a

GAO

United States Government Accountability Office

Report to the Chairman, House 

Committee on Transportation and 

Infrastructure

March 2006 CONGRESSIONAL 

OVERSIGHT

FAA Case Study 

Shows How Agency 

Performance, 

Budgeting, and 

Financial Information 

Could Enhance 

Oversight

GAO-06-378
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2006

CONGRESSIONAL OVERSIGHT

FAA Case Study Shows How Agency 

Performance, Budgeting, and Financial 

Information Could Enhance Oversight 

Highlights of GAO-06-378, a report to the 

Chairman, House Committee on 

Transportation and Infrastructure

Pursuant to various statutes, 

federal agencies develop an

abundance of performance, budget,

and financial information that 

could be useful for Congress’ 

review and monitoring of agencies. 

However, agencies’ understanding

of Congress’ information needs is 

often limited and agencies may not

be providing timely information in 

a format that aids congressional

understanding of trends and issues. 

Thus, Members and their staff may 

not be aware of or avail themselves 

to certain information. To describe

the information available and how 

it might be used to support 

congressional oversight, the 

Federal Aviation Administration

was selected as a case study in part 

due to the large quantity of 

information already available. GAO 

was asked to identify: (1)

information FAA produces that 

could enhance congressional

oversight, (2) other technology and

information resources that could

enhance congressional oversight,

and (3) how committee access to

FAA’s information could be

improved to enhance its timeliness

and usefulness. 

What GAO Recommends

While FAA makes much of its

information available on its Web 

site, GAO recommends that FAA 

further use technology to enhance 

congressional access to 

information, and offer regular 

meetings with Members of the 

committee and key staff to discuss 

areas of mutual concern. The 

agency generally concurred. 

The Federal Aviation Administration (FAA) has made available much of the

information and analytic resources that Congress needs to carry out its 

oversight function. For example, FAA has a strategic plan with long-term, 

outcome-oriented goals and objectives. Its annual Performance and 

Accountability Report includes the agency’s progress in achieving its goals, 

and allows Congress to monitor performance trends. This report also 

provides financial information useful for analyzing its operating results and 

financial position. FAA’s budget documents combined with performance 

data could provide Congress information to use in determining whether 

resources are achieving the planned performance improvements. Used 

together, this information could assist Members of Congress and 

congressional staff in their oversight responsibilities. 

Through its legislative support agencies—GAO, Congressional Research 

Service and the Congressional Budget Office—and the Department of 

Transportation’s (DOT) Inspector General (IG), congressional committee 

staff also have access to considerable resources for oversight. For example,

GAO’s 2005 High Risk Series Update includes FAA’s Air Traffic Control 

Modernization program and discusses progress the agency has made in 

addressing its problems. DOT’s IG annually reports on the top management 

challenges facing FAA, such as safety and capacity challenges. 

Effective communication is needed to ensure that information agencies

provide meets congressional needs. While considerable information 

resources are available, they may not be available in a manner that is useful 

to committees. We have reported that although agencies collect and 

produce a great deal of information, much of it did not reach the interested 

committees, and the information that did reach them was difficult to digest, 

highly aggregated, or was received too late to be useful. In the case of FAA, 

House Transportation and Infrastructure Committee staff said FAA has a 

large quantity of information available and effective communication between 

the staff and agency, but is interested in using technology to gain additional 

agency data. While FAA provides a great deal of information on its Web site, 

it could take additional advantage of technology to improve the timeliness 

and usefulness of information to the Congress. For example, a Frequently 

Asked Questions section could provide quick access to information often 

requested by committees. As a result of our discussions with committee and 

agency staff, FAA has initiated two suggested technology enhancements, a 

For Congress page on its Web site, providing a single point of access for 

information relevant for oversight, and a Web site subscription service 

notifying committee staff when relevant information has been updated on its 

Web site. Further, regular meetings between congressional committees and 

agency officials could identify the committee’s oversight objectives, provide 

a forum to discuss the issues, and develop approaches to meet them. 

Importantly, these findings constitute lessons learned that may be 

transferable to other agencies. 

www.gao.gov/cgi-bin/getrpt?GAO-06-378.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Bernice 

Steinhardt at (202) 512-6543 or 

steinhardtb@gao.gov. 
Page i GAO-06-378 Congressional Oversight

Contents

Letter 1

Results in Brief 2

Agency Performance, Budget, and Financial Management 

Documents Can Enhance Oversight Efforts 4

Analytical Agencies and Organizations Can Provide Information and 

Analysis to Enhance Oversight Efforts 24

Regular Communication and Timely Access to Useful Information 

Can Enhance Oversight 28

Conclusions 32

Recommendations for Executive Action 33

Agency Comments 33

Appendixes

Appendix I: Objectives, Scope and Methodology 35

Appendix II: Analytical Agencies and Organizations Can Provide 

Information and Analysis to Enhance Oversight Efforts 36

Appendix III: Financial Statements Provide Insights into Agency Financial 

Management and Resources 40

Appendix IV: GAO Contact and Staff Acknowledgements 56

Tables Table 1: FAA’s Four Strategic Goals 6

Table 2: Example of ATO’s Business Plan Efforts to Support a Flight 

Plan Goal 8

Table 3: Estimated Funding to Support FAA’s Safety Strategic Goal 

by Performance Goal 18

Table 4: Example of a Strategy and Research Area in the Next 

Generation Air Transportation System Integrated Plan 21

Table 5: Analytical Resource for Congressional Oversight, as 

Illustrated by FAA Information 36

Figures Figure 1: Status and Trends: Number of Operational Errors 9

Figure 2: FAA Scorecard for General Aviation Fatalities 13

Figure 3: Using Budget Information for Operations Obligations, 

Trust Fund and General Fund 16

Figure 4: Using Budget Information: Trust Fund Outlays Outpacing 

Receipts Since FY 2002 17

Figure 5: FAA’s For Congress Web site Page 30
Contents

Page ii GAO-06-378 Congressional Oversight

Figure 6: FAA’s Consolidated Balance Sheets for Fiscal Years 2003 

and 2004 41

Figure 7: Composition of FAA’s Assets and Liabilities, as of 

September 30, 2004 43

Figure 8: FAA’s Consolidated Statements of Net Cost for Fiscal 

Years 2003 and 2004 45

Figure 9: Net Costs for FAA’s Airport Program for Fiscal Years 2000 

through 2004 47

Figure 10: Composition of FAA’s Net Costs, for Fiscal Year 2004, by 

Business Line and Strategic Goal 48

Figure 11: FAA’s Consolidated Statements of Changes in Net 

Position for Fiscal Years 2003 and 2004 49

Figure 12: FAA’s Consolidated Statements of Budgetary Resources 

for Fiscal Years 2003 and 2004 51

Figure 13: Composition of Budgetary Resources, by Major Fund 

Type 53

Figure 14: FAA’s Consolidated Statements of Financing for Fiscal 

Years 2003 and 2004 54
Contents

Page iii GAO-06-378 Congressional Oversight

Abbreviations

ARTCC Air Route Traffic Control Centers

ATO Air Traffic Organization

CAS Cost Accounting System

CBO Congressional Budget Office 

CFO Chief Financial Officer

CIP Capital Improvement Plan

CRS Congressional Research Service

DOT Department of Transportation 

FAA Federal Aviation Administration 

FAQ Frequently Asked Questions

FFMIA Federal Financial Management Improvement Act of 1996

FSAS Flight Services Automation System

GA General Aviation

GMRA Government Management and Reform Act of 1994

GPRA Government Performance and Results Act

NAS National Airspace System

OASIS Operational and Supportability Implementation System

OIG Office of Inspector General

OMB Office of Management and Budget

PAR Performance and Accountability Report

PART Program Assessment Rating Tool

PMA The President’s Management Agenda

QFR Questions for the Record

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Page 1 GAO-06-378 Congressional Oversight

United States Government Accountability Office

Washington, D.C. 20548

A

March 8, 2006 Letr

The Honorable Don Young

Chairman, Committee on Transportation 

and Infrastructure

House of Representatives

Dear Mr. Chairman:

In your letter dated September 13, 2004, you noted that federal agencies 

develop an abundance of performance, budget, and financial information 

for internal use as well as to report to Congress for oversight purposes. 

However, Congress may not be fully aware of or availing itself of this 

information. Further, communication between agencies and Congress to 

clarify Congress’ information needs is limited. For example, you stated that 

agencies often do not provide information in a timely manner or in a format 

that facilitates understanding of trends and issues, making it difficult to 

synthesize and use the information to identify areas of greatest concern 

and conduct effective oversight. As a result, you stated that too often 

oversight occurs in an ad hoc manner as problems arise, and with 

inadequate information to determine and address root causes. Further, as 

government grows more complex, and agencies produce more information, 

it becomes harder for Congress to access, analyze, and summarize this 

information to develop its policy positions and legislative enactments. New 

ways must be continually found to use emerging technology and 

approaches to make agency information transparent and readily available. 

You requested that we help to address these issues by working with 

committee staff to develop a framework for establishing timely and 

constructive oversight of programs under the committee’s jurisdiction. To 

establish a working precedent, the Federal Aviation Administration (FAA) 

was selected as a case study as a result of its large quantity of information 

already available, the forward-looking management systems being 

developed, and the effective communications between the staff and agency. 

Our objectives were to identify: (1) information FAA produces that could 

enhance congressional oversight, (2) other available information resources 

that could enhance congressional oversight and, (3) how committee access 

to FAA’s information could be improved to enhance its timeliness and 

usefulness. 

To achieve our objectives, we worked with members of your committee’s 

oversight staff, as well as Aviation Subcommittee staff to better understand 
Page 2 GAO-06-378 Congressional Oversight

their information needs and delivery mechanisms. In addition, we 

identified relevant FAA performance, budget, and financial documents and 

met with senior officials from across FAA, including several lines of 

business—Airports, Air Traffic Organization, Aviation Safety—and staff 

offices—Aviation Policy, Planning and Environment, Financial Services, 

Government and Industry Affairs, Human Resources and Management. We 

also met with officials from the Department of Transportation’s (DOT) 

Office of Inspector General (OIG), the DOT’s Chief Information Officer, the 

Congressional Research Service, the General Service Administration’s 

FirstGov initiative, and the Office of Management and Budget, as well as 

representatives from several think tanks. Our review was conducted from 

September 2004 through December 2005 in accordance with generally 

accepted government auditing standards. 

Results in Brief FAA has made available much of the information and analytic resources 

that Congress needs to conduct its oversight role. For example, FAA 

developed a strategic plan with long-term, outcome-oriented goals and 

objectives. Its annual Performance and Accountability Report includes the 

agency’s progress in achieving its goals, and allows Congress to monitor 

performance trends. This report also provides financial information useful 

for analyzing its operating results and financial position. FAA’s budget 

documents combined with performance data could provide Congress 

information to use in determining whether resources are achieving the 

planned performance improvements. Used together, this information 

provides a valuable tool to assist Members of Congress and congressional 

staff in their oversight responsibilities. 

Through its legislative support agencies—GAO, Congressional Research 

Service and the Congressional Budget Office—as well as the Department of 

Transportation’s Inspector General, congressional committees also have 

access to considerable resources for oversight. For example, GAO’s High 

Risk Series Update includes FAA’s Air Traffic Control Modernization 

program and discusses progress it has made in addressing its problems. 

The DOT IG annually reports on the top management challenges facing 

FAA, such as safety and capacity challenges. 

