 

investments. These decision points guide key NextGen 

preimplementation activities in the context of other 

ongoing FAA activities and programs. A key effort in 

this alignment was an internal gap analysis that includes 

requirements for addressing identified shortfalls between 

the current NAS and the midterm NAS EA. 

In January 2009, the FAA released an update to its 

NextGen Implementation Plan (NGIP). The NGIP 

identifies a series of operational changes that will 

improve the performance of the NAS immediately 

while building the foundation for future capabilities. It 

also includes a core set of avionics targets for mid-term 

operations, around 2018, which require both government 

and industry investment. To foster deeper engagement, 

the FAA requested the aviation community, through the 

Radio Technical Commission for Aeronautics (RTCA), 

which functions as a Federal advisory committee, 

to recommend strategies that focus on maximizing 

NextGen mid-term operations benefits and address 

business investment issues. The January 2010 NGIP 

update will include the FAA’s response to the RTCA 

recommendations. Measuring the progress of NextGen 

commitments and key activities is critically important 

to the successful implementation, which is considered 

complete when all relevant training, policies, and 

procedures are in place.

Also in 2009, the GAO determined that FAA’s air 

traffic control modernization warranted removal from 

the High-Risk List. GAO found that FAA executives, 

managers, and staff demonstrated a strong commitment 

to—and a capacity for—resolving risks. Agency 

executives worked with the OMB to refine corrective 

action plans to address weaknesses, instituted programs 

to monitor and evaluate the effectiveness of corrective 

measures, and demonstrated progress in implementing 

these corrective measures. Specifically, the FAA did the 

following:

• Improved management capabilities on major projects 

and is working to extend these improvements to 

new projects.

• Continued to develop an EA—a blueprint of 

the agency’s current and target operations and 

infrastructure—and is refining it as the FAA’s 

NextGen system becomes better defined. 

• Implemented a cost estimating methodology and a 

cost accounting system. 

• Implemented a comprehensive investment 

management process.

• Assessed its human capital challenges and is now 

identifying plans to address critical staff shortages 

in areas such as program and financial management, 

systems engineering, contracting, and aviation 

research. 

The FAA has successfully put multiple new systems 

into operation throughout the country, including 

new air traffic displays, runway safety systems, and 

weather processing systems. In addition, while the 

FAA has reduced the scope of several key programs, 

its acquisitions have experienced fewer cost overruns 

and schedule delays. The FAA also developed an 

updated corrective action plan for 2009 to sustain its 

improvement efforts and enhance its ability to address 

risks.

NextGen’s success depends on the participation of a 

highly trained workforce. The FAA contracted with the 

National Academy of Public Administration (NAPA) 

to identify the skill sets required to integrate and 

implement the NextGen initiative. The FAA is now 

working across organizational lines to address the NAPA 

recommendations, including continual evaluation of 

staffing needs versus NextGen demands, streamlining 

its hiring processes, and aggressively pursuing enhanced 

training and retention programs. 

Notwithstanding the FAA’s progress, NextGen is still 

technically complex and costly, and FAA continues 

to place a high priority on efficient and effective 

management. The FAA faces challenges in undertaking 

needed research and development to better define new 

technologies, transitioning legacy systems to nextgeneration technologies, addressing aging facilities, and 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 73

obtaining a highly trained workforce with the knowledge 

and skills to manage the program. 

Further, NextGen will be built on key elements from 

existing programs and technology, and on new systems 

under development now. The plan is to make the 

most of modern aircraft capabilities and apply these to 

elements of the system that can take advantage of them. 

Then, during the next decade, the FAA will continue 

a series of coordinated upgrades to the current ground 

infrastructure and aircraft systems. 

With NextGen, we also will have the potential to 

establish seamless operations beyond our borders. To 

do so, the FAA will work with international partners 

to harmonize standards, procedures, and air and space 

transportation policies worldwide.

NextGen will introduce superior technology and new 

procedures to enhance operational capabilities and 

provide numerous efficiencies to the system. The 

resulting system will be scalable, networked, and fully 

digital.

With NextGen, the FAA will continue to advance our 

already exemplary safety record by introducing new 

analytic tools that more proactively detect adverse trends 

and identify precursors. These tools will allow us to act 

on potential problems before they take shape.

In addition, airports will benefit from increased safety, 

better use of existing capacity, greater design flexibility, 

and reduced environmental impacts. NextGen will 

also foster operational improvements, advances in 

technology, and the development of sustainable 

alternative fuels that will allow us to reduce aviation’s 

environmental footprint even as our transportation 

system grows.

Sustaining FAA’s Extensive Network of 

Aging Facilities

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

The FAA has the responsibility for more than 500 air 

traffic control facilities around the country and in U.S. 

territorial possessions. Many of these have exceeded the 

average useful life of 30 years and are in need of repair or 

modernization. Because 59 percent of FAA facilities are 

more than 30 years old, key decisions regarding facility 

consolidations and infrastructure needs, especially in 

light of transitioning to NextGen, are currently under 

consideration. 

The FAA is replacing outdated automation equipment at 

air traffic control towers and at terminal facilities with 

more current systems. Automation systems process data 

and display the information for air traffic controllers. 

The older equipment is limited in its capacity and is not 

immediately compatible with essential parts that will be 

put in place when the agency transitions to NextGen.

In FY 2009, the FAA’s ATO tracked sustainment needs 

submitted via the Needs Assessment Program tool and 

managed execution of the requirements via a Corporate 

Work Plan tool set. Major accomplishments included 

more than 150 Unstaffed Infrastructure Sustainment 

projects, which involved 30 shelter replacements, 30 

steel tower inspections, 30 HVAC replacements, 30 

roof repairs, and 30 access road repairs. In addition, the 

FAA completed 140 power system sustainment projects 

to include replacement of 70 engine generators, 5 

uninterruptible power systems, and 65 battery systems. 

Also, the ATO’s Technical Operations Unit developed 

a Service Life Replacement Model to assist in tracking 

facilities replacement funding needs for NextGen. This 

analysis details facility requirements and operational 

concepts.

The FAA continues to review future needs of legacy 

systems in an effort to consolidate remaining legacy 

equipment and dispose of excess property. The FAA 

completed the Concept of Use and Preliminary Facility 

requirements planning document in September 2009. 

This inventory of legacy air traffic controller equipment 

and commensurate sustainment requirements allows for 

the decrease in equipment need as it is overtaken by the 

NextGen system.
FEDERAL AVIATION ADMINISTRATION

74 PERFORMANCE RESULTS

In FY 2009, the FAA received $200 million in F&E 

funding from the ARRA. These funds will be used in 

FY 2010 to upgrade en route air traffic control centers, 

power systems, air traffic control tower and terminal 

radar approach facilities, and navigation and landing 

equipment. 

The en route traffic control center program consists of 25 

construction projects that will contribute to refurbishing 

18 centers that are more than 40 years of age. The 

construction projects include exterior wall replacements, 

elevator replacements, roof replacements, parking lot 

expansion, and refurbishment of mechanical systems.

The power systems program will implement replacement 

and upgrade construction projects at more than 90 

locations nationwide. The projects will include the 

installation of uninterruptible power supplies, power 

cable and breaker replacements, installation and upgrades 

for lightening protection, grounding and bonding, 

battery replacements, fuel storage tank replacement for 

engine generators, and installation and upgrade of engine 

generators.

The air traffic control tower and terminal radar approach 

control facility program will construct three new tower 

facilities and modernize three tower facilities.

The navigation and landing program will construct 

and install 4 airport lighting systems and 3 airport 

instrument landing systems, and will install replacement 

lamp monitoring systems at 10 runway sites. In addition, 

574 HVAC system replacements in unmanned navigation 

and landing facilities will be implemented at 128 airport 

locations nationwide.

In FY 2010, the FAA plans major construction and 

renovation projects at key locations such as Boston, 

Los Angeles, Atlanta, Chicago, Minneapolis, and 

Seattle. Other mission-critical and minor projects 

also are anticipated at 21 ARTCCs, as well as Center 

Radar Approach Control facilities in the near future. 

In addition, during multiple fiscal years, the FAA will 

further implement more Unstaffed Infrastructure 

Sustainment projects including shelter replacements, 

steel tower inspections and major repair work, HVAC 

replacements, major roof repairs, and access road repairs.

The Facility industry metric used to assess backlog and 

relative state-of-building infrastructure is the Condition 

Index. Since 2004, the FAA’s Condition Index has 

improved by an average of 0.6 percent per year due to 

targeted backlog reduction efforts. Efforts this year 

resulted in a decrease in maintenance backlog with 

replacement projects at Wilkes-Barre, Palm Springs, 

and Oakland towers. An additional decrease in backlog 

also is realized due to three modernization projects at 

Bakersfield, New York, and Lincoln for a total reduction 

of backlog maintenance of roughly $2.94 million. 

CHALLENGE: Protecting Against Increasing Cyber Security 

Risks and Enhancing the Protection of PII

Enhancing Security Protection of the Air 

Traffic Control System as a Critical National 

Infrastructure

MODERATE 

PROGRESS

SLIGHT 

PROGRESS

SIGNIFICANT 

PROGRESS

NO PROGRESS COMPLETE

PROGRESS METER

Commercial aviation plays an important role in fostering 

and sustaining the national economy and ensuring 

citizens’ safety and mobility. In light of this, the HSPD-7 

designated air traffic control systems as part of the 

Nation’s critical infrastructure.

In FY 2009, the FAA completed numerous milestones 

that support new standards in safeguarding and 

preserving our critical national infrastructure. In 

April 2009, the ISS completed its ambitious Audit and 

Compliance Program Plan. Compliance audits include 

operational computer systems and prototypes connected 

with the FAA in operational, mission support, and 

administrative environments. Regular audits ensure full 

compliance with multitiered security controls, and with 

security policies and procedures issued by the DOT, OIG, 

GAO, and ISS. 

“Logical access” is a term collectively referring to policies, 

procedures, and controls that safeguard access to 

computers and networks. During FY 2009, the ISS 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

PERFORMANCE RESULTS 75

ongoing regimen of NAS logical access studies were 

performed and successfully completed during site 

visits to the following installations: Oakland ARTCC, 

Southern California Terminal Radar Approach Control, 

New York ARTCC, and Chicago O’Hare International 

Airport. The results of these reviews are used to 

determine the effectiveness of system security controls 

that are implemented throughout the ATO. Audit 

findings of noncompliance, when found, are documented 

to ensure that corrective action is taken.

In addition, the ISS completed the report on logical 

access at NAS Operational Facilities and the System 

Configuration Baseline Compliance Audit Test Plan and 

Test Results Report, and developed the ISS Incident 

Mitigation Compliance Audit Test Plan and Test Results 

Report.

The ATO has completed two-thirds of Certification and 

Accreditation packages compliant with NIST 800-53 Rev. 

2 requirements that define successful risk management.

The FAA has developed a Business Continuity Plan (BCP) 

to ensure consistent and constant operations. Numerous 

logistical, fiscal, and technical hurdles have been resolved 

to prepare a recovery site capable of assuming the 

responsibilities of an inoperable ARTCC. The FAA’s 

William J. Hughes Technical Center is our designated 

recovery site. It has successfully used live Memphis 

data to demonstrate that operations could be shifted to 

an alternate location. The BCP is activation-ready, but 

would not be considered “Operational” until it is actually 

used to control air traffic in the event an ARTCC is lost 

for an extended period of time.

In accordance with the established plan, the ATO is on 

track to achieve 100 percent organizational compliance 

with security policies, procedures, and multitiered 

security controls by September 30, 2010.

It is crucial that NAS systems protection remains an 

increasing, shared, and visible priority. The FAA seeks not 

only to protect systems that protect travelers, but also 

to instill a full and justified confidence in customers and 

airlines, and to pave the way for a secure and successful 

implementation of NextGen. The ISS program is a 

growing and dynamic program, and measures its viability 

and lasting effectiveness by its continued success and by 

the continued measure of compliance it demonstrates.
The FAA is making pilot fatigue a high priority and is working rapidly to develop and implement a new flight time and rest rule based on fatigue 

science and a review of international approaches to the issue.

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

A MESSAGE FROM THE CHIEF FINANCIAL OFFICER 77

A MESSAGE FROM THE CHIEF FINANCIAL OFFICER

In the next two decades, NextGen will transform the way we currently use our national airspace. It is an expensive 

undertaking, but one we need to meet future flying demands, provide safety enhancements, create additional capacity, 

improve environmental performance, and support the economic viability of aviation. Currently the FAA’s total price 

tag for NextGen is expected to exceed $15 billion. We recognize that this investment is substantial, and as we plan for 

NextGen and begin to implement it, we are constantly mindful of how we spend the taxpayers’ dollars. 

We continue to find ways to better execute and manage the budget 

resources that Congress provides for NextGen, as well as for the FAA’s 

other critical budget needs. Our hard work to transform our financial 

management during the past 6 years is paying off.

We have successfully integrated best practices from the corporate 

world and aggressive strategies to improve performance and operate 

more like a business. We continue to implement strategies to address 

the need for cost reduction and improved financial management, 

including a centrally managed cost-control program, better financial 

and procurement oversight, and improvements in the tools and 

training necessary for financial management. To date, our SAVES 

initiative has achieved more than $47 million in cost savings. Since 

the 2005 implementation of a contract-review process for all contracts 

with a value of $10 million or more, we have evaluated and made 

improvements to 211 proposed acquisitions with an estimated 

contract value of more than $26 billion. The FAA also is implementing 

DOT’s Federal real property management initiatives. Since they were 

established, the DOT’s efforts have resulted in removal of more than 

$250 million in real property assets from the FAA portfolio. Savings 

resulting from the disposition of property have been applied toward future disposition efforts, as well as updates, 

upgrades, repairs, and renovations of current assets.

For the first time since 1995, the GAO removed the FAA’s air traffic control modernization program from its 

High-Risk List because of the progress made in keeping programs within budget and on schedule, and for meeting 

performance measures and program commitments. We have improved management capabilities on major projects, 

developed and refined an EA, implemented improved cost-estimating methodologies and a cost-accounting system, 

implemented a comprehensive investment management process, and assessed our human capital challenges. 

In FY 2009:

• We achieved an unqualified opinion on our FY 2009 financial statements with no material weaknesses. 

• For the fifth time in 6 years, the Association of Government Accountants awarded us top honors for our FY 2008 

PAR. This is considered the highest form of recognition in Federal Government management reporting.

• We received our seventh consecutive award from the League of American Communication Professionals for the 

FY 2008 Citizens’ Report, recognizing it as a top-quality annual report. 

• 84 percent of our employees are now on the pay-for-performance system, including our executives. This means 

that performance targets must be achieved before annual pay raises are granted. As part of this system, we provide 

incentives to ensure quality work and reward innovation.

• More than 90 percent of our project management initiatives are on time and on budget.

Ramesh K. Punwani

Assistant Administrator for Financial 

Services/Chief Financial Officer
FEDERAL AVIATION ADMINISTRATION

78 A MESSAGE FROM THE CHIEF FINANCIAL OFFICER

We are proud of our efforts to put exceptional financial management into place and, as a result, the significant gains we 

have made in terms of accountability to Congress, the taxpayers, and our customers. However, we must continue to 

earn this trust. We will continue these successful programs as well as pilot new initiatives to ensure that our financial 

practices remain effective and efficient. We know that every dollar we save can be used to preserve and provide the 

safest, most efficient aerospace system in the world.

Ramesh K. Punwani

Assistant Administrator for Financial Services/Chief Financial Officer

November 12, 2009
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

OIG QUALITY CONTROL REVIEW MEMO 79

OIG QUALITY CONTROL REVIEW MEMO

U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: Quality Control Review of Audited Date: November 13, 2009

Financial Statements for fiscal years 2009 and 

2008, Federal Aviation Administration

Report Number: QC-2010-010

Calvin L. Scovel III Reply to From:

Inspector General Attn. of: JA-20

To: The Secretary 

Federal Aviation Administrator

I respectfully submit the Office of Inspector General’s (OIG) Quality Control 

Review report on the Federal Aviation Administration’s (FAA) audited Financial 

Statements for Fiscal Years (FY) 2009 and 2008. 

The audit of FAA’s Financial Statements as of and for the year ended 

September 30, 2009, was completed by Clifton Gunderson LLP

(Clifton Gunderson), of Calverton, Maryland (see Attachment), under contract to 

OIG. We performed a quality control review of the audit work to ensure that it 

complied with applicable standards. These standards include the Chief Financial 

Officers Act, as amended; Generally Accepted Government Auditing Standards;

and Office of Management and Budget Bulletin 07-04, “Audit Requirements for 

Federal Financial Statements,” as amended.

Clifton Gunderson concluded that the financial statements present fairly, in all 

material respects, the financial position of FAA as of September 30, 2009, and its 

net costs, changes in net position, and budgetary resources, for the year then 

ended, in conformity with accounting principles generally accepted in the United 

States. Under contract to OIG, KPMG LLP, of Washington, DC, audited last 

year’s FAA financial statements and also expressed an unqualified opinion on 

those statements.1

1 Quality Control Review of Audited Financial Statements for Fiscal Years 2008 and 2007, Federal Aviation 

Administration, Report Number QC-2009-008, November 13, 2008. OIG reports and testimony can be found on our 

Web site at : www.oig.dot.gov.
FEDERAL AVIATION ADMINISTRATION

80 OIG QUALITY CONTROL REVIEW MEMO

2

We congratulate FAA for obtaining clean audit opinions with no material 

weaknesses for 2 consecutive years. FAA should be commended for making

significant progress in correcting control deficiencies in its financial management 

systems, which is no longer considered a significant deficiency this year. FAA 

also made good progress in addressing deficiencies pertaining to its Property, 

Plant, and Equipment (PP&E) accounting and reporting. However, due to the

magnitude and complexity of FAA’s PP&E, continued management attention is 

required.

Clifton Gunderson FY 2009 Audit Report 

Clifton Gunderson reported one internal control significant deficiency and no 

instances of reportable noncompliance with laws and regulations. 

Significant Deficiency

1. Property, Plant, and Equipment Accounting and Reporting

Clifton Gunderson made 14 recommendations to FAA to strengthen asset 

management and accounting controls for PP&E; we agree with all the 

recommendations and therefore, are making no additional recommendations.

FAA officials concurred with the significant deficiency and the recommendations

and committed to implement corrective actions by June 30, 2010. In accordance 

with DOT Order 8000.1C, the corrective actions taken in response to the 

recommendations are subject to follow up. 

Our review disclosed no instances where Clifton Gunderson did not comply, in all 

material respects, with applicable auditing standards. 

