REVIEW OF FAA’S SAFETY OVERSIGHT OF 

AIRLINES AND USE OF REGULATORY 

PARTNERSHIP PROGRAMS 

Federal Aviation Administration 

Report Number: AV-2008-057 

Date Issued: June 30, 2008 
U.S. Department of 

Memorandum

Transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: ACTION: Review of FAA’s Safety Oversight of 

Airlines and Use of Regulatory Partnership 

Programs 

Federal Aviation Administration 

Report Number AV-2008-057 

Date: June 30, 2008 

From: Calvin L. Scovel III 

Inspector General 

Reply to 

Attn. of: JA-1 

To: Acting Federal Aviation Administrator 

This report presents the interim results of our review of the Federal Aviation 

Administration’s (FAA) oversight of airlines’ regulatory partnership programs and 

its national program for risk based oversight, the Air Transportation Oversight 

System (ATOS). We initiated this review in response to a February 6, 2008, 

request from the Chairman of the House Committee on Transportation and 

Infrastructure. Specifically, the Chairman requested that we determine whether 

FAA thoroughly investigated whistleblowers’ complaints regarding FAA’s 

oversight of Southwest Airlines (SWA). 

The whistleblower allegation focused on SWA’s failure to follow a critical FAA 

airworthiness directive (AD) and an FAA inspector’s role in allowing the air 

carrier to continue flying aircraft in violation of the AD. The FAA directive1

 in 

this case required SWA to inspect the fuselages of its Boeing 737s for potential 

cracks that could lead to rapid decompression and fatal accidents. FAA issued this 

directive after an Aloha Airlines 737 lost a major portion of its hull while in flight 

at 24,000 feet in 1988, resulting in one fatality and multiple injuries. The 

Chairman also requested that we determine whether FAA took corrective actions 

in a timely manner. 

The objectives of our initial review were to determine (1) the thoroughness of 

FAA’s investigation of the whistleblower allegations and (2) the type and 

timeliness of corrective actions taken by FAA in response to any inappropriate 

 

1

 FAA Airworthiness Directive 2004-18-06 requires that Boeing 737s (series 200, 300, 400, and 500) be inspected for 

fuselage cracks every 4,500 cycles (1 cycle equals 1 take-off and landing) after they reach 35,000 cycles. 
2

inspector actions. At the request of Congress, we continue to review FAA’s air 

carrier oversight processes to determine if there are areas in which FAA could 

strengthen its oversight. Exhibit A contains our scope and methodology. Exhibit 

B lists the agencies we contacted or visited. 

We testified before the House Committee on Transportation and Infrastructure 

regarding the SWA matter on April 3, 2008.2

 We subsequently testified before 

two Senate subcommittees: the Senate Committee on Commerce, Science, and 

Transportation, Subcommittee on Aviation Operations, Safety, and Security on 

April 10, 2008,3

 and the Senate Committee on Appropriations, Subcommittee on 

Transportation, Housing and Urban Development, and Related Agencies on 

April 17, 2008.4

 

During these testimonies, we made a series of recommendations to improve 

FAA’s air carrier oversight practices. We are continuing our review of these 

issues and plan to issue a final report later this year. This interim report formally 

transmits to FAA the recommendations we have identified to date. FAA generally 

agreed with most of our recommendations for improving controls over its 

regulatory partnership programs and its national ATOS program. However, FAA 

did not agree with the two following recommendations, which are fundamental in 

improving its oversight of air carriers: (1) periodically rotate supervisory 

inspectors to ensure reliable and objective air carrier oversight and (2) establish an 

independent organization to investigate safety issues identified by FAA 

employees. Given the seriousness of the issues these recommendations were 

intended to address, we believe FAA needs to reconsider its position. 

Our complete recommendations, a summary of the Agency’s comments, and our 

response can be found on pages 9 through 12 of this report. FAA’s response is 

included in its entirety in the appendix. 

BACKGROUND 

According to SWA, it discovered it had violated the AD requiring fuselage 

inspections on March 14, 2007, and notified an FAA principal maintenance 

inspector (PMI) the following day. Although FAA requires air carriers to ground 

non-compliant aircraft and its inspectors to ensure that carriers comply, the 

inspector did not direct SWA to ground the 46 affected aircraft. 