Effective communication among agency officials, Members of Congress 

and congressional staff is needed to ensure that information agencies 

provide meets committee needs. While considerable information resources 

are available, they may not be available in a manner that is useful to 

committees. We have previously reported, in a review of interactions 
Page 3 GAO-06-378 Congressional Oversight

between the Congress and other executive branch agencies, that although 

agencies collect and produce a great deal of useful information, much of it 

did not reach the interested congressional committees, and the information 

that did reach the committees was difficult to digest, too highly aggregated, 

or was received too late to be useful.1

 In the case of FAA, House 

Transportation and Infrastructure Committee staff noted that the agency 

has a large quantity of information available and effective communication 

between the staff and the agency, but it is also interested in using 

technology to gain additional, timely access to agency data when 

conducting oversight. While FAA provides a great deal of information on its 

Web site, enhancing access to agency information using technology can 

improve the timeliness and usefulness of agency information to the 

Congress. For example, information alerts and summaries from the agency 

could be effective information sharing tools. Further, regular meetings 

between committees, staff and agency officials could identify the 

committee’s principal oversight objectives, provide a forum to discuss the 

issues, and develop the best approaches to meet them. 

To further enhance committee access to information about FAA, we 

recommend the Secretary of the Department of Transportation direct the 

Administrator of the FAA to implement a number of technology solutions 

to improve access to information, such as: 

• Continue to work with committee staff to further refine the For 

Congress Web site by improving the flow of information and taking 

advantage of emerging technologies; 

• Include a Frequently Asked Questions page on the For Congress site, 

allowing oversight committees to quickly find answers to commonly 

requested items relevant to Congress;

• Add moderated access on the For Congress Web site to allow access to 

information that should be made available to congressional committees, 

yet may not be appropriate for the general public; and

1

GAO, Program Evaluation: Improving the Flow of Program Information to the Congress, 

GAO/PEMD-95-1 (Washington, D.C.: Jan. 30, 1995) and GAO, Managing For Results: Views 

on Ensuring the Usefulness of Agency Performance Information to Congress, GAO/GGD00-35 (Washington, D.C.: January 2000).
Page 4 GAO-06-378 Congressional Oversight

• Consider offering regular meetings between the Members of the 

committee and key staff with senior FAA executives to address matters 

of mutual concern. 

We provided a draft of this report to the Secretary of the Department of 

Transportation for review and comment. We received comments from FAA 

officials, including the Deputy Assistant Administrator for Financial 

Services, on behalf of the Secretary who indicated that they were pleased 

to have FAA serve as our case study and they would consider the report’s 

recommendations as they continue to strive for excellence in fulfilling the 

Congress’ information needs. They highlighted a number of ways in which 

they are using technology solutions, including a dedicated Web page for 

Congress and a subscription e-mail service for Congress to receive notices 

of new information. We note that both improvements resulted from our 

discussions with committee and FAA staff, the latter in response to a 

recommendation contained in the draft of this report. 

Agency Performance, 

Budget, and Financial 

Management 

Documents Can 

Enhance Oversight 

Efforts

Congressional oversight is the review, monitoring, and supervision of 

federal agencies, programs and policy implementation. This oversight 

provides the legislative branch with an opportunity to inspect, examine, 

review and check the executive branch and its agencies. Congressional 

oversight includes two different features—that which is ongoing 

throughout the course of a year and that which is done at a specific time in 

the year in response to the issuance of the President’s budget. For the 

latter, House and Senate committees with jurisdiction over federal 

programs are required to submit a views and estimates report—a report 

containing the committee’s comments or recommendations on budgetary 

matters within its jurisdiction—to its respective budget committees each 

year within 6 weeks of the submission of the President’s budget. For 

example, the House Transportation and Infrastructure Committee’s fiscal 

year 2006 views and estimates report identified a number of aviationrelated issues and recommended increased funding over the President’s 

proposed budget for facilities and equipment to pay for capital 

improvements designed to increase capacity and reduce aviation gridlock 

and for airport safety upgrades, including explosive detection systems for 

airport baggage systems. Ongoing oversight and the specific views and 

estimates oversight reports can draw information from documents and 

reports issued by federal departments over the course of the year. 

Pursuant to the Government Performance and Results Act of 1993 (GPRA) 

and other statutes, federal agencies produce performance, budget, and 
Page 5 GAO-06-378 Congressional Oversight

financial information for internal management purposes and for reporting 

to Congress which can also be useful to congressional committees to 

enhance their oversight efforts. GPRA required federal agencies to develop 

strategic plans with long-term, outcome-oriented goals and objectives, 

annual goals linked to achieving the long-term goals, and annual reports on 

the results achieved. The Chief Financial Officers Act of 1990 (CFO) as 

expanded by the Government Management and Reform Act of 1994 

(GMRA) requires annual audited agencywide statements for 24 major 

federal departments. In the case of FAA, the agency has made available 

much of the information and analytic resources that Congress needs to 

conduct its oversight role. 

As part of DOT, FAA addresses some of the requirements of GPRA through 

its inclusion in DOT’s Performance and Accountability Report. However, 

FAA also produces its own strategic plan, unit-specific business plans and 

performance reports that identify agency priorities, goals, strategies and 

progress toward these goals and the success of the strategies employed. 

Collectively, these documents help Congress determine whether FAA’s 

goals are aligned with congressional goals and whether FAA is achieving 

them. Linking performance information to FAA’s budgetary resources, such 

as FAA is beginning to do in its performance-based budget, can also 

provide Congress the opportunity to oversee the results planned or 

achieved with budgeted resources and indicate FAA’s priorities for funding. 

Used together, these agency documents could assist committees in 

identifying and tracking progress on the issues related to reauthorization 

and oversight.

FAA’s Strategic and 

Performance Reporting 

Documents Outline Agency 

Goals and Priorities 

FAA manages performance through a series of integrated performance 

documents. FAA’s principal performance reports are: the strategic plan, 

called the Flight Plan; unit specific business plans; the annual Performance 

Accountability Report; and quarterly performance reports. The Flight Plan 

includes the agency’s mission, goals and strategies. In addition, each of 

FAA’s lines of business has a unit-specific business plan that outlines how 

its actions will support the goals and measures identified in the Flight Plan. 

FAA monitors and reports on the Flight Plan’s key performance targets 

through quarterly and annual performance reports. 

FAA’s Strategic Plan FAA’s current 5-year strategic plan, or Flight Plan, is designed to outline the 

agency’s mission, goals and strategies to achieve these goals through 2009, 

with the overall aim of seeking “to provide the safest, most efficient 

aerospace system in the world.” Among other things, GPRA requires 
Page 6 GAO-06-378 Congressional Oversight

agencies to consult with Congress and solicit the input of others as they 

develop these plans—a good opportunity for congressional committees 

and staff to influence FAA’s future. According to FAA senior executives, the 

Flight Plan is the primary document that identifies the agency’s priorities 

and performance expectations and is the driver of decision making at all 

levels. As such, the Flight Plan is key for internal agency and congressional 

oversight purposes. Committees can refer to the plan to determine whether 

national priorities are appropriately recognized and to raise questions 

about whether the strategies laid out are likely to lead to success. The 

Flight Plan identifies four strategic goals (see table 1), each of which are 

supported by objectives, strategies, initiatives, and performance targets the 

agency is responsible for achieving. FAA’s Flight Plan can be accessed via 

its Web site at http://www.faa.gov/about/plans_reports/.

Table 1: FAA’s Four Strategic Goals

Source: FAA.

Committees could use the strategic plan to identify oversight questions.2

For example:

• Do these goals take into account legislative priorities? 

• Are the strategies that support each goal consistent with legislative 

decisions? 

Increased safety Achieve the lowest possible accident rate and constantly improve 

safety

Greater capacity Work with local governments and airspace users to provide 

capacity in the U.S. airspace system that meets projected 

demand in an environmentally sound manner

International 

leadership

Increase the safety and capacity of the global civil aerospace 

system in an environmentally sound manner

Organizational 

excellence

Ensure the success of FAA’s mission through stronger leadership, 

a better trained and safer workforce, enhanced cost-control 

measures, and improved decision making based on reliable data

2

GAO previously issued a guide to assist in congressional review of federal departments’ 

strategic plans that includes a number of questions congressional staff may use to initiate 

discussion with the department and to identify ways to improve the department’s strategic 

plans. GAO, Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate 

Congressional Review, GAO/GGD-10.1.16 (Washington, D.C.: May 1997).
Page 7 GAO-06-378 Congressional Oversight

• How effective are the strategies in achieving these goals? 

• How were the specific initiatives and performance targets for each 

objective strategy developed?

• What key factors—external to FAA and beyond its control—exist and 

how will FAA mitigate or leverage them as appropriate, if they affect the 

achievement of the strategic plan goals?

• Does the plan include strategies for working with stakeholders (e.g., 

airlines, local governments or airport authorities)? 

 Unit-Specific Business Plans The agency’s Flight Plan is supported by unit-specific performance plans, 

called business plans. Each line of business and staff office produces 

annual business plans that demonstrate strategic alignment with the 

agency Flight Plan and define core business activities. The business plans 

are important tools for oversight because they provide a detailed 

description of the activities and responsibilities of each business line in 

supporting the Flight Plan. Specifically, the business plans define the Flight 

Plan’s performance targets, the specific initiatives that support the 

performance targets—and type of support required of each line of business 

(e.g., lead responsibility or support responsibility)—outline the key 

strategic activities in support of those initiatives; and define strategic 

activity targets to help gauge progress towards achieving the strategic 

initiative. The business plans can be found on FAA’s external Web site, at 

http://www.faa.gov/about/plans_reports/business_plan2005/.

For example, the Air Traffic Organization’s3 (ATO) fiscal year 2005 business 

plan details six strategic initiatives it is employing to help the agency meet 

its goal to reduce General Aviation (GA) fatal accidents.4

 Each of the 

strategic initiatives, which indicates whether ATO is the lead business line 

or is supporting other business lines, includes related strategic activities 

and activity targets that enable the ATO to further define and measure the 

degree its performance is contributing to overall agency performance. 

3

The primary mission of the ATO, one of FAA’s four business lines, is to move air traffic 

safely and efficiently. ATO’s customers are commercial and private aviation and the military. 

4

General aviation comprises a diverse range of aviation activities, from single-seat 

homebuilt aircraft, helicopters, balloons, single and multiple engine land and seaplanes, to 

extended range turbojets.
Page 8 GAO-06-378 Congressional Oversight

Table 2 shows an example of one of ATO’s strategic initiatives, activities 

and activity targets for supporting a Flight Plan goal. 

Table 2: Example of ATO’s Business Plan Efforts to Support a Flight Plan Goal

Source: FAA

Committees can use the business plans to identify oversight questions and 

additional reports that could be made available to them. For example: 

• How will the information from these reports affect the strategies for 

reducing accidents?

• Do the activities being implemented match congressional priorities? 

Annual Performance Reports FAA annually publishes a detailed account of agency performance, 

including its audited annual financial statements, in its Annual 

Performance and Accountability Report (PAR). While this report is not 

required, FAA believes it is essential to clearly and fairly present and 

discuss FAA’s finances and performance. GPRA requires agencies to 

measure performance toward the achievement of their goals and report 

annually on their progress in program performance reports. If a goal was 

not met, the report must provide an explanation and present the actions 

needed to meet any unmet goals in the future. These reports provide 

important information to agency managers, policy makers, and the public 

on what each agency accomplished with the resources it was given. FAA’s 

PAR provides Congress with annual and historical trend information for its 

key performance goals. For example, under the strategic goal Increased 

Safety, FAA has a performance target tied to its goal to reduce the number 

FAA’s Flight Plan performance 

target 

Reduce GA fatal accidents.

Strategic initiative in ATO’s 

business plan supporting Flight 

Plan’s performance target

Human factors: identify human factors that may 

cause accidents and develop strategies, methods, 

and technologies that will reduce those accidents 

(ATO has lead responsibility.)

