## Fiscal Year 2008 Costing Methodology Report

Prepared by: Federal Aviation Administration Assistant Administrator for Financial Services

January 2010ii TABLE OF CONTENTS

EXECUTIVE SUMMARY ..................................

................................................... ........................III

1 INTRODUCTION .......................................

................................................... ........................... 5

1.1 CAS Design Objectives..............................

................................................... ......................... 5

1.2 CAS Design.........................................

................................................... ................................. 6

1.3 Costing Terminology ................................

................................................... .......................... 7

1.4 Methods for Assigning Costs........................

................................................... ...................... 8

2 AIR TRAFFIC ORGANIZATION ...........................

................................................... .......... 10

2.1 ATO Cost Targets/Services..........................

................................................... .................... 10

2.2 ATO Cost Model .....................................

................................................... .......................... 10

2.3 ATO Cost Assignments ...............................

................................................... ..................... 12

2.4 ATO Multiple Service Assignments ...................

................................................... ............. 25

3 AVIATION SAFETY ....................................

................................................... ....................... 27

3.1 AVS Cost Targets/Services..........................

................................................... ..................... 27

3.2 AVS Cost Model.....................................

................................................... ........................... 27

3.3 AVS Cost Assignments ...............................

................................................... ...................... 28

4 AIRPORTS ...........................................

................................................... ................................ 33

4.1 ARP Cost Targets/Services ..........................

................................................... .................... 33

4.2 ARP Cost Model .....................................

................................................... .......................... 33

4.3 ARP Cost Assignments...............................

................................................... ...................... 34

5 FEDERAL AVIATION ADMINISTRATION CORPORATE OVERHEAD ASSIGNMENTS ........................................

................................................... ................................... 37

5.1 FAA Headquarters Overhead..........................

................................................... ................ 37

5.2 FAA Regional Overhead ..............................

................................................... .................... 38

APPENDIX ...........................................

................................................... .......................................... 1

A. ACRONYM LIST.......................................

................................................... ........................ 1

B. CAS REPORT TEMPLATES ...............................

................................................... ............ 1

B.1. ATO Cost of Service Report .........................

................................................... ................. 1

B.2. AVS Service Summary Report .........................

................................................... ............. 2

B.3. ARP Cost Type Report...............................

................................................... .................... 2iii Executive Summary

Purpose and Scope of Report

This report is intended for internal managerial acc ounting personnel and external users for the purpose of understanding (1) how the Federal Av iation Administration’s (FAA) Cost Accounting System (CAS) captures costs, and (2) how costs were assigned to the services provided by the Air Traffic Organization (ATO), Avi ation Safety (AVS), and Airports (ARP). This document describes the configuration for data processing for Fiscal Year 2008.

CAS Methodology Used

Before discussing the methodology used to identify the cost of projects and services, one must understand the role a cost accounting system p lays in a large organization like the FAA. A managerial cost accounting system is especi ally important for assessing operating performance from a financial perspective. A manage rial cost accounting system should help its users:

• Determine the costs of specific services, projects , activities, etc. and the composition of, and changes in, those costs;

• Determine the efforts and accomplishments associat ed with projects and delivery of services and their changes over time and in relatio n to costs; and

• Measure the efficiency and effectiveness of the or ganization’s management of services, projects, assets, etc.

Effective cost accounting and cost management is su pported by underlying processes and systems that generate data and information used to assign costs to projects and services, thus achieving the objectives described above. FAA collected and assigned costs to services using the following guiding principles:

• To the greatest extent possible, associate labor c osts directly with specific services to reduce the amount of costs that need to be allocate d among multiple services;

• Base overhead and general and administrative alloc ations on a non-econometric, cost accounting approach using best available data;

• Place costs into logical groupings that reflect di stinct services provided to groups of users;

• Comply with Federal Accounting Standards Advisory Board (FASAB) Standards, and with relevant elements of the Chief Financial Offic ers Act and Office of Management and Budget guidelines for cost accounting.

There are essentially three main areas within which the above guidelines can be applied to the overall costing methodology used for the FAA’s CAS:

1. Source Data – Identifying the source systems for th e appropriate cost and statistical data to be incorporated into the CAS. 2. Cost Targets – Identifying the cost objects or serv ices to be costed. 3. Cost Assignments – Determining how the costs, from the source systems, will be assigned to the identified services.iv Source Data

The costing methodology uses actual costs incurred, derived from several source systems to determine the total cost of each project and ser vice. Labor and non-labor costs are provided by FAA’s financial system. Other data, in cluding statistical information used to facilitate allocations, is provided by numerous oth er operational systems.

Cost Targets

Each major FAA Line of Business (LOB) defined the p roducts and services provided to its users. These services represent cost targets, used to measure costs for managerial cost accounting purposes.

Cost Assignments

The cost assignments in this report are described b ased on how the costs are reported on the LOB’s managerial cost reports. Costs are assigned to projects, which is the mechan ism used to capture cost objects (e.g., a service). Costs are attributed to projects, whic h are then attributed to services. This attribution of costs is done using several methods, all recognized by the Federal Accounting Standards Advisory Board (FASAB). In addition, adherence to the guidance previously d escribed resulted in assignments based on rational application of business rules that allo cate costs to all services that benefit without regard to its effect on users. The costing methodology used in this report is not expected to remain static. Rather, it continues to evolve as better operational and finan cial information becomes available and as FAA management gains more experience with the co st and performance information provided by the CAS.5 1 Introduction

This report is intended for internal managerial acc ounting personnel and external users for the purpose of understanding (1) how the Federal Av iation Administration’s (FAA) Cost Accounting System (CAS) captures costs, and (2) how costs were assigned to the services provided by the Air Traffic Organization (ATO), Avi ation Safety (AVS), and Airports (ARP). This document describes the configuration for data processing for Fiscal Year 2008. This section provides a basic overview of the desig n objectives of the cost accounting system and its components, and defines a common fra mework for discussing the costing methodology used by the Federal Aviation Administra tion (FAA).

1.1 CAS Design Objectives

The Federal Aviation Reauthorization Act of 1996, e nacted in October 1996, directed the FAA to develop a cost accounting system. The Act a lso called for the FAA to adopt “overflight” fees for aircraft flights that fly in U.S.-controlled airspace, but neither take-off from, nor land in, the United Sates. To satisfy this statute, and to also develop a syst em capable of improving financial and operational performance, several general requiremen ts were added, and collectively these remain as guiding principles for the cost accountin g system design. They include:

• Use best available data to provide a transparent, full cost of services provided to aviation users;

• Measure and control the cost of resources consumed and output produced;

• Support management decisions and plans based on re liable cost information;

• Direct and control operations, processes, and proj ects;

• Measure and benchmark the performance of organizat ions and management in financial terms;

• To the greatest extent possible, associate labor c osts directly with specific services to reduce the amount of costs that need to be allocate d among multiple services;

• Place costs into homogeneous pools reflecting dist inct services provided to groups of users; and

• Comply with Federal Accounting Standards Advisory Board (FASAB) Standards, and with relevant elements of the Chief Financial Offic er’s Act and Office of Management and Budget guidelines for cost accounting.

In addition, CAS receives its data from various inf ormation systems which affects the design of the cost accounting system. These system s include the following:

• FAA Financial Systems Policies and Procedures - these sources included existing FAA systems and procedures that govern the collecti on, formatting, and processing of financial data that is interfaced into the CAS; and

• FAA Operational Systems - these sources included existing operational syst ems and procedures that determine the collection, formattin g, and processing of operational (statistical) data that is interfaced into the CAS.

FAA considered these policies and procedures during the detailed design phase of the CAS implementation. Consideration of these policies en sures that the CAS design is sufficiently6 flexible to meet the information capability and rep orting requirements defined by internal users and external entities for financial and cost accounting systems.

1.2 CAS Design

The costing methodology uses actual costs incurred, derived from several source systems to determine the total cost of each project and ser vice. Labor and non-labor costs are provided by FAA’s financial system. Other data, in cluding statistical information used to facilitate allocations, is provided by numerous oth er operational systems.

1.2.1 Financial Accounting System

DELPHI is the core accounting and financial reporti ng system of the Department of Transportation and each of its constituent agencies , including FAA. DELPHI maintains general ledger balances, provides accounts payable and receivable, and other appropriation fund accounting capabilities. FASAB No. 4 discusses cost accounting as it relates to financial (proprietary) accounting and budgetary accounting. DELPHI performs financia l and budgetary accounting while CAS performs cost accounting. While FASAB recogniz es a relationship between cost accounting and budgetary accounting, they do not st ate a requirement to include budgetary transactions in the cost accounting system. Theref ore, only those transactions from DELPHI relevant to cost accounting are included in the CAS (e.g., revenues, expenses, gains, and losses).

