Source: http://www.docstoc.com/docs/110370065/SAR-Oct05-March06-FINAL-6-21bqxd
Timestamp: 2015-05-06 00:58:53
Document Index: 218713189

Matched Legal Cases: ['in fine', 'in fine', 'in fine', 'in fine', 'art 1520', 'in fine', 'art 1520', 'art 1520']

SAR Oct05 March06 FINAL 6-21b.qxd by zhouwenjuan
110370065
S emiannual
October 1, 2005–March 31, 2006
Office of Inspector General ■ U.S. Department of Transportation
From the Acting Inspector General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page v
Senate Resolution 382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page vi
Work Planned and in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 1
Aviation and Special Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 1
Financial and Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 4
Surface and Maritime Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 7
Competition and Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 10
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 11
October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 11
November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 17
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 28
Perspectives on Aviation Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 30
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 32
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 33
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 36
Oversight of Hurricane Relief and Recovery Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 41
Other Accomplishments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 45
Charts &amp; Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 47
Summary of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 47
Judicial and Administrative Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 48
Profile of All Pending Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 49
Application of Investigative Project Hours by Priority Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 49
Status of Unresolved Investigations Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 50
Application of Investigative Project Hours by Operating Administration . . . . . . . . . . . . . . . . . . . . . .Page 51
Completed OIG Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 51
OIG Reports with Recommendations That Questioned Costs                                         . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 52
OIG Reports with Recommendations That Funds Be Put to Better Use . . . . . . . . . . . . . . . . . . . . . .Page 52
OIG Reports Recommending Changes for Safety, Economy, or Efficiency                                              . . . . . . . . . . . . . . . . . . . .Page 53
Management Decisions Regarding OIG Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 53
Office of Inspector General Published Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 54
Office of Inspector General Congressional Testimonies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 57
Status of Unresolved Recommendations Over Six Months Old . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 57
Application of Audit Project Hours by Operating Administration . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 60
Mission, Organization, &amp; Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 61
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 65
iv   Semiannual Report to Congress
i n s p e c t or g e n e ra l
e are pleased to present the Department of Transportation Office
of Inspector General&#39;s Semiannual Report to Congress for the six
months ending March 31, 2006. We thank Secretary Mineta,
Deputy Secretary Cino, our modal administrators, and Congressional members
and staff for their responsiveness to our recommendations to strengthen safety,
improve program delivery, and maximize efficiency.
During this semiannual period, we issued 44 audit reports and 182 recom-
mendations, and our investigations resulted in 103 convictions. Our work
resulted in more than $819 million in financial recommendations, fines, resti-
tutions, civil penalties, and recoveries. We testified before Congress on 5 occa-
sions including such issues as ATC modernization; FAA&#39;s budget; Pipeline safe-
ty; Amtrak; and Aviation safety. A summary of highlights from audits, investi-
gations, and testimonies presented during this reporting period can be found
We also want to recognize the contributions of our former Inspector
General, Kenneth M. Mead, who retired in February 2006 after more than
30 years of Federal service. Ken served with great distinction and dedication
for almost nine years as Inspector General and his tenure was marked by a
solid record of accomplishments. As Secretary Mineta stated when he learned
of Ken&#39;s retirement:
“Taxpayers are losing a fierce ally with the resignation of my good friend and
respected colleague, Inspector General Mead. Ken has been a tireless advocate
for setting the highest possible standards of integrity, accountability, and per-
formance. Thanks to his efforts, we are all better at the work we do making
the nation&#39;s transportation system as safe and efficient as possible. He will be
remembered for his contributions and distinguished public service.”
To commemorate his service, on February 17, 2006 the United States
Senate passed a resolution recognizing Ken for his exemplary service. A copy
of the resolution is included in this report. It was a privilege and an honor for
all of us to have served under his leadership.
vi   Semiannual Report to Congress
viii   Semiannual Report to Congress
his section describes significant projects currently underway or
planned by the Office of Inspector General that focus on the
Department&#39;s progress in achieving its strategic objectives in safety,
mobility, global connectivity, environmental stewardship, and security. We will
review the oversight of aircraft maintenance work performed by outside repair
stations, FAA&#39;s progress on major acquisitions, and the competitive outsourcing
of flight service stations. We will ensure thorough financial reporting and
accounting practices throughout the Department and review information system
security. We will report on the status of the North American Free Trade
Agreement&#39;s border crossing provisions, the oversight of FTA&#39;s grants manage-
ment program, and NHTSA&#39;s management reviews of state highway safety pro-
grams. Our ongoing work in response to the natural disasters in the Gulf Coast
region continues to focus on the Department&#39;s efforts to rebuild damaged or
destroyed infrastructure and to protect reconstruction funding from fraud, waste,
OIG has developed the following work plan for the period of April 1 through
AVIATION AND SPECIAL PROGRAMS
■ Advanced Technology and Oceanic Procedures II
Compare FAA’s experience in acquiring an oceanic system to the experiences
of other major oceanic air traffic control service providers. Review the cost,
schedule, performance specifications, and the operating environment (i.e., com-
plexity and volume of airspace) that the system was designed to accommodate.
■ Validation of the Standard Terminal Automation Replacement System (STARS)
Phase I Program Costs
Review and validate the life cycle cost studies and other relevant analyses
provided to FAA’s Joint Resources Council to justify and rebaseline Phase I of
the STARS program.
■ Oversight of Aircraft Manufacturers’ Quality Assurance System for Suppliers
Evaluate FAA’s oversight of aircraft manufacturers’ quality assurance system
for domestic and foreign suppliers.
work planned and in progress   1
■ Air Carriers’ Outsourcing of Aircraft Maintenance
Determine the type and quantity of maintenance performed by outside
repair stations and whether FAA is effectively monitoring air carriers’ oversight
of the work performed by outside repair stations and verify whether safety
■ FAA’s Telecommunication Infrastructure Program
Determine whether FAA can transition to FTI within revised cost and sched-
ule guidelines and identify the key program risks that could affect FAA’s abili-
ty to meet cost and schedule projections.
■ Integrity Threats to Hazardous Liquid Pipelines
Assess (1) actions taken by hazardous liquid pipeline operators to remediate
integrity threats and (2) PHMSA efforts to verify the adequacy of these cor-
rective actions.
■ Follow-Up Review of FAA’s Management and Controls Over Memoranda of
Determine whether FAA’s newly established internal policies and procedures
have been effective in improving the Agency’s management of and controls over
MOUs. The audit was requested by the House Appropriations Subcommittee
on Transportation, Treasury, and Housing and Urban Development.
■ FAA’s Airport Surface Detection Equipment-Model X (ASDE-X) Program
Determine whether FAA’s strategy for deploying ASDE-X for operational
use is cost effective, given the changes in the program’s deployment strategy.
Determine to what extent the ASDE-X program will reduce the risk of runway
incursions and ground collisions.