Other Matters

While not formally addressed in Clifton Gunderson’s report, continued 

management attention and oversight of payments to grantees is needed to help 

sustain good financial management practices, especially for administering the 

$1.3 billion funded under the American Recovery and Reinvestment Act. In 

FY 2009, acting on our advice, FAA conducted a much more comprehensive test 

of payments made to Airport Improvement Program grantees. Based on the 

testing results, FAA projected that about $38 million in improper payments were 

made to grantees, mostly due to insufficient supporting documents provided by 

grantees. Testing for improper payments and requiring grantees to provide 

adequate support for use of Federal funds is essential to ensure accountability and 

provide for transparency. We encourage FAA to continue enhancing this testing.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

OIG QUALITY CONTROL REVIEW MEMO 81

3

We appreciate the cooperation and assistance of representatives of FAA, Office of 

Financial Management, and Clifton Gunderson. If we can answer any questions, 

please call me at (202) 366-1959; Ann Calvaresi-Barr, Principal Assistant 

Inspector General for Auditing and Evaluation, at (202) 366-1427; or Rebecca 

Leng, Assistant Inspector General for Financial and Information Technology 

Audits, at (202) 366-1407. 

Attachment

#
FEDERAL AVIATION ADMINISTRATION

82 INDEPENDENT AUDITORS’ REPORT

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INDEPENDENT AUDITORS’ REPORT 83

INDEPENDENT AUDITORS’ REPORT

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            

            

          

          



          





 

            



 



             









  

              

            

         





 

          





 
FEDERAL AVIATION ADMINISTRATION

84 INDEPENDENT AUDITORS’ REPORT



            

               





        

               

           



            

            

           











            

           

        

       

 



 



         

         

            





            





  



        

               


FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

INDEPENDENT AUDITORS’ REPORT 85

              





    

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

            



           

             





           





               





           

           

             

          





             







         



             

           

            

          



           

             
FEDERAL AVIATION ADMINISTRATION

86 INDEPENDENT AUDITORS’ REPORT







         







          





           

              

      

          

           



            







            

            



           

           



        

  

            



 



            

            

          

              



            


FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

INDEPENDENT AUDITORS’ REPORT 87

          



           

              

        





           

 









              












FEDERAL AVIATION ADMINISTRATION

88 INDEPENDENT AUDITORS’ REPORT

          















              



             

         

           

            





              

             



         

           



          



            

       





 

         

 



               



           



 

 

 

 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

INDEPENDENT AUDITORS’ REPORT 89



                 

            

            





 

 









 





 







 









          





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               

             

            





               

        



         







        

     




FEDERAL AVIATION ADMINISTRATION

90 INDEPENDENT AUDITORS’ REPORT

 

 

           



          



          











         









               

            





               

             



                

       

              









          

             



           

             



                

            


FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

INDEPENDENT AUDITORS’ REPORT 91





          











       



          

          





            



 



 



      



       



           





          

         



           

        



         

           



 



 


FEDERAL AVIATION ADMINISTRATION

92 INDEPENDENT AUDITORS’ REPORT



 

        



 



              





      





         

            

      



 

             

            



 








FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

INDEPENDENT AUDITORS’ REPORT 93

 







  

  

  

  

 



































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  

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  

  

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


FEDERAL AVIATION ADMINISTRATION

94 INDEPENDENT AUDITORS’ REPORT












FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

INDEPENDENT AUDITORS’ REPORT 95

u.s Depomnent 

of lronspo1otlon 

F9derol AvlcrtkM"l Adrnln~lrgtlon 

Ass~.nl Amll".ltatot fof F~ncitt S.rviCa and 

CNei Flnllnd.11 omce, 

Mr. all'. Ereolano. Jr .. Partner 

linon Gunderson. L.LI' 

11710 BcllSvillc Drive. Suite 300 

Calverton. Maryland 20705 

Dear Mr. Ercolano:

NOV 12 2009 

800 IndaP41ndtnce AYinue. 'SIN 

w.It1If1gCOi"I, DC 20591

We have received the Independent Auditors Report related 10 youraudil of the Federal 

Aviation Adminislration's fiscal ye"r 2009 consolidated financial statements. and olTer Lhe 

following response. 

'n,' Onice of Financial Services.tosether with the Air Tranie Orsanization and omcc of 

Regions and enler Operations. will continue to address the Property. Plom & Eqllipmcnl 

AccOlmflng lind lIeporrillji 'ignilicant deficiency as identified in the audit report. All 

corrective aclions will be substantially complolcd by March 3 1.2010 with the exception of 

certain portions ofLhe validaLion and existence testing of personal property asseLS. By 

March 31.20 I O. we \\;11 have completed n review and existence validation of at least 

70 pereelll of Delphi personal property r~'Cords greater than or equal to S I 00.000 net book 

value (NBV) by using correspond ing mainlenance records and other asset supporting sy terns. 

and will have corrected the Delphi records accordingly. By June 30. 2010, we will have 

compleled a statistically·based validation of the physical existence of!!ll personal property 

assets. regard less ofNBV, and we \\;11 have posted an adjustmelll to com..'Ctthe effects ofal'Y 

SHliiSlically relevant error projection. Thereafter. we will conduct ongoing rolling illvenlorieSi 

to continn the physical c. istenec of personal property assets and correct the associated asset 

l\.'Cords as necessary. Thus. by June '0. 2010. 100 pereent oflhe BV orall personul property 

asSCIS will have been individually tcsted. validated. and corrected. or inc luded in a stalistieally 

based error projection. 

F A is commillcd to continuously improving linancial management over agency pro!:,am . 

and to providing excellent service to our slnkeholders and taxpayers. We will continue 10 

work in partnership with the .udit W.m in support of an efficient and effective audit. 

incerdy. 

Ramcsh K. Punwani 
FEDERAL AVIATION ADMINISTRATION

96

FINANCIAL STATEMENTS

Assets 2009 2008

Intragovernmental

Fund balance with Treasury (Note 2) $ 4,064,759 $ 3,926,742

Investments, net (Note 3) 9,170,185 8,846,350

Accounts receivable, prepayments, and other (Note 4) 286,896 195,119

Total intragovernmental 13,521,840 12,968,211

Accounts receivable, prepayments, and other, net (Note 4) 98,433 134,695

Inventory, operating materials, and supplies, net (Note 5) 551,127 538,837

Property, plant, and equipment, net (Notes 6 and 9) 13,740,336 13,765,187

Total assets $ 27,911,736 $ 27,406,930

Liabilities

Intragovernmental liabilities

Accounts payable $ 25,160 $ 11,521

Employee-related and other (Note 8) 376,121 379,002

Total intragovernmental liabilities 401,281 390,523

Accounts payable 496,211 335,937

Grants payable 775,734 642,041

Environmental (Note 7, 15 & 16) 810,814 637,825

Employee-related and other (Notes 8, 9 & 16) 1,054,851 1,037,837

Federal employee benefits (Note 10) 901,282 915,242

Total liabilities 4,440,173 3,959,405

Commitments and contingencies (Notes 9 & 16)

Net position

Unexpended appropriations—earmarked funds (Note 12) 1,142,193 920,894

Unexpended appropriations—other funds 1,008,244 -

Subtotal unexpended appropriations 2,150,437 920,894

Cumulative results of operations—earmarked funds (Note 12) 11,236,393 11,182,229

Cumulative results of operations—other funds 10,084,733 11,344,402

 Subtotal cumulative results of operations 21,321,126 22,526,631

Total net position

Total liabilities and net position

 23,471,563 23,447,525

$ 27,911,736 $ 27,406,930

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED BALANCE SHEETS

As of September 30

(Dollars in Thousands)

FINANCIAL STATEMENTS

The accompanying notes are an integral part of these financial statements.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

97

Line of business programs (Note 11) 2009 2008

Air Traffic Organization

Expenses $ 11,171,855 $ 10,596,417 

Less earned revenues (271,754) (171,211)

Net costs 10,900,101 10,425,206 

A viation Safety

Expenses 1,187,156 1,161,014

Less earned revenues (10,245) (6,142)

Net costs 1,176,911 1,154,872

Airports

Expenses 4,034,970 3,753,840

Less earned revenues (369) (165)

Net costs 4,034,601 3,753,675

Commercial Space Transportation

Expenses 15,308 11,257

Net costs 15,308 11,257

Non line of business programs

Regional and center operations and other programs

Expenses 598,681 557,994

Less earned revenues (334,870) (370,883)

Net costs 263,811 187,111

Net cost of operations

Total expenses 17,007,970 16,080,522 

Less earned revenues (617,238) (548,401)

Total net cost $ 16,390,732 $ 15,532,121 

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED STATEMENTS OF NET COST

For the Years Ended September 30

(Dollars in Thousands)

FINANCIAL STATEMENTS

The accompanying notes are an integral part of these financial statements.
FEDERAL AVIATION ADMINISTRATION

98 FINANCIAL STATEMENTS

2009 2009 2009 2008 2008 2008

Earmarked Other funds Totals Earmarked Other funds Totals

Unexpended Unexpended Unexpended Unexpended Unexpended Unexpended 

appropriations appropriations appropriations appropriations appropriations appropriations

Beginning balances $ 920,894 $ - $ 920,894 $ 1,097,039 $ 2,877 $ 1,099,916

Budgetary financing sources

Appropriations received (Note 14) 3,804,462 1,300,000 5,104,462 2,342,939 - 2,342,939

Appropriations transferred—in/out 3,700 - 3,700 - - -

Rescissions, cancellations and other (104,787) - (104,787) (20,393) - (20,393)

Appropriations used (3,482,076) (291,756) (3,773,832) (2,498,691) (2,877) (2,501,568)

 (179,022)

$ 920,894

Total budgetary financing sources

Ending balances

 221,299

$ 1,142,193

 1,008,244

$ 1,008,244

 1,229,543

$ 2,150,437

 (176,145)

$ 920,894

 (2,877)

$ -

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET POSITION 

UNEXPENDED APPROPRIATIONS

For the Years Ended September 30 

(Dollars in Thousands)

The accompanying notes are an integral part of these financial statements.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

FINANCIAL STATEMENTS 99

2009 2009 2009 2008 2008 2008

Earmarked Other funds Totals Earmarked Other funds Totals

Cumulative Cumulative Cumulative Cumulative Cumulative Cumulative

results of results of results of results of results of results of

operations operations operations operations operations operations

Beginning balances $ 11,182,229 $ 11,344,402 $ 22,526,631 $ 11,647,347 $ 11,178,310 $ 22,825,657 

Budgetary financing sources

Appropriations used 3,482,076 291,756 3,773,832 2,498,691 2,877 2,501,568

Nonexchange revenue—excise taxes and other (Note 12) 10,884,331 1,441 10,885,772 12,283,879 (5,119) 12,278,760 

Transfers—in/out without reimbursement (135,549) - (135,549) (111,563) - (111,563)

Other financing sources

Transfers—in/out without reimbursement (529,750) 528,645 (1,105) (1,898,366) 1,898,366 -

Imputed financing from costs

 absorbed by others (Note 13) 610,150 52,127 662,277 514,478 49,852 564,330

Total financing sources 14,311,258 873,969 15,185,227 13,287,119 1,945,976 15,233,095 

Net cost of operations 14,257,094 2,133,638 16,390,732 13,752,237 1,779,884 15,532,121

 (299,026)

$ 22,526,631 

Net change

Ending balances

 54,164

$ 11,236,393 

 (1,259,669)

$ 10,084,733

 (1,205,505)

$ 21,321,126

 (465,118)

$ 11,182,229 

 166,092

$ 11,344,402 

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET POSITION 

CUMULATIVE RESULTS OF OPERATIONS

For the Years Ended September 30 

(Dollars in Thousands)

The accompanying notes are an integral part of these financial statements.
FEDERAL AVIATION ADMINISTRATION

100 FINANCIAL STATEMENTS

Budgetary resources (Note 14) 2009 2008

Unobligated balance brought forward, transfers and other $ 2,822,280 $ 2,753,668

Recoveries of prior year obligations 385,377 471,076

Budget authority 20,730,694 19,485,521

Spending authority from offsetting collections 6,164,596 7,174,115

Nonexpenditure transfers, net (46,300) (41,566)

Permanently not available (3,744,234) (4,697,732)

Total budgetary resources $ 26,312,413 $ 25,145,082 

Status of budgetary resources

Obligations incurred $ 22,714,270 $ 22,322,802 

Unobligated balance available 1,707,455 1,395,626

Unobligated balance not available 1,890,688 1,426,654

Total status of budgetary resources $ 26,312,413 $ 25,145,082 

Change in obligated balance

Obligated balance, net, beginning of period $ 8,471,544 $ 8,513,195

Obligations incurred 22,714,270 22,322,802

Gross outlays (21,553,160) (21,955,876)

Recoveries of prior years unpaid obligations, actual (385,377) (471,076)

Change in uncollected customer payments from

 Federal sources (30,291) 62,499

Obligated balance, net, end of period $ 9,216,986 $ 8,471,544

Unpaid obligations $ 9,680,165 $ 8,904,432

Uncollected customer payments from Federal sources (463,179) (432,888)

Obligated balance, net, end of period $ 9,216,986 $ 8,471,544

Outlays

Gross outlays $ 21,553,160 $ 21,955,876 

Collections, net of offsetting receipts (6,134,305) (7,237,024)

Distributed offsetting receipts (49,703) (1,970)

Net outlays $ 15,369,152 $ 14,716,882 

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

COMBINED STATEMENTS OF BUDGETARY RESOURCES

For the Years Ended September 30

(Dollars in Thousands)

The accompanying notes are an integral part of these financial statements.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 101

NOTES TO THE FINANCIAL STATEMENTS 

Note 1. Summary of Significant Accounting Policies 

A. Basis of Presentation

The financial statements have been prepared to 

report the financial position, net cost of operations, 

changes in net position, and status and availability 

of budgetary resources of the FAA. The statements 

are a requirement of the CFO Act of 1990, and the 

Government Management Reform Act of 1994. They 

have been prepared from, and are fully supported by, 

the books and records of the FAA in accordance with: 

(1) the hierarchy of accounting principles generally 

accepted in the United States of America and standards 

approved by the principals of the Federal Accounting 

Standards Advisory Board; (2) OMB Circular Number 

A-136, Financial Reporting Requirements; and (3) DOT 

and FAA accounting policies, which are summarized in 

this note. These statements, with the exception of the 

Statement of Budgetary Resources, are different from 

financial management reports, which also are prepared 

pursuant to OMB directives that are used to monitor 

and control the FAA’s use of budgetary resources. The 

statements are subjected to audit, as required by OMB 

Bulletin Number 07-04, Audit Requirements for Federal 

Financial Statements.

Notes 4 and 8 include the necessary information to 

present “other assets” and “other liabilities” as defined by 

OMB Circular Number A-136. This presentation is used 

to support the preparation of the consolidated financial 

statements of the U.S. Government. 

Unless specified otherwise, all dollar amounts are 

presented in thousands.

B. Reporting Entity

The FAA, which was created in 1958, is a component of 

the DOT, a cabinet-level agency of the Executive Branch 

of the U.S. Government. The FAA’s mission is to provide 

a safe, secure, and efficient global aerospace system that 

contributes to national security and the promotion 

of U.S. aerospace safety. As the leading authority in 

the international aerospace community, the FAA is 

responsive to the dynamic nature of customer needs, 

economic conditions, and environmental concerns. The 

FAA reporting entity is composed of the following major 

funds: 

• AATF. The AATF is funded by excise taxes that 

the Internal Revenue Service (IRS) collects from 

airway system users. These receipts are unavailable 

until appropriated by the U.S. Congress. Once 

appropriated for use, the FAA transfers AATF 

receipts necessary to meet cash disbursement needs 

to several other funds, from which expenditures 

are made. The AATF fully finances the following 

additional FAA funds: 

- Grants-in-Aid to Airports—AATF. As authorized, 

grants are awarded with Grants-in-Aid to 

Airports funding and used for planning and 

development to maintain a safe and efficient 

nationwide system of public airports. These 

grants fund approximately one-third of all capital 

development at the Nation’s public airports, and 

are administered through the AIP. 

- F&E—AATF. The F&E funds are the FAA’s 

principal means of modernizing and improving 

air traffic control and airway facilities. These 

funds also finance major capital improvements 

required by other FAA programs, as well as other 

improvements to enhance the safety and capacity 

of the NAS. 

- R,E,&D—AATF. R,E,&D funds finance 

long-term research programs to improve the 

air traffic control system.

• Operations General Fund and Operations—

AATF. Operations finances operating costs, 

maintenance, communications, and logistical 

support for the air traffic control and air navigation 

systems. It also finances the salaries and costs 

associated with carrying out the FAA’s safety 

and inspection and regulatory responsibilities. 

Operations—AATF is financed through transfers 

from the AATF. For administrative ease in 

obligating and expending for operational activities, 

those funds are then in turn transferred to the 

Operations General Fund, which is supplemented by 

appropriations from the U.S. Treasury. Expenditures 

for operational activities, whether originally funded 

by the AATF or the General Fund of the U.S. 

Treasury, are generally made from the Operations 

General Fund. 
FEDERAL AVIATION ADMINISTRATION

102 NOTES TO THE FINANCIAL STATEMENTS 

• Aviation Insurance Revolving Fund. Revolving 

funds are accounts established by law to finance a 

continuing cycle of operations with receipts derived 

from such operations usually available in their 

entirety for use by the fund without further action 

by the U.S. Congress. The Aviation Insurance 

Revolving Fund provides products that address 

the insurance needs of the U.S. domestic airline 

industry not adequately met by the commercial 

insurance market. The FAA is currently providing 

war-risk hull loss and passenger, crew, and 

third-party liability insurance as required by the 

Homeland Security Act of 2002 as amended by 

the FAA Extension Act of 2009. Current insurance 

coverage expires on December 31, 2009.

• Administrative Services Franchise Fund 

(Franchise Fund). The Franchise Fund is a 

revolving fund designed to create competition 

within the public sector in the performance of a 

wide variety of support services. 

• Other Funds. The consolidated financial 

statements include other funds such as: (a) 

Aviation Overflight User Fees, which is a special 

fund in which receipts are earmarked by law for 

a specific purpose; (b) Facilities, Engineering, and 

Development General Fund; and (c) General Fund 

Miscellaneous Receipts accounts established for 

receipts of nonrecurring activity, such as fines, 

penalties, fees, and other miscellaneous receipts for 

services and benefits.

• ARRA of 2009. The FAA received supplemental 

General Fund appropriations in FY 2009 for Grantin-Aid to Airports and F&E activities. The ARRA of 

2009 is discussed in detail in letter X of this note.