1.2.2 Cost Accounting System (CAS)

There are essentially three major components of the CAS. These components are described below and depicted in Figure 1-1. 1. Current FAA Information Systems. These include the information systems that will provide financial and statistical data to the CAS. These systems contain different levels of detail that will be required to meet the reporti ng and internal control requirements of the CAS. 2. Front End Control System. The Front End Control System (FECS) performs accounting maintenance and includes the procedures and software programs that control the loading of data from current FAA inform ation systems into the CAS. 3. PeopleSoft Projects Application. PeopleSoft Projects (public sector version) is a commercial, off-the-shelf software application. Th is software product maintains the financial, statistical, and control data residing i n the database, performs cost assignments, provides reporting capabilities, and p rovides application security.7 Figure 1-1

1.3 Costing Terminology

There are several sources of guidance that provide common definitions of terms and concepts for use in determining the cost of governm ent services as well as alternative acceptable methods for assigning costs within a cos t management system like the CAS. The primary source is the Federal Accounting Standa rds Advisory Board (FASAB), which issues Statements of Federal Financial Accounting S tandards (SFFAS) and concept statements. Each of these standards has varying re levance to the CAS. Most of these standards have a substantial impact on the accounti ng procedures and systems, which provide data to the CAS. SFFAS Number 4 (typically referred to as FASAB No. 4) and its related amendments set forth broad standards for ma nagerial cost accounting, which need to be incorporated in the design of cost accounting systems. FAA considered these standards and used them as the basis for the design of the cost accounting system. The information contained in this report relies on consistent and uniform terminology for concepts, practices, and techniques. The following terms, some of which are defined by FASAB, provide a common framework to achieve this g oal:8 Term & Definition Example
Direct Cost – The cost of resources that can be specifically identified with an output. (FASAB No. 4) • Cost of an air traffic controller’s salary

Indirect Cost – The cost of resources that are jointly or commonly used to produce two or more types of outputs but are not specifically identifia ble with any of the outputs. (FASAB No. 4) • Cost of the FAA Administrator’s salary

• Cost of a human resources specialist’s salary Project – For the purposes of the CAS, a project is a collective set of distinct activities that, wh en performed, represent a discrete product or service, an ongoing process step, or engineering project. Whatever the representation, projects serve as the primary “cost objects” in the CAS. Projects are used to capture the cost of:

• Developing a new radar system

• Maintaining a navigational device

• Preparing the agency’s budget

Cost Assignment – A process that identifies costs with activities, outputs, or other cost objec ts. In a broad sense, costs can be assigned to processes, activities, organizational divisions, products, and services. There are three methods of cost assignment: (a) directly tracing costswherever economically feasible, (b) cause-andeffect, and (c) allocating costs on a reasonable and consistent basis. (FASAB No. 4) • Spreading the cost of the FAA Administrator’s Office to all FAA services provided to users

• Spreading the cost of a line of business executive management team to the services that line of business provides to users

• Associating an engineering project with a particular service

Cost Pool – A collection of homogeneous costs that are to be assigned to cost objects. • All costs incurred by the FAA Administrator’s Office; includes the cost of salaries, supplies, or any other cost incurred by the Administrator. Basis – A measure that is used to distribute a pool of costs to pre-defined cost objects. This measure can be financial or statistical in nature. • The cost of flight inspection can be allocated to each facility based on the number of hours flown to inspect each facility. Cost Object – An activity output, or item whose cost is to be measured. In a broad sense, a cost object can be an organizational division, a function, task, product, service, or a customer. (FASAB No. 4) • The engineering department’s overhead costs are assigned to engineering projects, which are the cost objects.

Figure 1-2

1.4 Methods for Assigning Costs

As previously stated, FASAB provides guidance as to acceptable cost accounting practices, particularly cost assignments. FAA uses each of th e three types of cost assignment methods described by FASAB. Each method is describ ed below with examples of its9 application. Please note, the examples provided ar e used to understand the different types of cost assignments and may not apply to FAA.

• Direct Tracing. The assignment of costs to a chosen cost object.

− Example 1: An employee completes a time sheet indicating the hours worked on a particular project (cost object). The payroll syst em uses this information to calculate the cost of that project based on that employee’s p aid salary. This information is then provided as an input to the cost accounting system.

− Example 2: An employee takes a business trip in support of a specific project. On the employee’s expense report he or she charges the cost of the trip to the specific project code assigned to the project.

• Cause and Effect. A distribution of costs where the basis serves as an indicator as to changes in costs.

− Example 1: Distributing building lease costs to operating or ganizations using square footage occupied as the basis.

− Example 2: Distributing training costs to cost objects using attendance as the basis.

• Allocation. The assignment of costs to multiple cost objects on a reasonable and consistent basis.

− Example 1: Distributing the human resources department’s cos ts to the operating organizations using headcount as the basis.

− Example 2: Distributing overhead costs to cost objects using labor cost as the basis.

The method of cost assignment is chosen based on co st-benefit and data source availability. The FAA selected assignments by cons idering the cost to implement a specific method relative to the expected benefits of alterna tive assignment methods.10 2 Air Traffic Organization

The Air Traffic Organization (ATO) is an FAA line o f business whose primary responsibility is to move air traffic safely and efficiently. ATO consists of controllers, technicians, engineers, and support personnel whose daily effort s keep the commercial and private aviation and the military aircraft moving through t he National Airspace System (NAS). There are two major functions within ATO that parti cipate in the delivery of ATO services. These functions are described below:

• Air Traffic Control (ATC) - This function involves managing the safe and eff icient flow of air traffic through U.S. controlled airspace. T his is accomplished by a workforce of air traffic controllers, flight service specialists, an d managers and staff working at air traffic control facilities located throughout the United St ates.

• Technical Operations (Tech Ops) – This function ensures the safe and efficient flo w of air traffic through U.S. controlled airspace by ins talling, maintaining, and flight inspecting facilities. This is accomplished by a workforce of system specialists, flight inspection crews, engineering and project management personnel , managers and staff.

2.1 ATO Cost Targets/Services

To organize the source data and provide effective c ost information based on that data, a cost accounting system must have activity outputs, or cost objects, to measure the costs. The Air Traffic Organization (ATO) line of business (LOB) defined four broad services, which represent cost objects for managerial cost ac counting purposes. These services are defined as follows:

• Enroute - Air traffic control services provided to aircraf t operating primarily on instrument flight rules flight plans in controlled airspace be tween their departure and destination terminal areas. Enroute services are provided at s ervice delivery points (SDPs), referred to as Air Route Traffic Control Centers (ARTCCs), a nd Combined Enroute Radar Approach Control (CERAP) facilities.

• Oceanic - Air traffic control services provided to aircraf t operating within international airspace where oceanic separation minima and proced ures per International Civil Aviation Organization (ICAO) standards are applied. Oceanic services are provided at SDPs, referred to as ARTCCs and CERAP facilities.

• Terminal - Air traffic control services provided to aircraf t arriving and departing airport facilities under Instrument Flight Rules or Visual Flight Rules. Terminal services are provided at SDPs referred to as Terminal Radar Appr oach Control (TRACON), Radar Approach Control (RAPCON), Airport Traffic Control Tower (ATCT) or CERAP facilities.

• Flight Services - Services provided to users of the National Airsp ace System (NAS), including pilot briefings, search and rescue coordi nation, aviation weather information, and other flight advisory services. Flight Service s are provided at SDPs referred to as Automated Flight Service Stations (AFSS).

2.2 ATO Cost Model

The ATO cost model describes how costs are assigned at different levels of the Air Traffic Organization (ATO) using a hierarchical tree struct ure. The different levels in which costs are assigned are used as intermediate “roll-up” poi nts that serve only to meet management11 reporting needs. The levels in the hierarchical st ructure include Project, Category, Capability, and Service. Generally, as an activity occurs, the costs of that activity are assigned to a specific project, referred to as the Project level in the cost model. Each project rolls up to a broader level referred to as the Category level, which then rolls up to the Capability level. Finally, the Capability is r olled up to the final cost object, the Service. The following example shows how the cost model is u sed. The Tech Ops organization maintains a special type of long-range radar system , used to support only the Enroute service, with sites located around the country. Th e cost of maintenance technicians’ salaries who maintain those systems are collected i n a project established in the CAS for only that type of long-range radar. This is the “P roject” level. The cost of this project can then be aggregated to a level called “Category” whi ch, in this case, is called the Long Range Radar category where the costs of other types of long range radar systems are added. These costs can then be aggregated again to another level called “Capability” which, in this case is the Surveillance capability, where the costs of other systems performing a surveillance function are added. Fina lly, the costs can be aggregated yet again to the ”Service” level where all costs incurr ed in support of a specific service, in this case the Enroute service, are combined to provide t he total cost. Each level has unique elements within this shared hierarchy. Figure 2-1 depicts a conceptual view of the hierarchical structure just described.

Projects (ATC)

Air Traffic Control Traffic

Management Program 3 Program 3

Communication Surveillance ATC & Traffic Management Nav/Landing Automation



## ATO TREE CONCEPT

Services

Capability (Tech Ops) Capability (ATC) Enroute Oceanic Terminal Flight Services

Infrastructure Weather
Mission Support

Category (Tech Ops) Category 1 Category 2 Category 3

Projects (O&M) Projects (Engineering Services)

Management

Air Traffic Assistant Program 1 Program 2 Program 1 Program 2

Support

Figure 2-112 Services provided to external users are delivered f rom a facility managing contact with the customer. This facility is called a Service Delive ry Point (SDP) and is associated with the Service that is being delivered. Figure 2-2 depict s a conceptual view of the relationship between the service and the SDP. To the extent pra ctical, all costs associated with the structure depicted in Figure 2-1 are also identifie d with the SDP where service is provided to the user.