Strategic activity in ATO’s business 

plan

Develop pilot proficiency recommendations for 

technically advanced aircraft 

Activity target in ATO’s business 

plan 

Complete reports on: (1) proficiency standards for 

technically advanced aircraft, (2) the impact of 

technology on pilot performance metrics, and (3) the 

impact of technology on pilot aeronautical decision 

making 
Page 9 GAO-06-378 Congressional Oversight

of operational errors.5 Figure 1 shows the trend in the actual number of 

operational errors between fiscal year 2002 and fiscal year 2005. FAA 

exceeded its target number of operational errors in fiscal year 2003 by 38 

and again in fiscal year 2004 by 8. 

Figure 1: Status and Trends: Number of Operational Errors 

Based on this, potential questions for oversight could be:

• What are the primary causes of operational errors? 

5

According to FAA’s Fiscal Year 2004 Performance and Accountability Report, 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. FAA 

differentiates between technical violations and more severe operational errors, and includes 

only the severe operational errors for the performance measure to reduce operational 

errors. 

Source: FAA FY 2004 Performance and Accountability Report 2004 Preliminary data.

Number

Fiscal year

0

100

200

300

400

500

600

700

Target

Actual

2002 2003 2004 2005 

610

642 629

n/a

662 680

637

n/a
Page 10 GAO-06-378 Congressional Oversight

• What changes were put into place between fiscal year 2003 and 2004 to 

decrease operational errors?

• How was the target for 2005 set and what efforts will be put into place to 

meet this target?

The financial statements, supplementary information, and notes to the 

financial statements included in the PAR present historical information, 

showing the financial activity of the agency for the last 2 fiscal years and 

the financial position as of the end of each of those years. The five principal 

financial statements include: consolidated balance sheets, consolidated 

statements of net cost, consolidated statements of changes in net position, 

consolidated statements of budgetary resources, and consolidated 

statements of financing. The notes to the financial statements present more 

detailed information about transactions or conditions reflected in these 

statements. Often the Management’s Discussion and Analysis section of the 

PAR will address the kinds of operating conditions or changes that 

financial statement analysis discloses.

The statement of budgetary resources, which interrelates with the other 

financial statements, includes key information that is also included in the 

agency’s budget. This information is subjected to audit scrutiny, providing 

some assurance of the reliability of related budgetary information. The 

individual statements and examples of how they can be used for 

congressional oversight are discussed in appendix III.

The independent auditor’s report included in the PAR tells readers whether 

or not, or to what extent, the information provided in FAA’s financial 

statements and related notes is, in the opinion of the auditor, fairly stated. 

This report also includes the auditor’s statements on whether FAA had 

effective internal control over financial reporting and over compliance with 

laws and regulations, which would indicate whether financial management 

issues need more attention. They also report on any identified significant 

matters of noncompliance with selected provisions of applicable laws and 

regulations. In effect, the audit report is a report card on how well the 

agency is managed from a financial perspective. 

The auditor’s unqualified opinions on FAA’s financial statements for fiscal 

years 2002 through 2005 suggest that those statements are sufficiently 

reliable to be used as a tool for public and congressional oversight. 

However, the auditor’s reports for each of those years disclosed that FAA’s 

financial management systems did not substantially comply with federal 
Page 11 GAO-06-378 Congressional Oversight

financial management systems requirements under the Federal Financial 

Management Improvement Act of 1996 (FFMIA)6

, an issue that may 

warrant additional oversight. For fiscal years 2004 and 2005, the auditor 

noted, among other things, that in connection with FAA’s conversion to 

Delphi as its core financial system, several key financial systems that feed 

or support Delphi exhibited weaknesses regarding function, reporting or 

internal control. In addition, the auditor reported that in 2005 FAA, also in 

conjunction with the implementation of Delphi, had not timely processed 

all of its transactions and reconciled all of its key accounts. Similar 

problems had been reported for fiscal year 2004 by the auditor. While 

adjustments to the recorded balances were made during the preparation of 

the year end audited financial statements, these weaknesses could indicate 

that the agency’s financial information during the year may not be fully 

reliable.

Committee staff could use information from FAA’s independent auditor to 

facilitate an understanding of financial management and compliance 

issues, addressing questions such as: 

• Can users rely on the information provided in FAA’s financial 

statements?

• Did FAA have effective internal control over financial reporting and 

compliance with laws and regulations?

• Did FAA’s independent auditor report on any identified significant 

matter of noncompliance with applicable laws and regulations?

• Did FAA’s financial management improve or deteriorate over the fiscal 

year?

The answers to the above questions are also key to assessing the reliability 

of cost accounting information, which is discussed later. Cost accounting 

information generated from FAA’s financial reporting systems is essential 

to managing on-going agency operations and provides useful information to 

Congress about the cost of specific programs, activities, or outputs.

6

FFMIA requires that an agency shall implement and maintain financial management 

systems that comply substantially with Federal financial management systems 

requirements, applicable Federal accounting standards, and the U.S. Government Standard 

General Ledger at the transaction level.
Page 12 GAO-06-378 Congressional Oversight

FAA’s annual Performance and Accountability Report can be accessed via 

FAA’s Web site at http://www.faa.gov/about/plans_reports/.

Quarterly Performance 

Reporting

In addition to annual performance reporting, FAA monitors and reports 

quarterly on performance towards the strategic goals through the tracking 

of 31 key performance measures. FAA management conducts monthly, daylong meetings with executives from each line of business. At these 

meetings, the designated leaders for each of the four strategic goals present 

information related to the performance targets for their goal. Each of the 31 

performance targets is displayed using the traffic light graphics colors of 

red, yellow, and green. When a target is either yellow or red, the goal leader 

will discuss the steps needed to get to green—which indicates that the 

performance measure is met. 

Committees could use these reports to raise similar questions about ways 

to improve performance to achieve the performance target. FAA reports 

performance for these 31 measures on its external Web site quarterly, at 

http://www.faa.gov/about/plans_reports/Performance/. For example, under 

the strategic goal Increased Safety, FAA has a performance target tied to its 

goal to reduce the number of GA fatal accidents. FAA’s target for fiscal year 

2005 is not to exceed 343 GA fatal accidents. However, according to its final 

quarterly performance report for fiscal year 2005 published on the FAA 

Web site, the agency failed to meet its target, with a total of 350 GA fatal 

accidents, 7 fatal accidents above the target. Figure 2 shows the quarterly 

report for FAA’s measure on GA fatal accidents. 
Page 13 GAO-06-378 Congressional Oversight

Figure 2: FAA Scorecard for General Aviation Fatalities 

Committees could use this performance information to identify oversight 

questions. For example: 

Source: FAA.
Page 14 GAO-06-378 Congressional Oversight

• Why was FAA unable to meet its target for fiscal year 2005? 

• What has the agency been doing to improve on its performance for this 

target? 

• Does FAA measure the number of nonfatal GA accidents? If so, how 

does it use those data? 

In addition, questions could be raised about the measure itself. For 

example, why does the measure track the number of GA fatal accidents 

rather then the rate of GA fatal accidents? 

FAA’s Budget and LongTerm Planning Documents 

Can Be Used to Generate 

Questions About FAA’s 

Planned Resource Use

The annual federal budget is developed using a year-round administrative 

process of budget preparation and review. By the first Monday in February, 

the President submits a budget request to Congress for the fiscal year 

starting on the following October 1. However, preparation of that particular 

budget request began about 10 months before it was submitted to 

Congress. For example, for the fiscal year 2006 budget request, transmitted 

to Congress in February 2005, the budget process began in the spring of 

2004. Thus federal agencies deal concurrently with three fiscal years: 

(1) the current year, that is, the fiscal year in progress; (2) the coming fiscal 

year beginning October 1, for which they are seeking funds; and (3) the 

following fiscal year, for which they are preparing information and 

requests. In the spring and summer, agencies work with the Office of 

Management and Budget (OMB) to identify major issues for the upcoming 

budget request, develop and analyze options for the upcoming reviews of 

agency spending and program requests, and plan for the analysis of issues 

that will need decisions in the future. In September and October agencies 

submit their budget requests and other initial materials to OMB, typically 

on the first Monday after Labor Day of the year prior to the start of the year 

that the budget request covers. From October to December OMB reviews 

and briefs the President and senior advisors on the proposed budget 

policies and recommends a set of proposals after reviewing all agency 

requests. Budget decisions are passed back to agencies in late November 

and may be appealed. Final budget decisions are transmitted to Congress in 

the President’s budget request. 

At the same time an agency is working to formulate a new budget, it is 

executing its approved budget by spending the money Congress has 

appropriated to carry out the objectives of its program legislation. During 

the budget execution phase, agencies sometimes find they need more 
Page 15 GAO-06-378 Congressional Oversight

funding than appropriated because of unanticipated circumstances. Under 

such circumstances, agencies may request and Congress may enact a 

supplemental appropriation. 

FAA manages and reports budget decisions in several documents that 

could be used to enhance oversight. The three principal budget documents 

include the annual budget, the budget-in-brief and the performance-based 

budget justification. FAA’s annual budget presents actual receipts and 

spending levels for the fiscal year just completed, current year estimated 

receipts and spending, and estimated receipts and spending for the 

upcoming year as proposed by the President. The budget-in-brief 

summarizes the justification for FAA’s estimated budget by strategic goal. 

Finally, FAA’s performance-based budget justification provides a more 

detailed outline of its planned budget according to the Flight Plan’s 

strategic goals and describes the expected performance improvements. 

FAA’s Budget The fiscal year 2006 budget reports the total funding for all FAA programs 

and provides program and financing information by budget account. FAA’s 

budget has four components: operations; facilities and equipment; grantsin-aid for airports; and research, engineering, and development. There are 

two sources of FAA funding: the airport and airway trust fund, which 

contains ticket tax and other earmarked receipts, and general fund 

appropriations. In fiscal year 2006, the trust fund provides all funding for 

facilities and equipment; the airport improvement grants; and research, 

engineering and development, as well as partial funding for operations. The 

general fund is also used for operations and other, smaller accounts. 

Many different analyses can be done with budget data to identify oversight 

questions. For example, as shown in figure 3, fiscal year 2000 general fund 

financing of operations and maintenance increased from its pre-2000 level. 
Page 16 GAO-06-378 Congressional Oversight

Figure 3: Using Budget Information for Operations Obligations, Trust Fund and General Fund 

Further, figure 4 shows that trust fund outlays have outpaced receipts since 

fiscal year 2002, resulting in a decline in the trust fund balance. 

Source: GAO.

Dollars (in millions)

Fiscal year

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Trust fund share of FAA operations

General fund operations

Req.

2006

Est.

2005

1997 1998 1999 2000 2001 2002 2003 2004
Page 17 GAO-06-378 Congressional Oversight

Figure 4: Using Budget Information: Trust Fund Outlays Outpacing Receipts Since 

FY 2002 

Based on these analyses, some oversight questions could be: 

• What steps are being taken to understand the cost drivers of the 

operations and maintenance portion of budget?

• What is the desired balance between trust fund and general fund 

financing for FAA operations? 

FAA’s Budget-In-Brief FAA’s budget-in-brief is a publicly available summary of FAA’s budget 

justification. The budget-in-brief summarizes the FAA’s annual budget 

request by appropriation and by goal area. It provides committees with a 

quick comparison of resource allocation by goal and program activity for 

the prior year, current year and the budget year. For example, the budgetin-brief states that safety is FAA’s primary goal and proposes spending 71 

percent of the fiscal year 2006 request for the safety-related goals shown in 

table 3. For the goal of reducing GA fatal accidents, FAA is proposing a 

decrease from fiscal year 2005 in resources for facilities and equipment, 

Source: GAO.

