Department of Homeland Security
 

Review of Costs Invoiced by the Spokane Airport 


Board for Closed Circuit Television Cameras at 


Spokane International Airport Under Other 


Transaction Agreement Number 


HSTS04-09-H-REC304 Awarded by the 


Transportation Security Administration 


American Recovery and Reinvestment Act of 2009 

OIG-12-76 April 2012
 
,' '.::; OFFICE OF INSPECTOR GENERAL .~ _ ~~ Department of Homeland Security 

Washington, DC 205281 www.oig.dhs.gov 

APR 3 0 2012 

MEMORANDUM FOR: Kelly Hoggan 

Assistant Administrator 

Office of Security Capabilities 

Transportation Security Administration 

FROM: Anne L Richards ~r 

Assistant Inspector General for Audits 

SUBJECT: Review of Costs Invoiced by the Spokane Airport Board for 

Closed-Circuit Television Cameras at Spokane International 

Airport Under Other Transaction Agreement Number 

HSTS04-09-H-REC304 Awarded by the Transportation 

Security Administration 

Attached for your information is our final letter report entitled, Review of Costs Invoiced 

by the Spokane Airport Board for Closed-Circuit Television Cameras at Spokane 

International Airport Under Other Transaction Agreement Number HSTS04-09-H-REC304 

Awarded by the Transportation Security Administration. Since the report contains no 

recommendations to Transportation Security Administration management, we did not 

solicit formal comments. 

Consistent with our responsibility under the Inspector General Act, we are providing 

copies of our report to appropriate congressional committees with oversight and 

appropriation responsibility over the Department of Homeland Security. We will post 

the report on our website for public dissemination. 

Major contributors to this report are Roger LaRouche, Audit Director; Karl Gallagher, 

Audit Manager; and Ashley Smith, Report Referencer. 

Please call me with any questions, or your staff may contact John E. McCoy II, Deputy 

Assistant Inspector General for Audits, at (202) 254-4100. 

Attachment 
 

 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

Background 

On February 17, 2009, Congress enacted thefAmericanfRecoveryfandfReinvestmentfActf

off2009,fas amended (Recovery Act) to preserve and create jobs, promote economic 

recovery, and invest in transportation, environmental protection, and other infrastructure 

that will provide long-term economic benefits. The Recovery Act appropriated $1 billion 

to the Transportation Security Administration (TSA) for “procurement and installation of 

checked baggage explosive detection systems and checkpoint explosives detection 

equipment....” According to TSA, $61,827,702 of that amount was awarded to 14 

airport organizations for the advanced surveillance program. 

Under Other Transaction Agreement (OTA) No. HSTS04-09-H-REC304, as modified, TSA 

agreed to reimburse the Spokane Airport Board (Airport Board) for the allowable, 

allocable, and reasonable costs up to $1,950,696 to support the design, installation, and 

operation of closed-circuit television cameras (CCTVs) at the Spokane International 

Airport (Airport). Under the OTA, the Airport Board was required to install CCTVs 

throughout the Airport to monitor activities at various locations, including curbside 

ticketing, ticket counter baggage drop off, and TSA work stations. 

 

The OTA, signed on June 25, 2009, specifies a project period from June 25, 2009, 

through December 25, 2010, and requires the Airport Board to submit invoices for 

reimbursement of project costs to TSA. Reimbursement for eligible project costs is 

based on the scope of the agreement; and Office of Management and Budget (OMB) 

Circular A-87, Revised, CostfPrinciplesfforfState,fLocal,fandfIndianfTribalfGovernments.ff

The CCTV installation was completed on December 20, 2010, with total invoiced costs of 

$1,950,696. 

The agreement also requires the Airport Board to comply with the OMB Circular A-133, 

Revised, AuditsfoffStates,fLocalfGovernments,fandfNon-ProfitfOrganizations, and 

Recovery Act provisions to submit quarterly recipient reports to the Federal 

Government, and pay prevailing wages as determined by the Secretary of Labor under 

40 U.S.C. Chapter 31, Subchapter IV. 

The objective of this audit was to determine whether costs invoiced by the Airport 

Board are allowable, allocable, and reasonable according to the funding agreement and 

applicable Federal requirements. 

 

www.oig.dhs.gov 2 OIG-12-76 
 

 

 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

Results of Review

We determined that invoiced costs of $1,950,696 for the CCTV design and installation

were allowable, allocable, and reasonable. We also concluded that the Airport Board 

complied with the requirements for submitting quarterly reports, for paying prevailing 

wages, and for reporting project status to the Federal Government. 

www.oig.dhs.gov 3 OIG-12-76 
 

 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

Appendix A 

Objective, Scope, and Methodology 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was 

established by the HomelandfSecurityfActfoff2002 (Public Law 107-296) by amendment 

to the InspectorfGeneralfActfoff1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the Department. 

The objective of this audit was to determine whether costs invoiced by the Airport 

Board are allowable, allocable, and reasonable according to the funding agreement and 

applicable Federal requirements. Our audit covered invoiced costs of $1,950,696 for the 

period June 25, 2009, through December 20, 2010. This project is completed, and as

such this amount represents the total reimbursable and invoiced amount. 

Our tests and procedures included the following: 

•	 Reviewing TSA project files, the OTA and modifications, the Recovery Act,

and TSA and OMB guidelines.

•	 Interviewing TSA officials to gain an understanding of the project and project 

management. 

•	 Examining the Airport Board accounting records supporting the amounts 

invoiced. 

•	 Interviewing Airport Board officials to obtain an understanding of project 

management, accounting, procurement, and invoicing. 

•	 Inspecting the CCTV project. 

•	 Reviewing the audit working papers of the Washington State Auditor’s Office, 

which performed the Single Audit of the Airport Board for the fiscal year 

ending December 31, 2010. 

The Single Audit of the Airport Board was performed by the Washington State Auditor’s 

Office and included Recovery Act–funded CCTV project costs totaling $1,948,466 (or

almost 100% of invoiced costs). The Single Audit report classified the CCTV project as a 

major program. The report did not identify any questionable costs or compliance 

issues related to the CCTV project or any deficiencies in internal controls that were 

identified as material weaknesses that would affect the CCTV project. 

We also tested Airport Board records supporting costs invoiced to determine 

compliance with OMB Circular A-87, Revised, and with other terms and conditions of 

www.oig.dhs.gov 4 	 OIG-12-76 
 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

 

the agreement. We considered Airport Board internal controls over the administration 

of TSA funds in determining our audit procedures. 

We conducted this performance review between January 2012 and March 2012, 

pursuant to the InspectorfGeneralfActfoff1978, as amended, and according to 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 conclusions based upon our audit objectives. We believe that the evidence 

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

audit objectives. 

www.oig.dhs.gov 5 OIG-12-76 
 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

 

Appendix B 

Report Distribution

Department of Homeland Security

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Acting General Manager, Checked Baggage Division/Program 

Manager, Electronic Baggage Screening Program, TSA 

Director of Acquisition Policy, TSA 

Audit Liaison Official, TSA 

Departmental Recovery Act Coordinator 

Office of Management and Budget

Chief, Homeland Security Branch

DHS OIG Budget Examiner

Congress

Congressional Oversight and Appropriations Committees, as appropriate 

www.oig.dhs.gov 6 OIG-12-76 
ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General 

(OIG) at (202)254-4100, fax your request to (202)254-4305, or e-mail your request to 

our OIG Office of Public Affairs at DHS-OIG.OfficePublicAffairs@dhs.gov. For 

additional information, visit our OIG website at www.oig.dhs.gov or follow us on Twitter 

@dhsoig. 

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