Enroute Oceanic Terminal Flight Services

ARTCCs ARTCCs TRACONs AFSSs

CERAPs CERAPs RAPCONs

ATCTs

CERAPs 

## SDP CONCEPT

Services

SDPs SDPs SDPs SDPs

Figure 2-2

Some project costs cannot be associated with an SDP and therefore, are assigned at the service level. The Direct User Access Terminal Ser vice (DUATS) is an example of a cost that cannot be associated with an SDP. This contra ctual service provides direct access to weather briefing, flight planning, and flight plan filing information to allow pilots to obtain a self briefing and file a flight plan prior to flyin g. There are thousands of inquiries to the system at multiple SDPs each day and it is impracti cal to collect this much data for cost accounting purposes. When a particular cost element could not be associa ted with a project or SDP, it was assigned at the “service” level (or final cost obje ct level) of the hierarchy. For each cost element discussed in this document, it is indicated whether it was assigned at the project, SDP, or service level.

2.3 ATO Cost Assignments

This section of the report discusses the methods of assigning ATO costs allowed by FASAB No. 4 and how the FAA employs those methods in the ATO cost model. Included is a detailed discussion of each major cost assignment p erformed in the model. The discussion covers the cost pool to be assigned, the method of assignment, the target of the assignment, and the basis used.13 The discussion of the ATO assignments is organized based on how costs are reported on ATO’s Cost of Service report. See Appendix B for a n example of this report. Costs are organized in the Cost of Service report according t o the level in which the costs are controlled. Costs are controlled at the facility, service unit, ATO, or FAA level. See Figure 2-3 for an organizational view of these different l evels of control.

ATO AVS ARP AST ASH ARC

Level 2 - Service Unit

Numerous Facilities Service Areas

Numerous Facilities Service Areas Technical Operations FAA

Terminal Service Unit System Operations

ENR & OCN Service Unit

Flight Service

Service Areas Operations Planning

Safety

ATCSCC

Numerous Facilities

Numerous Facilities Level 1 - Facility 

## Levels of Assignments

Chief Operating Officer Level 4 - FAA

Finance Level 3 - ATO (Staff Office Service Units) Acquisitions

Communication

Figure 2-3 2.3.1 Level 1 – Facility Assignments

The following assignments are for costs that are co ntrolled by a field facility. Examples of these facilities include ARTCC, ATCT, AFSS, TRACON, etc. Each facility is assigned an SDP and the SDP is associated with the service that is being delivered.14 2.3.1.1 Air Traffic Control Direct Labor

Air Traffic Control direct labor costs include the compensation and benefits of personnel directly associated with providing ATC services. T hese services are typically provided by Air Traffic Controllers and first level supervisors

. The cost of ATC direct labor is directly traced to projects, SDPs, and services using the actual labor hours recorded to direct ATC projects by the personnel at each facility.

2.3.1.2 Air Traffic Control Indirect Labor

Air Traffic Control indirect labor costs include th e compensation and benefits of personnel that perform work common to many ATC activities (e. g., budgeting, human resources, leave, etc.). The cost of ATC indirect labor is directly traced t o projects, SDPs, and services using the actual labor hours recorded to indirect ATC project s by the personnel at each facility. Normally indirect costs are allocated to direct cos t. However, because these costs are charged to a unique organizational identifier (cost center) and, in the case of ATC cost centers, they are related to a single service and S DP, we are able to directly trace these indirect costs.

2.3.1.3 Air Traffic Control Direct Non-Labor

Non-labor includes costs such as supplies and trave l expenses. The ATC direct non-labor costs are the types of costs that are directly asso ciated with a specific ATC activity. The cost of ATC direct non-labor is directly traced to projects, SDPs, and services using the actual cost incurred by the personnel at each facil ity.

2.3.1.4 Air Traffic Control Indirect Non-Labor

Non-labor includes costs such as supplies and trave l expenses. The ATC indirect nonlabor costs are the types of costs that are common to many ATC activities (e.g., office supplies). The cost of ATC indirect non-labor is directly trac ed to projects, SDPs, and services using the actual cost incurred by the personnel at each f acility. Normally indirect costs are allocated to direct cost. However, because these c osts are charged to a unique organizational identifier (cost center) and, in the case of ATC cost centers, they are related to a single service and SDP, we are able to directl y trace these indirect costs.

2.3.1.5 Air Traffic Control Academy Training

The FAA Academy, located in Oklahoma City, is a lar ge training facility that provides agency-wide resident training services. The cost o f ATC training at the FAA Academy includes the costs for course development and deliv ery, and the associated ATC employee travel and per diem costs.15 A fixed percentage allocation is performed in the C AS to assign these training costs attributable to the ATC organization to services. The fixed percentages used to assign the cost to ea ch service were determined based on historic values from a system which provided detail ed travel and course information.

2.3.1.6 Air Traffic Control Contract Training

In addition to training at the FAA Academy, on-site training is provided under contract at select locations because of the specialized needs o f controllers. A pro rata allocation is performed in the CAS to as sign these training costs attributable to the ATC organization to projects, SDPs, and service s. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the actual amount of training hours invoic ed by the training contractor at each facility.

2.3.1.7 Tech Ops Direct Labor

Tech Ops direct labor cost includes the compensatio n and benefits of personnel that are directly associated with providing operations and m aintenance (O&M) of electronics and support equipment used in direct support of the NAS

. The cost of Tech Ops direct labor is directly trace d to SDPs and services using the actual labor hours recorded to direct Tech Ops projects by the personnel at each facility.

2.3.1.8 Tech Ops Direct Non-Labor

Tech Ops direct non-labor cost includes costs such as guard services, ground services, and transportation that are directly associated with th e NAS facilities and equipment (F&E) used for ATC. The cost of Tech Ops direct non-labor is directly t raced to SDPs and services using the actual cost incurred by the personnel at each facil ity.

2.3.1.9 Tech Ops District Office Indirect

Tech Ops District Offices (DO) are responsible for the operations and maintenance of facilities and equipment to support ATC services. The Tech Ops DO indirect cost includes both indirect labor and non-labor costs that are co mmon to many Tech Ops DO activities. A pro rata allocation is performed in the CAS to as sign the DO indirect costs to direct Tech Ops projects and SDPs. The portion of the cost that is assigned to each pr oject and SDP is determined based on the percentage of total costs that are directly tra ced to each Tech Ops DO project and SDP.16 2.3.1.10 Tech Ops Academy Training

The FAA Academy, located in Oklahoma City, is a lar ge training facility that provides agency-wide resident training services. The cost o f Tech Ops training at the FAA Academy includes the costs for course development and deliv ery, and the associated Tech Ops employee travel and per diem costs. A fixed percentage allocation is performed in the C AS to assign the training costs attributable to the Tech Ops organization to servic es. The fixed percentages used to assign the cost to ea ch service were determined based on historic values from a system which provided detail ed travel and course information.

2.3.1.11 Telecommunications

Telecommunications cost is associated with telecomm unications equipment and connectivity for NAS systems and equipment used to provide ATO services. It is important to point out that this assignment only addresses th e cost of leased telecommunications lines. Owned lines are considered part of the real property assets to which they are attached and are capitalized and depreciated accord ingly. A pro rata allocation is performed in the CAS to as sign telecommunications costs to projects related to facilities and/or SDPs that are connected via leased lines. Each leased line is mapped to either one or two project and SDP combinations which represent the connection points. The portion of the costs that is assigned to each p roject and/or SDP is determined based on the cost of the leased lines per facility. An F AA system tracks and manages the cost of each leased line for the facilities it services and provides that information to the CAS.
In addition to the telecommunications cost describe d above, the Oceanic service uses unique communications services provided by Aeronaut ical Radio, Inc. (ARINC). All ARINC telecommunications cost are assigned to t he Oceanic service based on a fixed percentage.

2.3.1.12 Telecommunications Support

Telecommunications support cost is associated with telecommunications equipment and connectivity for NAS systems and equipment used to provide ATO services, but cannot be directly assigned to a service. The cost of teleco mmunications to provide administrative support is a typical example of this cost because i t is common to multiple services. A pro rata allocation is performed in the CAS to as sign telecommunications support costs to projects, SDPs, and services. The portion of the costs that is assigned to each p roject, SDP, and service is determined based on the cost of leased lines per facility. An FAA system tracks and manages the cost of each leased line for the facilities it services and provides that information to the CAS.17 2.3.1.13 Flight Inspection Services

Flight inspection cost includes both labor and non- labor costs to support the flight inspection function for NAS related equipment and p rocedures. This function inspects surveillance, navigational, landing, and automation equipment by flying within the range of the equipment to ensure that it is functioning prop erly. To perform this function, the FAA maintains a fleet of specialized aircraft as well a s specially trained pilots and maintenance technicians. A pro rata allocation is performed in the CAS to as sign flight inspection costs to projects, SDPs, and services. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the hours flown for inspection per facilit y. An FAA system tracks and manages flight inspection activity by facilities inspected and hours flown and provides that information to the CAS.