• The FAA has rights and ownership of all assets 

reported in these financial statements. The FAA does 

not possess any nonentity assets.

C. Budgets and Budgetary Accounting

Congress annually enacts appropriations to permit the 

FAA to incur obligations for specified purposes. In FY 

2009 and 2008, the FAA was accountable for amounts 

made available in appropriations laws from the AATF, 

Revolving Funds, a Special Fund, and General Fund 

appropriations. Additionally, the ARRA provided 

supplemental General Fund appropriations to the FAA 

in FY 2009. The FAA recognizes budgetary resources 

as assets when cash (funds held by the U.S. Treasury) 

is made available through Department of the Treasury 

General Fund warrants and transfers from the AATF. 

D. Basis of Accounting

Transactions are recorded on both an accrual accounting 

basis and a budgetary accounting basis. Under the 

accrual method, revenues are recognized when 

earned, and expenses are recognized when a liability 

is incurred, without regard to receipt or payment of 

cash. Budgetary accounting facilitates compliance 

with legal requirements on the use of Federal funds. All 

material intraagency transactions and balances have 

been eliminated for presentation on a consolidated basis. 

However, the Statement of Budgetary Resources is 

presented on a combined basis, in accordance with OMB 

Circular A-136.

Intragovernmental transactions and balances result 

from exchange transactions made between the FAA 

and another Federal Government reporting entity, 

while those classified as “with the public” result from 

exchange transactions between the FAA and nonFederal entities. For example, if the FAA purchases 

goods or services from the public and sells them to 

another Federal entity, the costs would be classified as 

“with the public,” but the related revenues would be 

classified as “intragovernmental.” This could occur, for 

example, when the FAA provides goods or services to 

another Federal Government entity on a reimbursable 

basis. The purpose of this classification is to enable 

the Federal Government to prepare consolidated 

financial statements, and not to match public and 

intragovernmental revenue with costs that are incurred 

to produce public and intragovernmental revenue. 

E. Revenues and Other Financing Sources

Congress enacts annual, multiyear, and no-year 

appropriations to be used, within statutory limits, for 

operating, capital, and grant expenditures. Additional 

amounts are obtained from service fees (e.g., landing, 

registry, overflight fees), war-risk insurance premiums 

(see Note 16), and reimbursements for products and 

services provided to domestic and foreign governmental 

entities.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 103

The AATF is sustained by excise taxes that the IRS 

collects from airway system users. Excise taxes 

collected are initially deposited to the General Fund of 

the U.S. Treasury. The IRS does not receive sufficient 

information at the time the excise taxes are collected 

to determine how they should be distributed to specific 

earmarked funds. Therefore, the Treasury makes initial 

semimonthly distributions to earmarked funds based 

on estimates prepared by its Office of Tax Analysis 

(OTA). These estimates are based on historical excise 

tax data applied to current excise tax receipts. The 

FAA’s September 30, 2009, financial statements reflect 

excise taxes certified (as actual collections) by the IRS 

through June 30, 2009, and excise taxes estimated by 

the OTA for the period July 1 through September 30, 

2009, as specified by the Statement of Federal Financial 

Accounting Standards (SFFAS) Number 7, Accounting 

for Revenue and Other Financing Sources. When 

actual amounts are available from the IRS, generally 

3 to 4 months after each quarter-end, adjustments are 

made to the estimated amounts and the difference is 

accrued as an intragovernmental receivable or payable. 

Accordingly, actual excise tax collections data for the 

quarter ended September 30 will not be available from 

the IRS until January of the following year, at which 

time the difference between the September 30 estimate 

and the September 30 actual will be recorded in the 

FAA’s accounting system.

The AATF also earns interest from investments in U.S. 

Government securities. Interest income is recognized 

as revenue on the accrual basis of such collections for 

those quarters.

Appropriations are recognized as a financing source 

when expended. Revenues from services provided by 

the FAA associated with reimbursable agreements 

are recognized concurrently with the recognition of 

accrued expenditures for performing the services. 

War-risk insurance premiums are recognized as revenue 

on a straight-line basis during the period of coverage. 

Aviation overflight user fees are recognized as revenue in 

the period in which the flights took place. 

The FAA recognizes as an imputed financing source the 

amount of accrued pension and post-retirement benefit 

expenses for current employees paid on the FAA’s behalf 

by the OPM, as well as amounts paid from the U.S. 

Treasury Judgment Fund in settlement of claims or 

court assessments against the FAA.

F. Taxes

The FAA, as a Federal entity, is not subject to Federal, 

State, or local income taxes and, accordingly, no 

provision for income taxes has been recorded in the 

accompanying financial statements.

G. Fund Balance with the U.S. Treasury

The U.S. Treasury processes cash receipts and 

disbursements. Funds held at the Treasury are available 

to pay agency liabilities. The FAA does not maintain 

cash in commercial bank accounts or foreign currency 

balances. Foreign currency payments are made either by 

the Treasury or the Department of State and are reported 

by the FAA in the U.S. dollar equivalent.

H. Investment in U.S. Government Securities

Unexpended funds in the AATF and Aviation Insurance 

Revolving Fund (war-risk premiums) are invested in U.S. 

Government securities at cost. A portion of the AATF 

investments is liquidated semimonthly in amounts 

needed to provide cash for FAA appropriation accounts, 

to the extent authorized. The Aviation Insurance 

Revolving Fund investments are usually held to maturity. 

Investments, redemptions, and reinvestments are held 

and managed under the direction of the FAA by the U.S. 

Treasury. 

I. Accounts Receivable

Accounts receivable consists of amounts owed to the 

FAA by other Federal agencies and the public. Amounts 

due from Federal agencies are considered fully collectible. 

Accounts receivable from the public include, for example, 

overflight fees, fines and penalties, reimbursements 

from employees, and services performed for foreign 

governments. These amounts due from the public are 

presented net of an allowance for loss on uncollectible 

accounts based on historical collection experience or an 

analysis of the individual receivables. 

The FAA reports deposits in transit when the U.S. 

Treasury has not yet recognized the FAA’s collections 

received from the public or other Federal entities. 
FEDERAL AVIATION ADMINISTRATION

104 NOTES TO THE FINANCIAL STATEMENTS 

J. Inventory

Within the FAA’s Franchise Fund, inventory is held 

for sale to FAA field locations and other domestic 

entities and foreign governments. Inventory consists 

of materials and supplies used to support the NAS and 

is predominantly located at the FAA Mike Monroney 

Aeronautical Center in Oklahoma City. Inventory cost 

includes material, labor, and applicable manufacturing 

overhead, and is determined using the weighted moving 

average cost method.

FAA field locations trade nonoperational, repairable 

components with the Franchise Fund. These components 

are classified as “held for repair.” An allowance is 

established for repairable inventory based on the average 

historical cost of such repairs. The cost of repair is 

capitalized and these items are reclassified as “held for 

sale.”

Inventory may be classified as excess, obsolete, or 

unserviceable if, for example, the quantity exceeds 

projected demand for the foreseeable future, or if the 

item has been technologically surpassed. An allowance 

is established for excess, obsolete, and unserviceable 

inventory based on the condition of various inventory 

categories as well as the FAA’s historical experience with 

disposing of such inventory.

K. Operating Materials and Supplies

In contrast to inventory, which is held for sale by the 

Franchise Fund, operating materials and supplies are used 

in the operations of the agency. Operating materials 

and supplies primarily consist of unissued materials and 

supplies that will be used in the repair and maintenance 

of FAA-owned aircraft. They are valued based on the 

weighted moving average cost method or on the basis of 

actual prices paid. Operating materials and supplies are 

expensed using the consumption method of accounting.

Operating materials and supplies “held for use” are those 

items that are consumed on a regular and ongoing basis. 

Operating materials and supplies “held for repair” are 

awaiting service to restore their condition to “held for 

use.” 

Operating materials and supplies may be classified as 

excess, obsolete, or unserviceable if, for example, the 

quantity exceeds projected demand for the foreseeable 

future, or if the item has been technologically surpassed. 

An allowance is established for “held for use” and 

excess, obsolete, and unserviceable operating materials 

and supplies based on the condition of various asset 

categories, as well as the FAA’s historical experience with 

disposing of such assets. 

L. Property, Plant, and Equipment (PP&E)

The FAA capitalizes acquisitions of PP&E when the cost 

equals or exceeds $100,000 and the useful life equals 

or exceeds 2 years. The FAA records PP&E at original 

acquisition cost. However, where applicable, the FAA 

allocates an average cost of like assets within a program, 

commonly referred to as unit costing. The FAA purchases 

some capital assets in large quantities, which are known 

as “bulk purchases.” If the cost per unit is below the 

capitalization threshold of the FAA, then these items are 

expensed.

Depreciation expense is calculated using the straight-line 

method. Depreciation commences the first month after 

the asset is placed in service. The FAA does not recognize 

residual value of its PP&E. 

Real property assets such as buildings, air traffic control 

towers, en route air traffic control centers, mobile 

buildings, roads, sidewalks, parking lots, and other 

structures are depreciated over a useful life of up to 40 

years.

Personal property assets such as aircraft, decision support 

systems, navigation, surveillance, communications and 

weather-related equipment, office furniture, internal use 

software, vehicles, and office equipment are depreciated 

over a useful life of up to 20 years.

Buildings and equipment acquired under capital leases 

are amortized over the lease term. If the lease agreement 

contains a bargain purchase option or otherwise provides 

for transferring title of the asset to the FAA, the building 

is depreciated over a 40-year service life. 

Construction in Progress (CIP) is valued at actual direct 

costs plus applied overhead and other indirect costs.

The FAA occupies certain real property that is leased 

by the DOT from the General Services Administration. 

Payments made by the FAA are based on the fair market 

value for similar rental properties.

The FAA conducts a significant amount of research and 

development into new technologies to support the NAS. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 105

Until such time as the research and development project 

reaches “technological feasibility” the costs associated 

with the project are expensed in the year incurred. 

M. Prepaid Charges

The FAA generally does not pay for goods and services 

in advance, except for certain reimbursable agreements, 

subscriptions, and payments to contractors and 

employees. Payments made in advance of the receipt of 

goods and services are recorded as prepaid charges at the 

time of prepayment and recognized as expenses when 

the related goods and services are received.

N. Liabilities

Liabilities covered by budgetary or other resources are 

those liabilities for which Congress has appropriated 

funds or funding is otherwise available to pay amounts 

due. Liabilities not covered by budgetary or other 

resources represent amounts owed in excess of available, 

congressionally appropriated funds or other amounts. 

The liquidation of liabilities not covered by budgetary 

or other resources is dependent on future congressional 

appropriations or other funding, including the AATF. 

Intragovernmental liabilities are claims against the FAA 

by other Federal agencies.

O. Accounts Payable 

Accounts payable are amounts the FAA owes to other 

Federal agencies and the public. Accounts payable to 

Federal agencies generally consist of amounts due under 

interagency reimbursable agreements. Accounts payable 

to the public primarily consist of unpaid goods and 

services received by the FAA in support of the NAS, and 

estimated amounts incurred but not yet claimed by AIP 

grant recipients.

P. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual 

is reduced as leave is taken. For each biweekly pay 

period, the balance in the accrued annual leave account 

is adjusted to reflect the latest pay rates and unused 

hours of leave. Liabilities associated with other types 

of vested leave, including compensatory, credit hours, 

restored leave, and sick leave in certain circumstances, 

are accrued based on latest pay rates and unused hours 

of leave. Sick leave is generally nonvested, except for sick 

leave balances at retirement under the terms of certain 

union agreements. Funding will be obtained from future 

financing sources to the extent that current or prior year 

appropriations are not available to fund annual and other 

types of vested leave earned but not taken. Nonvested 

leave is expensed when used. 

Q. Accrued Workers’ Compensation

A liability is recorded for actual and estimated future 

payments to be made for workers’ compensation 

pursuant to the Federal Employees’ Compensation Act 

(FECA). The actual costs incurred are reflected as a 

liability because the FAA will reimburse the Department 

of Labor (DOL) 2 years after the actual payment of 

expenses by the DOL. Future appropriations will be 

used for the reimbursement to the DOL. The liability 

consists of: (1) the net present value of estimated 

future payments calculated by the DOL, and (2) the 

unreimbursed cost paid by the DOL for compensation 

to recipients under FECA. 

R. Retirement Plan

FAA employees participate in either the Civil Service 

Retirement System (CSRS) or the Federal Employees 

Retirement System (FERS). The employees who 

participate in CSRS are beneficiaries of the FAA’s 

matching contribution, equal to 7 percent of pay, 

distributed to their annuity account in the Civil Service 

Retirement and Disability Fund. 

FERS went into effect January 1, 1987. FERS and Social 

Security automatically cover most employees hired after 

December 31, 1983. Employees hired prior to January 1, 

1984, could elect either to join FERS and Social Security 

or to remain in CSRS. FERS offers a savings plan to 

which the FAA automatically contributes 1 percent of 

pay and matches any employee contribution up to an 

additional 4 percent of pay. For FERS participants, the 

FAA also contributes the employer’s matching share for 

Social Security. 
FEDERAL AVIATION ADMINISTRATION

106 NOTES TO THE FINANCIAL STATEMENTS 

The FAA recognizes the imputed cost of pensions and 

other retirement benefits during an employee’s active 

years of service. The OPM actuaries determine pension 

cost factors by calculating the value of pension benefits 

expected to be paid in the future and communicate these 

factors to the FAA for current period expense reporting. 

The OPM also provides information regarding the full 

cost of health and life insurance benefits. The FAA 

recognizes the offsetting revenue as imputed financing 

sources to the extent these expenses will be paid by the 

OPM.

S. Grants

The FAA records an obligation at the time a grant is 

awarded. As grant recipients conduct eligible activities 

under the terms of their grant agreements, they request 

payment by the FAA, typically via an electronic payment 

process. Expenses are recorded at the time of payment 

approval during the year. The FAA also recognizes an 

accrued liability and expense for estimated eligible grant 

payments not yet requested by grant recipients. Grant 

expenses, including associated administrative costs, are 

classified on the Consolidated Statements of Net Cost 

under the LOB program “Airports.”

T. Use of Estimates

Management has made certain estimates and 

assumptions when reporting assets, liabilities, revenue, 

and expenses, and in the note disclosures. Actual results 

could differ from these estimates. Significant estimates 

underlying the accompanying financial statements 

include: (a) the allocation of AATF receipts by the OTA; 

(b) legal, environmental, and contingent liabilities; 

(c) accruals of accounts and grants payable; (d) accrued 

workers’ compensation; (e) allowance for doubtful 

accounts receivable; (f) allowances for repairable and 

obsolete inventory balances; (g) allocations of common 

costs to CIP; (h) the allocation of an average cost of 

like assets within a program, commonly referred to as 

unit costing; (i) allocation of costs to programs on the 

Statement of Net Cost, and (j) accrued payroll and 

benefits payable.

There are two new estimates in FY 2009: (a) grants 

payable funded by the ARRA, and (b) CIP payable. Both 

of these estimates will use percentage of completion 

schedules provided by the vendors. 

U. Environmental Liabilities

The FAA recognizes two types of environmental 

liabilities: environmental remediation, and cleanup 

and decommissioning. The liability for environmental 

remediation is an estimate of costs necessary to bring 

a known contaminated site into compliance with 

applicable environmental standards. The increase or 

decrease in the annual liability is charged to current year 

expense.

Environmental cleanup and decommissioning is the 

estimated cost that will be incurred to remove, contain, 

and/or dispose of hazardous materials when an asset 

currently in service is shutdown. The FAA estimates 

the environmental cleanup and decommissioning costs 

at the time an FAA-owned asset is placed in service. For 

assets placed in service through FY 1998, the increase 

or decrease in the estimated environmental cleanup 

liability is charged to expense. Assets placed in service in 

FY 1999 and after do not have associated environmental 

liabilities. 

FAA environmental liabilities are recorded using 

uninflated estimates. There are no known possible 

changes to these estimates based on inflation, deflation, 

technology, or applicable laws and regulations. 

V. Contingencies

Liabilities are deemed contingent when the existence 

or amount of the liability cannot be determined with 

certainty pending the outcome of future events. The FAA 

recognizes contingent liabilities, in the accompanying 

balance sheet and statement of net cost, when they are 

both probable and can be reasonably estimated. The 

FAA discloses contingent liabilities in the notes to the 

financial statements (see Note 16) when the conditions 

for liability recognition are not met or when a loss from 

the outcome of future events is more than remote. In 

some cases, once losses are certain, payments may be 

made from the Judgment Fund maintained by the U.S. 

Treasury rather than from the amounts appropriated 

to the FAA for agency operations. Payments from the 

Judgment Fund are recorded as an “Other Financing 

Source” when made.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 107

W. Earmarked Funds Reporting

The FAA adopted SFFAS Number 27, Identifying 

and Reporting Earmarked Funds. SFFAS Number 27 

defines “earmarked funds” as those being financed by 

specifically identified revenues, often supplemented by 

other financing sources, which remain available over 

time. These specifically identified revenues and financing 

sources are required by statute to be used for designated 

activities, benefits or purposes, and must be accounted 

for separately from the Government’s general revenues. 

The FAA’s financial statements include the following 

funds, considered to be earmarked:

• AATF

• Operations—AATF

• Operations General Fund

• Grants-in-Aid for Airports—AATF

• F&E—AATF

• R,E,&D—AATF

• Aviation Insurance Fund

• Aviation User Fees

The AATF is funded by excise taxes that the IRS 

collects from airway system users. These receipts are 

unavailable until appropriated by the U.S. Congress. 

Once appropriated for use, the FAA transfers AATF 

receipts necessary to meet cash disbursement needs to 

several other funds, from which expenditures are made. 

Those funds that receive transfers from the AATF are the 

Operations Trust Fund; Grants-in-Aid for Airports; F&E; 

and R,E,&D, all of which are funded exclusively by the 

AATF. These funds represent the majority of FAA annual 

expenditures. 

In addition, the Operations General Fund is primarily 

funded through transfers from Operations—AATF, but 

also is supplemented by funding from the General Fund 

of the U.S. Treasury through annual appropriations. 

Because the Operations General Fund is primarily 

funded from the AATF, and because it is not reasonably 

possible to differentiate cash balances between those 

originally flowing from the AATF versus General Fund 

appropriations, the Operations General Fund is presented 

as an earmarked fund. The earmarked funds from the 

F&E fund are used to purchase or construct PP&E. When 

earmarked funds are used to purchase or construct PP&E, 

they are no longer available for future expenditure and 

have been used for their intended purpose, and therefore 

are classified as other funds on the balance sheet and 

the statement of changes in net position. The intended 

result of this presentation is to differentiate between 

earmarked funds available for future expenditure and 

earmarked funds previously expended on PP&E projects 

and therefore unavailable for future expenditure. 