 

2

 OIG Testimony Number CC-2008-046, “Actions Needed to Strengthen FAA’s Safety Oversight and Use of 

Partnership Programs,” April 3, 2008. OIG reports and testimonies are available on our website: www.oig.dot.gov. 3

 OIG Testimony Number CC-2008-067, “Key Safety Challenges Facing the Federal Aviation Administration,” 

April 10, 2008. 4

 OIG Testimony Number CC-2008-070, “Key Safety and Modernization Challenges Facing the Federal Aviation 

Administration,” April 17, 2008. 
3

Instead, the PMI encouraged SWA to formally self-disclose the AD violation 

through its Voluntary Disclosure Reporting Program (VDRP), which would allow 

the carrier to avoid any penalties. FAA accepted the air carrier’s self-disclosure 

on March 19, 2007, even though it had already accepted multiple disclosures on 

AD violations. SWA continued to operate the non-compliant aircraft on 

1,451 flights for 8 days after the carrier first notified FAA, carrying an estimated 

145,000 passengers. We estimate that, in total, aircraft flew in violation of the AD 

for up to 9 months, carrying 6 million passengers during this period. 

Once it formally self-disclosed the violation, SWA stated that it was in compliance 

with the AD, meaning it had inspected or grounded all affected aircraft. However, 

two FAA inspectors (the whistleblowers in this case) and SWA officials reported 

that the PMI had knowingly permitted SWA to continue flying the identified 

aircraft even after SWA’s self-disclosure. 

During our review, we found that several of these aircraft flew into airports 

multiple times after SWA self-disclosed the overflight where they could have 

received the required inspections. When SWA finally inspected the aircraft, it 

found fuselage cracks in five of them. The AD specifies that these cracks could 

potentially lead to fuselage separation and rapid aircraft depressurization if left in 

disrepair. 

SUMMARY OF RESULTS 

The events at SWA demonstrated serious lapses in FAA’s air carrier oversight. 

We found that FAA’s inspection office overseeing SWA (the Certificate 

Management Office, or CMO) developed an overly collaborative relationship with 

the air carrier, which allowed repeated self-disclosures of AD violations through 

its partnership program. We also found significant weaknesses in the Agency’s 

ATOS program, which allowed AD non-compliance issues within SWA’s 

maintenance program to go undetected for years. In addition, we found 

weaknesses in FAA’s (1) processes for conducting internal reviews and ensuring 

corrective actions and (2) policies for protecting employees who report critical 

safety issues. 

The breakdown in FAA’s air carrier oversight occurred because FAA did not 

implement and enforce effective management controls over its air carrier oversight 

program. Those controls include the plans, policies, and procedures necessary to 

meet missions, goals, and objectives and ensure compliance with applicable laws 

and regulations. Additionally, although FAA implemented an internationally 

recognized standard for establishing quality management systems, known as ISO9001, it failed to apply important requirements of the standard. Those 
4

requirements include regularly reviewing and improving Agency processes to 

ensure they are effective. 

Because FAA did not implement and enforce effective management controls over 

its air carrier oversight programs, including ISO-9001 requirements, the events at 

SWA were allowed to transpire. Further, because these control deficiencies exist 

across the ATOS and voluntary disclosure programs, FAA cannot have assurance 

that these problems are unique to SWA. 

FAA has begun actions to address the SWA safety directive violation; these 

include initiating a review of AD compliance at SWA and other air carriers and 

proposing to fine SWA more than $10 million. While FAA’s actions are 

necessary, albeit long overdue, the seriousness of the issues we identified will 

require immediate and comprehensive changes to FAA’s air carrier oversight 

program. 

Overly Collaborative Relationship With the Air Carrier Contributed to 

Breakdowns in Partnership Program 

We found that the CMO overseeing SWA developed an overly collaborative 

relationship with the air carrier that allowed repeated self-disclosures of AD 

violations through its partnership program. Partnership programs are intended to 

encourage data-sharing between FAA and air carriers to identify and address 

safety issues. Yet, FAA allowed SWA to repeatedly self-disclose AD violations 

without ensuring that SWA had developed a comprehensive solution for reported 

safety problems—which is required for FAA to accept the disclosure and absolve 

the carrier of any penalty. 

Clearly, SWA’s proposed solutions, which FAA has repeatedly accepted, have 

failed to solve AD compliance issues as the carrier has violated four different ADs 

eight times since December 2006, including five in 2008. FAA’s oversight in this 

case appears to allow, rather than mitigate, recurring safety violations. 