Dollars (in millions)

Fiscal year

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Receipts

Outlays

Req.

2006

Est.

2005

1997 1998 1999 2000 2001 2002 2003 2004
Page 18 GAO-06-378 Congressional Oversight

and grants-in-aid for airports, and in the number of full time equivalent 

employees devoted to this goal. 

Table 3: Estimated Funding to Support FAA’s Safety Strategic Goal by Performance 

Goal 

Source: FAA’s Budget-in-Brief, Fiscal Year 2006.

Based on this, potential questions for oversight could be:

• What changes were made in these areas to permit a reduction in funding 

while still making progress toward the goal of reducing GA fatalities?

• How is the decrease going to affect more ambitious targets for GA fatal 

accident reductions in performance plans?

• Was funding shifted from reducing GA fatal accidents to a different 

safety-related activity? If so, which activity and why?

As table 3 shows, at the same time FAA is proposing decreases in certain 

types of spending for reducing GA fatal accidents, FAA is proposing budget 

increases for reducing commercial fatal accident rates and achieving zero 

commercial space accidents. Another potential oversight question could 

therefore be: is FAA proposing increases in these other areas—where FAA 

is meeting its performance targets—while proposing decreases in reducing 

GA fatal accidents, a goal for which FAA is not meeting its performance 

target? FAA’s budget-in-brief can be accessed on its external Web site at 

http://www.faa.gov/about/budget/.

FAA’s Performance-Based 

Budget 

FAA’s performance-based budget, first done in fiscal year 2005 and 

submitted to the appropriations committees, is a prominent source of both 

performance and budgetary information on FAA and could also be useful 

for oversight. It highlights FAA’s identified resource needs and what the 

Dollars in millions

Performance goal

FY 2004 

actual

FY 2005 

enacted

FY 2006 

request

Reduce commercial fatal accident rate 7,276,192 7,669,769 7,885,275

Reduce general aviation fatal accidents 1,411,095 2,000,514 1,851,296

Zero commercial space accidents 13,019 12,955 13,209

Total Estimated Funding for Safety 8,700,306 9,713,239 9,749,780
Page 19 GAO-06-378 Congressional Oversight

agency deems to be the most important performance goals for that 

particular year. One goal of agency performance budgets is to show the 

relationship between resources and incremental improvements in 

performance. Congressional oversight could focus on whether planned 

performance improvements were achieved with the resources provided or, 

if not, raise questions about why they were not achieved. 

For example, FAA’s fiscal year 2005 performance-based budget shows a 

request for $10.2 million to reduce GA fatalities through the 

implementation of the Flight Services Automation System (FSAS) and 

Operational and Supportability Implementation System (OASIS). 

According to the budget, FSAS and OASIS will enable flight specialists to 

more efficiently provide weather and flight information, thereby aiding in 

the reduction of accidents through increased pilot awareness of weather 

conditions along the flight route. Committees could use information from 

the performance-based budget to oversee spending on and installation of 

the systems. For example: 

• Was the installation completed within the originally estimated funding 

level? 

• What percentage of GA fatal accidents results from the pilots’ 

insufficient knowledge of weather conditions? 

• Are the GA fatality rates decreasing in areas where the installation has 

occurred? 

FAA’s Other Long-Term Planning 

and Budget Documents 

FAA also produces some long-term planning and budget documents that 

could be helpful for oversight. Intended to integrate and coordinate longerterm perspectives and needs of organizations affecting airspace usage, 

these documents are:

• National Plan of Integrated Airport Systems, 

• Operational Evolution Plan,

• The Next Generation Air Transportation System Integrated Plan, and 

• Capital Investment Plan. 

The first three plans were cited by FAA officials as key documents 

presenting FAA’s long-term direction. The National Plan of Integrated 
Page 20 GAO-06-378 Congressional Oversight

Airport Systems for 2005 to 2009 identifies 3,344 airports that are 

significant to national air transportation and, therefore, eligible to receive 

grants under the FAA’s Airport Improvement Program. The plan and grant 

program support the Flight Plan’s goals of increased safety and greater 

capacity. The plan describes the condition and performance of the airport 

system according to six performance areas: safety, capacity, pavement 

condition, financial performance, surface accessibility, and noise. In 

addition, the plan provides cost estimates for needed improvements to 

airports by airport type—large, medium or small hub primary; no hub 

primary; non-primary commercial service; relievers;7

 or general aviation—

and by purpose of development—safety, security, reconstruction, 

standards, environment, airfield capacity, terminal buildings, ground 

access, and new airports. The projects are not prioritized, but inform the 

grant decisions for the Airport Improvement Program. The National Plan of 

Integrated Airport Systems for 2005 to 2009 can be accessed on FAA’s Web 

site at 

http://www.faa.gov/airports_airtraffic/airports/planning_capacity/npias/. 

Based on this plan, some oversight questions could be:

• How are the projects in the National Plan of Integrated Airport Systems 

selected for airport improvement grants?

• To what extent have the grant-funded improvements to airports 

achieved performance improvements for the Flight Plan goals of 

increased safety and greater capacity? 

The Operational Evolution Plan, created in collaboration with the aviation 

community, the Department of Defense, the National Weather Service and 

the National Aeronautics and Space Administration, is a rolling 10-year 

tactical implementation plan designed to increase the capacity and 

efficiency of the national airspace system8

 by approximately 30 percent 

within its initial 10-year horizon. The plan identifies four specific areas for 

improvement: terminal area, en route, and airport congestion; and air 

7

According to the National Plan of Integrated Airport Systems, relievers are high capacity 

general aviation airports located in metropolitan areas.

8

The national airspace system consists of a network of navigational aids and a number of air 

traffic control facilities designed to operate in conjunction with the various defined classes 

of airspace. These classes are subdivided into controlled, uncontrolled, special use, and 

other airspace categories.
Page 21 GAO-06-378 Congressional Oversight

traffic management flow efficiency. It also identifies milestones for 

expected improvements at each of the airports included in the plan. The 

Operational Evolution Plan can be accessed on FAA’s Web site at 

http://www.faa.gov/programs/oep/.

Based on this plan, some oversight questions could be: 

• Are the milestones for expected improvements realistic and are they 

being met?

• As airport improvements are completed what has been the impact on 

congestion? Are the changes as great as anticipated? 

The Next Generation Air Transportation System Integrated Plan is a 

multiorganization plan designed to transform the nation’s air transportation 

system to meet expected needs in 2025. This plan outlines eight 

transformation strategies that will be researched, developed, implemented 

and maintained by teams composed of federal, state, and local 

governments; quasi-government research institutions; universities; and the 

private sector. For each strategy there is a description of the research area 

and milestones for completion. 

Table 4: Example of a Strategy and Research Area in the Next Generation Air Transportation System Integrated Plan

Source: Next Generation Air Transportation System Integrated Plan.

Based on this plan, some oversight questions could be: 

• How do the strategic goals and performance targets in the Flight Plan 

and unit-specific business plans relate to these transformation 

strategies?

• How were these transformation strategies identified? 

Strategy Develop airport infrastructure to meet future demand. 

Provide a system that meets or exceeds user demand by integrating airport, airspace and air traffic 

management design, development, and deployment. Airport infrastructure must address the need to expand in 

a way that meets future capacity while satisfying the other objectives. This strategy is intended to provide 

customers a wide-range of options for air transportation in an efficient cost-conscious manner.

Research areas Develop requirements and concepts for servicing a variety of future demands, from maximizing overall 

metropolitan area capacity to servicing smaller communities. Groundside questions address airport access 

alternatives and associated transportation, security, and information systems requirements, such as regional 

airports and city check-in by specific location.
Page 22 GAO-06-378 Congressional Oversight

FAA also reports on long-term capital financing options in the Capital 

Investment Plan (CIP), which is a rolling 5-year financial plan that allocates 

planned funding to NAS projects. The Secretary of Transportation 

transmits the CIP to Congress each year at the time of the President’s 

annual budget submission. It includes estimated expenditures for each line 

item in the facilities and equipment budget for the current fiscal year and 

for the following 4 years. However, the CIP includes only projects that are 

likely to receive funding rather than all initiatives originally considered.

According to the CIP, a project’s planned funding is based on its support for 

the agency’s strategic goals and performance targets. As such, the CIP is an 

important oversight tool because it not only details estimated 

expenditures, but also provides the agency’s rationale for spending federal 

dollars on specific projects—or a group of related projects—and explains 

how such spending will enhance the agency’s ability to meet its strategic 

goals, and ultimately its mission. 

Based on this plan, potential questions for oversight could include:

• Are the projects clearly linked to agency goals and priorities?

• What other projects could meet these goals and priorities? Why were 

they rejected?

Cost Accounting Provides 

Detailed Operating Cost 

Analysis

Financial accountability goes beyond an agency’s obtaining an unqualified 

opinion on its annual financial statements. The key to financial 

accountability is obtaining accurate and useful information on a timely and 

ongoing basis to support day-to-day managerial decisions and oversight. As 

a critical part of its new Delphi financial management system installation, 

FAA’s cost accounting system (CAS) draws upon accounting information in 

Delphi to provide financial information that can be used to monitor 

ongoing operations as well to plan for the future. CAS has been principally 

implemented in the ATO and Commercial Space Transportation, which 

together comprise over 80 percent of FAA’s budget. FAA’s other two lines of 

business, Aviation Safety and Airports are expected to implement CAS in 

fiscal year 2006. 

CAS takes direct cost data from DOT’s financial management system and 

allocates those costs from the organization that incurred the costs to the 

organization, product, or service that benefited from the costs. The system 

allows analysis of costs aggregated within a program, activity, location or 
Page 23 GAO-06-378 Congressional Oversight

strategic goal. Allocated costs can also be used in an analysis of 

comparative operating efficiency for different operating periods or 

different locations. An example is a ratio of costs to a nonfinancial activity 

measure, such as cost per day, per employee, or per flight. Apparent 

abnormalities in trends or at particular locations may then be investigated. 

For example, at FAA the direct cost of an air traffic controller at a terminal 

would be allocated to airport operations, in proportion to takeoffs and 

landings, which are a major “driver” of those costs. Similarly, the indirect 

cost of a maintenance technician would be allocated to the lines of 

business that benefited from those costs using an appropriate allocation 

base.

A financial scoreboard in use at FAA regularly tracks trends in these unit 

costs, overhead rates, and other performance measures. Tracking these 

trends is key to identifying operating inefficiencies and, when projected to 

anticipated operating volumes, can help determine future financing needs.

According to FAA, CAS provided labor and overhead cost data which were 

used in the preparation of a competitive sourcing study for ATO flight 

service stations. The cost data were used as a basis to estimate the future 

cost of those existing in-house flight services. Comparison of those 

projected in-house costs to the costs of procuring the services from bidders 

in the private sector resulted in contracting out ATO Flight Service Stations 

in fiscal year 2005 at a projected contract savings of about $2.2 billion 

through fiscal year 2015. FAA has also reported that CAS data led to 

cancellation of a $27 million airport weather program and to savings of $7 

million from modification of an airport radar surveillance program.

CAS can break down the full costs for the individual activities undertaken 

to provide each of ATO’s services9

—En Route, Oceanic, Flight Services, 

and Terminal Services—by location, program and function. Using this kind 

of information, a separate fiscal year 2004 performance report prepared by 

ATO displayed unit costs of certain activities and services as well as some 

overall ATO revenue and cost trend analyses and other performance 

measures. The report cited a reduction of ATO’s total unit cost per flight by 

9

ATO’s services include: (1) En Route, the monitoring of aircraft during flight provided by 21 

Air Route Traffic Control Centers; (2) Oceanic, procedural air traffic control provided from 

three locations in the United States; (3) Flight Services, telephone and radio communication 

provided by 61 automated stations that have been substantially contracted out; and 

(4) Terminal Services, including air traffic control, provided by a network of over 400 

combined control facilities, terminal radar facilities, and towers.
Page 24 GAO-06-378 Congressional Oversight

$17, or 4.21 percent. This type of report is a tool for ongoing congressional 

oversight, addressing key operating issues identified by ATO management.