■ FAA Joint Planning and Development Office (JPDO)
Determine (1) progress made by JPDO in aligning and leveraging research
conducted by other Federal agencies, (2) how JPDO will shift new technolo-
gies and capabilities from research to prototype and introduction into the
National Airspace System, and (3) what barriers JPDO must overcome to
transition to a new air traffic management system. This audit was request-
ed by the Chairman and Ranking Member of the House Transportation
and Infrastructure’s Aviation Subcommittee.
■ Follow-Up on Airline Customer Service Commitment
Follow-up on the performance of U.S. airlines in implementing pro-
visions of the Airline Customer Service Commitment and related issues
2   Semiannual Report to Congress
that have an immediate impact on passengers, such as (1) notification of
delays and cancellations, (2) frequent flyer program, (3) overbooking and
denied boardings, and (4) accommodation for disabled and special needs pas-
sengers. In addition, we will evaluate how well the Department is oversee-
ing and investigating air travel and consumer protection requirements. The
audit was requested by the Chairman of the House Transportation and
Infrastructure’s Aviation Subcommittee.
■ FAA’s Oversight of Airport Revenue Diversions
Determine whether the City of Orlando is complying with revenue use
■ Review of Air Traffic Organization’s (ATO) Management Controls Over Credit
Determine if the ATO’s management controls over credit hours are suffi-
cient to ensure that credit hours are justified, necessary, and in the best inter-
est of the Government.
■ FAA’s Oversight of Airport Improvement Program (AIP) Hurricane Grants
Evaluate the adequacy of FAA’s procedures and controls for oversight of AIP
grants issued to assist airports in rebuilding after Hurricanes Katrina and Rita.
■ Emergency Disaster Relief Transportation Services Contract
Determine if FAA Southern Region’s internal controls over the contract
are sufficient to ensure that the Government received the services it paid for.
■ FAA Oversight of Aging Aircraft
Evaluate FAA’s progress in implementing provisions of the Aging Airplane
Act that require mandatory aging aircraft inspections and records review.
■ FAA’s Efforts To Improve Weather Forecasting in Terminal and En Route
Review major improvements-both technological and procedural-for enhanc-
ing the flow of weather information to air traffic controllers and
pilots and determine how these improvements can be made more
■ Progress in Executing FAA’s Air Traffic Controller Staffing
Address FAA&#39;s progress executing this plan and determine
whether productivity gains are being realized and realistically quan-
work planned and in progress   3
■ Implementation of FAA’s A-76 Plans for Flight Service Stations
Assess FAA’s oversight and management of the transition. Specifically, we
will determine if sufficient controls are in place to ensure that expected savings
■ Progress and Problems with FAA’s Major Acquisitions
Follow-up on our May 2005 audit report on FAA major acquisitions
and examine (1) recent changes in cost, schedule, and expected benefits
of key projects and (2) overall trends affecting FAA’s expenditure of facil-
ities and equipment funding ($2.5 billion appropriated by Congress for
FY 2005). The audit was requested by the Chairman and Ranking
Member of the House Aviation Subcommittee.
■ Use of Contract Audit Services, DOT Operating Administrations
Determine whether DOT and its Operating Administrations are obtaining
contract audit services as necessary and in accordance with policies, procedures,
and acquisition regulations.
■ Contractor Overhead and Compensation Under Grants
Review the effectiveness and implementation of audit provisions in Section
307 of the National Highway System Designation Act addressing audits of
contracts awarded by states to engineering and design firms. Procedures
include testing the allowability of compensation and other high overhead cost
elements billed by these firms.
■ Computer Security and Controls Over the National Driver Registry (NDR)
Determine whether (1) personal identification information stored in the
NDR can be accessed for unapproved use; (2) traffic violations are promptly
and accurately processed for NDR reporting; (3) an adequate contingency plan
exists to ensure business continuity; and (4) risks associated with NDR system
operations are properly assessed, tested, and mitigated to meet minimum
■ Review of Spending Priorities for the Office of the Assistant Secretary for
Determine if the Office of the Assistant Secretary for Administration (1) has
adequate support for budget requests, including funds to operate the Working
Capital Fund, (2) supports DOT operations commensurate with the office’s
mission, and (3) properly accounts for Working Capital Fund resources.
4   Semiannual Report to Congress
■ FAA’s RESULTS National Contracting Service
Review FAA’s use of multiple-award umbrella procurement programs to
acquire contract support services, focusing on the RESULTS procurement pro-
gram. We will determine whether RESULTS was properly established and whether
contracts are properly competed, administered, and have a well-defined scope.
■ Assessment of Corrective Actions To Eliminate Anti-Deficiency Act
Violations, FTA
Based on an FY 2005 Appropriations Act request, examine the adequacy of
FTA&#39;s corrective actions for ensuring that internal control measures and
accounting practices are in place to prevent an Anti-Deficiency Act violation
similar to the one reported by FTA in June 2003 for $77 million.
■ National Transportation Safety Board (NTSB) Government Travel Cards
Determine whether (1) internal controls are adequate to safeguard against
unauthorized use, (2) National Transportation Safety Board employees use
travel cards only for official Government business, and (3) delinquent travel
charge accounts are identified and monitored to ensure timely resolution.
■ Status Assessment of FAA’s Cost Accounting System
As required by FAA’s reauthorization act (AIR-21), perform a review of the
status of FAA’s Cost Accounting System and assess eight specific areas cover-
ing FAA’s methods for calculating and assigning costs to users and whether
those methods are reasonable.
■ FY 2006 DOT Consolidated Financial Statements
Render an opinion on the financial statements and issue reports on internal
controls and compliance with financial related laws and regulations.
■ Quality Control Review of FY 2006 Highway Trust Fund Financial Statements
Perform a quality control review of the audit by an independent public
accounting firm and determine if the audit was performed in accordance with
■ Quality Control Review of FY 2006 FAA Financial Statements
■ Quality Control Review of FY 2006 FAA’s Franchise Fund Financial Statements
work planned and in progress   5
■ Quality Control Review of FY 2006 SLSDC Fund Financial Statements
■ Quality Control Review of FY 2006 NTSB Financial Statements
■ Oversight of IPA’s SAS-70 Review of FAA’s Enterprise Service Center as it
Relates to the Delphi Financial Management System
accounting firm. DOT has been designated as one of the Centers of Excellence
to provide cross-agency accounting system services throughout the Federal
Government. OMB requires servicing agencies to hire an independent con-
tractor to review and test management assertions in accordance with AICPA
standards (SAS-70). The contractor will examine computer controls over the
information technology and data processing environment, as well as the input,
processing, and output controls built into the Delphi system.
■ Volpe Center Network Security
Determine if (1) Volpe information systems are properly accredited to
support business operations, (2) Volpe’s network infrastructure and con-
nection entry points are adequately secured to protect the critical infor-
mation assets, and (3) Volpe is leveraging departmental information technolo-
gy resources to maximize cost savings.
■ FY 2006 DOT Federal Information Security Management Act (FISMA) Review
Determine the effectiveness of DOT’s information security program by
measuring progress made in (1) implementing information security require-
ments since last year, (2) correcting air traffic control system security deficien-
cies, and (3) enhancing information technology investment management con-
trols. We will also provide input to DOT’s annual FISMA report by answer-
ing questions specified by OMB.