FAA maintains that disclosure programs are valuable, as they can help to identify 

and correct safety issues that might not otherwise be obtainable. However, we are 

concerned that FAA relies too heavily on self-disclosures and promotes a pattern 

of excessive leniency at the expense of effective oversight and appropriate 

enforcement. Further, a partnership program that does not ensure carriers correct 

underlying problems is less likely to achieve safety benefits. 

The overly collaborative relationship with the air carrier occurred because FAA 

did not have the following management controls over its partnership program: 
5

• FAA did not ensure adequate segregation of duties. This entails dividing 

duties and responsibilities among different individuals to reduce the risk of 

error or fraud. In the SWA case, the PMI was responsible for both acceptance 

and closure of the carrier’s self-disclosure through the VDRP. The CMO 

manager was not aware of the significance of the violation, or of the PMI’s 

complicity in allowing the violation to continue, because the program does not 

require management review of the report at any point in the process. 

The events at SWA demonstrated that FAA must implement and enforce a 

process for second-level supervisory review of self-disclosures before they are 

accepted and closed—acceptance should not rest solely with one inspector. 

FAA should also periodically rotate supervisory inspectors to ensure reliable 

and objective air carrier oversight. 

• FAA did not have management controls for avoiding a potential conflict of 

interest among its employees dealing with the carrier. Specifically, the 

SWA Regulatory Compliance Manager was a former FAA inspector assigned 

to SWA who reported directly to the PMI when he worked at FAA. The 

employee was able to transition from being an FAA inspector to a SWA 

manager in just 2 weeks. In his new job, he served as the liaison between the 

carrier and FAA and managed Southwest’s AD Compliance Program and its 

Voluntary Disclosure Reporting Program. 

FAA needs to implement post-employment guidance that includes a “coolingoff” period (e.g., 2 years) to prohibit an FAA inspector hired at an air carrier he 

or she previously inspected from acting in any type of liaison capacity between 

FAA and the carrier. This type of control is found throughout the Government 

to ensure that senior Agency officials cannot immediately be employed in a 

liaison capacity by the organizations they formerly regulated. 

• FAA failed to implement management controls to verify the propriety and 

integrity of corrective actions taken. In the case of SWA, FAA allowed the 

carrier to repeatedly self-disclose AD violations without ensuring that SWA 

had developed a comprehensive solution for reported safety problems. 

FAA must ensure that its VDRP guidance requires inspectors to (a) verify that 

air carriers take comprehensive actions to correct the underlying causes of 

violations identified through self-disclosure programs and (b) evaluate, before 

accepting a new report of a previously disclosed violation, whether the carrier 

developed and implemented a comprehensive solution. 

Finally, it appears that FAA management fostered a culture whereby air carriers 

were considered the primary customer of its oversight mission instead of the flying 

public. Satisfying customer requirements is a key tenet of the ISO 9001 Quality 
6

Standards. To meet this requirement, FAA announced its Customer Service 

Initiative in 2003, which defined its customers as the people and companies 

requesting FAA certification, other aviation services, or information related to the 

products and mission of the FAA. The initiative, however, was geared toward 

airlines, repair stations, and other commercial operators—not the flying public. 

The SWA case appears to illustrate that FAA’s definition of its customer has had a 

pervasively negative, although unintended, impact on its oversight program. FAA 

must ensure its air carrier oversight mission clearly identifies the flying public as a 

primary stakeholder and beneficiary of its inspection efforts. FAA should commit 

to this in writing and communicate it to all FAA inspection staff. 

Missed Inspections at SWA Demonstrate Weaknesses in FAA’s 

National Oversight 

Our work at SWA and other carriers found weaknesses in FAA’s national program 

for risk-based oversight, ATOS. At SWA, multiple missed ATOS inspections 

allowed AD compliance issues in SWA’s maintenance program to go undetected 

for several years. As early as 2003, one of the whistleblowers expressed concerns 

to FAA about SWA’s compliance with ADs. In 2006, he began urging FAA to 

conduct system-wide reviews, but FAA did not begin these reviews until after the 

details of the March 2007 disclosure became public. 

In fact, FAA inspectors had not reviewed SWA’s system for compliance with ADs 

since 1999. At the time of the SWA disclosure, FAA inspectors had not 

completed 21 key inspections in at least 5 years. While FAA has subsequently 

completed some of these inspections, as of April 15, 2008, 4 of these inspections 

were still incomplete; some had not been completed for nearly 8 years. 