Committees could use information from FAA’s cost accounting system to 

better understand costs and performance of individual programs, activities, 

or outputs, addressing questions such as:

• What is the total cost of ATO services per flight?

• How do this year’s costs per flight compare to last year’s?

• How does the per flight cost of traffic controllers compare among 

airports?

CAS can be used to link costs to strategic performance areas and to 

combine air traffic safety data with financial information. FAA has also 

used cost finding techniques for selected programs during the fiscal year 

2006 budget cycle to estimate the marginal cost of performance, i.e., the 

incremental results that might be achieved at different levels of funding.

Analytical Agencies 

and Organizations Can 

Provide Information 

and Analysis to 

Enhance Oversight 

Efforts

Through its legislative support agencies—GAO, Congressional Research 

Service and the Congressional Budget Office—and the Department of 

Transportation’s Inspector General, congressional committees also have 

access to considerable resources for oversight. See appendix II for a 

summary of additional information resources.

GAO, as the investigative arm of Congress, examines the use of public 

funds; evaluates federal programs and activities; and provides analyses, 

options, and other assistance to help Congress make effective oversight, 

policy, and funding decisions. Several documents that GAO produces on an 

ongoing basis or as part of a body of work may prove useful to 

congressional committees when setting an oversight agenda.

• GAO Strategic Plan (2004-2009)10 GAO’s strategic plan, which has 

been updated every 2 years since 2000, describes the trends and issues 

that are likely to affect congressional decision makers over the 6-year 

period of the plan. It also provides GAO’s plans for analyses and other 

10GAO, GAO Strategic Plan (2004-2009), GAO-04-534SP (Washington, D.C.: March 2004).
Page 25 GAO-06-378 Congressional Oversight

activities to help support Congress’s information needs. One of GAO’s 

strategic objectives is to support congressional and federal efforts to 

obtain and maintain a safe, secure, and effective national physical 

infrastructure. Several performance goals under this objective involve 

transportation-related issues, including assessing efforts to improve 

safety and security in the nation’s transportation system and assess the 

impact of transportation policies and practices. As such, oversight 

committees can look to GAO for information on these issues and more. 

• High-Risk Series: An Update11 Since 1990, GAO has periodically 

reported—generally at the start of each new Congress—on government 

operations it identifies as having a high risk of fraud, waste, abuse, and 

mismanagement. Increasingly, the list has grown to include programs or 

agencies that need urgent attention or transformation, such as the 

Department of Homeland Security. In the January 2005 update, GAO 

presented the status of areas previously identified as high-risk. These 

included two involving FAA—FAA Financial Management and FAA Air 

Traffic Control modernization. We determined that FAA’s progress in 

improving financial management overall, a high-risk area since 1999, has 

been sufficient to remove it from the list. However, while FAA had made 

progress in addressing root causes of problems with its Air Traffic 

Control modernization, originally designated as high-risk in 1995, we 

maintained the high-risk designation. Therefore, the status of FAA’s Air 

Traffic Control modernization may be an area for oversight by the 

Transportation and Infrastructure Committee.

• 21st Century Challenges: Reexamining the Base of the Federal 

Government12 In February 2005, GAO issued a report on 21st century 

challenges facing the nation—including the federal government’s longterm fiscal imbalance and changing demographics—that suggests the 

need to reexamine the base of the federal government. The report is 

intended to help Congress address these challenges by providing a 

series of illustrative questions, both generic and for 12 examination 

areas that could help support a fundamental and broad-based 

reexamination initiative. One of the 12 examination areas we identified 

is transportation, in which the report describes FAA’s challenge in 

11GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 2005).

12GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, GAO05-325SP (Washington, D.C.: February 2005).
Page 26 GAO-06-378 Congressional Oversight

addressing the declining revenues in the Aviation Trust Fund and how 

that could affect funding for the agency. Committees could ask the 

related illustrative question: Should the federal government continue to 

provide public financing to stimulate private financing in areas such as 

aviation, where a mix of private and public beneficiaries exists?

In addition, through our review of federal programs and activities, we have 

a large body of work on aviation issues, FAA management, programs, and 

performance. Further, committees can also request additional evaluations 

to address issues of further interest. Recent examples of these reports 

include the following:

• National Airspace System: Initiatives to Reduce Flight Delays and 

Enhance Capacity Are Ongoing but Challenges Remain;13

• Airport and Airway Trust Fund: Preliminary Observations on Past, 

Present, and Future;14

• Air Traffic Control: FAA Needs to Ensure Better Coordination When 

Approving Air Traffic Control Systems;15

• Air Traffic Control: FAA’s Acquisition Management Has Improved, but 

Policies and Oversight Need Strengthening to Help Ensure Results;16

• Aviation Safety: FAA Needs to Strengthen the Management of Its 

Designee Programs;17

13GAO, National Airspace System: Initiatives to Reduce Flight Delays and Enhance 

Capacity Are Ongoing but Challenges Remain, GAO-05-755T (Washington, D.C.: May 26, 

2005).

14GAO, Airport and Airway Trust Fund: Preliminary Observations on Past, Present, and 

Future, GAO-05-657T (Washington, D.C.: May 4, 2005).

15GAO, Air Traffic Control: FAA Needs to Ensure Better Coordination When Approving Air 

Traffic Control Systems, GAO-05-11 (Washington, D.C.: Nov. 17, 2004).

16GAO, Air Traffic Control: FAA’s Acquisition Management Has Improved, but Policies 

and Oversight Need Strengthening to Help Ensure Results, GAO-05-23 (Washington, D.C.: 

Nov. 12, 2004).

17GAO, Aviation Safety: FAA Needs to Strengthen the Management of Its Designee 

Programs, GAO-05-40 (Washington, D.C.: Oct. 8, 2004).
Page 27 GAO-06-378 Congressional Oversight

• National Airspace System: FAA Has Made Progress but Continues to 

Face Challenges in Acquiring Major Traffic Control Systems;18

DOT’s OIG works within DOT to promote effectiveness and head off, or 

stop, waste, fraud and abuse in departmental programs through audits and 

investigations. The OIG also consults with Congress about programs in 

progress and proposed laws and regulations. The OIG also publishes 

semiannual reports, which summarize its recent audits and investigations. 

In addition, the OIG annually reports on the top management challenges 

facing DOT. DOT’s Top Management Challenges report can be found at: 

http://www.oig.dot.gov/item.jsp?id=1701. Three challenges identified in the 

most recent management challenges report by the OIG,19 relate wholly to 

FAA.

• Mitigating flight delays and relieving congestion—actions needed 

to meet demand. The OIG report states that the growth in aviation 

operations has brought an increase in the number of aviation delays, 

with the incidence, rate, and length of delays in the summer of 2005 

approaching 2000 levels, generally regarded as the worst summer of 

aviation delays. The report states that DOT will need to develop a 

toolbox of relief measures to use including new construction, 

technological improvements, procedural changes, administrative 

controls, and market-based solutions. The report also states that new 

runways provide the most increases in capacity, and that DOT and FAA 

will need to ensure the navigation equipment and airspace modifications 

are in place before the eight new runway projects, planned to be 

completed by 2008, are constructed. Finally, FAA will need to continue 

to consider the use of market-based solutions to mitigate congestion, 

such as schedule caps and congestion pricing. 

• Reauthorizing aviation programs—establishing requirements and 

controlling costs are prerequisites for examining FAA financing 

options. The OIG report states that a major focus of the FAA over the 

next year will be preparing to reauthorize a wide range of aviation 

programs and exploring alternative financing mechanisms. Challenges 

18GAO, National Airspace System: FAA Has Made Progress but Continues to Face 

Challenges in Acquiring Major Traffic Control Systems, GAO-05-331 (Washington, D.C.: 

June 10, 2005).

19Top Management Challenges: Department of Transportation, November 15, 2005, PT2006-007.
Page 28 GAO-06-378 Congressional Oversight

facing FAA include (1) controlling costs with major acquisitions by 

delivering new systems that work, are on time, and are within budget, 

and by making decisions on the scope of billion-dollar projects that have 

been delayed for years; (2) getting control of support service contracts, 

reducing associated costs, and following through on the implementation 

of new procedures; (3) establishing requirements for the next 

generation air traffic management system; (4) addressing the expected 

surge in controller attrition and negotiating an affordable and equitable 

bargaining agreement; and (5) completing a cost-accounting system to 

reduce costs and improve operations. 

• Aviation safety—developing effective oversight programs for air 

carrier operations, repair station maintenance, and operational 

errors. The OIG report states that the FAA maintains an impressive 

safety record, but still faces challenges with air carrier and repair station 

oversight as a result of financial uncertainty, competition from low-cost 

carriers, and rebounding air traffic. Further, the report states that the 

FAA experienced an increase in the number of reported operational 

errors—when planes come too close together in the air—over the past 

year, and at additional locations where operational errors were not 

reported. 

Regular 

Communication and 

Timely Access to 

Useful Information Can 

Enhance Oversight 

Effective communication among agency officials, Members of Congress 

and congressional staff is needed to ensure that information agencies 

provide meets committee needs. While considerable information resources 

are available, they may not be available in a manner that is useful to 

committees. We have previously reported, in a review of interactions 

between the Congress and other executive branch agencies, that although 

agencies collect and produce a great deal of useful information, much of it 

did not reach the interested congressional committees, and the information 

that did reach the committees was difficult to digest, too highly aggregated, 

or was received too late to be useful.20 While FAA provides a great deal of 

information on its Web site, enhancing access to agency information using 

technology can improve the timeliness and usefulness of agency 

information to the Congress. For example, information alerts and 

20GAO, Program Evaluation: Improving the Flow of Program Information to the Congress, 

GAO/PEMD-95-1 (Washington, D.C.: Jan. 30, 1995) and GAO, Managing For Results: Views 

on Ensuring the Usefulness of Agency Performance Information to Congress, GAO/GGD00-35 (Washington, D.C.: January 2000).
Page 29 GAO-06-378 Congressional Oversight

summaries from the agency could be effective information sharing tools. 

Further, regular meetings between committees, staff and agency officials 

could identify the committee’s principal oversight objectives, provide a 

forum to discuss the issues, and develop the best approaches to meet them. 

Access to Timely and Useful 

Agency Information Could 

Improve Committee 

Oversight 

Providing relevant agency information using technology solutions can 

improve committee access and minimize the effort required of agency staff. 

House Transportation and Infrastructure Committee staff indicated that 

FAA has a large quantity of information available and effective 

communication between the staff and the agency, but it is also interested in 

using technology to gain additional, timely access to agency data when 

conducting oversight. From our discussions with committee and agency 

staff, improving access through technology solutions could meet the needs 

of both groups. Access to information could be improved by

• A For Congress page on FAA’s Web site,

• A Frequently Asked Questions section on the For Congress Web site,

• A Web site subscription service notifying committee staff when relevant 

information has been updated, and

• Moderated access rights to selected FAA documents.