■ FY 2006 NTSB Federal Information Security Management Act Review
Determine whether NTSB has made adequate progress in implementing the
planned correcting actions, based on last year’s audit recommendations.
6   Semiannual Report to Congress
■ Security and Controls Over the Pilot Medical Database
Determine whether the confidentiality and integrity of the Pilot
Medical Database is adequate to protect U.S.-certified pilots from
wrongful disclosure of their personal medical information.
Specifically, we will assess whether proper security is implemented
to (1) ensure only authorized people can gain access to the infor-
mation and (2) maintain the integrity (i.e., accuracy, complete-
ness, and timeliness) of personal medical information processed
■ Review of the Effectiveness of Price Analysis
Determine whether Operating Administrations are performing adequate
price analysis for their procurements, particularly when multiple bids were not
obtained for competitive solicitations or when pre-award information on con-
tractors’ proposals was not obtained.
■ Independent Assessment of DOT and NTSB Privacy
Contract with an independent, third party that is a recognized leader in pri-
vacy assessments to (1) evaluate the use of information in identifiable form,
(2) evaluate the privacy and data protection procedures of DOT and NTSB,
and (3) recommend strategies and specific steps to improve privacy and data
SURFACE AND MARITIME PROGRAMS
■ Federal Transit Administration Bus Procurement Processes
Determine whether FTA’s oversight ensures that transit agencies using
Federal funds to purchase and operate transit bus fleets (1) follow procurement
and management practices in accordance with Federal guidelines and (2) have
business practices that achieve the most cost effective use of Federal dollars.
■ Central Artery/Tunnel Project 2004 Finance Plan
Determine whether the 2004 Finance Plan (1) presents a cost estimate that is
based on all known and reasonably expected costs, (2) identifies appropriate and
available funding sources sufficient to meet the total estimated cost, (3) pro-
vides a project construction schedule that is based on all known and reasonably
anticipated delays, and (4) discloses other issues affecting the project.
■ Highway-Rail Grade Crossing Accident Reporting and Data Analysis
Assess the adequacy of the Federal Railroad Administration’s oversight of rail-
roads’ reporting of grade crossing collisions and analysis of data in its national
accident database. This report is a follow-up to our November 2005 report.
work planned and in progress   7
■ National Highway Traffic Safety Administration’s Oversight of Alcohol-
Compare the scope, direction, resources, and expenditures of programs and
activities of those states with the highest and lowest alcohol-related fatalities,
including the use of high visibility law enforcement methods, and determine
Federal resources dedicated to this effort.
■ Federal Highway Administration’s Oversight for Implementing Value
Engineering (VE)
Determine whether FHWA’s oversight is adequate to ensure that (1) VE
studies are performed in accordance with established criteria and (2) VE rec-
ommendations are timely and implemented to the maximum extent possible,
permitting potential savings to be achieved.
■ Opportunities for FHWA To Free Up Unneeded Funds in States Affected
by Hurricanes Katrina and Rita and Use Those Funds on Recovery
Assist FHWA in identifying funds dedicated to congressionally direct-
ed projects that are no longer needed and may, with congressional
approval, be freed up and redeployed to other projects within the same
state to reduce the cost of reconstruction.
■ Mississippi DOT Katrina Emergency Repair Contracts
Ensure that Mississippi Department of Transportation Emergency
Repair contract awards were consistent with applicable Federal and state
procurement procedures and that prices received were fair and reason-
able under the emergency conditions that resulted from Hurricane
■ Oversight of Federal Transit Administration Fixed Guideway Modernization
Assess FTA’s statutory oversight role and evaluate a sampling of transit agen-
cies to determine whether they have used these funds in accordance with the
■ National Highway Traffic Safety Administration (NHTSA) Oversight of State
Evaluate NHTSA’s practices and procedures in conducting management
reviews and special management reviews of state highway safety programs and
identify best practices to improve the reviews.
■ Federal Transit Administration Administrative Expenses
Determine if Federal Transit Administration administrative expenditures
were in compliance with the provisions of the FY 2005 Appropriations Act.
8   Semiannual Report to Congress
■ Review of FTA’s Oversight of Grants Management
Determine whether (1) grant drawdowns are adequately supported, and the
grantee is managing grant receipts in accordance with Federal requirements;
(2) costs charged to the grant are allowable and accurate; (3) FTA’s oversight
mechanisms adequately identify issues associated with the grantee’s financial
and grant management; and (4) required financial status and progress reports
accurately reflect grant activity and are submitted in a timely manner.
■ Springfield Union Station Rehabilitation Project
Determine whether the Federal Transit Administration’s oversight of the
project was adequate.
■ 2006 Report on Status of North American Free Trade Agreement’s
Border Crossing Provisions
Analyze the Federal Motor Carrier Safety Administration’s actions in
response to the OIG recommendations in the 2005 report and update
prior OIG audit analysis of FMCSA’s motor carrier data on Mexican
motor carriers operating in the United States.
■ Commercial Driver’s License Information System (CDLIS)
Assess the validity of data in CDLIS on a state-by-state basis, assess the
extent to which convictions are validly posted on drivers’ records, and
analyze the revenue derived from fees charged for use of CDLIS and the use of
■ Audit of the Federal Highway Administration’s Risk Assessments Under Its
Financial Integrity Review and Evaluation Program (FIRE)
Assess the Federal Highway Administration’s actions to implement its new
FIRE Program by (1) determining whether FHWA’s 52 division offices con-
ducted risk assessments that evaluated risks associated with the oversight of
Federal-aid funds provided to state departments of transportation and (2) ana-
lyzing the policies, methods, processes, and systems used by Federal-aid divi-
sion offices to conduct these assessments. Identify existing or potential risks to
highway grant funds and monitor or mitigate such risks.
■ Audit of the New Haven Harbor Crossing Project
Assess the (1) causes and effects of cost growth, funding shortfalls, and sched-
ule delays on the project; (2) Connecticut Department of Transportation’s
(ConnDOT) planned actions to manage these issues; and (3) FHWA’s steward-
ship to ensure that ConnDOT accurately developed and updated its cost esti-
mate and that sufficient long-term capital exists to complete the project.
a c t i v i t i e s   9
■ Risks Facing Major Highway Projects
Identify key management risks to cost, funding, schedule, and other project
elements and provide an assessment of FHWA’s stewardship and oversight of
these major projects.
■ Aviation Delays and Cancellations in Small Communities
For a select number of small- and non-hub airline markets, compare the
number and rate of airline delays and cancellations to service characteristics in
larger markets. Describe the decision-making process and the roles of the var-
ious air traffic control, airline, and airport functions in determining how delays
and cancellations are allocated throughout the National Airspace System under
constrained capacity conditions.
■ Amtrak Quarterly Report on Operational Savings
Report to the House and Senate Committees on Appropriations with esti-
mates of the savings accrued as a result of operational reforms instituted by
■ Airline Metrics
Update statistics on airline industry metrics regarding air service demand and
capacity, service performance, airline finances, and air service at small airports.