Additional disclosures concerning earmarked funds can 

be found in Note 12.

X. ARRA of 2009

The ARRA of 2009 was enacted primarily to preserve 

and create jobs, promote economic recovery, assist 

those most impacted by the recession, and to invest in 

transportation, environmental protection, and other 

infrastructure that will provide long-term economic 

benefits.

The FAA received supplemental funding from the 

ARRA of $1.1 billion for Grant-in-Aid to Airports and 

$200 million for F&E activities. This $1.3 billion of 

ARRA funding is reflected as appropriations received 

on the Consolidated Statements of Changes in Net 

Position, Unexpended Appropriations under the heading, 

2009 Other Funds. The F&E funding is to be used for 

improvements to power systems, ARTCCs, air traffic 

control towers, terminal radar approach control facilities, 

and navigation and landing equipment. The ARRA also 

stipulated that priority be given to F&E activities that 

will be completed within 2 years of enactment of this 

act, or by February 17, 2011. As of September 30, 2009, 

the FAA has obligated $89.7 million for F&E projects and 

disbursed $2.5 million. 

The Grant-in-Aid to Airports funding was to be used 

for discretionary grants and for the procurement, 

installation, and commissioning of runway incursion 

prevention devices and systems at airports. The ARRA 

also stipulated that priority be given to Grant-in-Aid 

to Airport projects that will be completed within 2 

years of enactment of this act, or by February 17, 2011. 

Of the $1.1 billion ARRA funding for Grant-in-Aid to 

Airports, an amount not to exceed $2.2 million may be 

used to fund the award and oversight of grants made 

under this provision. As of September 30, 2009, the 

FAA has awarded $1.1 billion in Grant-in-Aid to Airport 

grants and disbursed $178.9 million of the grant awards. 

Oversight costs for ARRA-funded grants as of 

September 30, 2009, are $100,000. 
FEDERAL AVIATION ADMINISTRATION

108 NOTES TO THE FINANCIAL STATEMENTS 

Note 2. Fund Balance with Treasury

Following are the fund balance with Treasury account balances as of September 30, 2009 and 2008:

Status of fund balance with Treasury

2009 2008

Earmarked and other funds $ 3,691,915 $ 3,602,736

Franchise fund 322,455 255,873

Aviation Insurance Revolving Fund 50,389

Total $ 4,064,759

 68,133

$ 3,926,742

Status of fund balance with Treasury

Unobligated balance

 Available $ 1,707,455 $ 1,395,626

 Not available 1,890,688 1,426,654

Obligated balance not yet disbursed 466,616

Total $ 4,064,759

 

$ 

 1,104,462

 3,926,742

Unobligated fund balances are either available or not 

available. Amounts are reported as not available when 

they are no longer legally available to the FAA for 

obligation. However, balances that are not available can 

change over time, because they can be used for upward 

adjustments of obligations that were incurred during the 

period of availability or for paying claims attributable to 

that time period. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 109

Note 3. Investments

As of September 30, 2009 and 2008, the FAA’s investment balances were as follows:

2009

Amortized Market

(Premium) Investments Value

Intragovernmental Securities Cost Discount (Net)

$ 

Disclosure

 Nonmarketable par value $ 7,829,468 $ - $ 7,829,468 7,829,468

 Market-based 1,289,850 (6,770) 1,283,080 1,283,080

 Subtotal 9,119,318 (6,770) 9,112,548 9,112,548

 Accrued Interest 57,637 57,637

 Total Intragovernmental Securities $ 9,176,955 $ (6,770) $ 9,170,185 $ 9,112,548 

2008

Amortized Market

(Premium) Investments Value

Intragovernmental Securities Cost Discount (Net)

$ 

Disclosure

 Nonmarketable par value $ 7,673,709 $ - $ 7,673,709 7,673,709

 Market-based 1,087,268 (533) 1,086,735 1,086,735

 Subtotal 8,760,977 (533) 8,760,444 8,760,444

 Accrued Interest

 Total Intragovernmental Securities

 85,906

$ (533)

 85,906

$ 8,846,883 $ 8,846,350 $ 8,760,444

The Secretary of the Treasury invests AATF funds on 

behalf of the FAA. FAA investments are considered 

investment authority and available to offset the cost 

of operations to the extent authorized by Congress. 

As of September 30, 2009 and 2008, $7.8 billion and 

$7.7 billion were invested respectively in U.S. Treasury 

Certificates of Indebtedness. Nonmarketable par value 

Treasury Certificates of Indebtedness are special series 

debt securities issued by the Bureau of Public Debt to 

Federal accounts, and are purchased and redeemed at par 

(face value) exclusively through the Federal Investment 

Branch of the U.S. Treasury’s Bureau of Public Debt. 

The securities are held to maturity and redeemed at face 

value on demand; thus, investing entities recover the 

full amount invested plus interest. Investments as of 

September 30, 2009, mature on various dates through 

June 30, 2010, and investments as of September 30, 2008, 

matured on various dates through June 30, 2009. The 

annual rate of return on Certificates of Indebtedness is 

established in the month of issuance. The average rate of 

return for certificates issued during FY 2009 and FY 2008 

was 3.2 percent and 4.3 percent, respectively.

Nonmarketable, market-based Treasury securities are 

debt securities that the Treasury issues to Federal entities 

without statutorily fixed interest rates. Although the 

securities are not marketable, their terms (prices and 

interest rates) mirror the terms of marketable Treasury 

securities. The FAA invests Aviation Insurance Fund 

collections in nonmarketable, market-based securities 

and amortizes premiums and discounts over the life of 

the security using the interest method. As of September 

30, 2009, these nonmarketable, market-based securities 

had maturity dates ranging from October 2009 to 

November 2013, and have an average rate of return of 

approximately 3.4 percent. 
FEDERAL AVIATION ADMINISTRATION

110 NOTES TO THE FINANCIAL STATEMENTS 

The U.S. Treasury does not set aside assets to pay the 

future expenditures of the AATF and the Aviation 

Insurance Fund. Instead, the cash collected from the 

public for the AATF and the Aviation Insurance Fund 

is deposited to the U.S. Treasury, and used for general 

Government purposes. Treasury securities are issued to 

the FAA as evidence of the collections by the AATF and 

Aviation Insurance Fund. Treasury securities are an asset 

to the FAA and a liability to the U.S. Treasury. Because 

the FAA and the U.S. Treasury are both parts of the 

U.S. Government, these assets and liabilities offset each 

other from the standpoint of the U.S. Government as 

a whole. For this reason, they do not represent an asset 

or a liability in the U.S. Government-wide financial 

statements. 

To the extent authorized by law, the FAA has the ability 

to redeem its Treasury securities to make expenditures. 

When the FAA requires redemption of these securities, 

the U.S. Government finances those expenditures out 

of accumulated cash balances by raising tax or other 

receipts, borrowing from the public, repaying less debt, or 

curtailing other expenditures. This is the same way the 

U.S. Government finances all other expenditures. 

Note 4. Accounts Receivable, Prepayments, and Other Assets

Accounts receivable, prepayments, and other assets as of September 30, 2009 and 2008 were composed of the 

following: 

2009 2008

Intragovernmental

Accounts receivable $ 154,941 $ 105,968

Prepayments and other 131,955 89,151

 Intragovernmental total 286,896 195,119

With the public

Accounts receivable, net 60,349 51,589

Prepayments 37,567 28,124

Deposits in transit and other 517 

 

 54,982

With the public total 98,433 134,695

Total accounts receivable, 

prepayments, and other $ 385,329 $ 329,814

Intragovernmental prepayments represent advance 

payments to other Federal Government entities for 

agency expenses not yet incurred or for goods or services 

not yet received.

Accounts receivable from the public are shown net of 

allowances for uncollectible amounts of $18.5 million 

and $10.9 million, as of September 30, 2009 and 2008.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 111

Note 5. Inventory, Operating Materials, and Supplies 

Following are inventory, operating materials, and supplies as of September 30, 2009 and 2008: 

Inventory

2009

Cost Allowance

$ 

Net

Held for sale $ 80,406 $ (84) 80,322

Held for repair 493,356 (99,909) 393,447 

Raw materials, finished goods, and other 23,410 (10,591) 12,819 

Excess, obsolete, and unserviceable 4,984 (4,984) -

 Inventory total 602,156 (115,568) 486,588 

Operating materials and supplies

Held for use 45,498 (165) 45,333 

Held for repair 38,412 (19,206) 19,206 

Excess, obsolete, and unserviceable 411 (411) - 

 Operating materials and supplies total 84,321 (19,782) 64,539 

Total inventory, operating materials, and supplies $ 686,477 $ (135,350) $ 551,127 

Inventory

2008

Cost Allowance

$ 

Net

Held for sale $ 66,523 $ (96) 66,427

Held for repair 487,116 (96,240) 390,876 

Raw materials, finished goods, and other 26,299 (10,591) 15,708 

Excess, obsolete, and unserviceable 19,583 (19,583) - 

 Inventory total 599,521 (126,510) 473,011 

Operating materials and supplies

Held for use 48,845 - 48,845 

Held for repair 34,953 (17,972) 16,981 

Excess, obsolete, and unserviceable, net 526 (526) - 

 Operating materials and supplies total

Total inventory, operating materials, and supplies

 84,324 (18,498)

$ (145,008)

 65,826 

$ 683,845 $ 538,837 

Inventory is considered held for repair based on the 

condition of the asset or item, and the allowance for 

repairable inventory is based on the average historical 

cost of such repairs. 

The FAA transfers excess items for disposal into the 

Government-wide automated disposal system. Disposal 

proceeds, recognized upon receipt, may go to the U.S. 

Treasury’s General Fund or to an FAA appropriation, 

depending on the nature of the item and the disposal 

method. 
FEDERAL AVIATION ADMINISTRATION

112 NOTES TO THE FINANCIAL STATEMENTS 

Note 6. Property, Plant, and Equipment, Net 

Following are PP&E balances as of September 30, 2009 and 2008: 

2009

Acquisition Accumulated Net

Class of fixed asset value depreciation book value

Real property, including land $ 5,089,354 $ (2,732,102) $ 2,357,252 

Personal property 19,558,819 (11,081,159) 8,477,660 

Assets under capital lease (Note 9) 204,485 (96,036) 108,449 

Construction in progress 2,770,846 - 2,770,846 

Property not in use

Total property, plant, and equipment

 176,282 (150,153) 26,129

$ 27,799,786 $ (14,059,450) $ 13,740,336 

2008

Acquisition Accumulated Net

Class of fixed asset value depreciation book value

Real property, including land $ 4,928,461 $ (2,588,037) $ 2,340,424 

Personal property 19,290,502 (10,266,822) 9,023,680 

Assets under capital lease (Note 9) 166,387 (125,137) 41,250 

Construction in progress 2,341,968 - 2,341,968 

Property not in use

Total property, plant, and equipment

 95,013 (77,148) 17,865 

$ 26,822,331 $ (13,057,144) $ 13,765,187

The FAA’s CIP relates primarily to NAS assets, which 

are derived from centrally funded national systems 

development contracts, site preparation and testing, raw 

materials, and internal labor charges. 

Assets temporarily not in use, including decommissioned 

assets awaiting disposal, are reflected in FAA financial 

records as Property Not in Use.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 113

Note 7. Environmental Liabilities

Following are the FAA’s environmental liabilities as of September 30, 2009 and 2008:

2009 2008

Environmental remediation $ 555,421 $ 384,381 

Environmental cleanup and decommissioning 255,393 253,444 

 

Total environmental liabilities $ 810,814 $ 637,825 

Additional information on contingencies related to environmental projects is disclosed in Note 16.

Note 8. Employee-Related and Other Liabilities

Following are the FAA’s employee-related and other liabilities as of September 30, 2009 and 2008: 

2009

Non-current Current 

Intragovernmental liabilities liabilities Total

Advances received $ - $ 40,244 $ 40,244 

Accrued payroll & benefits payable to other agencies - 76,705 76,705 

Other liabilities - 17,988 

 

17,988 

Liabilities covered by budgetary or other resources - 134,937 134,937

Federal Employees' Compensation Act payable 120,066 90,949 211,015 

Other - 30,169 30,169 

Liabilities not covered by budgetary or other resources 120,066 121,118 241,184 

Intragovernmental total 120,066 256,055 376,121 

With the public

Advances received and other - 95,499 95,499 

Accrued payroll & benefits payable to employees - 260,448 

 

260,448

Liabilities covered by budgetary or other resources - 355,947 355,947

Accrued unfunded annual & other leave & assoc. benefits 49,289 351,426 400,715 

Sick leave compensation benefits for air traffic controllers 59,764 21,011 80,775 

Capital leases (Note 9) 92,548 23,292 115,840 

Legal claims - 41,000 41,000 

Other accrued liabilities 60,574 - 

 

60,574 

Liabilities not covered by budgetary or other resources 262,175 436,729 698,904

Public total

Total employee related and other liabilities

 262,175

$ 382,241 

 792,676

$ 1,048,731

 1,054,851

$ 1,430,972
FEDERAL AVIATION ADMINISTRATION

114 NOTES TO THE FINANCIAL STATEMENTS 

Intragovernmental

2008

Noncurrent 

liabilities

Current 

liabilities Total

Advances received $ - $ 48,017 $ 48,017 

Accrued payroll & benefits payable to other agencies - 67,523 67,523 

Other liabilities - 13,617 

 

13,617 

Liabilities covered by budgetary or other resources - 129,157 129,157

Federal Employees' Compensation Act payable 118,177 86,994 205,171 

Other - 44,674 

 

44,674 

Liabilities not covered by budgetary or other resources 118,177 131,668 249,845 

Intragovernmental total 118,177 260,825 379,002 

With the public

Advances received and other - 66,473 66,473 

Accrued payroll & benefits payable to employees - 227,360 

 

227,360

Liabilities covered by budgetary or other resources - 293,833 293,833

Accrued unfunded annual & other leave & assoc. benefits 48,386 344,989 393,375 

Sick leave compensation benefits for air traffic controllers 63,595 15,930 79,525 

Capital leases (Note 9) 49,271 12,400 61,671 

Legal claims - 109,450 109,450 

Other accrued liabilities 99,983 - 

 

99,983

Liabilities not covered by budgetary or other resources 261,235 482,769 744,004

Public total

Total employee-related and other liabilities

 261,235

$ 379,412

 776,602

$ 1,037,427

 1,037,837

$ 1,416,839

Accrued payroll and benefits to other agencies consist of 

FAA contributions payable to other Federal agencies for 

employee benefits. These include the FAA’s contributions 

payable toward life, health, retirement benefits, Social 

Security, and matching contributions to the Thrift 

Savings Plan.

An unfunded liability is recorded for the actual cost of 

workers’ compensation benefits to be reimbursed to 

the DOL, pursuant to the FECA. Because DOL bills the 

FAA 2 years after it pays such claims, the FAA’s liability 

accrued as of September 30, 2009, includes workers’ 

compensation benefits paid by the DOL during the 

periods July 1, 2007–June 30, 2009, and accrued liabilities 

for the quarter July 1, 2009–September 30, 2009. The 

FAA’s liability accrued as of September 30, 2008, included 

workers’ compensation benefits paid by the DOL during 

the period July 1, 2006–June 30, 2008, and accrued 

liabilities for the quarter July 1, 2008–September 30, 

2008. 

The estimated liability for accrued unfunded leave and 

associated benefits includes annual and other types of 

vested leave, and sick leave under the terms of certain 

collective bargaining agreements, including the NATCA 

agreement, Article 25, Section 13. For example, the 

NATCA agreement gives air traffic controllers, who are 

covered under FERS, the option to receive a lump sum 

payment for 40 percent of their accumulated sick leave 

as of their effective retirement date. Based on sick leave 

balances, this liability was $80.8 million and 

$79.5 million as of September 30, 2009 and 2008, 

respectively.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 115

The FAA estimated that 100 percent of its $41.0 million 

and $109.5 million legal claims liabilities as of September 

30, 2009 and 2008, respectively, would be paid from the 

permanent appropriation for judgments, awards, and 

compromise settlements (Judgment Fund) administered 

by the Treasury.

Other Accrued Liabilities with the Public is composed 

primarily of accruals for utilities, leases, and travel 

obligations. Total liabilities not covered by budgetary 

resources are presented in Note 15. 

Note 9. Leases 

Capital Leases 

Following is a summary of the FAA’s assets under capital lease as of September 30, 2009 and 2008:

2009 2008

Land, buildings, and machinery $ 204,485 $ 166,387 

Accumulated depreciation (96,036) (125,137) 

Assets under capital lease, net $ 108,449 $ 41,250

Following are the FAA’s future payments due on assets under capital lease as of September 30, 2009:

Future Payments Due by Fiscal Year

(Liabilities not covered by budgetary or other resources)

Year 1 (FY 2010) $ 15,769

Year 2 (FY 2011) 14,765

Year 3 (FY 2012) 11,586

Year 4 (FY 2013) 8,977

Year 5 (FY 2014) 8,698

After 5 Years 96,254

Less: Imputed interest (40,209)

Total capital lease liability $ 115,840

The FAA’s capital lease payments are authorized 

to be funded annually as codified in the U.S. Code, 

Title 49, Section 40110(c)(1), which addresses general 

procurement authority. The remaining principal 

payments are recorded as unfunded lease liabilities. The 

imputed interest is funded and expensed annually.
FEDERAL AVIATION ADMINISTRATION

116 NOTES TO THE FINANCIAL STATEMENTS 

Operating Leases

The FAA has operating leases for real property, aircraft, and telecommunications equipment. Following are future 

operating lease payments due as of September 30, 2009:

Fiscal Year

Year 1 (FY 2010) $ 165,302

Year 2 (FY 2011) 148,638

Year 3 (FY 2012) 106,162

Year 4 (FY 2013) 58,187

Year 5 (FY 2014) 42,471

After 5 Years 144,081

 Total future operating lease payments $ 664,841

Operating lease expense incurred during the years ended 

September 30, 2009 and 2008, was $214.1 million and 

$201.0 million, respectively, including General Services 

Administration leases that have a short termination 

privilege, but the FAA intends to remain in the lease. The 

operating lease amounts due after 5 years do not include 

estimated payments for leases with annual renewal 

options. Estimates of the lease termination dates are 

subjective, and any projection of future lease payments 

would be arbitrary. 