We have previously identified system-wide problems with ATOS. For example, 

in 2002,5

 we found inconsistent inspection methods across FAA field offices for 

various carriers. As a result, FAA inspectors were confused over how to conduct 

ATOS inspections and assess risks. We recommended that FAA strengthen 

national oversight and accountability to ensure consistent field implementation of 

ATOS. FAA agreed that it needed to strengthen national oversight and stated that 

the newly appointed director of Flight Standards (at Headquarters) would enhance 

oversight and hold field offices accountable for implementing ATOS effectively. 

However, this action still did not improve consistency with ATOS inspections at 

field offices. 

 

5

 OIG Report Number AV-2002-088, “Air Transportation Oversight System,” April 8, 2002. 
7

In our 2005 report,6 we found that inspectors did not complete 26 percent of 

planned ATOS inspections—more than half of these were in identified risk areas. 

We recommended, among other things, that FAA strengthen its national oversight 

and accountability to ensure consistent and timely ATOS inspections. However, 

FAA still has not fully addressed our recommendations. 

Had FAA strengthened its national oversight by implementing effective 

management controls, it would have been able to monitor the extent to which 

required inspections were not being performed and it would have been able to 

intervene earlier to correct the problem. Effective management controls should be 

designed to ensure ongoing monitoring occurs in the course of normal operations 

at all levels of an organization. 

Ongoing monitoring is also a key ISO 9001 requirement. Those monitoring 

activities should assess the quality of the program’s performance over time and 

ensure that the findings of audits and other reviews are promptly resolved. Also, 

because the control deficiencies we found in FAA’s oversight of SWA inspections 

reflect inadequate oversight at the national and regional management levels, FAA 

executives cannot be assured that the problems that existed at SWA are unique to 

that location. 

FAA must implement a Headquarters-based process to monitor field office 

inspections. The process should alert local, regional, and Headquarters 

management of overdue inspections so that immediate corrective actions can be 

taken. FAA must also develop a national review team that conducts periodic 

quality assurance reviews of FAA’s oversight of air carriers to ensure that 

(1) appropriate processes and procedures are applied and (2) pertinent policies, 

laws, and regulations are followed. Ultimately, this quality assurance function 

should provide FAA executives with reasonable assurance that inspections are 

completed in a thorough and timely manner. 

Events at SWA and NWA Demonstrate Weaknesses in FAA’s Internal 

Reviews of Safety Issues and Protection for Employees Who Report 

Them 

Our work at SWA and Northwest Airlines (NWA) has identified weaknesses in 

FAA’s processes for conducting internal reviews, ensuring corrective actions, and 

protecting employees who report safety concerns. In the SWA case, FAA’s 

internal reviews found as early as April 2007 that the PMI was complicit in 

allowing SWA to continue flying aircraft in violation of the AD. Yet, FAA did 

 

6

 OIG Report Number AV-2005-062, “FAA Safety Oversight of an Air Carrier Industry in Transition,” June 3, 2005. 
8

not attempt to determine the root cause of the safety issue nor initiate enforcement 

action against the carrier until November 2007. 

At NWA, FAA’s reviews of an inspector’s safety concerns were limited and 

overlooked key findings identified by other inspectors. Although some of the 

inspector’s safety concerns were valid, FAA informed him that all of his concerns 

lacked merit. 

We also have concerns regarding FAA’s failure to protect employees who report 

safety issues from retaliation by FAA managers and other FAA employees. For 

example, in the SWA case, after one whistleblower voiced his concerns to FAA, 

an anonymous hotline complaint was lodged against him. According to the CMO 

manager, the PMI indicated that a SWA representative submitted the complaint. 

The complaint was non-specific and never substantiated, but the whistleblower 

was removed from his oversight duties for 5 months while under investigation. 

However, unlike the whistleblower, the PMI who admitted he allowed SWA to 

continue flying in violation of the AD was never completely relieved of his 

oversight duties; he was merely transferred to another FAA office. 

Our work at NWA found the same problem with FAA’s handling of the inspector 

who reported safety concerns. As with the inspector in the SWA case, FAA 

managers reassigned an experienced inspector to office duties, following a 

complaint from the airline, and restricted him from performing oversight on the 

carrier’s premises. 

The issues exposed at both of these air carriers show that FAA did not establish an 

appropriate control environment or a reliable internal review process; it also failed 

to protect employees who identified important safety issues. To prevent 

recurrence of this situation, FAA should establish an independent organization 

(that reports directly to the FAA Administrator or Deputy Administrator) to 

investigate safety issues identified by its employees. 