■ Annual Assessment of Amtrak
Evaluate and analyze Amtrak’s current financial status and its operating and
capital budget performance. We will also review Amtrak’s annual grant request,
its long term capital needs, and its revised cost allocation methodology.
■ Amtrak Cost Accounting System
As required by the Fiscal Year 2006 Appropriations Act funding
the Department of Transportation, review and comment to the
Secretary of Transportation and the House and Senate Committees
on Appropriations on Amtrak’s implementation of a managerial cost
accounting system, including average and marginal unit cost capabil-
ity. Amtrak was directed by the Act to expend not less that $5 mil-
lion on a system to improve decision making by Amtrak’s Board of
Directors and management of the corporation. The Act further
requires OIG to provide this review within 30 days of the develop-
ment of the managerial cost accounting system.
10   Semiannual Report to Congress
Company and Its President Sentenced for Illegal Transport and
J &amp; N Coatings International (J &amp; N) and the company&#39;s president, Drossos
Tiliakos, were sentenced in U.S. District Court in Oklahoma City, Oklahoma
for their roles in illegally transporting and disposing of lead-based paint
removed from bridges by J&amp;N employees on two federally-funded highway
projects in Oklahoma. Tiliakos was sentenced to 16 months imprisonment and
ordered to pay a $10,000 fine. The company was fined $20,000 and placed on
two years&#39; probation. Investigation found that a project inspector had falsified
waste analysis reports in exchange for a $3,000 bribe. This allowed J&amp;N to
transport and dispose of the hazardous waste in non-hazardous waste landfills.
By doing so, the contractor saved thousands of dollars in disposal fees. The
inspector and a J&amp;N secretary were previously sentenced in this case, which was
investigated jointly with the EPA-CID. Tiliakos and J&amp;N were referred to
FHWA for consideration of suspension on January 25, 2006; FHWA action is
pending as of March 31, 2006.
We issued our annual report on DOT’s information security program
and found that the quality of security certification reviews improved during
FY 2005. However, about 15 percent of departmental systems were overdue
for recertification. The Department also needs to enforce implementation
of the security configuration policy, ensure computer vulnerabilities are cor-
rected in a timely manner, and complete deployment of the intrusion detec-
tion system at one Internet connection point. Further, FAA took only lim-
ited steps this year to address prior air traffic control system security recom-
mendations. FAA only collected security information on about half of the
systems used to support en route air traffic services and has not yet analyzed
Finally, we found that departmental oversight of major system investments
needs to be enhanced. While projects managed by most Operating
Administrations benefited from the departmental Investment Review Board’s
oversight, the Board has had little positive impact on complicated air traffic
activities   11
control projects. These FAA projects are the most complex and challenging
systems, accounting for over 80 percent of the Department’s IT budget. The
issue that needs to be resolved is whether FAA’s exemption from compliance
with the Federal procurement regulations (based on provisions in the
Appropriations Act for FY 1996) also exempts it from the investment manage-
ment oversight requirements of the Clinger-Cohen Act. To enhance IT invest-
ment management controls, we recommended that the Department (1) clari-
fy, in consultation with the Secretary, the Board’s role in performing invest-
ment management oversight of FAA’s major investments and (2) identify
resources and processes to better support the Board by performing more sub-
stantive, in-depth, analytical reviews of progress, problems, and risks associated
with major FAA investments.
NTSB’s Information Security Program
As required by the Federal Information Security Act, we performed an audit
of NTSB’s information security program. This is the second year that small
agencies such as NTSB are required to report to Congress on their information
security programs. Last year, we identified significant system vulnerabilities,
such as a lack of system inventory and limited ability to respond to security inci-
dents in a timely manner. We reported that NTSB’s information security pro-
gram should be classified as a material weakness and recommended corrective
actions; NTSB management concurred. This year, our follow-up review found
that NTSB has made limited progress in implementing the planned actions and
that its computer networks, incident monitoring, and response capabilities
remain vulnerable. Our recommendations to enhance network security include
finalizing the system inventory, completing risk assessments for all systems, and
requiring the Chief Information Officer to submit monthly reports describing
progress made towards completing critical security program elements. The
corrective actions planned by NTSB in response to our recommendations are
reasonable and should provide a solid foundation for implementing an effective
information security program. We will continue to monitor NTSB’s progress
towards completing these actions.
Illinois Truck Driver Involved in Fatal Accident Jailed for Lying to
Investigators about CDL Fraud
Nasko Nazov, a former driver for World Truck, Chicago, Illinois, was sen-
tenced in U.S. District Court in Chicago to 10 months in prison. Nazov pled
guilty in June 2005 to lying to a federal grand jury investigating allegations of
Illinois residents fraudulently obtaining Wisconsin CDLs. He stated that he
12   Semiannual Report to Congress
had lived at an address in Wisconsin for several years when he actually lived in
Illinois. In March 2004, Nazov, who held a Wisconsin CDL, caused an acci-
dent resulting in the death of a family of four while he was operating a com-
mercial motor vehicle in Tennessee. Our investigation found that the address
used by Nazov for his Wisconsin CDL was also used by other Illinois residents
who had obtained Wisconsin CDLs. Those residents admitted to having been
assisted in obtaining the CDLs by an interpreter who provided written test
answers to CDL applicants at the test site. Upon completion of his prison
term, Nazov will be transferred to Tennessee authorities to face charges of
vehicular homicide. The investigation was conducted jointly with the U.S.
Demolition Company and Executive Plead Guilty in Bribery Case
Involving Falsified DBE Certification affecting $228,000 in DOT-
funded Subcontracts
Philly-Wide Interiors, Inc. (PWI) and its owner, Daniel
Pellicciotti, pled guilty in U.S. District Court in Philadelphia to
bribery of a public official. Pellicciotti admitted to submitting a false
application to the Philadelphia Minority Business Enterprise Council
(MBEC) for certification as a disadvantaged business enterprise
(DBE). The application falsely stated that Pellicciotti&#39;s wife, a full-
time nurse, controlled PWI, allowing the firm to qualify as a woman-
owned business. The company subsequently obtained a $228,000
subcontract in 2001 for demolition and refurbishment work on a
Southeastern Pennsylvania Transportation Authority project.
Investigation found that at various times in 2000, Pellicciotti had
provided cash and other things of value to Wendell B. Toland, Jr.,
then employed by MBEC, in exchange for receiving the illicit DBE
certification. Toland, who cooperated in the investigation, pled guilty on
May 25, 2005 and was ordered to pay $1,500 in fines and restitution and to
serve 36 months probation. Both Pellicciotti and PWI have been debarred
from doing business with the federal government for a three year period. The
investigation was conducted jointly with the FBI, IRS, and the Department of
Labor-OIG.
activities   13
Helicopter Mechanic Sentenced for Making False Statements on
John Henry Ford, who formerly held an FAA Airframe and Power Plant
(A&amp;P) Certificate and was the owner/mechanic of Raco Helicopters Corp.,
based at Monmouth County New Jersey Airport, Farmingdale, New Jersey was
sentenced in U.S. District Court in Trenton, New Jersey to five months in a
community correctional center, five months home detention, a total of ten
years probation (during which he may have nothing to do with the aviation
industry), and was ordered to pay $7,700 in fines and restitution. In April,
Ford pled guilty to felony charges of making false statements related to heli-
copter maintenance records. In 2001 and 2003, FAA had revoked Ford&#39;s A&amp;P
Certificates. Our investigation found that during that time, even though he was
not certified to perform inspections, Ford had continued to perform helicop-
ter maintenance without the requisite supervision and falsified inspection dates.