Several applications allowing Web-based access to information could 

benefit both the committee seeking information as well as the agency that 

provides information. For example, as a result of our discussions with 

committee and agency staff, FAA has initiated a For Congress page on its 

Web site. The page provides a single point of access for information 

committee staff identified in our discussions as relevant for oversight, as 

shown in figure 5. In addition, following a recommendation contained in 

our draft report, FAA added a subscription e-mail service to notify 

congressional users about new information available, such as new press 

releases and speeches by agency officials. We had pointed out that a 

subscription service could enhance the timeliness in which Congress 

receives information for oversight. For example, a subscription service 

notifying committees when notices of proposed rulemakings and other 

regulatory or policy guidance documents are published would give 

committees relevant information in a timely manner. 
Page 30 GAO-06-378 Congressional Oversight

Figure 5: FAA’s For Congress Web site Page

The For Congress Web site could be further improved by including a 

Frequently Asked Questions (FAQ) section to provide information often 

requested by committees. According to a manager within FAA, the agency 

provides a great deal of budget information to Congress in response to 

2

Source: FAA.

1

From the FAA main Web page, 

select the “More” link located in 

the upper right corner.

Next, choose 

“Congress” from 

the navigation 

menu located on 

the left side of the 

page.

This will bring you to the FAA information 

page for Congress.

3
Page 31 GAO-06-378 Congressional Oversight

questions for the record (QFRs) that are submitted by the appropriations 

committees of both chambers. However, the agency response is shared 

only with the requesting committee, even though it could be useful to all 

committees involved in oversight. In addition, many of these QFRs, as well 

as other requests for information, are handled in an ad hoc manner by 

individual FAA officials. When similar requests for information arrive, FAA 

officials often have to create an entirely new response. An FAA official said 

they had a general FAQ section, available on the bottom of all FAA Web 

pages, but it does not include the QFRs, or other questions regarding FAA 

planning, budgeting or performance. A FAQ section on the For Congress

Web page could minimize agency efforts by allowing it to post requested 

information once, rather than tying up valuable time and resources by 

repeatedly responding to similar questions. In addition, sharing agency 

responses to congressional information requests could enable quick access 

to information likely to assist in other congressional efforts. 

Other uses of technology, such as granting moderated access rights to 

selected FAA documents, could also enhance committee access to 

information. Moderated access would allow increased access of FAA 

information to committee staff, beyond what is available on the agency’s 

public Web site. To provide moderated access, individual committee staff 

would be issued accounts or use passwords to obtain access to information 

restricted to congressional users. The content allowed through the 

moderated access would be negotiated between the agency and committee. 

One way for committees to identify documents that are available would be 

to provide increased search capabilities on the FAA Web site. Increasing 

the Web site search capability would allow committees to identify what 

information exists, even if the entire document content was not 

immediately available. Using this knowledge of what information exists, 

committees could better identify exactly which of the information they 

would like to have made available through moderated access. 

Regular Meetings Between 

Committees and Agency 

Officials Could Provide a 

Forum to Discuss Oversight 

Issues

We have previously reported in a review of interactions between Congress 

and other executive branch agencies, that communication between 

committees and agency staff is often one-way, with little opportunity for 

direct discussion. According to Transportation and Infrastructure 

Committee staff, they generally contact the agency when they have a 

specific question, on an ad hoc basis. Transportation and Infrastructure 

Committee staff and experts we interviewed said constant communication 

with agencies within the committee’s jurisdiction, both formal and 

informal, could contribute to successful oversight. Developing a routine 
Page 32 GAO-06-378 Congressional Oversight

schedule of meetings could create a degree of certainty for both parties 

that issues important to each will be discussed. The timing, frequency, 

attendees, and agenda items could be negotiated in advance by both 

parties. Meetings could serve several purposes—they could be used to 

identify the committee’s principal oversight objectives, provide a forum to 

discuss the issues, and develop the best approaches to meet them.

Agency officials that we spoke with also supported regular meetings with 

committees. An FAA official said establishing an effective way to regularly 

communicate with Transportation and Infrastructure Committee staff 

would better enable FAA to directly inform the committee about emerging 

issues, whereas now the committee often relies on third party analysis and 

information. They understood that such meetings were not only 

opportunities for the committee to improve its oversight capacity, but also 

were opportunities for the agency to identify issues that may have received 

less attention and to help put the large amount of performance, budget, and 

financial information in a broader context so that committees can better 

understand the agency’s operations. The potential benefits of regular 

committee and agency staff meetings were evident during the constructive 

discussions coordinated by GAO for this report. 

Conclusions In order to conduct effective oversight of federal agencies and programs, 

congressional committees need access to timely and useful information. 

The types of information we identified as available for FAA management 

could also be used for oversight. Moreover, these types of information are 

produced routinely by all federal agencies and could be used by 

committees of jurisdictions to regularly monitor agency performance. 

However, as government grows more complex and agencies produce more 

information, it becomes harder for Congress to access, analyze, and 

summarize this information to develop its policy positions and legislative 

enactments. New ways must be continually found to use emerging 

technology and approaches to make agency information transparent and 

readily available. But despite the availability of information, and in FAA’s 

case, its public accessibility, more can be done to make this information 

readily accessible to congressional committees. In particular, improving 

access to information via technology solutions like those described in this 

report could allow congressional committees to access information as 

needed and minimize the number of duplicative information requests 

agencies are asked to respond to. In addition, establishing a schedule of 

routine meetings will provide congressional committees and agency 
Page 33 GAO-06-378 Congressional Oversight

officials with the opportunity to discuss in-depth the issues and challenges 

facing all federal agencies, including FAA. Establishing a collaborative 

approach to oversight will allow more consistent, rather than ad hoc, 

committee oversight. Importantly, these findings constitute lessons learned 

that may be transferable to other agencies. 

Recommendations for 

Executive Action

We recommend the Secretary of the Department of Transportation, direct 

the Administrator of FAA, to take the following actions to further enhance 

committee access to FAA information:

• Continue to work with committee staff to further refine the For 

Congress Web site by improving the flow of information and taking 

advantage of emerging technologies; 

• Include a Frequently Asked Questions page on the For Congress site, 

allowing oversight committees to quickly find answers to commonly 

requested items relevant to Congress;

• Add moderated access on the For Congress Web site to allow access to 

information that should be made available to congressional committees, 

yet may not be appropriate for the general public;

• Consider offering regular meetings between the Members of the 

committee and key staff with senior FAA executives to address matters 

of mutual concern. 

Agency Comments We provided a draft of this report to the Secretary of the Department of 

Transportation for review and comment. We received comments from FAA 

officials, including the Deputy Assistant Administrator for Financial 

Services, who indicated that they were pleased to serve as our case study 

and they would consider the report’s recommendations as they continue to 

strive for excellence in fulfilling the Congress’ information needs. The 

officials said that they endeavor to ensure Congress is fully informed of 

FAA’s planned and ongoing programs and activities, relying on a staff of 

dedicated professionals who know and understand the needs of Congress 

to maintain a steady flow of useful information to Congress. The officials 

also said that they make extensive use of technology to enhance the 

information available to Congress. They noted that a considerable amount 

of information is available to Members of Congress and their staff in a 
Page 34 GAO-06-378 Congressional Oversight

section of FAA’s Web site dedicated to serving the information needs of 

Congress—as our report notes, an improvement developed as a result of 

discussions between agency and congressional staff during our review. In 

addition, they indicated they had created a subscription e-mail service to 

enable committee staff to be notified when information is updated on their 

Web site, such as with new press releases and speeches by agency officials. 

As noted earlier, this action was recommended in our draft report; 

consequently, since FAA has taken these steps, we have eliminated the 

recommendation from the final report. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days after its 

issuance date. At that time, we will send copies of this report to the 

Secretary of Transportation and will make copies available to others upon 

request. In addition, the report will be available at no charge on GAO’s Web 

site at http://www.gao.gov. 

Please contact me on (202) 512-6543 if you or your staff have any questions 

about this report. Contact points for our Office of Congressional Relations 

and Public Affairs may be found on the last page of this report. Other 

contacts and staff acknowledgments are listed in appendix IV. 

Sincerely yours,

Bernice Steinhardt

Director, Strategic Issues
Page 35 GAO-06-378 Congressional Oversight

Appendix I

Objectives, Scope and Methodology AAppenednxidexiIs

The objectives of this report were to identify (1) information FAA produces 

that could enhance congressional oversight; (2) other available information 

resources that could enhance congressional oversight; and, (3) how 

committee access to FAA’s information could be improved to enhance 

timeliness and usefulness. 

To identify the information and delivery mechanisms that would enhance 

the committee’s ability to oversee FAA programs and management, we met 

with staff from the U.S. House of Representatives Committee on 

Transportation and Infrastructure and its subcommittee on Aviation. 

To identify information produced by FAA that could enhance oversight, we 

met with FAA senior officials from numerous offices, including several 

lines of business—Airports; Air Traffic Organization; and Aviation Safety—

and staff offices—Aviation Policy, Planning and Environment; Financial 

Services; Government and Industry Affairs; Human Resources and 

Management. In addition, we met with officials from the Chief Information 

Office/Office of Information Services and the Office of Inspector General 

for the Department of Transportation.

To identify information resources external to FAA that could enhance 

congressional oversight, we met with officials from other government 

entities such as the Congressional Research Service, the General Service 

Administration’s FirstGov initiative, and the Office of Management and 

Budget. In addition, we met with technology representatives from LexisNexis. Finally, we attended meetings with representatives from the 

Mercatus Center, CATO Institute, and the Heritage Foundation, hosted by 

the House Committee on Transportation and Infrastructure.

In addition, we reviewed FAA performance, budget and financial 

documents and FAA’s Web site. We also reviewed reports and evaluations 

produced by analytical agencies and organizations and prior GAO work in 

this area. 

Written comments from FAA are included in appendix II. We conducted our 

work from September 2004 through November 2005 in accordance with 

generally accepted government auditing standards.
Page 36 GAO-06-378 Congressional Oversight

Appendix II

Analytical Agencies and Organizations Can 

Provide Information and Analysis to Enhance 

Oversight Efforts ApendxiI

Table 5: Analytical Resource for Congressional Oversight, as Illustrated by FAA Information

GAO

www.gao.gov

• GAO Strategic Plan (2004-2009) (GAO-04-534SP). GAO’s strategic plan, which has been updated every 2 years 

since 2000, describes the trends and issues that are likely to affect congressional decision makers over the 6-year 

period of the plan. It also provides GAO’s plans for analyses and other activities to help support Congress’s 

information needs. One of GAO’s strategic objectives is to support congressional and federal efforts on a safe, 

secure, and effective national physical infrastructure. Several performance goals under this objective involve 

transportation-related issues, including assessing efforts to improve safety and security in the nation’s 

transportation system and the impact of transportation policies and practices. As such, committee oversight staff 

can look to GAO for support on these issues and more. GAO’s strategic plan can be found at: 

http://www.gao.gov/sp.html.

• High-Risk Series: An Update (GAO-05-207). Since 1990, GAO has periodically reported—generally at the start 

of each new Congress—on government operations it identifies as having a high risk of fraud, waste, abuse, and 

mismanagement. Increasingly, the list has grown to include programs or agencies that need urgent attention or 

transformation, such as the Department of Homeland Security. In the January 2005 update, GAO presented the 

status of areas previously identified as high-risk. These included two involving FAA—FAA Financial Management 

and FAA Air Traffic Control modernization. We determined that FAA’s progress in improving financial management 

overall, a high-risk area since 1999, has been sufficient to remove it from the list. However, while FAA had made 

progress in addressing root causes of problems with its Air Traffic Control modernization, originally designated as 

high-risk in 1995, we maintained the high-risk designation. Therefore, the status of FAA’s Air Traffic Control 

modernization may be an area for oversight by the Transportation and Infrastructure Committee staff. GAO’s High 

Risk Series: An Update can be found at: http://www.gao.gov/docsearch/featured/highrisk.html.