Note 10. Federal Employee Benefits Payable

As of September 30, 2009 and 2008, FECA actuarial 

liabilities were $901.3 million and $915.2 million, 

respectively. The DOL calculates the FECA liability for 

the DOT, and the DOT allocates the liability amount 

to the FAA based on actual workers’ compensation 

payments to FAA employees during the preceding 

4 years. FECA liabilities include the expected liability 

for death, disability, medical, and miscellaneous costs 

for approved compensation cases, plus a component for 

incurred but not reported claims. The estimated liability 

is not covered by budgetary or other resources and thus 

will require future appropriated funding. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 117

Note 11. Net Cost by Program and Other Statement of Net Cost Disclosures

The FAA’s four LOBs represent the programs reported on 

the Statement of Net Cost. Cost centers assigned to each 

LOB permit the direct accumulation of costs. Other costs 

that are not directly traced to each LOB, such as agency 

overhead, are allocated. 

Following are net costs for the years ended September 30, 

2009 and 2008, by strategic goal:

For the Year Ended September 30, 2009

Strategic Goal Areas

Organizational International 

Line of business programs Safety Capacity Excellence Leadership Total

Air Traffic Organization $ 7,924,375 $ 2,834,027 $ 109,001 $ 32,698 $ 10,900,101

Aviation Safety 1,158,316 942 8,356 9,297 1,176,911

Airports 2,118,569 1,915,629 403 - 4,034,601

Commercial Space Transportation 12,302 3,006 - - 15,308

Non-line of business programs 

Regional and center operations and other 97,029 7,914 157,362 1,506 263,811

Net cost $ 11,310,591 $ 4,761,518 $ 275,122 $ 43,501 $ 16,390,732

For the Year Ended September 30, 2008

Strategic Goal Areas

Organizational International 

Line of business programs Safety Capacity Excellence Leadership Total

Air Traffic Organization $ 7,678,165 $ 2,592,749 $ 105,295 $ 48,997 $ 10,425,206

Aviation Safety 1,131,312 1,270 13,050 9,240 1,154,872

Airports 1,970,680 1,782,621 374 - 3,753,675

Commercial Space Transportation 9,160 2,097 - - 11,257

Non-line of business programs 

Regional and center operations and other

Net cost

 68,819 5,613 111,611 1,068

4,384,350 $ 230,330 $ 59,305

 187,111

$ 10,858,136 $ $ 15,532,121
FEDERAL AVIATION ADMINISTRATION

118 NOTES TO THE FINANCIAL STATEMENTS 

Following is the FAA’s distribution of FY 2009 and FY 2008 net costs by intragovernmental-related activity versus with 

the public: 

For the Year Ended September 30, 2009

Intra- With the

Line of business programs governmental Public Total

Air Traffic Organization

Expenses $ 2,160,316 $ 9,011,539 $ 11,171,855

Less earned revenues (224,191) (47,563) (271,754)

Net costs 1,936,125 8,963,976 10,900,101

Aviation Safety

Expenses 266,429 920,727 1,187,156

Less earned revenues (2,089) (8,156) (10,245)

Net costs 264,340 912,571 1,176,911

Airports

Expenses 25,276 4,009,694 4,034,970

Less earned revenues - (369) (369)

Net costs 25,276 4,009,325 4,034,601

Commercial Space Transportation

Expenses 3,611 11,697 15,308

Net costs 3,611 11,697 15,308

Non-line of business programs

Regional and center operations and

other programs

Expenses 123,542 475,139 598,681

Less earned revenues (55,304) (279,566) (334,870)

Net costs 68,238 195,573 263,811

Net cost of operations

Total expenses 2,579,174 14,428,796 17,007,970

Less earned revenues (281,584) (335,654) (617,238)

Net costs $ 2,297,590 $ 14,093,142 $ 16,390,732
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 119

For the Year Ended September 30, 2008

Intra- With the

Line of business programs governmental Public Total

Air Traffic Organization

Expenses $ 2,139,999 $ 8,456,418 $ 10,596,417

Less earned revenues (170,683) (528) (171,211)

Net costs 1,969,316 8,455,890 10,425,206

Aviation Safety

Expenses 174,605 986,409 1,161,014

Less earned revenues (6,117) (25) (6,142)

Net costs 168,488 986,384 1,154,872

Airports

Expenses 18,138 3,735,702 3,753,840

Less earned revenues - (165) (165)

Net costs 18,138 3,735,537 3,753,675

Commercial Space Transportation

Expenses 1,693 9,564 11,257

Net costs 1,693 9,564 11,257

Non-line of business programs

Regional and center operations and

other programs

Expenses 83,917 474,077 557,994

Less earned revenues (17,718) (353,165) (370,883)

Net costs 66,199 120,912 187,111

Net cost of operations

Total expenses 2,418,352 13,662,170 16,080,522

Less earned revenues (194,518) (353,883) (548,401)

Net costs $ 2,223,834 $ 13,308,287 $ 15,532,121

Note 12. Earmarked Funds

The FAA’s earmarked funds are presented in two 

classifications: the first classification is composed of the 

AATF and all related funds that receive funding from the 

AATF; and includes the Operations Trust Fund; Grantsin-Aid for Airports; F&E; and R,E,&D, all of which are 

funded exclusively by the AATF. The AATF classification 

also includes the Operations General Fund, which is 

primarily funded through transfers from Operations—

AATF, but is additionally supplemented by the General 

Fund of the U.S. Treasury through annual appropriations. 

Because the Operations General Fund is primarily 

funded from the AATF, and because it is not reasonably 

possible to differentiate cash balances between those 

originally flowing from the AATF versus general fund 

appropriations, the Operations General Fund is presented 

as an earmarked fund. In addition, this note presents 

only the earmarked funds that retain available financing 

sources. As such, the balances in the PP&E fund, though 

funded from the F&E earmarked fund, are reported as 

other funds and therefore are excluded.
FEDERAL AVIATION ADMINISTRATION

120 NOTES TO THE FINANCIAL STATEMENTS 

The second classification of earmarked funds includes the 

Aviation Insurance Revolving Fund and Aviation User 

Fees. 

Airport and Airway Trust Fund

The FAA’s consolidated financial statements include the 

results of operations and financial position of the AATF. 

The U.S. Congress created the AATF with the passage of 

the Airport and Airway Revenue Act of 1970. 

The Act provides a dedicated source of funding to the 

Nation’s aviation system through the collection of 

several aviation-related excise taxes. The IRS collects 

these taxes on behalf of the FAA’s AATF. These taxes can 

be withdrawn only as appropriated by the U.S. Congress. 

The Treasury OTA estimates the amount collected 

monthly and subsequently adjusts the estimates to 

reflect actual collections quarterly. The total taxes 

recognized in the FAA’s FY 2009 and FY 2008 financial 

statements included the OTA’s estimate of $2.8 billion 

for the quarter ended September 30, 2009, and 

$2.9 billion for the quarter ended September 30, 2008.

As discussed in Note 1 E., FY 2009 excise tax revenue 

includes amounts certified as actual by the IRS for the 

first three quarters and amounts estimated by the OTA 

for the fourth quarter. The following table summarizes 

the fourth-quarter excise taxes accrued in the FAA’s FY 

2008 and 2007 financial statements and the amounts 

certified as actual by the IRS several months after the 

issuance of those financial statements:

FY 2008 FY 2007

Estimates $ 2,901,280 $ 2,818,050

Actuals 2,891,422 3,017,496

 Under (Over) Accrual $ (9,858) $ 199,446

Excise taxes estimated by the OTA in the first, second, 

and third quarters exceeded amounts subsequently 

certified as actual by the IRS by $53.8 million, 

$282.5 million, and $951.4 million, respectively. 

The large downward adjustment for the third quarter 

of FY 2009 was the result of an inflated estimate 

distribution from the Treasury to the AATF. However, 

the OTA modified its fourth quarter distribution 

calculation estimate of excise taxes for this matter. It 

is expected that this modification will minimize the 

variance between the fourth quarter FY 2009 estimate 

and the corresponding subsequent IRS-certified amount, 

expected to be reported in January 2010.

Other Earmarked Funds

The FAA has authority under the Aviation Insurance 

Program to insure commercial airlines that may be 

called upon to perform various services considered 

necessary to the foreign policy interests of the United 

States, when insurance is not available commercially or 

is available only on unreasonable terms and conditions. 

The insurance issued, commonly referred to as war-risk 

insurance, covers losses resulting from war, terrorism, or 

other hostile acts. The FAA reported premium insurance 

revenues of $154.8 million and $171.3 million for the 

periods ended September 30, 2009 and 2008, respectively. 

The Aviation Insurance Program activity is reported 

below as other earmarked funds. The Aviation Insurance 

Program is discussed further in Note 1.W. and Note 16. 

Aviation User Fees, commonly referred to as overflight 

fees, are charged to commercial airlines that fly in U.S.-

controlled air space, but neither take off nor land in 

the United States. The FAA reported overflight fees of 

$53.2 million and $58.5 million for the periods ended 

September 30, 2009 and 2008, respectively. Aviation User 

Fees activity is reported below as other earmarked funds.

Fiscal data as of, and for the years ended September 30, 

2009 and 2008, are summarized in the following charts. 

Intraagency transactions have not been eliminated in the 

amounts presented. 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 121

2009

Other Earmarked Total Earmarked

Balance Sheet AATF Funds Funds

Assets

Fund balance with Treasury $ (204,227) $ 2,713,909 $ 2,509,682

Investments, net 7,829,468 1,340,717 9,170,185

Accounts receivable, net - 3,953,310 3,953,310

Other assets 46,290 3,582,635 3,628,925

Total assets $ 7,671,531 $ 11,590,571 $ 19,262,102

Liabilities and net position

AATF amounts due to FAA $ 3,772,213 $ - $ 3,772,213

Other liabilities - 3,111,303 3,111,303

Unexpended appropriations - 1,142,193 1,142,193

Cumulative results of operations 3,899,318 7,337,075 11,236,393

Total liabilities and net position $ 7,671,531 $ 11,590,571 $ 19,262,102

Statement of net cost 

Program costs $ 11,783,177 $ 2,946,927 $ 14,730,104

Less earned revenue: -

Aviation insurance premiums - (154,794) (154,794) 

Overflight user fees - (53,194) (53,194) 

Other revenue - (265,022) (265,022) 

Net cost of operations $ 11,783,177 $ 2,473,917 $ 14,257,094

Statement of changes in net position

Cumulative results beginning of period $ 4,822,612 $ 6,359,617 $ 11,182,229

Nonexchange revenue:

Passenger ticket tax 7,465,647 - 7,465,647

International departure tax 2,187,182 - 2,187,182

Investment income 281,994 - 281,994

Fuel taxes 556,570 - 556,570

Waybill tax 469,881 - 469,881

Tax refunds and credits (110,034) - (110,034)

Other revenue 8,643 24,448 33,091

Budgetary financing sources - 3,346,527 3,346,527

Other financing sources - 80,400 80,400

Unexpended appropriations - 1,142,193 1,142,193

Net cost of operations (11,783,177) (2,473,917) (14,257,094)

Change in net position

Net position end of period

 (923,294) 2,119,651

$ 8,479,268

 1,196,357

$ 3,899,318 $ 12,378,586
FEDERAL AVIATION ADMINISTRATION

122 NOTES TO THE FINANCIAL STATEMENTS 

2008

Other Earmarked Total Earmarked

Balance Sheet AATF Funds Funds

Assets

Fund balance with Treasury $ 848,372 $ 2,748,123 $ 3,596,495

Investments, net 7,746,547 1,099,803 8,846,350

Accounts receivable, net - 3,913,411 3,913,411

Other assets - 2,569,494 2,569,494

Total assets $ 8,594,919 $ 10,330,831 $ 18,925,750

Liabilities and net position

AATF amounts due to FAA $ 3,772,307 $ - $ 3,772,307

Other liabilities - 3,050,320 3,050,320

Unexpended appropriations - 920,894 920,894

Cumulative results of operations 4,822,612 6,359,617 11,182,229

Total liabilities and net position $ 8,594,919 $ 10,330,831 $ 18,925,750

Statement of net cost 

Program costs $ 13,466,390 $ 692,130 $ 14,158,520

Less earned revenue: -

Aviation insurance premiums - (171,271) (171,271)

Overflight user fees - (58,498) (58,498)

Other revenue - (176,514) (176,514) 

Net cost of operations $ 13,466,390 $ 285,847 $ 13,752,237

Statement of changes in net position

Cumulative results beginning of period $ 6,046,786 $ 5,600,561 $ 11,647,347

Nonexchange revenue:

Passenger ticket tax 8,260,611 - 8,260,611

International departure tax 2,462,375 - 2,462,375

Investment income 429,572 - 429,572

Fuel taxes 624,493 - 624,493

Waybill tax 521,040 - 521,040

Tax refunds and credits (55,957) - (55,957)

Other revenue 82 41,663 41,745

Budgetary financing sources - 2,387,128 2,387,128

Other financing sources - (1,383,888) (1,383,888) 

Unexpended appropriations - 920,894 920,894

Net cost of operations (13,466,390) (285,847) (13,752,237)

Change in net position

Net position end of period

 (1,224,174) 1,679,950

$ 7,280,511

 455,776

$ 4,822,612 $ 12,103,123
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 123

 Note 13. Imputed Financing Sources

The FAA recognizes as imputed financing the amount 

of accrued pension and post-retirement benefit expenses 

for current employees. The assets and liabilities 

associated with such benefits are the responsibility of the 

administering agency, the OPM. Amounts paid from the 

U.S. Treasury’s Judgment Fund in settlement of claims or 

court assessments against the FAA also are recognized as 

imputed financing. For the fiscal years ended September 

30, 2009 and 2008, imputed financing was as follows:

2009 2008

Office of Personnel Management $ 580,340 $ 550,856

Treasury Judgment Fund 

Total imputed financing sources

 81,937 13,474

$ 662,277 $ 564,330

Note 14. Statement of Budgetary Resources Disclosures

The Required Supplementary Information section of 

this report includes a schedule of budgetary resources by 

each of the FAA’s major fund types. Budget authority 

as reported in the Combined Statements of Budgetary 

Resources includes amounts made available to the FAA 

from general, earmarked, and special funds. In contrast, 

appropriations received as reported in the Consolidated 

Statements of Changes in Net Position pertain only to 

amounts made available to the FAA from general funds. 

The following is a reconciliation of these amounts:

2009 2008

Combined Statement of Budgetary

 Resources—budget authority $ 20,730,694 $ 19,485,521 

Less amounts made available to FAA

 from AATF-dedicated collections (15,526,738) (17,042,518)

Net transfers of budget authority and other (46,300) (41,566)

Less special fund aviation user fees (53,194) (58,498)

Consolidated Statement of Changes in Net

 Position—appropriations received $ 5,104,462 $ 2,342,939

FAA had rescissions of budgetary resources in FY 2009 

and FY 2008 to Grant-in-Aid to Airports of $93.2 million 

and $270.5 million, respectively. 

As of September 30, 2009 and 2008, the amount of 

budgetary resources obligated for undelivered orders was 

$8.8 billion and $8.3 billion, respectively. 

Budget authority on the FY 2008 Combined Statement 

of Budgetary Resources includes contract authority of 

$4.4 billion and expired funds of $43 million that are 

not presented in the Budget of the U.S. Government. 

Also, obligations incurred on the FY 2008 Combined 

Statement of Budgetary Resources includes $92 million 

of expired funds and $676 million of certain reimbursable 

and revolving fund obligations incurred that are not 

presented in the Budget of the U.S. Government. As 

a result, the FAA’s FY 2008 Combined Statement of 

Budgetary Resources differs from FY 2008 actuals 

reported in the appendix of the FY 2009 Budget of the 

U.S. Government (The Budget of the U.S. Government 
FEDERAL AVIATION ADMINISTRATION

124 NOTES TO THE FINANCIAL STATEMENTS 

is available online at http://www.whitehouse.gov/

omb). As of the date of issuance of the FAA’s FY 2009 

Combined Statement of Budgetary Resources, the 

Budget of the U.S. Government for FY 2011, which will 

contain actual FY 2009 amounts, was not yet published. 

The OMB is expected to publish this information early 

in calendar year 2010.

OMB Circular A-136 requires the following additional 

Combined Statement of Budgetary Resources disclosures:

• Congress mandated permanent indefinite 

appropriations for the F&E; Grants-in-Aid; and 

R,D,&E to fully fund special projects that were 

ongoing and spanned several years.

• The FAA does not have obligations classified as 

“exempt from apportionment.” However, during 

FY 2009 and FY 2008, direct and reimbursable 

obligations incurred against amounts apportioned 

under categories A and B, as defined in OMB Circular 

No. A-11, Part 4, Instructions on Budget Execution, 

were as follows:

2009 2008

Direct Reimbursable Direct Reimbursable

Category A $ 5,797,847 $ 477,830 $ 6,959,806 $ 416,908

Category B

Total

 16,173,757 264,836

$ 21,971,604 $ 742,666 

 14,686,661 259,427

$ 21,646,467 $ 676,335

Statement of Budgetary Resources vs. Budget of the U.S. Government

Budgetary Obligations Distributed 

Authority Incurred Offsetting Receipts

FAA Combined Statement of Budgetary Resources $ 19,485,000 $ 22,323,000 $ (1,970) $ 

Net Outlays

14,720,000

Reconciliation to Budget of the U.S. Government:

 Liquidation of contract authorization (4,399,000) - - - 

 Expired funds 43,000 (92,000) - - 

 Rescissions (270,000) - - - 

 Aviation user fees (42,000) - - - 

 Reimbursable funds - (676,000) - - 

 Obligations from trust funds - (6,397,000) - - 

 Distributed offsetting receipts - - 1,970

Budget of the U.S. Government $ 14,817,000 $ 15,158,000 $ -

 - 

$ 14,720,000

Unobligated balances of budgetary resources for 

unexpired accounts are available in subsequent years 

until expiration, upon receipt of an apportionment from 

the OMB. Unobligated balances of expired accounts are 

not available. At the end of FY 2008, $19.3 million of 

obligated balances were in appropriations cancelled at 

year-end pursuant to 31 U.S.C. 1552 and thus have not 

been brought forward to FY 2009. Additionally, transfers 

in FY 2009 to the DOT for Essential Air Services also 

reduced balances available for obligation.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 125

Note 15. Financing Sources Yet To Be Provided

The following table shows the relationship between 

liabilities not covered by budgetary or other resources as 

reported on the balance sheets as of September 30, 2009 

and 2008, and the change in components of net cost 

of operations that will require or generate resources in 

future periods. 