2.3.1.14 Logistics

The FAA Logistics Center is a large depot that is r esponsible for maintaining stocks and stores of spare parts for issuance to the field, pe rforming facility refurbishment services, and providing on-site repair services. These costs incurred for the provision of ATC services are the majority of the logistics costs. In addition to the ATC related costs, the Logistics Center also supports the Regional Offices and other LOBs as a source of office supplies and other support equipment. A pro rata allocation is performed in the CAS to as sign the portion of costs from the Logistics Center incurred in support of ATO. The A TO portion of the costs is identified by the payment ATO makes to the Logistics Center to fu nd their operations and comparing that to the Logistics Center’s total funding. The costs are assigned to projects, SDPs, and services. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the value of spare parts issued to each fa cility as reported by FAA. An FAA system tracks and manages the value of the equipmen t that the Logistics Center issues to each facility in the field and provides that inform ation to the CAS.

2.3.1.15 Utilities

The FAA’s utility costs are significant due to its running of safety critical equipment 24 hours a day with full back-up power sources. Utility cos ts include electricity, gas, water, etc. Utility costs are directly traced to projects, SDPs , and services using the actual amount of utility cost incurred at each facility.

2.3.2 Level 2 - Service Unit Assignments

Management control for the following costs exists a t the service unit level (e.g., Enroute & Oceanic, Terminal, Tech Ops, and System Operations) . Therefore, these costs are grouped together for reporting purposes.18 2.3.2.1 ATC and Tech Ops Workers’ Compensation

Workers Compensation (WC) is managed and administer ed by the Department of Labor (DOL). FAA’s total WC liability is made up of actu al benefits paid to employees (referred to as an accrued liability), as well as an actuarial e stimate reflecting future liabilities. The actuarial WC Liability amount includes estimates fo r death, disability, medical, and miscellaneous costs for compensation cases. A pro rata allocation is performed in the CAS to as sign WC costs attributable to the ATC organization to ATC projects, SDPs, and services. A pro rata allocation is also performed in the CAS to assign WC costs attributable to the T ech Ops organization to Tech Ops projects and their associated SDPs. The portion of WC cost that is assigned to each ATC project, SDP, and service is determined based on the total cost of personnel com pensation and benefits directly assigned to ATC service units. Similarly, the port ion of WC cost that is assigned to each Tech Ops project, SDP, and service is determined ba sed on the total cost of personnel compensation and benefits directly assigned to the Tech Ops service unit.

2.3.2.2 Direct Field Support

Each ATO capability (e.g., communication, infrastru cture, surveillance, etc.) provides support for the activities with which it is associa ted. Although the project that provides this support is directly associated with the activities in the capability, it cannot be traced to a specific SDP. Using the radar example, the surveil lance capability provides support by fixing a problem with a particular type of radar. However, this type of radar equipment may be used at multiple SDPs, which means the support p roject cannot be traced to a single SDP. Therefore, a pro rata allocation is performed in th e CAS to assign the direct field support costs to SDPs and services. For each capability, the portion of the cost that i s assigned to each SDP and service is determined based on the total cost of projects for that capability that are already assigned to SDPs and services.

2.3.2.3 Contract Weather

In order to provide timely and accurate weather inf ormation to controllers and pilots, weather personnel are on-site at each ARTCC. These individuals, working under contract, interpret weather readings and forecasts. An allocation is performed in the CAS to assign the se costs to projects, all Enroute ARTCC SDPs, and the Enroute service. The cost is assigned evenly to each SDP.

2.3.2.4 Contract Weather Observations

Certain ATCTs and TRACONs provide approach control services to smaller airports within their airspace. In order to accomplish this safely and to augment automated weather19 observation systems, contract weather observers, wh o report weather observations to the ATCT or TRACON, are located at these remote airport s. A pro rata allocation is performed in the CAS to as sign these costs to projects, the SDPs that receive the contract weather observation servi ces, and services. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the amount each SDP is invoiced.

2.3.2.5 Contract Tower

Among all the terminal facilities, contract control lers rather than FAA employees staff a number of the smaller towers. These are referred t o as contract towers. The contract towers are treated the same as any other Terminal f acility in that they are assigned to an SDP. A pro rata allocation is performed in the CAS to as sign the contract tower costs to projects and SDPs providing Terminal services under contract

. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the contract amount for each SDP.

2.3.2.6 Contract Flight Service

Contract flight service cost is the cost associated with air traffic control services provided under contract for flight service stations (AFSS) w ithin the continental United States. All contract flight service costs are assigned to t he Flight Services (FSS) service. The cost is assigned and remains at the service level becaus e these costs are not tracked by SDP.

2.3.2.7 Direct User Access Terminal Service

Direct User Access Terminal Service (DUATS) is a co ntract service associated with providing direct access to weather briefing, flight planning, and flight plan filing information to allow pilots to obtain a self briefing and file a flight plan prior to flying. All DUATS costs are assigned to the Flight Services (FSS) service. The cost is assigned and remains at the service level because these cost s are not tracked by SDP.

2.3.2.8 Contract Maintenance

FAA procures services from commercial vendors to ma intain certain hardware and software items used in the NAS. These contracts are large-d ollar, multi-year, national contracts that are assigned to the ATO services. A fixed percentage allocation is performed in the C AS to assign contract maintenance costs to projects, SDPs, and services. A fixed portion o f the cost is also assigned to the National Network Control Center (NNCC). The fixed percentages used to assign the cost to th e NNCC and each project, SDP, and service were determined based on an analysis of the maintenance contract’s purpose (what system(s) are being maintained) and the associated costs.20 2.3.2.9 Acquisition & Implementation

The FAA is continuously working to modernize the NA S which includes researching, designing, developing, and purchasing new equipment (Acquisition); and then installing, integrating, and verifying the new equipment (Imple mentation). Direct and indirect labor costs as well as non-labor costs (e.g., contractors ) are incurred by both the Acquisition and Implementation organizations in order to provide th ese functions. Several cost assignments are used to assign Acquisi tion and Implementation costs. The cost assignments for both of these areas are the sa me; the only difference being the organization that incurs the cost. First, costs are directly traced to the project and service using project information found on the financial transaction. If costs cannot be directly traced to a service, th en projects are grouped by Capability and a pro rata allocation is performed in the CAS to assi gn the costs to services. The portion of the cost that is assigned to each project and servi ce is determined based on the percentage of that capability’s total cost that is directly tr aced to each service. Finally, certain costs cannot be directly traced no r associated with a capability. These costs include Leases, Technical Services Support Contract s (TSSC), NAS Infrastructure Support (Engineering Services) Contracts (NISC), and Other Miscellaneous Projects. In these cases, a fixed percentage allocation is performed i n the CAS to assign the projects to the appropriate services. The fixed percentages used t o assign the cost to each service were determined based on a year-end analysis of the actu al costs traced to each service.

2.3.2.10 Depreciation & Capital Leases

Depreciation is defined as the proportionate amount of an asset’s acquisition cost expensed over its estimated useful life and assigned to the period during which it is in use. Depreciable assets include Personal Property (e.g., aircraft, equipment, furniture, etc.), Real Property (e.g., buildings, ATC towers, etc.), and Capital Leases. Capital leases are agreements for the rights to use property or equipm ent for a specified period of time and must meet specific criteria to be considered capita lized. The FAA Financial Manual describes the criteria and procedures related to ca pitalization and depreciation of assets. Depreciation costs, which include the cost of capit al leases, are directly traced to projects, SDPs, and services using the asset identifier infor mation on the accounting transaction. If depreciation costs cannot be directly traced to a project, SDP, and service, a pro rata allocation is performed in the CAS to assign the co sts to projects, and services. The portion of the cost that is assigned to each pr oject and service is determined based on depreciation costs that are directly traced to a pr oject and service.

2.3.3 Level 3 - ATO Assignments

The following assignments are for costs that are co ntrollable by the ATO line of business.21 2.3.3.1 ATC System Command Center

The Air Traffic Control System Command Center (ATCS CC) is part of a multipurpose facility that houses specialized systems that enabl e the FAA to better manage the flow of air traffic throughout the NAS. It provides traffic ma nagement and advisory services to air traffic control facilities. It has a dedicated con troller workforce along with a full complement of operational, administrative, technical support a nd management personnel. A pro rata allocation is performed in the CAS to as sign the ATCSCC costs to projects, SDPs, and services. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the number of traffic management coordinat ors (TMCs) residing at each SDP.

2.3.3.2 Operations Control Centers (Atlantic, Mid-S tates, Pacific)

The National Operations Control Center (NOCC) is pa rt of a multipurpose facility that houses specialized systems that enable FAA to bette r manage NAS services. Specifically, the NOCC provides centralized reporting of facility outage information for the entire NAS. It has a dedicated maintenance technician staff along with a full complement of operational, administrative, and management personnel. In addit ion, the NOCC has three “satellite” control centers: the Atlantic Operational Control Center (AOCC), the Mid-States Operation Control Center (MOCC), and the Pacific Operations C ontrol Center (POCC). A pro rata allocation is performed in the CAS to as sign the NOCC costs to its satellite organizations: the AOCC, MOCC, and POCC. The portion of the cost that is assigned to each sa tellite OCC is determined based on the total personnel compensation and benefits cost for each organization.
After the NOCC costs are allocated to the satellite OCCs, a pro rata allocation is performed in the CAS for each OCC to assign the “loaded” cost s of the OCC to projects, SDPs within the service areas that the OCC supports, and servic es. The portion of the OCCs cost that is assigned to ea ch project, SDP, and service is determined based on the number of equipment sites a ssigned to each SDP.