RECOMMENDATIONS 

Our recommendations are a result of our work to date on FAA’s safety oversight 

of airlines and use of regulatory partnership programs. At the request of Congress, 

we are continuing to review FAA’s Voluntary Disclosure Reporting and ATOS 

programs, and we will make further recommendations based on that work. Our 

interim recommendations focus on basic management controls identified thus far 

that FAA must implement immediately to ensure it is (1) meeting the missions, 

goals, and objectives of its air carrier oversight program and (2) fully complying 

with all applicable laws and regulations. 
9

Accordingly, we recommend that FAA implement the following management 

controls over the VDRP process: 

1. Implement and enforce a process for second-level supervisory review of 

self-disclosures before they are accepted and closed—acceptance and 

closure should not rest solely with one inspector. 

2. Ensure that inspectors (a) verify that air carriers take comprehensive actions 

to correct the underlying causes of violations identified through selfdisclosure programs and (b) evaluate—before accepting a new report of a 

previously disclosed violation—whether the carrier developed and 

implemented a comprehensive solution. 

We also recommend that FAA implement the following management controls over 

its risk-based ATOS program: 

3. Develop procedures for periodically rotating supervisory inspectors to 

ensure reliable and objective air carrier oversight. 

4. Implement post-employment guidance that includes a “cooling-off” period 

(e.g., 2 years) that prohibits an FAA inspector hired at an air carrier he or 

she previously inspected from acting in any type of liaison capacity 

between FAA and the carrier. 

5. Ensure its air carrier oversight mission clearly identifies the flying public as 

a primary stakeholder and beneficiary of its inspection efforts; FAA should 

commit to this in writing and clearly communicate it to all FAA inspection 

staff. 

6. Implement a process to monitor field office inspections and alert local, 

regional, and Headquarters management to overdue inspections so that 

immediate corrective actions can be taken. 

7. Create a national review team to conduct periodic quality assurance reviews 

of FAA’s oversight of air carriers to ensure that (a) appropriate processes 

and procedures are being applied consistently and (b) pertinent policies, 

laws, and regulations are being followed. 

Finally, we recommend that FAA implement the following general management 

control: 

8. Establish an independent organization (that reports directly to the FAA 

Administrator or Deputy Administrator) to investigate safety issues 

identified by FAA employees. 
10

AGENCY COMMENTS AND OIG RESPONSE 

We provided FAA with our draft report on May 28, 2008, and received FAA’s 

comments on June 24, 2008. In its written response, FAA agreed to fully 

implement all but two of our eight recommendations. FAA did not agree with our 

recommendation to periodically rotate inspectors (recommendation 3) and 

partially agreed with our recommendation to establish an independent 

investigative organization (recommendation 8). 

In its response to recommendation 3, FAA stated that it is evaluating the 

recommendation to periodically rotate supervisory inspectors to ensure reliable 

and objective air carrier oversight. FAA stated that it is concerned that it would 

not be practical to require inspectors and their families to relocate on a regular 

basis. FAA also stated that from a budgetary perspective, the yearly costs of 

rotating inspectors would be exorbitant. 

We recognize the logistical and budgetary constraints this initiative could create; 

however, we continue to believe that FAA needs a process to ensure objective air 

carrier oversight by its inspectors. FAA should reconsider its response and 

develop alternatives that would address the intent of our recommendation to 

provide greater assurance that FAA inspectors do not develop overly collaborative 

relationships with the air carriers they oversee. 

Possible alternatives could include (a) incorporating assessments to determine if 

there is an overly collaborative relationship between inspectors and the air carriers 

they oversee into FAA’s Air Carrier Evaluation Program and establishing a 

process for reassigning those inspectors who have developed such relationships 

and (b) modifying FAA’s aviation safety inspector training program to include 

additional sensitivity and integrity training for air carrier relations. Accordingly, 

we are requesting that FAA reconsider its position regarding this recommendation 

and provide us with alternative planned actions. 

In response to recommendation 8, FAA stated partial agreement because it has 

already deployed the Safety Issues Report System (SIRS) Process to provide an 

avenue for employees to resolve safety issues without fear of repercussions and to 

document issues and decisions to promote consistency in the application of safety 

standards. 