FAA assisted in this investigation.
Actions Taken and Needed in Implementing Mandates
and Recommendations Regarding Pipeline and Hazardous
We issued our report on DOT’s progress in implementing congres-
sional mandates and other safety recommendations for improving
pipeline and hazardous materials safety. Our review found that while
progress has been made, the Department needs to continue its focus on
reducing the number of outstanding congressional mandates and NTSB
recommendations-these include legislation enacted as far back as 1992
and mandates resulting from the Pipeline Safety Improvement Act of
2002. We also stated that senior officials need to focus on meeting their
statutory requirements when responding to NTSB recommendations to
ensure they have been handled in a timely manner and properly
The Acting Inspector General testified in March 2006 before the
House Committee on Transportation and Infrastructure, Subcom-
mittee on Highways, Transit, and Pipelines on progress and remaining
challenges in strengthening pipeline safety. Currently, there is only one
open mandate from 1992, and PHMSA plans to issue a rulemaking
proposal by the end of the year. All mandates from 1996 are closed.
PHMSA has also completed actions on 19 of the 23 mandates from the
14   Semiannual Report to Congress
2002 Act. The congressional deadlines for two of the mandates are not until
the end of this year and PHMSA plans to meet the target dates. Clearly,
PHMSA is making good progress in implementing congressional mandates and
improving pipeline safety, but it is not at an end state because operators are still
in the early stages of implementing integrity management programs.
Former Paving Contracting Official Jailed
Over Three Years for Bribery in Connection with
Washington, DC Road Projects
Antonio C. Bras, former asphalt superintendent for Fort
Myer Construction Company (FMCC) was sentenced in
U.S. District Court in Washington, D.C. to 37 months in
prison for his role in a scheme to bribe D.C. Department
of Public Works engineers and inspectors to accept job tick-
ets overstating the amount of asphalt used in city paving
jobs by nearly $500,000. Bras pleaded guilty in 2003 to
conspiracy to commit bribery. FMCC, two other compa-
nies, and 12 individuals (including Bras) were investigated
under the &#39;Operation Hot Mix&#39; investigation, which
involved FHWA contracts totaling over $32 million.
FMCC was ordered in April 2003 to pay $900,000 in
fines, restitution and civil damages, and was debarred from
Government contracting for 18 months, ending in December 2004. Granja
Contracting, Inc. (Granja) and C&amp;F Construction Co. (C&amp;F) were sentenced
in February 2002. Granja was debarred by FHWA for a two-year period that
expired in June 2004, and C&amp;F was subject to a one-year voluntary exclusion
agreement (expiring in February 2003) that precluded C&amp;F from contracting
on Washington, DC-funded/administered projects.
Bras is currently under an indefinite suspension from doing business with the
Government. All 12 individuals, including city public works officials who
accepted bribes of up to $200 for each phony asphalt job ticket, have also been
sentenced. The investigation was conducted jointly with the FBI.
activities   15
Second Former Professor Pleads Guilty to Embezzlement from
DOT-funded Research Center
Paul G. Bedewi, former adjunct professor at George Washington
University (GWU) and deputy director of the DOT-funded National Crash
Analysis Center in Ashburn, Virginia pled guilty in U.S. District Court,
Washington, DC to one felony count of theft from programs receiving fed-
eral funds. Bedewi was charged with embezzling $78,602 in DOT and
GWU research funds between August 2002 and June 2004 through illegal
stipends and unallowable purchases. Our investigation found that Bedewi
caused the Center to issue $36,150 in unauthorized and fraudulent graduate
assistant stipends to his wife; Bedewi also made unauthorized charges total-
ing $42,452 using a GWU-issued purchase card. Paul Bedewi is the cousin
of Nabih Bedewi, former GWU engineering professor and director of the
crash center, who was sentenced in June 2005 to over three years in prison
and ordered to pay $872,221 in restitution for embezzling nearly $1 million
in DOT and GWU research funds. Paul Bedewi has been referred to FHWA
for consideration of suspension and Nabih Bedewi has been referred for con-
sideration of debarment following his term of imprisonment.
California Aircraft Parts Manufacturing Company Pays
$2.5 Million in Civil Settlement under SUPs Case
Paul R. Brilles, Inc., doing business as PB Fasteners, Gardena,
California, paid the Government $2.5 million pursuant to a settle-
ment agreement under a whistleblower case. The case involved alleged
nonconforming aircraft fasteners used on a variety of military and
commercial aircraft (e.g., Boeing 737, 747s, 757s, 767s, and 777s).
PB Fasteners allegedly submitted claims to the Government and other
entities/customers for the sale of fasteners when PB Fasteners had
failed to perform magnetic particle inspections required by contract
specifications. According to the FAA, the rejected fasteners were not
safety-critical items, and there is no evidence of these parts failing dur-
ing use. As part of the settlement agreement, the criminal case was dis-
missed. This was a joint investigation with DCIS, the US Army&#39;s
Criminal Investigation Command, and NASA-OIG.
16   Semiannual Report to Congress
Former Colorado DMV Clerk Gets 18 Months in Prison for Fraud
in Connection with the Unlawful Sale of Fraudulent CDL
Virginia Villegas, a former driver&#39;s license clerk for the Colorado Department
of Revenue, Division of Motor Vehicles (CO-DMV), was sentenced in U.S.
District Court in Denver to 18 months in prison and 36 months probation for
fraud in connection with identification documents. Villegas pled guilty in August
2005. Our investigation found that Villegas facilitated the unlawful sale of
approximately 100 Colorado driver&#39;s licenses and 20 CDLs to illegal aliens.
Unqualified drivers pose a safety threat to all travelers on our nation&#39;s roadways.
The scheme involved a middleman, Juan Francisco Alderete-Diaz, who admitted
to locating individuals seeking to buy driver&#39;s licenses, collecting as much as
$2,400 per license, and paying Villegas $200 to $500 for each license issued.
Alderete-Diaz was sentenced to three years&#39; probation on October 17, 2005.