### NOCC

AOCC MOCC POCC

SDPs and Services within the Eastern Service Area SDPs and

Services within the Central Service Area SDPs and

Services within the Western Service Area Operations Control Centers Assignments

Figure 2-422 2.3.3.3 National Network Control Center

The National Network Control Center (NNCC) is a maj or data network management system that enables the sharing of flight and other data b etween the ATC facilities. There are two NNCC “hubs,” one in Atlanta and the other in Salt L ake City. Limited NNCC-related equipment can also be found at other ATC facilities . The NNCC cost includes labor and non-labor costs of personnel operating the NNCC fac ilities as well as telecommunications costs for NAS systems in support of the NNCC facili ties. A pro rata allocation is performed in the CAS to as sign the NNCC costs to the NNCC project, selected SDPs with Traffic Management Unit (TMU) presence, and services. An SDP with TMU presence is one that has personnel on- site dedicated to providing traffic management. The portion of the cost that is assigned to each SD P and service is determined based on the number of handles per SDP. A handle is defined as a single aircraft departing, arriving, or transiting an ATC facility’s airspace.

2.3.3.4 Charting

The Tech Ops organization is responsible for develo ping, producing, and distributing aeronautical charts and maps, and approach procedur es. Since the public consumes these maps and charts, this organization is reimbursed fo r much of its costs. Charting costs only include the costs of these products that are for th e FAA’s direct benefit. A pro rata allocation is performed in the CAS to as sign the charting costs to a project, SDPs, and the Enroute and Terminal services. The portion of the cost that is assigned to each SD P and service is determined based on the percentage of ATC personnel compensation and be nefits.

2.3.3.5 Service Area Indirect

ATO is made up of different types of Service Units – Staff Office Service Units and ATC/Tech Ops related Service Units. Each of the AT C/Tech Ops related Service Units has a regional component referred to as a Service Area. Each Service Area provides oversight and support for the services provided by the three regions within the respective Service Area. The cost to provide support to the regions i s considered overhead, or indirect, because it benefits multiple SDPs and services. A pro rata allocation is performed in the CAS to as sign each Service Area’s indirect costs to the direct projects, SDPs, and services that they s upport. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the percentage of total direct cost that i s assigned to each project, SDP, and service for that Service Area.

2.3.3.6 Service Unit Indirect

As described above, ATO is made up of different typ es of Service Units – Staff Office Service Units and ATC/Tech Ops related Service Unit s. The Service Unit indirect cost23 includes only the indirect costs associated with AT O’s ATC/Tech Ops related Service Units. The ATC related Service Units provide a specific se rvice (e.g., Enroute & Oceanic, Terminal, System Operations, and Technical Operatio ns) directly to the users. Each of ATO’s ATC/Tech Ops related Service Units contains a Headquarters component. The majority of the Service Unit’s Headquarters cost is considered overhead, or an indirect cost, because it is incurred to support the Service Unit. A pro rata allocation is performed in the CAS to as sign each Service Unit’s Headquarters’ indirect costs to the direct projects, SDPs, and se rvices that they support. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the percentage of total direct cost that i s assigned to each project, SDP, and service for that Service Unit.

2.3.3.7 ATO Indirect

As described above, ATO is made up of different typ es of Service Units. The ATO indirect cost includes only the indirect costs associated wi th ATO’s Staff Office Service Units. The Staff Office Service Units perform overhead related activities that provide support for ATO’s ATC/Tech Ops related Service Units. These ATO Staf f Office Service Units include the Chief Operating Officer, acquisitions, communicatio ns, finance, operation planning, and safety. The activities provided by ATO’s Staff Off ice Service Units are considered indirect cost because they are common to the ATC related Ser vice Units. A pro rata allocation is performed in the CAS to as sign each Service Unit’s indirect costs to the projects, SDPs, and services that they support. The portion of the cost that is assigned to each pr oject, SDP, and service is determined based on the percentage of total direct cost that i s assigned to each project, SDP, and service for that Service Unit.

2.3.4 Level 4 - FAA Assignments

The following sections refer to ATO’s portion of co st that are controlled outside of ATO including corporate FAA overhead and organizational costs from other LOBs that benefit ATO.

2.3.4.1 FAA Indirect

FAA Indirect costs include FAA headquarters and reg ional overhead. A portion of these costs are assigned to the direct projects and servi ces within each LOB, including ATO. The FAA overhead assignments are described below in sec tion 5 - Federal Aviation Administration Corporate Overhead Assignments.

2.3.4.2 Medical

Air traffic controllers receive regular medical exa ms as well as drug and alcohol tests. An organization within the FAA’s Office of Aviation Me dicine (AAM), which resides within the24 Aviation Safety (AVS) line of business, funds, cond ucts, and manages these exams and tests. A pro rata allocation is performed in the CAS to as sign the medical cost to projects, SDPs, and ATO services. The portion of the cost that is assigned to each pr oject, SDP, and ATO service is determined based on the percentage of personnel com pensation and benefits attributed to each SDP.

2.3.4.3 Gain/Loss

FAA enters various transactions in order to recogni ze financial gains and/or losses. These entries were made in order to recognize financial g ains or losses on inventory and assets, reclassification of certain labor costs from a curr ent year expense to a capitalized cost, and other miscellaneous gains and losses. A fixed percentage allocation is performed in the C AS to assign gains and losses to ATO services. The fixed percentages used to assign the cost to ea ch ATO service were determined based on a year-end analysis of the actual costs traced t o each service.

2.3.4.4 Accrued Liabilities

FAA enters various transactions in order to recogni ze the appropriate level of unfunded liabilities for the following types of cost: post retirement benefits, ATC sick leave, environmental remediation, Federal Employees Compen sation Act (FECA), and legal claims.

2.3.4.4.1 Unfunded Liabilities for Leave & Retireme nt

Unfunded liabilities for leave and post retirement benefits are accrued to recognize the appropriate level of unfunded liabilities for pensi on, health and life insurance, and ATC sick leave. A pro rata allocation is performed in the CAS to as sign ATO’s portion of sick leave and retirement liabilities to projects, SDPs, and servi ces. The portion of cost for ATC sick leave that is assi gned to each project, SDP, and service is determined based on the percentage of AT C service units’ personnel compensation and benefits costs attributable to eac h service. The portion of cost for retirement liabilities that is assigned to each pro ject, SDP, and service is determined based on ATO personnel compensation and benefits co sts attributable to each service.

2.3.4.4.2 Unfunded Liability for Environmental Reme diation

FAA accrues a liability for the environmental remed iation of known contaminated sites and the estimated environmental cost to decommissio n assets presently in service.25 A fixed percentage allocation is performed in the C AS to assign the environmental remediation projects to services. The fixed percentages used to assign the cost to ea ch service were determined based on a year-end analysis of the actual costs traced t o each service.

2.3.4.4.3 Actuarial Liability for Federal Employees Compensation Act (FECA)

The Federal Employees Compensation Act is administe red by the Department of Labor (DOL) Office of Workers’ Compensation Programs and provides monetary compensation for Federal employees who are injured in the performance of duty. FAA accrues a liability for FECA compensation payments. A pro rata allocation is performed in the CAS to as sign the FECA Liability to projects, SDPs, and services. The portion of cost for FECA that is assigned to ea ch project, SDP, and service is determined based on the percentage of ATO’s WC cost s attributable to each service.

2.3.4.4.4 Unfunded Liability for Legal Claims

The FAA accrues a liability for asserted and pendin g legal claims reasonably possible of loss. A fixed percentage allocation is performed in the C AS to assign the legal claims liability cost to each service. The fixed percentages used to assign the cost to ea ch service were determined based on a year-end analysis of the actual costs traced t o each service.

2.4 ATO Multiple Service Assignments

Most costs are assigned to an SDP, which is the fac ility managing contact with the customer and is associated with the service being p rovided. However, some SDPs provide multiple services. As a result, special assignment s are necessary to appropriately assign the cost of these particular SDPs to each of the se rvices it provides. The following Enroute facilities also provide ocean ic service: New York, Oakland, Houston, Anchorage, and San Juan. Personnel and equipment a re shared at these specific SDPs to provide both Enroute and Oceanic services. A fixed percentage allocation is performed in the C AS to assign a portion of the ATC and Tech Ops costs at each of the shared facilities to the Oceanic service. The portion of Tech Ops cost that is assigned to th e Oceanic service for each shared facility is determined based on the ratio of Oceanic “sector s” to total “sectors” at each of the shared ARTCCs. A sector is a region of airspace as signed to a single controller. The San Juan SDP is unique in that all of its shared costs are allocated using this basis (i.e., not only the Tech Ops costs). The portion of ATC cost that is assigned to the Oce anic service for each shared facility (except for San Juan) is determined based on histor ical Oceanic on-position time as a percentage of the total on-position time for all fa cilities. These percentages were26 determined using a statistically valid analysis on a sample of sign-in, sign-out time records logged by controllers in the normal course of perfo rming their duties at each of the shared facilities.27 3 Aviation Safety

Aviation Safety (AVS) is an FAA line of business re sponsible for the certification, production approval, and continued airworthiness of aircraft a s well as the certification of pilots, mechanics, and others in safety-related positions. In addition, Aviation Safety develops regulations and certificates all U.S. civil aviatio n operational and maintenance enterprises.