FAA’s response is unacceptable. Although FAA stated that it partially agreed 

with our recommendation, the actions taken do not demonstrate a commitment on 

FAA’s part to address the root causes of the issues we identified. Our work at 

SWA and NWA identified serious weaknesses in FAA’s processes for conducting 

internal reviews, ensuring corrective actions, and protecting employees who report 

safety concerns. 
11

In our view, SIRS merely adds one more process to an already existing internal 

reporting process within the Aviation Safety Organization that is unequivocally 

ineffective and possibly even biased against resolving root causes of serious safety 

lapses. Implementation of SIRS does not address the intent of our 

recommendation, which was to establish an independent organization (reporting 

directly to the Administrator or Deputy Administrator) to investigate safety issues 

identified by FAA employees. Accordingly, we are requesting that FAA 

reconsider its position regarding this recommendation. 

FAA concurred with our remaining recommendations (1, 2, 4, 5, 6, and 7). 

Specifically, FAA agreed to: 

• Revise FAA Order 8900.1, Flight Standards Information Management System, 

to require field office management to sign off on acceptance of a VDRP report 

and ensure that the operator has completed the comprehensive fix appropriately 

before closing out the VDRP report. FAA published interim guidance to this 

effect on May 1 and plans to incorporate this policy change into permanent 

guidance by September 30, 2008. 

• Amend FAA Order 8900.1 and the VDRP Advisory Circular to emphasize 

reviewing the comprehensive fix proposed by the operator to ensure it 

addresses the issue being reported. FAA will also update inspector guidance to 

ensure principal inspectors and management consider the nature of each report, 

including repeated reports of the same regulation. FAA plans to complete this 

action by May 1, 2009. 

• Initiate a rulemaking to establish a 2-year cooling-off period for FAA 

inspectors. The Rulemaking Project Record, which starts the rulemaking 

process, was approved on May 15. 

• Reiterate its commitment to the safety of the flying public by having the 

Associate Administrator for Aviation Safety visit every FAA Region. 

• Modify its Aviation Safety Dashboard to show the percentage of the ATOS 

inspections assigned and completed, those that have not been assigned, and the 

reasons for the unassigned. FAA agreed to send Alert Notifications to the 

regional division managers at the end of each calendar quarter. 

• Revise its guidance to require Air Carrier Evaluation Program audits to be 

conducted on a regular basis. 

We consider FAA’s planned actions to these recommendations to be responsive 

and therefore consider them resolved pending completion. If properly 
12

implemented, FAA’s actions should significantly enhance its oversight of air 

carriers and its use of regulatory partnership programs. 

ACTIONS REQUIRED 

We request that FAA reconsider its position regarding recommendations 3 and 8 

and provide us with a revised response to those recommendations within 

15 calendar days. FAA’s planned actions are responsive to the intent of our other 

recommendations and we consider those recommendations resolved pending 

completion of the planned actions. 

According to Department of Transportation Order 8000.1C, we will follow up 

with FAA on recommendations 1, 2, 4, 5, 6, and 7 to ensure its corrective actions 

are consistent with the intent of those recommendations. 

We appreciate the courtesies and cooperation of FAA representatives during this 

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

Assistant Inspector General for Aviation and Special Program Audits, at 

(202) 366-0500. 

# 

cc: Anthony Williams, ABU-100 

 Martin Gertel, M-1 
13

EXHIBIT A. SCOPE AND METHODOLOGY 

We conducted this performance audit in accordance with generally accepted 

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

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our 

audit objectives. We conducted this review between February and March of 2008. 

Two FAA inspectors alleged that SWA was permitted to operate aircraft in violation 

of a mandatory airworthiness directive because of an overly collaborative relationship 

between the local FAA inspection office and the air carrier. These inspectors 

requested protection under the Whistleblower Act. In February 2008, the House 

Committee on Transportation and Infrastructure requested that we review FAA’s 

handling of the SWA matter and examine FAA’s oversight from a national 

perspective. To accomplish this, we performed work at FAA’s Southwest Regional 

Office, two FAA certificate management offices, a Flight Standards District Office, 

and Southwest Airlines. Throughout our review, we contacted FAA Flight Standards 

Service officials to apprise them of our review progress. 

To obtain details about the allegation, members of the Office of Inspector General 

audit and investigative staff interviewed the whistleblowers at the local FAA 

certificate management offices in Irving and Fort Worth, Texas, in February 2008. 

We also analyzed inspection data from FAA inspection databases to determine the 

validity of the allegations. We obtained inspection reports from these data sources to 

identify strengths and weaknesses in FAA’s surveillance of SWA as related to the 

whistleblowers’ concerns. 