2009 2008 Change

FECA payable (Note 8) $ 211,015 $ 205,171 $ 5,844

Capital Leases (Notes 8 and 9) 115,840 61,671 54,169

Environmental liabilities (Notes 7 and 16) 810,814 637,825 172,989

Unfunded annual & other leave & associated benefits (Note 8) 400,715 393,375 7,340

Sick leave compensation benefits (Note 8) 80,775 79,525 1,250

 Increases—components of net cost of operations

 requiring or generating resources in future periods (Note 17) 241,592

FECA actuarial (Note 10) 901,282 915,242 (13,960)

Legal claims (Note 8) 41,000 109,450 (68,450)

Other accrued liabilities (Note 8) 90,743 144,657 (53,914)

 Decreases—resources that fund expenses

 recognized in prior periods (Note 17) (136,324)

Total liabilities not covered by budgetary resources 2,652,184 2,546,916 105,268

Total liabilities covered by budgetary resources

Total liabilities

 1,787,989 1,412,489 375,500

$ 4,440,173 $ 3,959,405 $ 480,768

Note 16. Commitments, Contingencies, and Other Disclosures 

Reauthorization. Effective October 1, 2009, the FAA is 

operating under a continuing resolution, Public Law 111-

88, for its appropriation and many of its programmatic 

and financing authorities. The continuing resolution will 

be in effect through December 18, 2009, and includes a 

provision that allows the FAA to collect aviation-related 

excise taxes and continue spending at fiscal 2009 rates. It 

also provides sufficient contract authority for the AIP. 

Without legislative action, many of the FAA’s 

programmatic and financing authorities, including the 

AIP contract authority and the authority to collect excise 

taxes into and make expenditures from the AATF, will 

expire after December 31, 2009. The outcome of future 

legislative and executive negotiation of these matters is 

uncertain. 

Contract Options. As of September 30, 2009, the FAA 

had contract options of $10.2 billion. These contract 

options give the FAA the unilateral right to purchase 

additional equipment or services or to extend the 

contract terms. Exercising this right would require the 

obligation of funds in future years.

AIP. The AIP provides grants for the planning and 

development of public-use airports that are included 

in the National Plan of Integrated Airport Systems. 

Eligible projects generally include improvements related 

to enhancing airport safety, capacity, security, and 

environmental concerns. The FAA’s share of eligible costs 

for large and medium primary-hub airports is 75 percent 

with the exception of noise program implementation, 

which is 80 percent. For remaining airports (small 

primary, reliever, and general aviation), the FAA’s share of 

eligible costs is 95 percent.

The FAA has authority under 49 U.S.C. 47110(e) to issue 

letters of intent to enter into AIP grant agreements. 

The FAA records an obligation when a grant is awarded. 

Through September 30, 2009, the FAA issued letters of 

intent beginning in FY 1988 and extending through FY 

2020 totaling $5.9 billion. As of September 30, 2009, 

the FAA had obligated $4.9 billion of this total amount, 

leaving $1.0 billion unobligated.
FEDERAL AVIATION ADMINISTRATION

126 NOTES TO THE FINANCIAL STATEMENTS 

Through September 30, 2008, the FAA issued letters of 

intent beginning FY 1988 and extending through FY 

2020 totaling $5.7 billion. As of September 30, 2008, 

the FAA had obligated $4.6 billion of this total amount, 

leaving $1.1 billion unobligated.

Aviation Insurance Program. The FAA is authorized 

to issue hull and liability insurance under the Aviation 

Insurance Program for air carrier operations for which 

commercial insurance is not available on reasonable 

terms and when continuation of U.S. flag commercial 

air service is necessary in the interest of air commerce, 

national security, and the foreign policy of the United 

States. The FAA may issue: (1) nonpremium insurance 

and (2) premium insurance for which a risk-based 

premium is charged to the air carrier, to the extent 

practical.

During FY 2009, the FAA provided premium war-risk 

insurance to 63 airlines. For these airlines, combined 

hull and liability per occurrence coverage limits range 

from $100 million to $4 billion. The FAA also provided 

nonpremium, war-risk insurance to 36 carriers with 

1,593 aircraft for DoD charter operations for Central 

Command, and standby nonpremium, war-risk 

insurance policies for six carriers for State Department 

charter operations. 

As of September 30, 2009, there are no pending aviation 

insurance claims. There is approximately $1.3 billion 

available in the Aviation Insurance Revolving Fund to 

pay claims to carriers covered by premium insurance. 

If premium insurance claims should exceed that 

amount, additional funding could be appropriated from 

the General Fund. The DoD and State Department 

have agreed to pay claims to the carriers covered by 

nonpremium insurance. 

Legal Claims. As of September 30, 2009 and 2008, the 

FAA’s contingent liabilities for asserted and pending legal 

claims reasonably possible of loss were estimated at 

$93.0 million and $80.6 million, respectively. There are 

other claims that could result in significant payouts; 

however, it is not possible at this time to determine the 

probability of an unfavorable outcome, or to determine 

an estimate of potential loss for these matters, if any. 

Environmental Liabilities. As of September 30, 

2009, the FAA has estimated contingent liabilities, 

categorized as reasonably possible of $202.2 million 

related to environmental remediation. Contingency costs 

are defined for environmental liabilities as those costs 

that may result from incomplete design, unforeseen 

and unpredictable conditions, or uncertainties within a 

defined project scope.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

NOTES TO THE FINANCIAL STATEMENTS 127

Note 17. Reconciliation of Net Cost of Operations to Budget

This note reconciles the resources available to the FAA to finance operations and the net cost of operating FAA 

programs.

Resources used to finance activities 2009 2008

Budgetary resources obligated

Obligations incurred $ 22,714,270 $ 22,322,802

Less: Spending authority from offsetting collections and

receipts and recoveries of prior year obligations 6,599,676 7,645,191

Obligations, net of offsetting collections 16,114,594 14,677,611

Other resources

Transfers in/(out) without reimbursement (1,105) -

Imputed financing from costs absorbed by others 662,277 564,330

Net other resources used to finance activities 661,172 564,330

Total resources used to finance activities 16,775,766 15,241,941

Resources used to finance items not part of the net cost of operations

Change in budgetary resources obligated for goods, services, and

benefits ordered but not yet received 558,626 (103,627) 

Resources that fund expenses recognized in prior periods (decreases in

unfunded liabilities) (Note 15) 136,324 10,440

Resources that finance the acquisition of assets 1,046,529 1,249,137

Other resources or adjustments to net obligated resources that do not

affect net cost of operations 53,706 11,367

Total resources used to finance items not part of net cost of operations 1,795,185 1,167,317

Total resources used to finance net cost of operations 14,980,581 14,074,624

Components of net cost of operations that will not require or generate

resources in the current period

Components requiring or generating resources in future periods

Increases in annual leave liability and other unfunded liabilities (Note 15) 241,592 280,363

Components not requiring or generating resources in future periods

Depreciation and amortization 1,120,870 1,130,852

Other 47,689 46,282

Total components of net cost of operations that will not require or

generate resources 1,168,559 1,177,134

Total components of net cost of operations that will not require or 

generate resources in the current period

Net cost of operations

 1,410,151 1,457,497

$ 16,390,732 $ 15,532,121
FEDERAL AVIATION ADMINISTRATION

128 REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

Stewardship Investment

Non-Federal Physical Property

Airport Improvement Program

For the Fiscal Years Ended September 30

Unaudited

State/Territory 2009 2008 2007 2006 2005

Alabama $ 88,006 $ 53,568 $ 58,006 $ 75,753 $ 59,571

Alaska 258,493 228,082 238,486 182,020 210,446 

Arizona 81,016 87,839 64,170 100,235 85,226 

Arkansas 41,746 40,313 41,002 48,454 42,342 

California 257,045 402,378 377,060 330,255 322,128 

Colorado 127,959 54,327 95,914 90,421 61,916 

Connecticut 36,016 13,388 8,279 9,154 9,991 

Delaware 15,112 11,163 12,109 7,127 9,707 

District of Columbia 19,052 5,652 47,131 - 5,657 

Florida 209,747 157,214 209,219 210,656 181,151 

Georgia 112,453 118,644 78,564 70,484 128,053 

Hawaii 81,303 41,556 74,179 45,815 33,097 

Idaho 26,444 21,905 22,307 30,687 24,855 

Illinois 126,249 116,104 197,470 111,302 152,307 

Indiana 63,444 66,825 57,649 69,098 45,537 

Iowa 30,776 37,843 33,501 32,866 34,064 

Kansas 43,475 22,059 32,735 32,497 25,864 

Kentucky 47,411 32,981 62,393 70,784 64,216 

Louisiana 66,617 58,036 66,659 59,783 79,747 

Maine 21,130 26,631 24,413 16,960 26,324 

Maryland 26,262 30,575 52,523 54,956 38,864 

Massachusetts 77,193 42,092 30,217 70,894 27,907 

Michigan 95,534 121,795 99,889 120,606 137,814 

Minnesota 62,844 68,027 64,822 88,144 67,267 

Mississippi 43,608 69,768 69,488 40,229 41,696 

Missouri 79,620 104,980 91,667 92,826 116,612 

Montana 44,214 28,997 50,018 45,161 27,877 

Nebraska 46,884 17,051 30,227 31,567 28,633 

Nevada 62,106 51,045 58,106 95,972 56,148 

New Hampshire 21,930 24,337 49,344 17,327 22,245 

New Jersey 81,388 111,692 88,620 94,207 53,960 

New Mexico 25,966 23,273 27,373 27,799 19,761 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 129

State/Territory 2009 2008 2007 2006 2005

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

Stewardship Investment

Non-Federal Physical Property

Airport Improvement Program

For the Fiscal Years Ended September 30

Unaudited

State/Territory 2009 2008 2007 2006 2005

New York $ 111,873 $ 80,292 $ 121,806 $ 124,315 $ 118,853

North Carolina 105,959 97,242 70,696 79,245 102,669 

North Dakota 21,948 19,395 26,433 17,530 23,074 

Ohio 106,927 150,547 113,446 126,327 100,776 

Oklahoma 49,832 33,975 40,475 43,459 42,941 

Oregon 62,678 35,154 34,823 43,946 53,329 

Pennsylvania 112,739 119,807 90,909 135,097 126,833 

Rhode Island 7,441 13,177 24,985 16,085 11,901 

South Carolina 42,403 34,553 24,614 43,391 38,246 

South Dakota 32,142 29,557 24,161 18,489 22,065 

Tennessee 96,655 76,141 96,290 78,238 45,678 

Texas 289,801 299,473 212,737 260,496 235,495 

Utah 39,329 56,319 49,935 38,669 41,200 

Vermont 8,179 6,234 10,234 7,325 4,333 

Virginia 81,283 64,932 104,667 97,613 82,330 

Washington 133,508 97,078 111,797 97,519 168,764 

West Virginia 28,280 25,256 34,623 35,917 26,991 

Wisconsin 61,043 48,781 50,008 55,632 53,074 

Wyoming 25,486 19,323 18,687 25,509 38,536 

American Samoa 9,273 5,195 9,732 4,792 9,615 

Guam 38,245 18,683 29,920 12,428 11,137 

Northern Mariana Islands 8,678 12,151 20,024 13,302 10,274 

Puerto Rico 20,625 16,578 9,760 26,024 16,209 

Virgin Islands 3,698 6,892 4,732 1,114 4,702 

Administration 115,903 96,965 74,685 75,640 82,415 

 Totals $ 4,034,970 $ 3,753,840 $ 3,923,719 $ 3,852,141 $ 3,712,423 

The FAA makes project grants for airport planning 

and development under the AIP to maintain a safe and 

efficient nationwide system of public-use airports that 

meets both current and future needs of civil aeronautics. 

The FAA works to improve the infrastructure of the 

Nation’s airports, in cooperation with airport authorities, 

local and State governments, and metropolitan planning 

authorities.
FEDERAL AVIATION ADMINISTRATION

130 REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

 Department of Transportation

FEDERAL AVIATION ADMINISTRATION

 Stewardship Investment

Research and Development

For the Fiscal Years Ended September 30

Unaudited

Expenses FY 2009 FY 2008 FY 2007 FY 2006 FY 2005

Applied Research $ 95,764 $ 88,114 $ 102,782 $ 106,390 $ 103,659

Development 1,102 814 844 587 547

Administration 35,055 33,519 32,050 30,566 29,163

R&D Plant 3,381 3,498 4,217 3,821 5,287

Total $ 135,302 $ 125,945 $ 139,893 $ 141,364 $ 138,656

The FAA conducts research and provides the essential air 

traffic control infrastructure to meet increasing demands 

for higher levels of safety, efficiency, and environmental 

improvement.

Research priorities include aircraft structures and 

materials; fire and cabin safety; crash injury protection; 

explosive detection systems; ground deicing operations 

and decreased in-flight ice buildup; better tools to predict 

and warn of weather hazards, turbulence, and wake 

vortices; aviation medicine; and human factors. Human 

factors refer to research on how people (e.g., air traffic 

controllers, pilots) perform when interacting with, for 

example, technology and equipment under various 

conditions. Optimizing this interaction contributes to 

higher levels of safe air travel. 

Following are some of the FAA’s top FY 2009 research and 

development accomplishments: 

• The search for alternatives to conventionally derived 

aviation fuel has led to the development of a new 

ASTM standard, D7566, Specification for Aviation 

Turbine Fuels Containing Synthesized Hydrocarbons. 

The Commercial Aviation Alternative Fuel Initiative 

(CAAFI) played a key leadership role in achieving 

this major milestone which was introduced 

September 1, 2009. The new specification will allow 

the use of semisynthetic aviation fuel in commercial 

airliners. CAAFI stakeholders also took key steps 

to advance the acceptance and understanding 

of alternative aviation fuels by conducting three 

flight demonstrations on commercial airliners. In 

December 2008, an Air New Zealand Boeing 747 

made a demonstration flight with a bio-jet fuel. 

This was followed in January 2009 by a Continental 

Airlines Boeing 737 and a Japan Airlines Boeing 747. 

• The Aviation Weather Research Program completed 

concept development of methods that will enable 

customized 1–3 hour probabilistic forecasts, targeted 

initially, for the OEP 35 Airports. This capability 

will utilize current observations and past history to 

produce hourly forecasts in 5 minutes. This approach 

will enable timely forecasts and will be combined 

with numerical modeling techniques to extend the 

forecasts to 12 hours. This capability will provide a 

valuable tool for identifying hazardous ceiling and 

visibility conditions that impact traffic capacity at 

the OEP terminals. 

• Air traffic in the United States is expected to increase 

significantly during the next several decades. Some 

high-end estimates indicate that by 2025 total 

passenger enplanements may more than double and 

total aircraft operations may triple in comparison 

to today’s traffic. In the next 10 to 15 years, most 

U.S. tower facilities will reach the end of their useful 

life. New tower construction costs are escalating. To 

address these critical issues, the FAA has developed 

the NextGen Towers operational concept. The 

NextGen Towers concept reduces the need for 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

REQUIRED SUPPLEMENTARY INFORMATION 131

physical infrastructure associated with air traffic 

control towers and will provide a means to control 

airport traffic from the ground.

• The FAA, in conjunction with the airline industry, 

embarked on a series of tests to determine the 

optimum procedure for fighting a laptop computer 

fire on board an aircraft. Halon 1211, the typical 

fire extinguisher installed in passenger aircraft, was 

effective in extinguishing the burning electrolyte, 

but did not prevent adjacent cells from going into 

thermal runaway and catching on fire. It was 

determined that water was the most effective agent 

in cooling the remaining cells and stopping the chain 

reaction. A training video was developed by the Fire 

Safety Team, which illustrates effective and practical 

methods of extinguishing a cabin fire involving 

lithium batteries in a laptop computer. The video, 

“Extinguishing In-Flight Laptop Computer Fires,” 

is located in the announcements section of the Fire 

Safety Team Web site: http://www.fire.tc.faa.gov.

• For more than 50 years, the standard light source 

used for airfield lighting was the incandescent lamp. 

These lamps are not very efficient in producing 

light as most of the energy is released in the form 

of heat. With advancements in the LED field, it has 

become viable to consider their use as a replacement 

for the incandescent lamp. LEDs have the potential 

to provide significant energy savings, reduced 

maintenance, and overall life cycle cost savings 

while providing a more reliable visual cue. As part 

of the operational evaluation of LEDs, Runway 

Entrance Lights of the RWSL system at San Diego 

International Airport will be converted from 

incandescent to LED during Fiscal Year 2010. This 

will be the first use of red LEDs on an airport surface. 

REQUIRED SUPPLEMENTARY INFORMATION 

 U.S. Department of Transportation

 FEDERAL AVIATION ADMINISTRATION

 Supplementary Information

 Deferred Maintenance

 As of September 30, 2009

 Unaudited

Asset Costs to Return to

Category Method Condition* Acceptable Condition

Buildings Condition assessment 4&5 $ 111,298

Other structures

and facilities Condition assessment 4&5 $ 147,000

* Condition Rating Scale: 4=Poor; 5=Very Poor

Deferred maintenance is maintenance that was not 

performed when it should have been, or was scheduled 

to be performed but was delayed until a future period 

due to a lack of resources or funding. The FAA reports 

deferred maintenance only on assets with condition 

ratings of 4 and 5, in compliance with SFFAS Number 6, 

Accounting for PP&E; SFFAS Number 8, Supplemental 

Stewardship Reporting; and SFFAS Number 14, 

Amendments to Deferred Maintenance Reporting 

(amends SFFAS 6 and 8). 