3.1 AVS Cost Targets/Services

To organize the source data and provide effective c ost information based on that data, a cost accounting system must have activity outputs, or cost objects, to measure the costs. The Aviation Safety Organization (AVS) line of busi ness (LOB) defined eight broad services, which represent cost objects for manageri al cost accounting purposes. These services are defined as follows:

• Aerospace Medicine – Medical programs and services provided to the avi ation community including aerospace medical research, occ upational health, and medical support services.

• Airworthiness Certification - Certification that the design, production quality , and airworthiness of aeronautical products, parts and a ppliances are deemed to meet established aviation safety standards.

• Designee – AVS services provided by a designee. A Designee is a representative of the FAA Administrator authorized by law to examine, test, and/or make inspections necessary to issue airman or aircraft certificates. However, a designee is not considered an employee of the U.S. Government, and is not fede rally protected for the work performed or the decisions made as a designee.

• Registration – Development, maintenance, and operation of nation al programs for the registration of United States civil aircraft and ce rtification of airmen.

• Surveillance – Inspection of the physical, chemical, visual, fu nctional attributes or characteristics of a product, person, facility, or operation to determine that a person, an item or a certain segment of an operation meets sta ndards that are required for certification or approval by the FAA.

• Standards - Creation and amendment, as necessary, of the rul es and regulations that provide the safety standards for people, organizati ons, and equipment operating in the U.S. civil aviation system through policy developme nt, analysis, and rulemaking.

• Air Operator/Agency Certification – Certification of air operators and/or air agenci es that is deemed to meet established aviation safety standards.

• Other Services – Other services provided by AVS including aviatio n research, and oversight of the unmanned aerial system, and unappr oved parts.

Each of these broad services is made up of a series of projects representing additional levels of detail used to enhance AVS’ cost manageme nt capability. These projects are organized into a hierarchy (tree) that allows for i ntermediate reporting points.

3.2 AVS Cost Model

The cost model describes how costs are assigned for the Aviation Safety line of business. The levels in the structure include Project and Ser vice. Generally, as an activity occurs, the costs of that activity are assigned to a specific p roject, referred to as the Project level in the28 cost model. Each project is associated with one of the broad services that AVS provides. The Service is the final cost object. For example, consider the following activities: dev eloping and issuing airworthiness directives, developing and issuing Federal Aviation Regulations, and training the workforce who develop and issue standards. The cost of each of these activities is assigned to a specific project. All of the projects in this exam ple fall under the Standards service.

Aerospace Medicine Airworthiness

Certification Designees Registration Surveillance Standards Air Operator/ Agency Certification Other

Services

Projects Projects Projects Projects Projects Projects Pro jects Projects
Project 1 Project 1 Project 1 Project 1 Project 1 Projec t 1 Project 1 Project 1
Project 2 Project 2 Project 2 Project 2 Project 2 P roject 2 Project 2 Project 2
Project 3 Project 3 Project 3 Project 3 Project 3 Projec t 3 Project 3 Project 3 AVS Sevices AVS Cost Model

Figure 3-1

3.3 AVS Cost Assignments

This section of the report discusses the methods of assigning costs allowed by FASAB No. 4 and how the FAA employs those methods in the cost model. Included is a detailed discussion of each major cost assignment performed in the model. The discussion covers the cost pool to be assigned, the method of assignm ent, the target of the assignment, and the basis used. The discussion of the AVS assignments is organized based on how costs are reported on the AVS Service Summary report. See Appendix B for an example of this report.

3.3.1 AVS Direct Labor

AVS direct labor costs include the compensation and benefits of personnel directly associated with providing AVS services. The cost of AVS direct labor is directly traced to projects using the actual labor hours recorded to direct AVS projects by AVS personnel.

3.3.2 AVS Direct Non-Labor

Non-labor includes costs such as supplies and trave l expenses. The AVS direct non-labor costs are the types of costs that are directly asso ciated with a specific AVS activity.29 The cost of AVS direct non-labor is directly traced to projects using the actual cost incurred by AVS personnel.

3.3.3 AVS Allocations

Certain costs cannot be directly traced to a servic e. Allocation steps were designed to assign these types of costs to the services they su pport in order to capture the full cost of each AVS service. The sections below describe AVS’ allocated costs.

3.3.3.1 FAA Corporate Overhead

FAA corporate overhead costs include FAA headquarte rs and regional overhead. A portion of these costs are assigned to the direct projects and services within each LOB, including AVS. The FAA overhead assignments are described be low in section 5 - Federal Aviation Administration Corporate Overhead Assignments.

3.3.3.2 AVS Headquarters Overhead

AVS headquarters consists of offices that provide s upporting activities that are common to the services provided by AVS. Typical examples of these indirect costs include general and administrative costs, budgeting, human resources, e tc. This cost pool also includes AVS’ imputed costs for post retirement benefits, whereas this cost is reported separately by some LOBs. A pro rata allocation is performed in the CAS to as sign overhead cost associated with headquarters to direct projects. The portion of the cost that is assigned to each pr oject is determined based on the total cost that is directly assigned to each project.

3.3.3.3 AVS Regional Overhead

AVS is organized into geographical regions and each region has several field offices. The regional overhead consists of indirect costs that a re incurred as the result of providing supporting activities that are common to the field offices in that region. Typical examples of these indirect costs include general and administra tive costs. A pro rata allocation is performed in the CAS for e ach region to assign overhead cost associated with that regional office to direct proj ects. The portion of the cost that is assigned to each pr oject is determined based on the total cost that is directly assigned to each project with in that particular region.

3.3.3.4 AVS Field Overhead

Field facilities are generally the offices in which direct services are provided. However, these offices still may incur indirect costs which are not directly related to the service being30 provided. Typical examples of these indirect costs include general and administrative costs, office space, supplies, etc. A pro rata allocation is performed in the CAS for e ach field office described above to assign overhead cost associated with that field office to direct projects. The portion of the cost that is assigned to each pr oject is determined based on the total cost that is directly assigned to each project with in that particular field office.
AVS field overhead allocations were created for the following AVS field offices: Flight Standards District Offices (FSDO), International Fi eld Offices (IFO), Aircraft Evaluation Groups (AEG), and Certificate Management Offices (C MO). The indirect costs associated with other AVS field offices such as Medical Field Offices (MFO), Manufacturing Inspection District Offices (MIDO), Aircraft Certification Off ices (ACO), etc. are not allocated at this level of detail; rather, the indirect costs are inc luded in the regional overhead allocations for their respective region.

3.3.3.5 AVS Workers’ Compensation

Workers Compensation (WC) is managed and administer ed by the Department of Labor (DOL). FAA’s total WC liability is made up of actu al benefits paid to employees (referred to as an accrued liability), as well as an actuarial e stimate reflecting future liabilities. The actuarial WC Liability amount includes estimates fo r death, disability, medical, and miscellaneous costs for compensation cases. A pro rata allocation is performed in the CAS to as sign WC costs associated with the AVS organization to direct projects. The portion of the cost that is assigned to each pr oject is determined based on the total cost of personnel compensation and benefits that is directly assigned to each project.

3.3.3.6 AVS Leave

Employees who are absent from work record their tim e to a leave project in lieu of a standard labor project. At FAA, leave is costed wh en it is taken rather than when it is earned. Therefore, leave cost cannot be associated with direct projects. A pro rata allocation is performed in the CAS to as sign the cost of leave to direct projects. The portion of the cost that is assigned to each pr oject is determined based on the total cost of personnel compensation and benefits that is directly assigned to each project.

3.3.3.7 AVS Academy Training

The FAA Academy, located in Oklahoma City, is a lar ge training facility that provides agency-wide resident training services. The cost o f training at the FAA Academy includes the costs for course development and delivery, and the associated AVS employees’ travel and per diem costs. A pro rata allocation is performed in the CAS to as sign the training costs attributable to AVS to direct projects within AVS.31 The portion of the Academy training cost that is as signed to each project is based on the total direct cost of training activities incurred b y the organization. Organizations within AVS also develop and provide localized training for emp loyees due to the specialized nature of their work. The cost of the localized training is directly assigned to projects in that organization and therefore used as the basis to ass ign the Academy training cost.

3.3.3.8 AVS Technical Training

In addition to the Academy training, organizations within AVS also develop and provide localized training for employees due to the special ized nature of their work. In most cases, specialized training is provided to train employees who work on a specific project and therefore, the training cost is directly assigned t o that project. However, in some instances, technical training is common to multiple projects, making it an indirect cost. A pro rata allocation is performed in the CAS to as sign the indirect technical training costs to direct projects. The portion of the indirect technical training cost that is assigned to each project is based on the total direct cost of training activities inc urred by the organization.

3.3.3.9 AVS Special Projects

In addition to the allocations described above, AVS also defined a few special cost assignments. These allocations are designed to ass ign the cost of specific projects to the direct projects that benefit from the cost.

3.3.3.9.1 

### Special Projects to Aerospace Medicine

AVS identified specific Research, Engineering, & De velopment (RE&D) indirect projects that support the Aerospace Medicine servic e. A pro rata allocation is performed in the CAS to as sign the cost described above to direct projects within the Aerospace Medicine servi ce. Otherwise, the cost would be pooled as overhead and spread across all of AVS’ se rvices. The portion of this cost that is assigned to each p roject is based on the total direct costs charged to projects in the Aerospace Medicine service.