To determine whether FAA’s Security and Hazardous Materials Division thoroughly 

investigated the whistleblowers’ complaints regarding FAA’s oversight of Southwest 

Airlines, we reviewed the Division’s report of investigation and interviewed the 

investigator that completed the review. The investigative report contained numerous 

interviews of FAA personnel and served as a basis for our selection of individuals to 

interview to obtain further information. 

The Committee also requested that we examine FAA’s oversight from a national 

perspective and provide any recommendations to strengthen FAA’s oversight of the 

air carrier industry. Over the next 6 months, we plan to conduct a series of audits to 

address the Committee’s concerns in this area. 

Exhibit A. Scope and Methodology 
14

EXHIBIT B. AGENCIES VISITED OR CONTACTED 

Federal Aviation Administration 

Headquarters: 

Flight Standards Service Washington, DC 

Regional Offices: 

Southwest Regional Office Fort Worth, TX 

 FAA Security and Hazardous Materials 

Division Fort Worth, TX

Certificate Management Offices (CMO): 

Southwest Airlines CMO Irving, TX 

 American Airlines CMO Fort Worth, TX 

Flight Standards District Office (FSDO): 

 Dallas-Fort Worth FSDO Fort Worth, TX 

Air Carrier

Southwest Airlines Dallas, TX 

Exhibit B. Agencies Visited or Contacted 
15

APPENDIX. MANAGEMENT COMMENTS 

Federal Aviation 

Administration 

Memorandum 

Date: June 24, 2008 

To: Matthew E. Hampton, Deputy Assistant Inspector General for Aviation and 

Special Program Audits 

From: Ramesh K. Punwani, Assistant Administrator for Financial Services/CFO 

Prepared by: Anthony Williams, x79000 

Subject: OIG Draft Report: Review of FAA’s Safety Oversight of Airlines and Use of 

Regulatory Partnership Programs 

Thank you for providing us the draft report of your audit of “Review of FAA’s Safety Oversight of 

Airlines and Use of Regulatory Partnership Programs.” We agree that there were serious lapses on 

behalf of some individuals at the Southwest Certificate Management Office and the Southwest 

regional office. We value the Report’s recommendations and will implement each to the extent they 

are practicable. In general; we believe that introducing additional management controls in programs 

such as the Voluntary Disclosure Reporting Program (VDRP) and the Air Transportation Oversight 

System (ATOS) will be beneficial. These are extremely valuable programs in terms of their 

contributions to FAA's safety mission. We look forward to the OIG’s continued review of ATOS. 

Your evaluations and recommendations are a valued contribution to our continuous improvement 

process. 

OIG Recommendation 1: Implement and enforce a process for second-level supervisory review of 

self-disclosures before they are accepted and closed--acceptance and closure should not rest solely 

with one inspector. 

FAA Response: Concur: On May 1, the FAA published interim guidance for inspectors in the form 

of Notice 8900.39, Requiring Appropriate 14 CFR Part 119 Corporate Officer and FAA Office 

Manager Signatures for the Voluntary Disclosure Reporting Program. In this guidance we require the 

certificate holding district office management to sign off on acceptance of a VDRP. 

Management must also assure that the operator has completed the comprehensive fix appropriately 

before closing out the VDRP. We will have this policy change fully incorporated into our permanent 

guidance, FAA Order 8900.1, Flight Standards Information Management System, by September 30. 

On May 1, the FAA published interim guidance for operators in Information for Operators (InfO) 

08021, explaining both the requirement for FAA management sign-off and for a key management 

Appendix. Management Comments 
16

official in the airline to sign-off on the VDRP submission. We will include this change in an update of 

Advisory Circular 00-58, Voluntary Disclosure Reporting Program, also by September 30. 

OIG Recommendation 2: Ensure that inspectors (a) verify that air carriers take comprehensive 

actions to correct the underlying causes of violations identified through self-disclosure programs and 

(b) evaluate--before accepting a new report of a previously disclosed violation--whether the carrier 

developed and implemented a comprehensive solution. 

FAA Response: Concur: The notice issued on May 1 stressed management involvement by both the 

operator and the FAA concerning the initial report and its close-out. We will amend the VDRP 

portion of FAA Order 8900.1, and the VDRP advisory circular to emphasize reviewing the 

comprehensive fix proposed by the operator to assure it addresses the issue being reported. As well, 

we will update that guidance to make certain that FAA principal inspectors and management take into 

consideration the nature of each report, including repeated reports of the same regulation. We will 

provide specific examples in the guidance when appropriate. Order 8900.1 will be updated before the 

notice expires on May 1, 2009. 