Ringleader in Conspiracy Involving nearly 600 Fraudulent
Wisconsin CDLs gets More Than Three Years in Prison
Adam Babul, Chicago, Illinois was sentenced in U.S. District Court in
Chicago to 41 months in federal prison followed by 36 months supervised release
for his role in a conspiracy to fraudulently obtain CDLs. Babul, owner of Bamba,
Inc. (a firm providing assistance to individuals seeking legal documents and legal
status in the United States) was found guilty of conspiracy by a federal jury in
June 2005. Three other defendants pled guilty as co-conspirators and were sen-
tenced in October 2005 to varying periods of probation. Investigation revealed
that the defendants guaranteed CDL certification to Illinois residents in exchange
for cash payments of about $2,000 each. CDL applicants were transported to
Wisconsin where they established bank accounts using a fraudulent Wisconsin
address. The bank account documentation was then used as proof of residency
for Wisconsin CDL applications. The CDL applicants were also assisted by a lan-
guage translator supplied by Bamba, Inc., who provided answers to CDL test
questions at the examination site. This investigation was conducted jointly with
activities   17
In November 2005, we issued our annual reports on the financial statement
audits conducted for the Department and the National Transportation Safety
Board. All financial statements received unqualified or &quot;clean” opinions. Our
reviews, listed below, are congressionally required to verify that the audits com-
plied with applicable laws and standards, including the Chief Financial Officers
Act, Generally Accepted Government Auditing Standards, and the Office of
Management and Budget Bulletin 01-02, “Audit Requirements for Federal
DOT Consolidated Financial Statements,
FY 2005 and FY 2004
We reported on DOT’s consolidated financial statements fiscal years 2005
and 2004. For the fifth consecutive year, the Department received an unqual-
ified, or “clean,” audit opinion, indicating to users of the Department’s finan-
cial statements that the information presented is reliable. This year, the
Department again met the Office of Management and Budget’s accelerated
deadline to submit audited financial statements as part of the Government’s
annual Performance and Accountability Report. The Operating Admini-
strations made substantial progress in FY 2005 to strengthen management con-
trols and provide better oversight of resources. We identified three financial
management issues that need heightened attention: FAA transactional
accounts, reliability of FHWA financial data, and FHWA’s grant financial man-
agement and oversight practices. We believe that FHWA and FAA have plans
underway that, if implemented on a sustained basis during 2006, will result in
these issues not being material next year.
Quality Control Review of Audited Financial Statements for
FY 2005 and FY 2004 for the Federal Aviation Administration
We performed a quality control review of KPMG’s audit of FAA’s FY 2005
and FY 2004 financial statements.The financial statements received an unqual-
ified or &quot;clean&quot; opinion. The report also presented one material internal con-
trol weakness, three reportable conditions, and three instances of noncompli-
ance with laws and regulations. We concurred with KPMG’s 18 recommenda-
tions for corrective actions and found that KPMG’s audit work complied with
applicable laws and standards. FAA agreed with KPMG’s findings and recom-
mendations and committed to implement corrective actions during FY 2006.
FY 2005 and FY 2004 for the Highway Trust Fund
We performed a quality control review of the audit of the Highway Trust
Fund FY 2005 and FY 2004 financial statements, completed by Clifton
18   Semiannual Report to Congress
Gunderson LLP. The financial statements received an unqualified or &quot;clean&quot;
opinion. The audit categorized problems identified into two material weak-
nesses, two reportable conditions, and four instances of noncompliance with
laws and regulations. Clifton Gunderson made 37 recommendations for cor-
rective actions. Management concurred with the weaknesses, generally agreed
with the recommendations, and planned to submit a detailed action plan to the
OIG. OIG concurred with the recommendations and found that the audit
work complied with applicable standards.
Quality Control Review of the Audited Balance Sheet for FY 2005
for FAA Administrative Services Franchise Fund
We performed a quality control review of KPMG’s audit of the Franchise
Fund’s September 30, 2005, balance sheet. The audit presented one materi-
al internal control weakness and three reportable internal control weaknesses.
KPMG made 15 recommendations regarding the internal control weaknesses
and 2 additional ones to correct instances of noncompliance with significant
laws and regulations. Management concurred and agreed to implement cor-
rective action. In our opinion, KPMG’s audit work complied with applicable
Quality Control Review of Audited Financial Statements for FY
2005 and FY 2004 for the Saint Lawrence Seaway Development
Our quality control review of the SLSDC’s audited financial statements for
FY 2005 and FY 2004 concluded that the financial statements presented fair-
ly, in all material respects, the financial position of SLSDC as of and for the
fiscal years ended September 30, 2005, and September 30, 2004. In our
opinion, the audit work complied with applicable standards, and we issued no
Quality Control Review of Audited Financial Statements
for FY 2005 and FY 2004 for the
We issued a quality control review of the audit of the NTSB’s financial
statements, as of and for the years ended September 30, 2005, and
September 30, 2004. The audit provided an unqualified or &quot;clean&quot; opinion on
NTSB’s financial statements; however, it included one material internal control
weakness related to implementation of an agency-wide information security pro-
gram. In our opinion, the audit work complied with applicable standards. ■
activities   19
Report on Inactive Obligations in the
We issued our fifth report in 8 years on FHWA’s efforts to identify and
release Federal-aid funds kept idle on transportation projects year after year.
We found $258 million of unneeded funds in 14 states
and estimated that states nationwide could release
unneeded Federal-aid funds between $440 million and
$775 million. In response to our audit, FHWA
worked aggressively with the states to review inac-
tive obligations and, as a result, released a total of
$757 million of idle Federal-aid funds by September
30th and made them available for use on active
transportation projects. FHWA also endorsed our
prior recommendations and identified implementa-
tion actions, such as establishing the new Financial
Integrity Review and Evaluation Program and pro-
posing amendments to its regulation governing
when unneeded obligations should be released.
FHWA agreed to continue working with the states
to institutionalize processes to identify and release
unneeded Federal-aid funds. This will ensure that
the progress FHWA made this year is sustained in
20   Semiannual Report to Congress
We issued our annual report on the top management challenges facing
the Department, as required by law. The report was incorporated into the
Department’s FY 2006 Performance and Accountability Report, which is
signed by the Secretary and sent to Congress and the Office of
Management and Budget. In considering the nine challenges identified for
FY 2006, we continued to focus on the Department’s key strategic goals to
improve transportation safety, capacity, and efficiency.
■ Working With Other Agencies To Respond to Disasters and
Address Transportation Security. The attacks of September
11, 2001, and the recent hurricane destruction in the Gulf
Coast region exposed the vulnerabilities of our Nation’s citi-
zens and critical transportation and energy infrastructure to
catastrophic events. There is a continuing need for an effi-
cient interagency approach to preparing for, responding to,
and recovering from such devastating events. As DOT
addresses rebuilding and relief tasks, it will need to work
closely with other agencies to (1) ensure that missions are
well-coordinated and cost-effective so that reconstruction
funding is protected from fraud, waste, and abuse and (2) address securi-
ty issues within the U.S. transportation system and protect users from
criminal and terrorist acts.
■ Getting the Most for Every Taxpayer Dollar Invested in Highway and Transit
Projects. This year, we have seen positive signs from FHWA with its com-
mitment to increase oversight of transportation dollars, and we urge that sus-
tained attention be given to this area. More progress is needed, as we con-
tinue to see examples of ineffective management of highway funds, such as
the identification of over $1.2 billion in Federal highway aid obligations sit-
ting idle during the last 7 years. We see three key issues that need to be
addressed: (1) actions by FHWA and the states are needed to provide over-
sight of highway funds to ensure projects are delivered on time, within budg-
et, and free from fraud; (2) enhancing fraud prevention capabilities and tak-
ing aggressive action against fraud perpetrators, including motor fuel tax eva-
sion; and (3) tough decisions between competing transit needs.