Deferred maintenance is estimated using condition 

assessment surveys and includes the following 

buildings, structures, and facilities: En Route, Terminal, 

FAA Technical Center, FAA Aeronautical Center, and 

unstaffed facilities. The FAA recognizes maintenance 

expense as incurred.
FEDERAL AVIATION ADMINISTRATION

132 REQUIRED SUPPLEMENTARY INFORMATION U. S. Department of Transportation FEDERAL AVIATION ADMINISTRATION Schedule of Budgetary Resources by Major Fund Type As of September 30, 2009 Unaudited Trust Fund Trust Fund Trust Fund Research, Aviation Grants-in-Aid Facilities & Eng., & Insurance Franchise Other Combined Budgetary Resources to Airports Equipment Development Revolving Fund Operations Funds Total Unobligated balance brought forward and transfers $ 102,772 $ 1,146,277 $ 38,981 $ 1,136,744 $ 192,909 $ 181,883 $ 22,714 $ 2,822,280 Recoveries of prior year obligations 145,691 139,341 4,680 8 19,941 75,716 - 385,377 Budget authority 7,500,000 2,689,931 171,010 - - 9,042,467 1,327,286 20,730,694 Spending authority from offsetting collections 15 105,540 4,546 180,755 435,747 5,437,549 444 6,164,596 Nonexpenditure transfers, net - - - - - 3,700 (50,000) (46,300) Permanently not available Total Budgetary Resources $ (3,693,200) - (1,972) - 4,081,089 $ 217,245 $ 1,317,507 - (49,062) - (3,744,234) 4,055,278 $ $ 648,597 $ 14,692,253 $ 1,300,444 $ 26,312,413 Status of Budgetary Resources

Obligations incurred $ 3,660,582 $ 2,748,720 $ 149,127 $ 6,643 $ 474,226 $ 14,506,401 $ 1,168,571 $ 22,714,270

Unobligated balances—available 212 1,212,134 61,600 31,465 174,371 95,800 131,873 1,707,455

Unobligated balances—not available

Total Status of Budgetary Resources $

394,484 120,235 6,518 1,279,399

 4,081,089 $ 217,245 $ 1,317,507

- 90,052 - 1,890,688

4,055,278 $ $ 648,597 $ 14,692,253 $ 1,300,444 $ 26,312,413

Change in Obligated Balances

Obligated balance, net, beginning of period $ 5,064,438 $ 1,785,810 $ 137,523 $ 5,827 $ 62,962 $ 1,414,982 $ 2 $ 8,471,544

Obligations incurred 3,660,582 2,748,720 149,127 6,643 474,226 14,506,401 1,168,571 22,714,270

Gross outlays (3,876,472) (2,541,066) (144,063) (5,642) (427,694) (14,376,739) (181,484) (21,553,160)

Recoveries of prior year obligations, actual (145,691) (139,341) (4,680) (8) (19,941) (75,716) - (385,377)

Change in uncollected customer payments from 

 Federal sources

Obligated balance, net, end of period $

 - (24,330) (3,958) -

 1,829,793 $ 133,949 $ 6,820

 58,529 (60,532) - (30,291)

 4,702,857 $ $ 148,082 $ 1,408,396 $ 987,089 $ 9,216,986

Obligated balance, net, end of period 

Unpaid obligations $ 4,702,914 $ 1,944,592 $ 147,116 $ 6,820 $ 166,251 $ 1,725,383 $ 987,089 $ 9,680,165

Uncollected customer payments from -

 Federal sources

Total unpaid obligated balance, net

 (57) (114,799) (13,167) - (18,169) (316,987) - (463,179)

 end of period $ 4,702,857 $ 1,829,793 $ 133,949 $ 6,820 $ 148,082 $ 1,408,396 $ 987,089 $ 9,216,986

Net Outlays

Gross outlays $ 3,876,472 $ 2,541,066 $ 144,063 $ 5,642 $ 427,694 $ 14,376,739 $ 181,484 $ 21,553,160

Offsetting collections (16) (81,211) (587) (180,755) (494,276) (5,377,016) (444) (6,134,305)

 Distributed offsetting receipts

Net Outlays $

 - - - -

2,459,855 $ 143,476 $ (175,113)

 - - (49,703) (49,703)

 3,876,456 $ $ (66,582) $ 8,999,723 $ 131,337 $ 15,369,152
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

REQUIRED SUPPLEMENTARY INFORMATION 133

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

Schedule of Budgetary Resources by Major Fund Type

As of September 30, 2008

Unaudited

Trust Fund

Trust Fund

Grants-in-Aid

Trust Fund

Facilities &

Research, Aviation

Franchise Other Combined

Budgetary Resources to Airports

Eng., & Insurance

Equipment Development Revolving Fund Operations Funds Total

Unobligated balance brought forward and transfers $ 203,054 $ 1,117,706 $ 31,341 $ 939,626 $ 162,635 $ 288,338 $ 10,968 $ 2,753,668

Recoveries of prior year obligations 160,164 168,813 10,523 53 42,546 88,977 - 471,076

Budget authority 8,074,000 2,471,327 146,831 - - 8,740,000 53,363 19,485,521

Spending authority from offsetting collections 10,973 54,090 6,901 199,545 403,080 6,499,577 (51) 7,174,115

Nonexpenditure transfers, net - - - - - - (41,566) (41,566)

Permanently not available (4,669,500) - (6,015) - - (22,217) - (4,697,732)

Total Budgetary Resources $ 3,778,691 $ 3,811,936 $ 189,581 $ 1,139,224 $ 608,261 $ 15,594,675 $ 22,714 $ 25,145,082

Status of Budgetary Resources

Obligations incurred $ 3,675,919 $ 2,665,659 $ 150,600 $ 2,480 $ 415,352 $ 15,412,792 $ - $ 22,322,802Unobligated balances—available 102,772 1,047,013 32,911 4,668 173,561 34,701 - 1,395,626

Unobligated balances—not available - 99,264 6,070 1,132,076 19,348 147,182 22,714 1,426,654

Total Status of Budgetary Resources $ 3,778,691 $ 3,811,936 $ 189,581 $ 1,139,224 $ 608,261 $ 15,594,675 $ 22,714 $ 25,145,082

Change in Obligated Balances

Obligated balance, net, beginning of period $ 5,367,986 $ 1,800,673 $ 122,913 $ 8,975 $ 104,032 $ 1,108,611 $ 5 $ 8,513,195

Obligations incurred 3,675,919 2,665,659 150,600 2,480 415,352 15,412,792 - 22,322,802

Gross outlays (3,819,303) (2,559,690) (119,172) (5,575) (379,211) (15,072,922) (3) (21,955,876)

Recoveries of prior year obligations, actual (160,164) (168,813) (10,523) (53) (42,546) (88,977) - (471,076)

Change in uncollected customer payments from  Federal sources - 48,068 (6,382) - (34,665) 55,478 - 62,499

Obligated balance, net, end of period $ 5,064,438 $ 1,785,897 $ 137,436 $ 5,827 $ 62,962 $ 1,414,982 $ 2 $ 8,471,544

Obligated balance, net, end of period -88 86

Unpaid obligations $ 5,064,498 $ 1,876,366 $ 146,645 $ 5,827 $ 139,659 $ 1,671,435 $ 2 $ 8,904,432

Uncollected customer payments from  Federal sources (60) (90,469) (9,209) - (76,697) (256,453) - (432,888)

Total unpaid obligated balance, net end of period $ 5,064,438 $ 1,785,897 $ 137,436 $ 5,827 $ 62,962 $ 1,414,982 $ 2 $ 8,471,544

Net Outlays

Gross outlays $ 3,819,303 $ 2,559,690 $ 119,172 $ 5,575 $ 379,211 $ 15,072,922 $ 3 $ 21,955,876

Offsetting collections (10,986) (102,085) (604) (199,930) (368,415) (6,555,055) 51 (7,237,024)

 Distributed offsetting receipts

Net Outlays

 - - - -

2,457,605 $ 118,568 $ (194,355)

 - - (1,970) (1,970)

$ 3,808,317 $ $ 10,796 $ 8,517,867 $ (1,916) $ 14,716,882
FEDERAL AVIATION ADMINISTRATION

134 ADMINISTRATIVE SERVICES FRANCHISE FUND

ADMINISTRATIVE SERVICES FRANCHISE FUND

Background

Public Law 104-205, Department of Transportation and 

Related Agencies Appropriation Act, 1997, authorized 

the FAA to establish an Administrative Services Franchise 

Fund (Franchise Fund). The Franchise Fund is designed 

to create competition within the public sector in the 

performance of a wide variety of support services. 

It allows for the establishment of an environment 

to maximize the use of internal resources through 

the consolidation and joint-use of like functions and 

the recognition of economies of scale and efficiencies 

associated with the competitive offering of services to 

other Government agencies.

The FAA’s Franchise Fund is composed of several 

programs, within which it offers a wide variety of 

services. These services include accounting, travel, 

duplicating, multimedia, information technology, 

logistics and material management, aircraft maintenance, 

international training, and management training. 

The Franchise Fund’s major customers are FAA LOB 

programs. Other customers include DOT entities, 

non-DOT government agencies, and international 

government entities.

Description of Programs and Services

Several programs within the Franchise Fund are 

organized around an Enterprise Services Center (ESC) 

concept, designed to integrate the key components 

necessary to be a full-service financial management 

provider. The efficiencies and economies of scale created 

by this integration offer the opportunity to compete for 

customers seeking a provider of financial management 

services. As new customers come on board, this further 

reduces the cost of providing the services by spreading 

the fixed cost of operations over a larger customer base. 

Following are the three components of the ESC, all 

falling within the single Franchise Fund:

• Enterprise System—configuration and support of 

application software and databases

• Financial Operations—transaction processing, 

financial reporting, and analysis services 

• Information Technology—hosting, 

telecommunications, information system security, 

and end-user support services

During FY 2005, the OMB selected the ESC as a Financial 

Management Center of Excellence (COE). As a COE, the 

ESC now has the ability to compete to provide financial 

management services for other Government agencies. 

The ESC currently provides financial management 

services to all DOT agencies, the National Endowment 

for the Arts, Commodity Futures Trading Commission, 

Institute of Museum and Library Services, and the 

U.S. GAO, and also has several proposals out to other 

agencies.

In addition to being selected as a COE, the ESC was 

chosen by the FAA Administrator to serve as the 

consolidated provider of all financial management 

services for all FAA organizations. The ESC committed 

to providing an improved level of service, meeting all 

Joint Financial Management Improvement Program 

requirements.

The Franchise Fund also includes the following program 

areas:

The Aircraft Maintenance and Engineering Group 

in the office of Aviation System Standards is located at 

the Mike Monroney Aeronautical Center (Aeronautical 

Center) in Oklahoma City. It provides total aircraft 

support including maintenance, quality assurance, and 

overall program management. This service includes 

preventive, as well as repair/overhaul and/or modification 

requirements, and reliability and maintainability studies. 

The Aircraft Maintenance and Engineering Group can 

provide full or partial support depending on customer 

requirements, from short-term preventive maintenance 

or one-time engineering tasks to more involved activities 

such as a full complement of maintenance services with 

quality assurance and engineering support.

The CMEL, located at Palm Coast, FL, provides 

nontechnical training in support of the FAA mission. 

The center designs and delivers face-to-face, centralized 

training both onsite and at field locations. Students also 

complete more than 5,000 distance learning programs 

each year. CMEL is fully accredited with commendations 

by the Commission on Occupational Education, and 

the American Council on Education has determined 

that CMEL courses are worthy of upper-division college 

credit. Federal, professional, and local communities also 

recognize the CMEL as a premier resource for leadership 

and team-building training.
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

ADMINISTRATIVE SERVICES FRANCHISE FUND 135

The International Training Division (ITD) in the 

FAA Academy at the Aeronautical Center in Oklahoma 

City delivers technical assistance and training to 

enhance international aviation safety and security while 

promoting U.S. aviation system technologies, products, 

and services overseas. The products and services of the 

ITD include training program management, instructional 

services, training design/development/revision, technical 

training evaluations, and consulting services tailored 

to meet specifically defined needs of the FAA and its 

international customers.

The FAA Logistics Center, also located at the 

Aeronautical Center, provides comprehensive logistics 

support and a highly sophisticated level of maintenance 

and repair services to ensure the safety of the flying 

public and to satisfy the critical needs of the NAS 

and related requirements. Services include material 

management (e.g., provisioning, cataloging, acquisition, 

inventory management, inventory supply), reliable 

and cost-effective depot-level repair of line-replaceable 

units, life cycle and performance cost analysis, logistics 

automation, distribution services, disposal of items no 

longer required, and technical support in the repair and 

maintenance of NAS and related equipment.

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

FRANCHISE FUND

Condensed Information

ASSETS, LIABILITIES, and NET POSITION

(Dollars in Thousands)

Unaudited

As of September 30

2009 2008

Assets

Fund balance with Treasury $ 322,455 $ 255,873

Accounts receivable, net 2,522 6,082

Inventory and related property, net 473,770 457,302

General property, plant, and equipment, net 22,258 6,540

Other 556 491

Total assets $ 821,561 $ 726,288

Liabilities

Accounts payable $ 23,293 $ 15,440 

Advances from others 214,919 160,340

Employee-related 18,007 15,169

Other 3,611 4,309

Total liabilities 259,830 195,258 

Net position

Cumulative results of operations 561,731 531,030 

Total net position 561,731

Total liabilities and net position $ 821,561

 531,030

$ 726,288
FEDERAL AVIATION ADMINISTRATION

136 ADMINISTRATIVE SERVICES FRANCHISE FUND

U. S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

FRANCHISE FUND

Condensed Information

REVENUES AND EXPENSES

(Dollars in Thousands)

Unaudited

For the Years Ended

September 30

2009 2008

Enterprise Services Center Revenues $ 127,791 $ 109,592

Expenses 147,564 127,695

Profit/(loss) (19,773) (18,103)

Aircraft Maintenance and Enginering Group Revenues 55,999 51,722

Expenses 56,503 54,521

Profit/(loss) (504) (2,799)

FAA Academy Revenues 14,982 13,929

Expenses 15,730 13,475

Profit/(loss) (748) 454

FAA Logistics Center Revenues 282,652 266,208

Expenses 265,388 228,781

Profit/(loss) 17,264 37,427

Total Consolidated Revenues 481,424 441,451

Expenses 485,185 424,472

Profit/(loss) $ (3,761) $ 16,979
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

ADMINISTRATIVE SERVICES FRANCHISE FUND 137

U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

FRANCHISE FUND

Condensed Information

FINANCING SOURCES AND NET POSITION

(Dollars in Thousands)

Unaudited

Cumulative results of operations

2009 2008

Beginning balance, net position $ 531,030 $ 480,577

Financing sources

Transfers-in/out without reimbursement (17,665) (16,240)

Imputed financing from costs absorbed by others 52,127 49,714

Total financing sources 34,462 33,474

Profit (loss) (3,761)

Ending balance, net position $ 561,731

 16,979

$ 531,030
Early NextGen capabilities in use at several large airports, including those in Atlanta, Charlotte, and Newark, have contributed to more efficient 

arrival and departure performance.

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

OTHER ACCOMPANYING INFORMATION 139

OTHER ACCOMPANYING INFORMATION

INSPECTOR GENERAL’S TOP MANAGEMENT CHALLENGES FOR FY 2010

Each fiscal year, the DOT OIG identifies and reports the 

top challenges that management will face in the ensuing 

year. While prepared for the DOT as a whole, the report 

includes certain challenges that pertain specifically to 

the FAA. At the time of publication of the FAA’s FY 2009 

PAR, the OIG’s report had not been finalized. Therefore, 

we have included excerpts of the draft that pertain to the 

FAA.

Maximizing the Department’s Economic Recovery 

Investments 

• Enhancing oversight of ARRA spending 

• Reporting accurate and consistent job creation data 

Addressing Human Factors and Strengthening the 

Regulatory and Oversight Framework for Aviation 

Safety

• Increasing efforts to address human factors

• Providing an equivalent level of safety for passengers 

flying on-demand carriers by strengthening 

regulations and oversight 

• Maintaining momentum in joint FAA/industry 

efforts to improve runway safety 

Moving Toward the NextGen System and 

Improving Performance of the NAS

• Taking actions to deliver NextGen in the near-term 

and midterm 

• Maximizing the benefits of performance-based 

navigation in the NAS and keeping airspace redesign 

projects on track

• Improving programs for developing the next 

generation of air traffic controllers 

Improving Contract Management and Oversight

• Strengthening the DOT suspension and debarment 

program to effectively safeguard against awards to 

improper parties

• Improving award-fee contracting processes to meet 

acquisition outcomes

• Maintaining high ethical standards among DOT 

employees and fund recipients 

Enhancing the Ability to Combat Cyber Attacks 

and Improving the Governance of IT Resources 

• Establishing a robust information security program 

to support the DOT’s missions 

• Increasing security protection and resilience of the 

air traffic control system to reduce the risks of cyber 

attacks 

• Strengthening the privacy protection program to 

secure PII 

• Enhancing control of IT investments through 

oversight and accountability 

Strengthening the Department’s Acquisition 

Workforce

• Addressing acquisition workforce retention and 

recruitment concerns

• Ensuring a sufficient and competent acquisition 

workforce to meet mission needs 

Management Response

We agree that the FAA faces significant challenges 

in aviation, and we have aligned our resources and 

performance targets so that we can be successful. The 

challenges stated above will be met by focusing on 

improving safety, increasing capacity, and achieving 

organizational excellence.

The FAA is intrinsically aware of the sensitive nature 

of our ARRA responsibilities, and we have worked 

conscientiously to see that the Administration’s vision 

is carried out in the best interests of the taxpayer. We 

carefully considered the equitable distribution of funding 

throughout the country, while targeting the highest 

yields in safety and increased efficiencies for the flying 

public. A careful balance is in place to adequately apply 

ARRA resources across the network of acquisition 

programs to achieve the planned program benefits for all 

of the objectives in the NAS architecture. The 
FEDERAL AVIATION ADMINISTRATION

140 OTHER ACCOMPANYING INFORMATION

resource distribution is carefully weighed and considers 

criticality, complexity, and short- or long-term need 

of the requirement. Program oversight and project 

management are accorded the most careful attention 

to detail. Quarterly ARRA funds recipient reporting is 

carefully validated for accuracy and completeness in 

accordance with the Administration’s espoused goal of 

transparency and visibility. The FAA was the first agency 

to fully obligate $1 billion, and the first to successfully 

create viable data validation systems that ensure 

accurate funding and project tracking. Our continued 

commitment to success implementing the ARRA has 

helped earn our place as a recognized leader in the DOT’s 

efforts to bring Americans back to work.

Making a safe aviation system even safer is an ongoing 

challenge. Our safety record indicates that we have 

addressed identified risk factors that could cause an 

accident or incident. Our challenge now is to identify 

any remaining risks and eliminate, minimize, or 

manage them. We have already taken steps to address 

a number of the OIG’s recommendations regarding our 

oversight of the air carriers, as well as the outsourcing 

of aircraft maintenance. We are enhancing our current 

ACEP and reviewing field office compliance with policy 

and procedures of our national program for risk-based 

oversight, ATOS. We published an NPRM that addresses 

updated certification requirements for 23 turbojets. We 

will continue to use special conditions to establish the 

appropriate certification standards until new regulations 

are finalized. In general, we believe that introducing 

additional management controls in programs such as 

the Voluntary Disclosure Reporting Program and ATOS 

is beneficial. These are extremely valuable programs in 

terms of their contributions to the FAA’s safety mission.