3.3.3.9.2 

### Special Projects to Designees

The hierarchy of projects that make up the Designee service is organized based on the AVS organization associated with the project. In a ddition, the Designee service includes a special oversight project that supports the designee projects associated with Flight Standards (AFS). A pro rata allocation is performed in the CAS to as sign the cost of the special oversight project to the direct projects owned by AFS, within the Designee service.32 The portion of this cost that is assigned to each p roject is based on the total direct costs charged to those projects owned by AFS, withi n the Designee service. This special allocation is performed so that the fu ll costs of the designee projects associated with AFS can be captured.

3.3.3.9.3 

### Special Projects to Flight Standards

The FLSASAM project is a direct project, within the Other Services service, that is used to provide support for the automated staffing alloc ation model. AVS identified that this project specifically benefits Flight Standards (AFS ). A pro rata allocation is performed in the CAS to as sign the cost of the project described above to the direct projects attributable to AFS. The portion of this cost that is assigned to each p roject is based on the total direct costs charged to those projects by AFS. This special allocation is performed so that the co st of the FLSASAM project is assigned to the organization and its projects that benefit.33 4 Airports

The Airports (ARP) organization is an FAA line of b usiness which provides leadership in planning and developing a safe and efficient nation al airport system, taking into account economics, environmental compatibility, local propr ietary rights, and safeguarding the public investment.

4.1 ARP Cost Targets/Services

To organize the source data and provide effective c ost information based on that data, a cost accounting system must have activity outputs, or cost objects, to measure the costs. ARP defined several services, which represent cost objects for managerial cost accounting purposes. These services are defined as follows:

• Airspace Determination – Conducting aeronautical studies associated with t he construction or alteration of airports and the eval uation of obstructions near airports.

• Airport Safety Certification – Certifying that airports meet established operati onal and safety standards. Two services were defined in ord er to differentiate between the Part 139 and Non-Part 139 certifications.

• Compliance – Assisting airport owners to meet their contractu al obligations assumed when they accepted Federal grant funds or the trans fer of Federal property for airport purposes. This also includes monitoring and invest igating airports for compliance with these obligations as well as other applicable Feder al laws.

• Development Planning – Providing guidance on airport planning issues an d developing techniques, methods, and procedures for use in airp ort planning.

• Environmental – Evaluating environmental impacts of Airport Impr ovement Program (AIP) projects and determining reasonable alternati ves to comply with the National Environmental Policy Act of 1969 (NEPA).

• Passenger Facility Charge (PFC) Implementation – Providing oversight and guidance for the collection and use of the Passenger Facilit y Charge (PFC), a fee collected for every enplaned passenger at commercial airports con trolled by public agencies.

• Airport Improvement Program (AIP) Implementation – Providing oversight and guidance for grants for the planning and developmen t of public-use airports that are included in the National Plan of Integrated Airport Systems (NPIAS). Two services were defined in order to differentiate between primary a nd non-primary airports.

• Standards Development – Developing and issuing standards for airport des ign, construction, maintenance, operations, safety, and grant compliance.

• Airport Noise – Evaluating and measuring noise at airports and s urrounding areas and determining exposure of individuals to noise that r esult from the operations of an airport.

4.2 ARP Cost Model

The cost model describes how costs are assigned for the Airports line of business. The levels in the structure include Project and Service . Generally, as an activity occurs, the costs of that activity are assigned to a specific p roject, referred to as the Project level in the cost model. Each project is associated with one of the services that ARP provides. For ARP, the model is relatively simple because there i s generally a one to one relationship between project and service - the project represent s the service being provided. The Service is the final cost object.34 4.3 ARP Cost Assignments

This section of the report discusses the methods of assigning ARP costs. Included is a detailed discussion of the cost assignment, includi ng the cost pool to be assigned, the method of assignment, the target of the assignment, and the basis used. The discussion of the ARP assignments is organized based on how costs are reported on ARP’s Cost Type report. See Appendix B for an exam ple of this report.

4.3.1 ARP Direct Labor

ARP direct labor costs include the compensation and benefits of personnel directly associated with providing ARP services. The cost of ARP direct labor is directly traced to projects using the actual labor hours recorded to direct ARP projects by ARP personnel.

4.3.2 ARP Direct Non-Labor

Non-labor includes costs such as supplies and trave l expenses. The ARP direct non-labor costs are the types of costs that are directly asso ciated with a specific ARP activity. The cost of ARP direct non-labor is directly traced to projects using the actual cost incurred by ARP personnel.

4.3.3 ARP Allocations

Certain costs cannot be directly traced to a servic e. Allocation steps were designed to assign these types of costs to the services they su pport in order to capture the full cost of each ARP service. The sections below describe ARP’ s allocated costs.

4.3.3.1 ARP Leave

Employees whom are absent from work record their ti me to a leave project in lieu of a standard labor project. At FAA, leave is costed wh en it is taken rather than when it is earned. Therefore, leave cost cannot be associated with direct projects. A pro rata allocation is performed in the CAS to as sign the cost of leave to direct projects. The portion of the cost that is assigned to each pr oject is determined based on the total cost of personnel compensation and benefits that is directly assigned to each project.

4.3.3.2 ARP Academy Training

The FAA Academy, located in Oklahoma City, is a lar ge training facility that provides agency-wide resident training services. The cost o f training at the FAA Academy includes35 the costs for course development and delivery, and the associated ARP employees’ travel and per diem costs. A pro rata allocation is performed in the CAS to as sign the training costs attributable to ARP to direct projects within ARP. The portion of the Academy training cost that is as signed to each project is based on the total cost of training activities incurred by the o rganization. Organizations within ARP also develop and provide localized training for employee s due to the specialized nature of their work. The cost of the localized training is direct ly assigned to projects in that organization and therefore used to assign the Academy training c ost.

4.3.3.3 ARP Headquarters Overhead

ARP headquarters consists of offices that provide s upporting activities that are common to the services provided by ARP. Typical examples of these indirect costs include general and administrative costs, budgeting, human resource s, etc. This cost pool also includes ARP’s imputed costs for post retirement benefits, w hereas this cost is reported separately by some LOBs. A pro rata allocation is performed in the CAS to as sign overhead cost associated with headquarters offices to direct projects. The portion of the cost that is assigned to each pr oject is determined based on the total cost that is directly assigned to each project.

4.3.3.4 ARP Regional Overhead

ARP is organized into geographical regions and most of these regions have field offices. The regional overhead consists of indirect costs th at are incurred as the result of providing supporting activities that are common to the office s in that region. Typical examples of these indirect costs include general and administra tive costs. A pro rata allocation is performed in the CAS for e ach region to assign overhead cost associated with that regional office to direct proj ects. The portion of the cost that is assigned to each pr oject is determined based on the total cost that is directly assigned to each project with in that particular region.

4.3.3.5 ARP Field Overhead

The ARP field offices consist of Airport District O ffices (ADO). The overhead cost at these field facilities consist of indirect cost incurred which are not directly related to the service being provided. Typical examples of these indirect costs include general and administrative costs, miscellaneous supplies, etc. A pro rata allocation is performed in the CAS for e ach field office to assign overhead cost associated with that field office to direct project s. The portion of the cost that is assigned to each pr oject is determined based on the total cost that is directly assigned to each project with in that particular field office.36 4.3.3.6 FAA Corporate Overhead

FAA corporate overhead costs include FAA headquarte rs and regional overhead. A portion of these costs are assigned to the direct projects and services within each LOB, including ARP. The FAA overhead assignments are described be low in section 5 - Federal Aviation Administration Corporate Overhead Assignments.37 5 Federal Aviation Administration Corporate Overhea d Assignments

This section of the report discusses the methods of assigning FAA corporate overhead costs. Included is a detailed discussion of the co st assignment, including the cost pool to be assigned, the method of assignment, the target o f the assignment, and the basis used.

5.1 FAA Headquarters Overhead

The FAA is organized such that a majority of its ge neral and administrative (G&A) services are provided by centralized organizations, referred to as FAA staff offices. These organizations provide accounting and budget service s; human resources management; government, public and industry affairs; legal and policy services; as well as executive leadership. FAA headquarters overhead costs repres ent the indirect cost of FAA general and administrative services provided to the lines o f business by personnel residing at FAA headquarters and the Aeronautical Center (AMC). A series of pro rata allocations is performed in th e CAS to assign the FAA headquarters indirect costs to projects, service delivery points (SDPs), and services within each LOB and selected organizations within AMC. Then, a series of pro rata allocations is performed to assign the AMC indirect costs to projects, SDPs, an d services within each LOB, residing in the Aeronautical Center. Note that not all LOBs tr ack costs at a service and/or SDP level 1

. In this case, costs are assigned at the project lev el. The portion of the cost of the Administrator’s Offi ce (AOA) and other Assistant Administrator’s Offices assigned to projects, SDPs, and services within each LOB is determined based on the percentage of total cost wh ile the portion of the cost of human resources services assigned to projects, SDPs, and services within each LOB is determined based on the percentage of labor cost. The portion of the AMC cost assigned to each LOB is based on the percentage of total cos t assigned to each LOB. Figure 5-1, below, illustrates this allocation in more detail.