• 21st Century Challenges: Reexamining the Base of the Federal Government (GAO-05-325SP). In February 

2005, GAO issued a report on 21st century challenges facing the nation—including the federal government’s longterm fiscal imbalance and changing demographics—that suggests the need to reexamine the base of the federal 

government. The report is intended to help Congress address these challenges by providing a series of illustrative 

questions, both generic and for 12 examination areas, that could help support a fundamental and broad-based 

reexamination initiative. One of the 12 examination areas we identified is transportation, in which the report 

describes FAA’s challenge in addressing the declining revenues in the Aviation Trust Fund and how that could 

affect funding for the agency. Committee staff could use the related illustrative question—should the federal 

government continue to provide public financing to stimulate private financing in areas such as aviation where a 

mix of private and public beneficiaries exists? GAO’s 21st Century Challenges Report can be found at 

http://www.gao.gov/index.html. 

In addition, through our review of federal programs and activities, we have a large body of work on aviation issues, 

FAA management, programs, and performance. Further, committee staff can also request additional evaluations to 

address issues of further interest. Recent examples of these reports include:

• National Airspace System: Initiatives to Reduce Flight Delays and Enhance Capacity Are Ongoing but Challenges 

Remain (GAO-05-755T) 

• Airport and Airway Trust Fund: Preliminary Observations on Past, Present, and Future (GAO-05-657T)

• Air Traffic Control: FAA Needs to Ensure Better Coordination When Approving Air Traffic Control Systems (GAO05-11)

• Air Traffic Control: FAA’s Acquisition Management Has Improved, but Policies and Oversight Need Strengthening 

to Help Ensure Results (GAO-05-23)

• Aviation Safety: FAA Needs to Strengthen the Management of Its Designee Programs (GAO-05-40)
Appendix II

Analytical Agencies and Organizations Can 

Provide Information and Analysis to Enhance 

Oversight Efforts

Page 37 GAO-06-378 Congressional Oversight

DOT’s Inspector 

General 

www.oig.dot.gov

DOT’s OIG works within DOT to promote effectiveness and head off, or stop, waste, fraud and abuse in 

departmental programs through audits and investigations. The OIG also consults with Congress about programs in 

progress and proposed laws and regulations. Twice a year, the OIG also publishes semiannual reports, which 

summarize its recent audits and investigations. In addition, the OIG annually reports on the top management 

challenges facing DOT. DOT’s Top Management Challenges report can be found at: 

http://www.oig.dot.gov/item.jsp?id=1701. Three challenges identified in the most recent management challenges 

report by the OIGa relate wholly to FAA

• Mitigating flight delays and relieving congestion—actions needed to meet demand. The OIG report states 

that the growth in aviation operations has brought an increase in the number of aviation delays. The incidence, 

rate, and length of delays this past summer is approaching 2000 levels, which was generally regarded as the 

worst summer of aviation delays. The report states that DOT will need to develop a toolbox of relief measures, 

including construction, technological improvements, procedural changes, administrative controls, and marketbased solutions, that can be used as appropriate. The report also states that new runways provide the most 

increases in capacity, and that DOT and FAA will need to ensure the navigation equipment and airspace 

modifications are in place before the eight runway projects, planned to be completed by 2008, are constructed. 

Finally, FAA will need to continue to consider use of market-based solutions to mitigate congestion, such as 

schedule caps and congestion pricing. 

• Reauthorizing aviation programs—establishing requirements and controlling costs are prerequisites for 

examining FAA financing options. The OIG report states that a major focus of the FAA over the next year will be 

preparing to reauthorize a wide range of aviation programs and explore alternative financing mechanisms. 

Challenges facing FAA include: (1) controlling costs with major acquisitions by delivering new systems that work, 

are on time, and are within budget, and making decisions on the scope of billion-dollar projects that have been 

delayed for years; (2) getting control of support service contracts, reducing associated costs, and following 

through on the implementation of new procedures; (3) establishing requirements for the next generation air traffic 

management system; (4) addressing the expected surge in controller attrition and negotiating an affordable and 

equitable bargaining agreement; and (5) completing a cost-accounting system to reduce costs and improve 

operations. 

• Aviation safety—developing effective oversight programs for air carrier operations, repair station 

maintenance, and operational errors. The OIG report states that the FAA maintains an impressive safety 

record, but still faces challenges with air carrier and repair station oversight as a result of financial uncertainty, 

competition from low-cost carriers, and rebounding air traffic. Further, the report states that the FAA experienced 

an increase in the number of reported operational errors—when planes come too close together in the air—over 

the past year, and additional locations where operational errors were not reported. 

Program 

Assessment 

Rating Tool 

(PART)

www.whitehouse.

gov/omb/

PART is a diagnostic tool created as a central component to the President’s Management Agenda, and is intended 

to assess and improve program performance and results by providing a consistent approach to evaluating the 

management and performance of federal programs. It is used by the Office of Management and Budget to conduct 

oversight. PART evaluates a program’s (1) purpose and design, (2) strategic planning, (3) program management, 

and (4) program results (e.g., whether a program is meeting its long-term and annual goals).b

 PART has been used 

to assess five FAA programs from the fiscal year 2006 budget 

• Air traffic services

• Grants-in-aid for airports

• Facilities and equipment

• Regulation and certification

• Research, engineering and development

(Continued From Previous Page)
Appendix II

Analytical Agencies and Organizations Can 

Provide Information and Analysis to Enhance 

Oversight Efforts

Page 38 GAO-06-378 Congressional Oversight

Source: GAO.

The President’s 

Management 

Agenda (PMA)

www.results.gov

The President’s Management Agenda identifies five governmentwide goals to improve federal management and 

deliver results. The goals are strategic management of human capital, competitive sourcing, improved financial 

performance, expanded electronic government, and budget and performance integration. The Executive Branch 

Management Scorecard tracks how well the departments and major agencies are executing the five 

governmentwide initiatives. The scorecard employs a stoplight grading system: green for success, yellow for mixed 

results, and red for unsatisfactory. The Department of Transportation, of which FAA is a part, received a rating of 

green for the strategic management of human capital, competitive sourcing, expanded electronic government and 

budget and performance integration, and a rating of red for improved financial performance in the September 2005 

ratings. 

Congressional 

Research Service 

(CRS) 

www.crs.gov

CRS, a department of the Library of Congress, is a nonpartisan analytical, research, and reference arm for 

Congress with the mission to support an informed national legislature. CRS serves Congress throughout the 

legislative process by providing comprehensive and reliable legislative research, analysis, and information services 

that are timely, objective, nonpartisan, and confidential. CRS is organized into five interdisciplinary research 

divisions: American Law; Domestic Social Policy; Foreign Affairs, Defense and Trade; Government and Finance; 

and Resources, Science and Industry. 

Recent CRS reports related to the FAA include:

• Aviation Taxes and Fees: Major Issues (Order Code RS21321)

• Avoiding Gridlock in the Skies: Issues and Options for Addressing Growth in Air Traffic (Order Code RL32707)

• Federal Transportation Funding: Selected Programs Fiscal Years 1994-2004 (Order Code RL32472)

• Fiscal Year 2006 Appropriations for the Department of Transportation (Order Code RL32945)

• Vision 100: An Overview of the Century of Aviation Reauthorization Act (Pub. L. No. 108-176) (Order Code 

RL32498)

Congressional 

Budget Office 

(CBO)

www.cbo.gov

CBO is a nonpartisan legislative branch agency that produces material to inform congressional decisions on 

spending and taxes. Specifically, CBO publishes cost estimates and mandate statements for congressional bills, 

reports needed for the budget process, budgetary and economic analytical studies, policy briefs, background 

papers, and a monthly budget review of the fiscal activity of the government. CBO is organized into six divisions: 

budget analysis, heath and human resources, macroeconomic analysis, microeconomic studies, national security, 

and tax analysis. 

CBO publications containing information on FAA include:

• Budget Options (February 2005)

• Financing Small Commercial-Service Airports: Federal Policies and Options (April 1999)

Examples of relevant CBO cost estimates include:

• H.R. 1496, Return of General Aviation to Ronald Reagan Washington National Airport Act of 2005 (May 4, 2005)

• H.R. 2115, Vision 100-Century of Aviation Reauthorization Act (Dec. 9, 2003)

Think Tanks Think tanks engage in a range of policy-related activities, and comprise a diverse set of institutions that have varied 

organizational forms. They could provide information and research to enhance congressional oversight. 

Industry, Interest 

and User Groups

Industry, interest and user groups are public and private organizations involved in the aviation industry that could 

provide research and information to inform committee staff on oversight issues.

(Continued From Previous Page)
Appendix II

Analytical Agencies and Organizations Can 

Provide Information and Analysis to Enhance 

Oversight Efforts

Page 39 GAO-06-378 Congressional Oversight

a

Top Management Challenges: Department of Transportation, Nov. 15, 2005, PT-2006-007.

b

For GAO’s assessment of OMB’s PART, see GAO, Performance Budgeting: PART Focuses on 

Program Performance, but More Can Be Done to Engage Congress, GAO-06-28 (Washington, D.C.: 

Oct. 28, 2005) and GAO, Performance Budgeting: Observations on the Use of OMB’s Program 

Assessment Rating Tool for the Fiscal Year 2004 Budget, GAO-04-174 (Washington, D.C.: Jan. 30, 

2004).
Page 40 GAO-06-378 Congressional Oversight

Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources ApendxiI

FAA’s annual financial statements can be used to analyze the agency’s 

operating results and its financial position. Most of this analysis involves 

looking at how various individual reported amounts interrelate or 

represent the agency as a whole, and how those amounts or relationships 

change from period to period. The historical information presented can 

establish a baseline for estimates of future operations and funding needs. 

Agency financial information can be valuable for

• facilitating an understanding of an agency’s operations;

• providing a common database for the development, analysis, and debate 

of alternative policies;

• supporting an historical perspective from which to evaluate future 

plans, budgets, and spending proposals;

• assessing agency accountability for actual results when compared to 

budgets; and

• evaluating program costs.

Further information regarding federal financial statements can be found in 

a guide to the annual financial report of the U.S. Government, published 

recently by GAO. This guide can be helpful to Congress and taxpayers in 

evaluating both governmentwide financial reports and those of individual 

agencies.1

FAA’s Balance Sheet FAA’s balance sheet shows an end-of-the-year view of its overall financial 

position, its assets (what it owns), its liabilities (what it owes), and the 

difference between the two (its net position). A wide variety of analyses 

can be applied to information presented in FAA’s consolidated balance 

sheets for fiscal years 2003 and 2004, which are presented in Figure 6.

1

GAO, Understanding the Primary Components of the Annual Financial Report of the 

United States Government, GAO-05-958SP (Washington, D.C.: September 2005).
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 41 GAO-06-378 Congressional Oversight

Figure 6: FAA’s Consolidated Balance Sheets for Fiscal Years 2003 and 2004

Source: FAA’s fiscal year 2004 Performance and Accountability Report.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 42 GAO-06-378 Congressional Oversight

Committee staff could use information from FAA’s balance sheet to 

facilitate a better understanding of the agency’s financial position, 

addressing questions such as

• What are FAA’s largest asset and liability categories?

• What is the makeup of FAA’s assets and liabilities?

• What future funding may be required to replace deteriorating operating 

assets and to satisfy long-term liabilities?