Last year, the FAA initiated a Call to Action with our 

stakeholders to identify initiatives to improve oversight 

processes for aviation safety and pilot training. We 

identified several issues including pilot training and 

qualifications, cockpit discipline, flight crew fatigue, 

and consistency of safety standards and compliance 

between air transportation operators. We are updating 

our Advisory Circular on pilot records, setting the 

expectation that airlines request all records that are 

available from the FAA and previous employers when 

they hire a new pilot. We have revised our certification 

standards for transport category airplanes to ensure 

timely activation of the ice protection system. The rule 

requires that the ice protection system is designed to 

operate continuously, it is automatically activated, or it 

must alert the flight crew each time the system needs to 

be cycled. This new rule enhances safety by not relying 

on pilot observation alone to determine if an aircraft is 

accumulating ice. Piloting is a highly mobile profession, 

which means that pilots are often domiciled in places 

that are hundreds of miles from the airlines’ bases of 

operations. We are monitoring to determine if this has an 

impact on pilot fatigue and if it is an appropriate area for 

regulation.

Reducing the risk of potential runway incursions 

continues to be one of the FAA’s top safety priorities. 

We are continuing to deploy new technologies such as 

ASDE-X, RWSL, SMM, LCGS, and FAROS. With SMM 

Displays and Own-Ship Position, pilots will see exactly 

where their aircrafts are on the airfield, thus reducing the 

chances of losing situational awareness and being in the 

wrong place. We have reached agreements with several 

airlines to fund in-cockpit runway safety systems in 

exchange for critical operation data. The data will help 

the FAA evaluate the safety impact of SMM technology, 

and is expected to accelerate key safety capabilities 

necessary for the transition to NextGen. LCGS is a lowcost, commercially available radar surveillance system 

that we will install at certain small- and mediumsized airports that do not have ASDE (either ASDE-3 

or ASDE-X). FAROS is an automated safety system 

designed to notify pilots on approach to land that the 

runway is occupied or otherwise unsafe for landing. An 

enhanced version of FAROS (eFAROS) was installed at 

one airport and the short-term operational evaluation 

indicates that the system is effective. We have challenged 

our industry partners to step up their actions to make 

runways safe, and they are responding by improving the 

markings and paint on taxiways at hundreds of airports 

around the country. As advanced technology systems 

are implemented, their expected cumulative effect is 

to further diminish the number of incursions and their 

severity.

Modernizing the NAS will require adept management 

of the highly complex, multiyear initiative known as 

NextGen. NextGen is needed to improve efficiency, 
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

OTHER ACCOMPANYING INFORMATION 141

create additional capacity, provide enhancements to 

safety and environmental performance, and usher 

aviation into the satellite era. As we lay the groundwork 

for this dramatic transformation, new technology and 

procedures are already being implemented to provide 

immediate benefits to operators. With these advances, we 

are able to take advantage of initiatives such as RNAV/

RNP, ADS-B, Data Communication (DataComm), and 

En Route Modernization (ERAM). A key challenge is 

reducing risk with the introduction of these initiatives. 

We will continue to identify potential opportunities to 

accelerate the deployment of NextGen capabilities and 

to deliver additional benefits. This will be done carefully 

and methodically to ensure a cohesive system, so that we 

can maximize the benefits of NextGen.

RNAV allows aircraft to fly on any desired flight 

path with the support of ground- or space-based 

navigational aids, within the limits of the capability 

of the systems onboard the aircraft, or a combination 

of both capabilities. This helps solve operational issues 

by making aircraft approaches available in areas where 

we cannot install, operate, or maintain a ground-based 

navigational aid. RNP enhances a pilot’s situational 

awareness by providing the aircraft’s navigation system 

with the ability to monitor the navigation performance 

it achieves and informing the crew if the requirement 

is not met during a flight operation. The benefits of 

RNAV/RNP begin today. Aircraft capable of more 

precise navigation can fly paths that reduce noise over 

communities and environmentally sensitive areas. These 

procedures should reduce fuel usage significantly, leading 

to less carbon emissions.

Expansion of surveillance coverage through ADS-B is 

essential to support air traffic control modernization 

efforts. ADS-B enhances pilots’ situational awareness 

by allowing them to see radar-like displays of airborne 

traffic, weather conditions, and flight-restricted areas 

on their cockpit displays that update in real time and 

do not degrade with distance or terrain. The improved 

situational awareness will mean that pilots will be 

able to fly at safe distances from one another with less 

assistance from air traffic controllers. Airspace can be 

better utilized by providing the capability for reduced 

separation and allowing for greater predictability 

in departure and arrival times. ADS-B and other 

complementary improvements have already enhanced 

safety by reducing the accident rate.

Air traffic management today is dependent on rapid 

reliable voice communications between air traffic 

controllers and pilots. This process is labor intensive, 

time consuming, and is prone to verbal communication 

errors. DataComm will bridge the gap between current 

voice-only air traffic control and the data-intensive 

NextGen. It will provide two-way data transmissions 

directly to pilots and their flight management systems. 

DataComm will improve on-time performance; reduce 

delays, emissions and noise; and enhance safety. This 

will enable the FAA to meet the growing demand for air 

travel, all while improving operational and life cycle costs 

for both airspace managers and users.

ERAM replaces today’s En Route Host Computer 

System by providing capabilities that the current Host 

cannot because of its technological and structural 

limitations. New capabilities such as flexible routing 

around weather, congestion, and traffic restrictions and 

automated controller-to-controller coordination will 

reduce controller workload and increase productivity. 

ERAM development and deployment is being conducted 

incrementally to reduce risk, provide early benefits, 

address equipment sustainment issues, and ensure 

a stable system during the transition from the Host 

Computer system.

Our people are our most valuable resource. Training the 

next generation of air traffic controllers is key to our 

success, and we are aggressively pursuing our training 

goals. The FAA will continue to closely monitor facilities 

to make sure that trainees are progressing through 

each stage of training while also ensuring the safe and 

efficient operation of the NAS. The 2009 Controller 

Workforce Plan included an appendix showing by 

facility the number of controllers in training who were 

exceeding their respective training time benchmarks. 

We believe meeting the training time benchmarks is a 

more meaningful goal to track. The FAA is bringing in 

retired FAA air traffic controllers as contract instructors 

to train the new workforce. By harnessing their valuable 

air traffic expertise, these experts can focus solely on 

training the next generation of controllers, rather than 

moving back and forth between working traffic and 

on-the-job training. The FAA has also concurred with 

the five recommendations from the June 2009 IG report, 

Training Failures Among Newly Hired Controllers, and is 

actively engaged in meeting these recommendations. 
FEDERAL AVIATION ADMINISTRATION

142 OTHER ACCOMPANYING INFORMATION

These recommendations include developing and 

implementing procedures for tracking training failures, 

developing uniform definitions of training failures, 

enforcing timely facility updates into the national 

training database, and using the database to identify 

trends and root causes of training failures.

We continue to focus our efforts toward improving 

contract management and oversight. We revised our 

AMS to include objective, measurable, award-fee criteria 

for evaluating contractor performance. We will manage 

and close out our contracts on time, capitalize the assets 

they produce in a timely manner, ensure the information 

technology used is secure, and keep our facilities that 

house these assets in good condition. All of this must be 

managed with the highest of ethical standards. We will 

continue to provide onsite ethics training for acquisition 

personnel and offer computer-based ethics training for 

the remaining acquisition personnel.

We recognize the importance of having a robust 

information security program that protects against, 

detects, and responds to increased threats of 

sophisticated and organized attacks on our networks 

and computers. Protecting the NAS infrastructure 

requires vigilance and adherence to the strictest standards 

outlined in legislation and policy. We have directed our 

efforts toward mitigating these threats by maintaining 

appropriate levels of situational awareness and incident 

response, augmenting these efforts with workshops, 

posters, and awareness days.

The FAA continues to take actions that are needed 

to ensure a sufficient and competent acquisition 

workforce. These include conducting supply and demand 

analysis, including essential workforce statistics such 

as retirement and attrition information, accession 

planning, and identification of long- and short-term 

needs. Data collected is used to focus recruitment and 

staffing on critical acquisition disciplines, streamline the 

hiring process, and leverage human resource flexibilities. 

The FAA also is expanding on its acquisition training 

and certification programs and implementing an 

integrated Acquisition Career Development Program 

to define career paths and implement a structured 

career development program. This program highlights 

not only training and learning opportunities, but also 

developmental opportunities for advancement, and 

sets the framework to target recruitment of acquisition 

professionals in entry-level, midlevel, and senior-level 

career tracks. NextGen requires multiple contract 

vehicles to successfully deploy the technology that 

keeps our aviation system the safest in the world. The 

development and implementation of this initiative will 

require the FAA to hire new employees who will have 

expertise in disciplines such as program and financial 

management, systems engineering, contracting, and 

aviation research. We recognize the importance of 

attracting and retaining the proper skill sets for NextGen.

These challenges are all significant, but we are prepared 

to measure our performance routinely and hold ourselves 

accountable to the American taxpayers.

SUMMARY OF AUDIT RESULTS AND MANAGEMENT ASSURANCES 

Table 1 is a summary of the results of the independent 

audit of the FAA’s consolidated financial statements by 

the FAA’s auditors in connection with the FY 2009 audit.

TABLE 1. SUMMARY OF FINANCIAL STATEMENTS AUDIT

Audit Opinion

FY 2009—unqualified

FY 2008—unqualified

Restatement No

Material Weakness FY 2008—number of 

material weaknesses

Revised and Reissued FY 2009—number of 

material weaknesses

0 0 0
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

OTHER ACCOMPANYING INFORMATION 143

Table 2 is a summary of management assurances related 

to the effectiveness of internal control over the FAA’s 

financial reporting and operations, and its conformance 

with financial management system requirements under 

Sections 2 and 4, respectively, of the FMFIA. The last 

portion of Table 2 is a summary of the FAA’s compliance 

with the FFMIA.

TABLE 2. SUMMARY OF MANAGEMENT ASSURANCES

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance Unqualified statement of assurance

Material Weakness Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance Unqualified statement of assurance 

Material Weakness Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA § 4)

Statement of Assurance Systems conform to financial management system

Nonconformances Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

Conformance of FAA’s core financial 

management system, Delphi, is 

assessed and reported by the DOT.

0 0 0 0 0 0

Compliance with FFMIA

Agency Auditor

Overall Substantial Compliance Yes Yes

1. System Requirements Yes

2. Accounting Standards Yes

3. USSGL at Transaction Level Yes

Improper Payments Information Act of 2002 

The Improper Payments Information Act of 2002 and 

OMB Circular A-123 Appendix C guidance require 

Federal agencies to review all programs and activities 

annually, identify those that may be susceptible to 

significant erroneous payments, and determine an annual 

estimated amount of erroneous payments made in those 

programs. The FAA reports its progress on reducing 

erroneous payments to both the President and Congress. 

Our FY 2009 review did not identify any programs or 

activities at risk for “significant erroneous payments” in 

accordance with the OMB’s criteria (i.e., programs with 

erroneous payments exceeding both $10 million and 

2.5 percent of program payments). 
Today, more than three-quarters of commercial aircraft are equipped for RNAV, and almost half of these are equipped for RNP precision procedures. 

These technologies collectively result in improved safety, access, capacity, predictability, operational efficiency, and environment.

Credit: FAA Image Gallery
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

GLOSSARY OF ACRONYMS 145

GLOSSARY OF ACRONYMS

ACRONYM NAME

AAL Alaskan (Regional Office) 

AAI Airports Authority of India

AATF Airport and Airway Trust Fund 

ACE Central (Regional Office) 

ACEP Air Carrier Evaluation Program

ACP Aviation Cooperation Program

ACSI American Customer Satisfaction Survey 

ADS-B Automatic Dependent Surveillance-Broadcast 

AEA Eastern (Regional Office) 

AED Automated External Defibrillator

AGA Association of Government Accountants 

AGL Great Lakes (Regional Office) 

AIO Office of Information Services (FAA Staff Office) 

AIP Airport Improvement Program 

AITS Automated Inventory Tracking System

AMS Acquisition Management System 

ANE New England (Regional Office) 

ANM Northwest Mountain (Regional Office) 

AOC Communications (FAA Staff Office) 

ARP Airports (FAA Line of Business) 

ARRA American Recovery and Reinvestment Act

ARTCC Air Route Traffic Control Center

ASDE-X Airport Surface Detection Equipment-Model X

ASIAS Aviation Safety and Information Analysis and Sharing 

ASO Southern (Regional Office) 

AST Commercial Space Transportation (FAA Line of Business) 

ASV Annual Service Volume 

ASW Southwest (Regional Office) 

AT-CTI Air Traffic Collegiate Training Initiative

ATD Air Traffic Division

ATM Air Traffic Management

ATO Air Traffic Organization (FAA Line of Business) 

ATOS Air Transportation Oversight System 

AVS Aviation Safety (FAA Line of Business) 

AWP Western Pacific (Regional Office) 

BCP Business Continuity Plan 

BPA Blanket Purchase Agreement 

CAAFI Commercial Aviation Alternative Fuel Initiative 

CAASD Center for Advanced Aviation System Development

ACRONYM NAME

CAP Chicago Airspace Project

CAS Cost Accounting System 

CASS Continuing Analysis and Surveillance System

CAST Commercial Aviation Safety Team 

CASTLE Consolidated Automated System for Time and Labor

CDA Continuous Descent Approach

CFI Certified Flight Instructor 

CFO Chief Financial Officer 

CIO Chief Information Officer

CIP Construction in Progress 

CLEEN Continuous Low Emissions, Energy, and Noise

CMEL Center for Management and Executive Leadership 

CMT Certificate Management Teams 

COE Center of Excellence 

COOP Continuity of Operations

COTR Contracting Officer’s Technical Representative

COTS Commercial Off-The-Shelf

CPAF Cost Plus Award Fee

CSMC Cyber Security Management Center 

CSRS Civil Service Retirement System 

DataComm Data Communication

DNL Day-Night Sound Level 

DoD Department of Defense 

DOL Department of Labor 

DOT Department of Transportation 

EA Enterprise Architecture 

eFAROS Enhanced version of FAROS

EMDT Executive Management Development Training

ERAM En Route Modernization

ESC Enterprise Services Center 

EVM Earned Value Management 

F&E Facilities and Equipment 

FAA Federal Aviation Administration 

FAROS Final Approach Runway Occupancy Signal

FASA V Federal Acquisition Streamlining Act of 1994, Title V

FECA Federal Employees’ Compensation Act 

FEMA Federal Emergency Management Agency

FERS Federal Employees Retirement System 

FFMIA Federal Financial Management Improvement Act 
FEDERAL AVIATION ADMINISTRATION

146 GLOSSARY OF ACRONYMS

ACRONYM NAME

FFRDC Federally Funded Research and Development Center

FISMA Federal Information Security Management Act 

FMFIA Federal Managers’ Financial Integrity Act 

FSEP Facility Service and Equipment Profile

FY Fiscal Year 

G&A General and Administration 

GA General Aviation 

GAO Government Accountability Office 

GPS Global Positioning System 

GPT Grievance Processing Time 

HPO High Performing Organization 

HSPD Homeland Security Presidential Directive 

HVAC Heating/Ventilating/Air Conditioning

ICAO International Civil Aviation Organization 

IFR Instrument Flight Rules

IG Inspector General 

IPIA Improper Payment Information Act 

IRS Internal Revenue Service 

ISS Information Systems Security 

IT Information Technology 

ITD International Training Division 

ITEB Information Technology Executive Board 

JFK John F. Kennedy 

JPDO Joint Planning and Development Office 

LCGS Low-Cost Ground Surveillance 

LED Light-Emitting Diode

LOB Lines of Business 

LoSS Loss of Separation Standards

MCC Millennium Challenge Corporation

MD&A Management’s Discussion and Analysis

NAPA National Academy of Public Administration

NAS National Airspace System 

NASA National Aeronautics and Space Administration 

NATCA National Air Traffic Controllers Association 

NBV Net Book Value

NextGen Next Generation Air Transportation System 

NFR Notification of Findings and Recommendations

NGIP NextGen Implementation Plan

NIST National Institute of Standards and Technology 

NMW No Material Weaknesses 

NNEW NextGen Network Enabled Weather

ACRONYM NAME

NPRM Notice of Proposed Rulemaking

NTSB National Transportation Safety Board 

OEP Operational Evolution Partnership 

OIG Office of the Inspector General 

OMB Office of Management and Budget 

OMP O’Hare Modernization Project

OPM Office of Personnel Management 

OSHA Occupational Safety and Health Administration

OTA Office of Tax Analysis 

PAR Performance and Accountability Report 

PBN Performance-Based Navigation

PEL Program for Emerging Leaders

PEPC Pre-Employment Processing Center 

PII Personally Identifiable Information

PP&E Property, Plant, and Equipment 

R,E,&D Research, Engineering, and Development 

RNAV Required Area Navigation 

RNP Required Navigation Procedures 

RPO Remote Pilot Operator

RTCA Radio Technical Commission for Aeronautics

RWSL Runway Status Lights 

SAAAR Special Aircraft and Aircrew Authorization Required

SAVES Strategic Sourcing for the Acquisition of Various 

Equipment and Supplies

SE Safety Enhancement 

SFFAS Statement of Federal Financial Accounting Standards 

SGL Standard General Ledger

SMM Surface Moving Map

SMS Safety Management System 

SWIM System Wide Information Management 

TARP Traffic Analysis and Review Program 

TBD To Be Determined 

TMA Traffic Management Advisor

TRACON Terminal Radar Approach Control

TSS Tower Simulation System

USSGL U.S. Standard General Ledger

USTDA U.S. Trade and Development Agency

VHF Very High Frequency

VLJ Very Light Jets

VPD Vehicle/Pedestrian Deviation

WAAS Wide-Area Augmentation System
FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT

GLOSSARY OF ACRONYMS 147

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New initiatives—including runway safety awareness campaigns, improved runway markings and lighting, and high-quality signage—employed 

during the past 2 years have resulted in a 50 percent decrease in runway incursions. In FY 2009, there were only 12 serious runway incursions in the 

United States, setting a new benchmark for airport safety. 

Credit: FAA Image Gallery
WE WELCOME YOUR COMMENTS!

Thank you for your interest in the FAA’s FY 2009 Performance and Accountability Report. We welcome your 

comments on how we can make this report more informative for our readers. 

Please send your comments to 

Mail:

Office of Financial Reporting and Accountability 

Federal Aviation Administration 

800 Independence Avenue, SW 

Room 612 

Washington, DC 20591 

Phone: 202–267–3018

Email: Allison.Ritman@faa.gov 

Fax: 202–493–4191 

This report and reports from prior years are available on the FAA Web site at www.faa.gov/about/plans_reports. 

For a printed copy, call 202–267–3018 or email Allison.Ritman@faa.gov.
HQ-08655

U.S. Department of Transportation

Federal Aviation Administration

800 Independence Avenue, SW

Washington, DC 20591

www.faa.gov