1 

### The Service Delivery Point concept is specific to the Air Traffic Organization and described in detail in section 2.2 – ATO Cost Model

.38 ARP ASH AST ATO AVS AMC

ARP ASH AST ATO AVS AMC 

## FAA Headquarter G&A Expense Assignment

AMC

AMC and LOB Tenant Organizations at AMC AHR AOA / Other Staff Offices

LOB and Selected Elements of AMC Pool includes Human Resources Organization.

Basis = Labor Cost Pool includes FAA Administrator's Office and all other Assistant Administrative Offices.

Basis = Total Cost

Pool includes Aeronautical Center Accounting and Budget Organization.

Basis = Total Cost

Figure 5-1

5.2 FAA Regional Overhead

As mentioned above, the FAA is organized such that a majority of its general and administrative (G&A) services are provided by centr alized organizations. FAA regional overhead costs represent the indirect cost of FAA g eneral and administrative services provided to the lines of business by personnel resi ding at FAA regional headquarters offices. A series of pro rata allocations is performed in th e CAS to assign the FAA regional overhead costs in each region to projects, SDPs, an d services in the respective region,39 within each LOB with a regional component. Note th at AST and AMC do not receive an allocation because these organizations do not have a regional component. Also, note that not all LOBs track costs at a service and/or SDP le vel 1 . In this case, costs are assigned at the project level. The portion of the cost of financial management rel ated services assigned to projects, SDPs, and services is determined based on the perce ntage of total cost while the portion of the cost of human resources services and other staf f offices assigned to projects, SDPs, and services is determined based on the percentage of labor cost. Figure 5-2, below, illustrates this allocation in more detail.



### ARP ASH AVS ATO AST AMC FAA Regional G&A Expense Assignment



### Regional Budget/Finance Regional Non-Financial

LOB and Selected Elements of AMC 

### Pool includes

all financial management regional office organizations.

Basis = Total Cost Pool includesall nonfinancial regional office organizations.

Basis = Labor Cost

Figure 5-2A-1 Appendix

A. Acronym List

Below is a list of acronyms used throughout this do cument.

AAM Office of Aviation Medicine
ACO Aircraft Certification Office ADO Airports District Office AEG Aircraft Evaluation Groups AFS Flight Standards Service AFSS Automated Flight Service Station AIP Airport Improvement Program AMC Mike Monroney Aeronautical Center
AOA Office of the Administrator AOCC Atlantic Operations Control Center ARC Assistant Administrator for Regions and Center Operations ARINC Aeronautical Radio, Inc. ARP Associate Administrator for Airports
ARTCC Air Route Traffic Control Center ASH Assistant Administrator for Security and Hazmat AST Associate Administrator for Commercial Space Tr ansportation
ATC Air Traffic Control ATCSCC Air Traffic Control System Command Center ATCT Airport Traffic Control Tower ATO Air Traffic Organization AVS Associate Administrator for Aviation Safety CAS Cost Accounting System CERAP Combined Enroute Radar Approach Control CMO Certificate Management Office DOL Department of Labor
DUATS Direct User Access Terminal Service
ENR Enroute Service F&E Facilities and EquipmentA-2 FAA Federal Aviation Administration FASAB Federal Accounting Standards Advisory Board FECA Federal Employees Compensation Act FECS Front-End Control System FSDO Flight Standards District Office FSS Flight Services Service G&A General & Administrative Expense ICAO International Civil Aviation Organization
IFO International Field Office LDR Labor Distribution Reporting
LOB Line of Business
MFO Medical Field Office MIDO Manufacturing Inspection District Office MOCC Mid-States Operations Control Center NAS National Airspace System NISC NAS Infrastructure Support Contract (Engineeri ng Services Contract)
NNCC National Network Control Center NOCC National Operational Control Center NPIAS National Plan of Integrated Airport Systems O&M Operations & Maintenance OCC Operational Control Center
OCN Oceanic Service PFC Passenger Facility Charge POCC Pacific Operations Control Center RAPCON Radar Approach Control RE&D Research, Engineering, & Development SDP Service Delivery Point SFFAS Statement of Federal Financial Accounting Sta ndards Tech Ops Technical Operations TMC Traffic Management Coordinator TMU Traffic Management Unit TRACON Terminal Radar Approach Control TSSC Technical Services Support Contract WC Workers CompensationB-1 B. CAS Report Templates

B.1. ATO Cost of Service Report

ENROUTE OCEANIC FLIGHT SERVICE TERMINAL TOTAL FYTD TOTAL

Level 1 - Facility ATC Direct Labor $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX ATC Indirect Labor $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,X XX $ XXX,XXX $ XXX,XXX ATC Direct Non-Labor $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX ATC Indirect Non-Labor $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX ATC Contract Training $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX ATC Academy Training $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX Tech Ops Direct Labor $ XXX,XXX $ XXX,XXX $ XXX,XXX $ X XX,XXX $ XXX,XXX $ XXX,XXX Tech Ops Direct Non-Labor $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX $ XXX,XXX Tech Ops DO Indirect $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX Tech Ops Academy Training $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX $ XXX,XXX Telecommunications $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX ,XXX $ XXX,XXX $ XXX,XXX Telecommunications Support $ XXX,XXX $ XXX,XXX $ XXX,X XX $ XXX,XXX $ XXX,XXX $ XXX,XXX Flight Inspection Services $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Logistics $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Utilities $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX subtotal: $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX

Level 2 - Service Unit ATC Workers' Compensation $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX $ XXX,XXX Tech Ops Workers' Compensation $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Direct Field Support $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX ,XXX $ XXX,XXX $ XXX,XXX Contract Weather $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Contract Weather Observations $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Contract Tower $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Contract Flight Service $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX DUATS $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Contract Maintenance $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX Implementation $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Acquisition (non ATO) $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX Acquisition (ATO) $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX Depreciation & Capital Leases $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX subtotal: $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX

Level 3 - ATO ATC System Command Center $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX $ XXX,XXX Atlantic Operations Control Center $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Mid-States Operations Control Center $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Pacific Operations Control Center $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX National Network Control Center $ XXX,XXX $ XXX,XXX $ X XX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Charting $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Service Area Indirect $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX ,XXX $ XXX,XXX $ XXX,XXX Service Unit Indirect $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX ATO Indirect $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX subtotal: $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX

Level 4 - FAA FAA Regional Indirect $ XXX,XXX $ XXX,XXX $ XXX,XXX $ X XX,XXX $ XXX,XXX $ XXX,XXX FAA Headquarters Indirect $ XXX,XXX $ XXX,XXX $ XXX,XX X $ XXX,XXX $ XXX,XXX $ XXX,XXX Medical $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Gain/(Loss) $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX Accrued Liabilities $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX ,XXX $ XXX,XXX $ XXX,XXX subtotal: $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX

Grand Total: $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX FAA COST ACCOUNTING SYSTEM
ATOC005 - COST OF SERVICE REPORT FOR THE YEAR ENDING SEPTEMBER 30, 2008B-2 B.2. AVS Service Summary Report

CURRENT FYTD LABOR NON-LABOR ALLOCATED TOTAL LABOR NON-LABOR ALLOCATED TOTAL AERSPCMED AERSPCMED $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX AIRWORCRT AIRWORCRT $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX DESIGNEES DESIGNEES $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX OPRAGCYCRT OPRAGCYCRT $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XX X,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX OTHERSERV OTHERSERV $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX REGISTRTN REGISTRTN $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX STANDARDS STANDARDS $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX SURVELNCE SURVELNCE $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX

TOTAL $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX,XXX $ XXX, XXX $ XXX,XXX $ XXX,XXX Grouping: AVS Organization: AVS FAA Cost Accounting System Project Summary Report FY2008, END-OF-YEAR RUN

B.3. ARP Cost Type Report

Organization: ARP

ARPHQTRS ARPREG TOTAL Labor Labor $ XXX,XXX $ XXX,XXX $ XXX,XXX Sub-total $ XXX,XXX $ XXX,XXX $ XXX,XXX

Non-Labor Travel $ XXX,XXX $ XXX,XXX $ XXX,XXX

Rent, Leases and Utilities $ XXX,XXX $ XXX,XXX $ XXX,X XX Other Services $ XXX,XXX $ XXX,XXX $ XXX,XXX Equipment $ XXX,XXX $ XXX,XXX $ XXX,XXX All Other $ XXX,XXX $ XXX,XXX $ XXX,XXX

Sub-total $ XXX,XXX $ XXX,XXX $ XXX,XXX

Allocations Leave $ XXX,XXX $ XXX,XXX $ XXX,XXX

AMA Training for ARP $ XXX,XXX $ XXX,XXX $ XXX,XXX ARP Headquarters $ XXX,XXX $ XXX,XXX $ XXX,XXX ARP Regional $ XXX,XXX $ XXX,XXX $ XXX,XXX ADO Indirect $ XXX,XXX $ XXX,XXX $ XXX,XXX FAA Headquarters $ XXX,XXX $ XXX,XXX $ XXX,XXX FAA Regional $ XXX,XXX $ XXX,XXX $ XXX,XXX

Sub-total $ XXX,XXX $ XXX,XXX $ XXX,XXX

TOTAL $ XXX,XXX $ XXX,XXX $ XXX,XXX FAA Cost Accounting System Cost Type Report FY2008, END-OF-YEAR