■ Building on Recent Initiatives To Further Strengthen Surface Safety
Programs. The Safe, Accountable, Flexible, and Efficient Transportation
Equity Act: A Legacy for Users (SAFETEA-LU), enacted August 10, 2005,
activities   21
includes significant funding increases and initiatives in highway, commercial
vehicle, and rail safety programs. DOT has set an ambitious goal of reducing
the rate of highway fatalities from 1.46 fatalities per 100 million vehicle miles
traveled to 1.0 fatality by 2008. The Department should explain how it will
meet the targeted decline from 2007 to 2008, which, if met, would more
than double the largest year-to-year rate decline going back 30 years. DOT
must maximize SAFETEA-LU provisions to build on past initiatives by
(1) addressing highway safety problems where serious injuries and fatali-
ties persist through advances in infrastructure and behavioral strategies,
(2) preventing fraud in the Commercial Driver’s License program, and
(3) strengthening Rail Safety Program oversight and enforcement.
■ Reforming Intercity Passenger Rail To Improve Performance. Amtrak’s
current model for intercity passenger rail is broken. From
FY 1997 to FY 2004, the Agency’s annual operating losses
rose from $797 million to $1.3 billion, and its debt grew
from $1.7 billion to $4.6 billion. Amtrak has an estimated
$5 billion backlog of infrastructure repairs, and on-time
performance continues to fall-from 77 percent in FY 2002
to 71 percent in FY 2004. Reauthorization is an opportuni-
ty for true reform in these areas and should focus on improv-
ing mobility around the country-not just in the Northeast
Corridor-and on restructuring long-distance services. It is
imperative that DOT work with Congress to create a new
model for passenger rail. Three key steps are to (1) require
Amtrak to do more to reduce cost, (2) give states a larger
voice in determining service requirements, and (3) establish
adequate and stable Federal funding.
■ Mitigating Flight Delays and Relieving Congestion-Actions Needed To Meet
Demand. After a few years of relative reprieve from aviation congestion,
large growth in operations has increased both traffic and the number of avi-
ation delays. The incidence, rate, and length of delays this past summer
approached 2000 levels, which is generally regarded as the worst summer
of aviation delays. The number of arrival delays in the summer of 2005
was within 5 percent of those in the same period of 2000 and represent-
ed an 8 percent increase over the number of delays in 2004. DOT’s chal-
lenge in addressing delay growth is three-fold: (1) taking appropriate action
against growing aviation delays, such as developing relief measures that
include construction, technological improvements, procedural changes,
administrative controls, and market-based solutions; (2) keeping planned
22   Semiannual Report to Congress
infrastructure and airspace redesign projects on schedule while effectively
implementing short-term initiatives; and (3) exploring alternatives for man-
aging capacity where new initiatives are not feasible.
■ Reauthorizing Aviation Programs-Establishing Requirements and
Controlling Costs Are Prerequisites for Examining FAA Financing Options.
Over the next year, FAA will be preparing to reauthorize a wide range of
aviation programs. The current authorization and various taxes
expire in 2007, and FAA has begun seeking views on alternative
financing options. However, before financing decisions can be
made, a clear understanding of financial requirements and cost
control methods is needed. FAA’s rising operating costs are
now crowding out its capital and airport accounts, and there
are increasing demands on the Trust Fund and other revenue
sources, including the General Fund. In FY 2006, FAA’s
budget is expected to exceed estimated Trust Fund revenues
by $2 billion.The challenges facing FAA include (1) control-
ling costs of major acquisitions and making decisions on the
scope of delayed billion-dollar projects, (2) getting control of
support service contracts, (3) establishing requirements for the
next generation air traffic management system, (4) addressing the expected
surge in controller attrition, and (5) completing a cost-accounting system
to reduce costs and improve operations.
■ Aviation Safety-Developing Effective Oversight Programs for Air Carrier
Operations, Repair Station Maintenance, and Operational Errors. The U.S.
aviation industry has maintained an impressive safety record, and, to its
credit, FAA is making progress toward a risk-based safety oversight system
to focus limited inspection resources. However, financial uncertainty, com-
petition from low-cost carriers, and rebounding air traffic all contribute to
a very different and still evolving aviation environment, in which large air
carriers are working to reduce costs by increasing the use of outside repair
facilities. Key challenges for FAA are (1) following through on its commit-
ments to advance risk-based oversight systems for air carrier operations and
work performed by external repair facilities and (2) continuing its efforts to
identify and reduce operational errors.
■ Improving Information Technology Investment and Computer Security.
DOT is responsible for one of the largest information technology (IT)
investment portfolios among civilian agencies, with almost 500 computer
systems supporting key mission areas at a cost of about $2.7 billion annu-
activities   23
ally. During FY 2005, the Department enhanced the quality of systems
security, and the departmental Investment Review Board continued its
oversight of major IT investments, but with mixed results. DOT’s major
challenges in these areas include (1) clarifying the Board’s role in assisting
the Secretary to maximize the value and manage the risk of major IT
investments, (2) eliminating redundant IT infrastructures outside of DOT
Headquarters to reduce operating costs, (3) better securing operational air
traffic control systems, and (4) correcting weaknesses in the Federal Railroad
Administration network and enhancing business contingency plans for critical
DOT systems.
■ Ensuring That Reforms Are Implemented in the Maritime
Administration’s Title X1 Loan Guarantee Program. As of June 30, 2005,
MARAD’s consolidated Title XI loan guarantee program portfolio was val-
ued at $3.2 billion, with another $618 million in pending loan guarantee
applications. Over 25 percent ($800 million) of the portfolio remains at an
elevated risk of default. However, the number of companies considered at
the greatest risk and the total number of companies have been reduced on
the Credit Watch list since the issuance of our September 2004 audit report.
MARAD has also made progress in implementing the new program over-
sight policies and procedures that we recommended. MARAD must con-
tinue vigilant oversight of the loan guarantee portfolio by (1) completing
the development of its computerized Title XI loan guarantee tracking sys-
tem and (2) fully enforcing the reserve requirements established to miti-
gate the risks of noncompliant loans and pursuing remedies to cure any
outstanding defaults. ■
24   Semiannual Report to Congress
Inspector General Testifies on Aviation Safety
On November 17th, the Inspector General testified before the Senate
Committee on Commerce, Science, and Transportation regarding FAA’s over-
sight and changes in the airline industry. The testimony focused on advancing
risk-based safety oversight systems for air carriers, improving oversight of domes-
tic and foreign repair stations, reducing collision risks in the air and on the
ground, improving operational error reporting, and addressing emerging issues.