OIG Recommendation 3: Develop procedures for periodically rotating supervisory inspectors to 

ensure reliable and objective air carrier oversight. 

FAA Response: Non-Concur: FAA is evaluating this recommendation, but is concerned that it is not 

very practical to require inspectors and their families to relocate on a regular basis. Additionally, 

from a budgetary perspective, the yearly costs related to a rotation of the work force every 3 years 

(moving 1/3 per year) would break out as follows: Principal Inspectors -- only $12 million; Principal 

Inspectors and Managers -- $27 million, and for all Flight Inspectors --$129.3 million. 

OIG Recommendation 4: Implement post-employment guidance that includes a “cooling-off” 

period (e.g., 2 years) that prohibits an FAA inspector hired at an air carrier he or she previously 

inspected from acting in any type of liaison capacity between FAA and the carrier. 

FAA Response: Concur: The FAA is implementing this recommendation through a rulemaking that 

would establish a 2-year cooling-off period. During this period, a former FAA inspector hired by an 

airline he/she previously inspected could not represent that airline to the FAA. The Rulemaking 

Project Record, which starts the rulemaking process, was approved May 15. 

OIG Recommendation 5: Ensure its air carrier oversight mission clearly identifies the flying public 

as a primary stakeholder and beneficiary of its inspection efforts; FAA should commit to this in 

writing and clearly communicate it to all FAA inspection staff. 

FAA Response: Concur: The Associate Administrator for Aviation Safety (AVS) has visited or has 

scheduled visits to every Region and to the Aeronautical Center to reiterate our commitment to the 

safety of the flying public. We are considering the most effective way to communicate this 

commitment to all employees. 

OIG Recommendation 6: Implement a process to monitor field office inspections and alert local, 

regional, and Headquarters management to overdue inspections so that immediate corrective actions 

can be taken. 

FAA Response: Concur: The AVS Dashboard has been modified to show the percentage of the 

ATOS assessments assigned and completed, and those that have not been assigned and why (for 

example, because of lack of resources). This Dashboard is reviewed by the AVS Management Team 

Appendix. Management Comments 
Appendix. Management Comments 

17

monthly. Alert Notifications are sent by the Flight Standards Certification and Surveillance Division 

to the regional division managers at the end of each calendar quarter.- 

OIG Recommendation 7: Create a national review team to conduct periodic quality assurance 

reviews of FAA’s oversight of air carriers to ensure that (a) appropriate processes and procedures are 

being applied consistently and (b) pertinent policies, laws, and regulations are being followed. 

FAA Response: Concur: The Air Carrier Evaluation Program (ACEP) is currently in place as part of 

the ATOS system. We will change our guidance to require these audits on a regular basis. The Flight 

Standards Service Director will convene periodically a team of FAA executive level safety 

professionals to determine ACEP focus areas based on analysis of current conditions, such as trends 

in surveillance, outsourcing or financial conditions. We will analyze results of focused ACEP 

campaigns to direct corrective measures. Additionally, the Flight Standards Evaluation Program 

(FSEP) will be used to assess whether FAA offices operate according to national policy. The Flight 

Standards field managers and supervisors make up 6 FSEP audit teams. The yearly audit schedule 

assigns audit teams to 30 offices throughout the Flight Standards organization, and auditors cannot 

evaluate any office within their region. AFS-l receives quarterly audit reports containing all finding 

and trends. All FSEP transmittals are entered as corrective action reports into the quality management 

system. 

OIG Recommendation 8: Establish an independent organization (that reports directly to the FAA 

Administrator or Deputy Administrator) to investigate safety issues identified by FAA employees. 

FAA Response: Partially Concur: AVS deployed the Safety Issues Report System (SIRS) Process on 

April 30 to provide an avenue for employee to gain resolution of safety issues without fear of 

repercussions, and to document issues and decisions to further promote consistency in the application 

of safety standards. To date, 24 potential issues have been sent in (since the hearings)--18 of these 

were sent by electronic mail directly to the Associate Administrator for Aviation Safety, and 6 were 

entered into the SIRS automated system since it was deployed at the end of April. Of the total, 11 

were appropriate to be accepted in SIRS; the remainder included items related to personnel issues and 

employee messages of support to the Associate Administrator.