For example, as shown in Figure 7, FAA’s two largest asset categories are 

property, plant, and equipment valued at about $14.5 billion and 

investments valued at about $10.3 billion. For additional information about 

the makeup of these assets, the balance sheet refers readers to the related 

notes. Referring to the related note 6, one can learn that the acquisition 

value (cost) of personal property (e.g. equipment) increased by $1.3 billion, 

or 10 percent, from fiscal year 2003 to fiscal year 2004, and that the sizeable 

increase in the reported cost of property, plant, and equipment includes 

new acquisitions of National Airspace System equipment. The balance 

sheet and notes also show that FAA has significant amounts invested in the 

Airport and Airway Trust Fund but that the balance of these investments 

fell during fiscal year 2004. A possible inquiry to the FAA might address a 

relationship between the investment balance and additions to property, 

plant and equipment. Also disclosed in note 6, the accumulated 

depreciation of each asset class is one potential indicator of the relative 

deterioration of those assets. Accumulated depreciation is ultimately 

limited to the original acquisition value of an asset, and substantially 

depreciated assets may possibly soon require funding for their 

replacement.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 43 GAO-06-378 Congressional Oversight

Figure 7: Composition of FAA’s Assets and Liabilities, as of September 30, 2004

The balance sheet also indicates a significant percentage increase in 

accounts receivable that are not intragovernmental transactions among 

federal entities. Though less significant than some of the other amounts 

shown in the balance sheet, such an increase might warrant a follow-up 

discussion with FAA regarding its cause and whether this indicates a new 

trend that will require funding from additional appropriations in the future. 

Source: FAA’s fiscal year 2004 Performance and Accountability Report, Management’s Discussion and Analysis.

Composition of assets (as of September 30, 2004)

3%

Other

Property, plant,

and equipment

Investments

Fund balance

with Treasury 10%

51% 36%

Composition of liabilities (as of September 30, 2004)

Employee related,

legal, and

other liabilities

Accounts payable

Federal employee

benefits

Environmental

cleanup costs

17%

20%

27%

36%
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 44 GAO-06-378 Congressional Oversight

Statement of Net Cost FAA’s statement of net cost is intended to show how much it costs 

taxpayers to operate FAA. Net cost is calculated by subtracting any earned 

revenues from gross cost, which include program costs as well as 

administrative costs, resulting in FAA’s costs to taxpayers. As shown in 

Figure 8, FAA’s statement of net costs presents cost information for each of 

its four major lines of business – air traffic organization, regulation and 

certification2

, airports, and commercial space transportation -- and two 

categories that are not lines of business, including agency overhead. 

2

The FAA PAR for fiscal year 2005 presents a line of business called aviation safety in place 

of regulation and certification.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 45 GAO-06-378 Congressional Oversight

Figure 8: FAA’s Consolidated Statements of Net Cost for Fiscal Years 2003 and 2004

Source: FAA’s fiscal year 2004 Performance and Accountability Report.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 46 GAO-06-378 Congressional Oversight

Committee staff could use information from FAA’s statement of net cost to 

enhance their understanding of possible future cost trends, addressing 

questions such as: 

• How much did FAA’s net cost increase or decrease from the prior fiscal 

year?

• Which of FAA’s programs experienced the largest increase and which 

experienced the largest decrease in net cost from the prior fiscal year?

• Which of FAA’s programs accounted for most of its net cost?

For example, FAA’s statements of net cost for fiscal years 2003 and 2004 

show that other than a nearly $200 million (6.8 percent) increase in net 

costs related to the airport program, operating results were substantially 

consistent for those two years, indicating that future operating costs of 

FAA’s other business lines may be stable. Based on the airports’ program 

increase, a reader may decide to perform further analysis using FAA’s 

statements of net cost from prior fiscal years. As shown in Figure 9, further 

analysis of the airport program over time indicates that net costs for the 

program have doubled over the last four fiscal years. This may prompt 

questions to determine the causes for the increase, whether this growth 

was expected and, going forward, how much the airport program should 

continue to grow.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 47 GAO-06-378 Congressional Oversight

Figure 9: Net Costs for FAA’s Airport Program for Fiscal Years 2000 through 2004

FAA provides additional information about the distribution of net costs in 

note 12 of its financial statements, which is summarized in Figure 10. This 

information shows that FAA’s most costly line of business was air traffic 

organization, which accounted for about two-thirds of its net costs. The net 

cost information provided in note 12 also shows that 72 percent of FAA’s 

net costs were used to support its strategic goal of safety. Using the 

information about net costs disclosed by FAA, a reader can consider 

whether FAA’s current cost distribution appropriately reflects its strategic 

goals and congressional priorities, or whether resources should be 

redirected.

Source: GAO analysis of information obtained from FAA’s fiscal year 2000 through 2004 Performance and Accountability Reports.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2000 2001 2002 2003 2004

Net cost

Fiscal year
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 48 GAO-06-378 Congressional Oversight

Figure 10: Composition of FAA’s Net Costs, for Fiscal Year 2004, by Business Line and Strategic Goal

Statement of Changes in Net 

Position

FAA’s statement of changes in net position shows how it financed its 

operations for the fiscal year. It shows the agency’s net position at the 

beginning of the fiscal year, the major inflows and outflows of funds that 

caused the net position to change during the year, and the ending net 

position. FAA’s statements of changes in net position for fiscal years 2003 

and 2004 are displayed in figure 11. 

Source: GAO analysis of information obtained from FAA’s fiscal year 2004 Performance and Accountability Report.

Business line 

1.6%

Commercial space

transportation and

all other

Airports

Air Traffic Organization

Regulation and

certification

7.7%

24.4%

66.3%

Strategic goal

0.1%

International

leadership

Capacity

Safety

5.1%

Organizational

excellence

22.8%

72.0%
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 49 GAO-06-378 Congressional Oversight

Figure 11: FAA’s Consolidated Statements of Changes in Net Position for Fiscal 

Years 2003 and 2004

Committee staff could use information from the statement of changes in 

net position to facilitate a better understanding of FAA’s financial position 

and direction, addressing questions such as: 

Source: FAA’s fiscal year 2004 Performance and Accountability Report.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 50 GAO-06-378 Congressional Oversight

• What were FAA’s primary financing sources and how much did they 

increase or decrease?

• To what extent did FAA’s excise tax revenue cover its net costs?

• Did FAA’s net position improve or deteriorate?

For example, FAA’s statement of changes in net position shows that FAA is 

primarily financed through excise tax revenue and appropriations. 

However, fiscal year 2004 appropriations used decreased by about 20 

percent from the previous year, while excise taxes and associated revenue 

rose by about three percent, conditions that if analyzed in greater detail, 

might reveal important information about the agency’s future aggregate 

spending or income trends. For example, the decrease from fiscal year 2003 

to 2004 in appropriations used approximated the amount associated with 

FAA’s 2003 transferred operations, leading a reader to infer that the two are 

related. However, analyzing the trend of this information going forward 

may tell a different story about the agency’s direction. If the trend indicated 

by FAA’s statement of changes in net position for fiscal year 2004 continues, 

FAA may be able to meet more of its costs through service fees and excise 

taxes rather than appropriated funds. Also, the percentage composition of 

financing sources can be compared to that of other agencies or programs. 

Statement of Budgetary 

Resources

The statement of budgetary resources presents the amount of budgetary 

resources available during the fiscal year and the status of those resources 

at the end of the year. This statement provides basic information about 

budget authority made available from appropriations, fee collection, and, 

when applicable, borrowing authority. The relationship of obligations to 

outlays is also presented for the fiscal year. FAA’s statements of budgetary 

resources for fiscal years 2003 and 2004 are displayed in figure 12. 
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 51 GAO-06-378 Congressional Oversight

Figure 12: FAA’s Consolidated Statements of Budgetary Resources for Fiscal Years 

2003 and 2004

Source: FAA’s fiscal year 2004 Performance and Accountability Report.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 52 GAO-06-378 Congressional Oversight

Committee staff could use information from FAA’s statement of budgetary 

resources to obtain an overview of the agency’s financial position and 

direction, addressing questions such as: 

• Were there increases or decreases in budget authority, unobligated 

budgetary resources, total budgetary resources, obligations incurred, 

and/or disbursements?

• To what extent were current fiscal year budgetary resources used?

For example, FAA’s statements of budgetary resources for fiscal years 2003 

and 2004 show that budgetary authority, budgetary resources, obligations 

incurred, and disbursements all increased in fiscal year 2004, indicating a 

possible expansion in FAA’s overall activities for the year. However, FAA’s 

budgetary resources increased at a faster pace than outlays and 

obligations, which might indicate a change in FAA’s budgetary needs that 

should be analyzed further.

FAA provides additional information about the use of its budgetary 

resources in the required supplementary information section of its PAR, 

which includes a schedule of budgetary resources by major fund type. As 

shown in figure 13, an analysis of this schedule shows that the operations 

fund uses the most budgetary resources followed by the grants-in-aid to 

airports fund and the facilities and equipment fund. In addition, readers 

may compare the fiscal year 2004 schedule of budgetary resources by 

major fund type to schedules for prior years. A comparison of the fiscal 

year 2003 and 2004 schedules included in the 2004 PAR shows that 

budgetary resources for facilities and equipment grew by 3.8 percent, 

compared to 8.1 percent growth for grants and 5.0 percent growth for 

operations. This type of analysis allows for consideration as to whether 

FAA’s current use of budgetary resources is efficient and reflects 

congressional priorities. 
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 53 GAO-06-378 Congressional Oversight

Figure 13: Composition of Budgetary Resources, by Major Fund Type

Statement of Financing The statement of financing reconciles the resources used to finance an 

agency’s operations for each fiscal year using budgetary accounting with 

the net cost of operations determined using the accrual basis of 

accounting. It explains the differences between an agency’s obligations of 

budget authority as reported in budget documents and the statement of 

budgetary resources, and the net cost of its operations as shown in the 

statement of net cost, indicating the various categories of transactions that 

are considered when preparing one of those statements but not the other. 

The statement illustrates the link between budgetary accounting (primarily 

cash basis), which records obligations when goods and services are 

ordered, and financial (accrual basis) accounting, which records expenses 

when goods are consumed and services are received in fulfillment of the 

agency’s objectives. FAA’s fiscal year 2003 and 2004 statements of financing 

are shown in figure 14. 

Source: GAO analysis of FAA’s fiscal year 2004 Performance and Accountability Report, schedule of budgetary resources by major

fund type.

Other

Facilities and equipment

Operations

24% Grants-in-Aid to airports

23%

48%

5%
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 54 GAO-06-378 Congressional Oversight

Figure 14: FAA’s Consolidated Statements of Financing for Fiscal Years 2003 and 

2004

Source: FAA’s fiscal year 2004 Performance and Accountability Report.
Appendix III

Financial Statements Provide Insights into 

Agency Financial Management and Resources

Page 55 GAO-06-378 Congressional Oversight

Committee staff could use information from the statement of financing to 

facilitate an understanding of FAA’s financial position and direction, 

addressing questions such as: 

• How much of FAA’s net costs were due to the depreciation of its assets?

• How much did FAA spend on capitalized fixed assets?

For example, FAA’s statements of financing for fiscal years 2003 and 2004 

show an increase of 29 percent in resources used to acquire assets, 

transactions which affect budgetary resources but are not shown on the 

statement of net costs until they are used up or depreciated, in the case of 

property, plant, and equipment. As a result, additional oversight may be 

warranted for the increase in resources being used to finance the 

acquisition of assets.
Page 56 GAO-06-378 Congressional Oversight

Appendix IV

GAO Contact and Staff Acknowledgements ApendxiIV

GAO Contact Bernice Steinhardt on (202) 512-6543 or steinhardtb@gao.gov. 

Acknowledgments In addition to the contact names above, Linda Calbom, Director; Christine 

Bonham, Assistant Director; Elizabeth Curda, Assistant Director; Jack 

Warner, Assistant Director; Kevin J. Conway, Fred Evans, Benjamin Licht, 

and Chelsa Gurkin made significant contributions to this report.

(450362)
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