Final Defendant is Sentenced in $100 Million Wisconsin
Daniel D. Beaudoin, a former manager of a Wisconsin construction compa-
ny, was fined $10,000 by a U.S. District Court judge in Green Bay, Wisconsin
and ordered to serve one year probation for providing price information used
in a bid-rigging scheme on Wisconsin highway construction projects. The
company was unaware of Beaudoin&#39;s illegal conduct. Beaudoin pled guilty in
August 2005 to a felony charge of violating the Sherman Antitrust Act.
Unbeknownst to his employer, Beaudoin conspired with principals of two
other Wisconsin firms, Vinton Construction Co. and Streu Construction Co.
to rig bids on about $100 million in contracts funded by FHWA and FAA.
Vinton, Streu, and their executives involved in the scheme have been sentenced
to pay a total of $3.1 million in fines. Vinton and its co-owners were suspended
from contracting on federally-funded projects in March 2004. The owners of
Streu are subject to a voluntary exclusion agreement prohibiting them from
doing business with the government through August 3, 2007. Beaudoin has
been debarred by the state of Wisconsin for three years, and FHWA is consid-
ering debarment at the federal level. The investigation was conducted jointly
with the FBI and Department of Justice, with assistance from FHWA and the
a c t i v i t i e s   25
Owner of Fire Safety Company Jailed and Ordered to Pay
Over $11,000 for Fraudulently Certifying the Safety of Compressed
Dale B. Nason, owner of Statewide Fire Protection, Buxton, Maine was sen-
tenced in U.S. District Court in Portland, Maine to six months in prison and
ordered to pay $11,203 in restitution for violating federal Hazmat transporta-
tion laws by falsely certifying the hydrostatic retesting of high-pressure carbon
dioxide fire extinguishers. Nason pled guilty in July. Investigation disclosed
that, from May 2001 until December 2004, Nason fraudulently marked the
Re-tester Identification Number (RIN) of another company on high-pressure
cylinders which had not been tested in accordance with DOT&#39;s Hazmat regu-
lations. Customers for these fire extinguishers included fire departments,
numerous public and private schools, hospitals, and the Portsmouth Naval
Shipyard. Failure to perform accurate periodic hydrostatic retesting of gas
cylinders, which is required by law, places lives of users at risk of injury or death
due to explosion or malfunction. All known customers (over 700) were alert-
ed to the fraudulent certifications and the need for critical re-testing. PHMSA
Two Officials of California Aircraft Parts Brokerage Firm
Sentenced to Combined 22 Years in Jail and Ordered to
Pay Nearly $5.5 Million in Case Involving Substitution of Flight-
Amanullah J. Khan, former owner/operator of United
Aircraft &amp; Electronics, Inc. (UAE), Anaheim, California
was sentenced in U.S. District Court in Santa Ana,
California to 15 years and 8 months in jail and ordered to
pay nearly $5.5 million in restitution on numerous felony
charges, including conspiracy and aircraft parts fraud. Khan
pleaded guilty in 2003 during a jury trial to charges that,
between 2000 and 2002, he falsely certified that a flight-critical
part for Bell helicopters called a &#39;grip assembly&#39; (which connects
the helicopter tail rotor blades to the hub) sold by UAE was
made of steel, when in fact it was made of aluminum.
Aluminum has a significantly shorter useful life than steel, and
if a grip failed in flight, the helicopter would likely crash. Khan
26   Semiannual Report to Congress
also sold used turbine blades and other critical parts for jet aircraft that were
falsely certified as new and airworthy. Both Khan and UAE have been debarred
from Government contracting for 50 years (expires July 2052) based on exten-
sions of prior debarments resulting from suspected unapproved parts (SUPs)
cases investigated by the Air Force. Khan&#39;s sentence was impacted by a second
case investigated by DHS-ICE in which Khan attempted to sell fighter jet parts
to undercover agents who he thought were Chinese arms brokers. In that case,
Khan pled guilty in 2004 to conspiracy and violating the Arms Export Control
Act. On November 7, Ziad J. Gammoh, a UAE salesman/purchaser who was
charged with Khan in the false certification case and pled guilty in October
2003, was sentenced in the same U.S. District Court to 6 years and 6 months
in jail and ordered to pay nearly $5.5 million (jointly with Khan) and $14,794
in restitution to the IRS. The false certification/SUPs case was investigated
jointly with the FBI, DCIS, and AF-OSI, and with assistance from FAA.
Audit of Oversight of Highway-Rail Grade Crossing Accident
Reporting, Investigations, and Safety Regulations
We reported on the adequacy of FRA’s oversight of grade
crossing (1) accident reporting to the National Response
Center (NRC), (2) accident investigations, and (3) enforce-
ment of safety regulations. Prior to report issuance, in response
to continuing congressional concerns about rail safety, the
Inspector General also testified in July on the findings discussed
in this report before the House Committee on Transportation
and Infrastructure, Subcommittee on Railroads. First, we
found that railroads failed to report 21 percent of serious
crossing collisions to NRC and FRA can do more to enforce
this reporting requirement. Second, the Federal Government
investigates very few crossing collisions and needs to develop
strategies to increase its involvement in investigations. Third,
FRA should strengthen its enforcement of grade crossing
safety regulations. FRA concurred with our audit results and
agreed to take corrective actions.
a c t i v i t i e s   27
Virginia Company and Employees Fined a Combined $163,500 for
Falsely Certifying the Safety of Compressed Gas Cylinders
Fire Safety Products, Inc. (FSPI), Christiansburg, Virginia was ordered to
pay $62,500 in fines and restitution by a U.S. District Court judge in Roanoke,
Virginia for violating Hazmat regulations regarding testing and certification of
compressed gas cylinders -- and for mail fraud in billing customers for the false
certifications. FSPI owner/vice-president Gilbert Lee Maxwell was fined
$20,000. Manager Allen Jay Dickerson was fined $1,000. FSPI previously
agreed to pay an additional $80,000 fine under a civil settlement reached on
November 30, 2005. FSPI was also required to surrender its PHMSA retest
authority for a period of five years. OIG investigation found that over 1,200
cylinders (e.g., medical oxygen tanks and firefighter air packs) serviced by
FSPI were falsely certified as having been retested. Testing either was not
conducted or was inadequate due to improperly trained FSPI employees
and/or poorly calibrated test equipment. Customers included hospitals, nurs-
ing homes, and fire departments. Periodic hydrostatic retesting of gas cylinders
is required by law, and failure to perform such testing places the lives of users
at risk of injury or death due to explosion or malfunction. All known customers
were alerted to the fraudulent certifications and the need for critical re-testing.
FAA Has Opportunities To Reduce Academy Training Time and
Costs by Increasing Educational Requirements for Newly Hired
With plans to hire 12,500 new air traffic controllers over the next 10 years,
FAA must carefully evaluate all opportunities to control costs and efficiently
train new controllers while maintaining the quality and stan-
dards of those services. Our report on new controller training
at the FAA Academy found ways that FAA could reduce train-
ing costs and expedite the training process. We recommend-
ed that FAA (1) identify specific coursework that could be dis-
continued as part of Government-provided training, (2) deter-
mine if those courses could be made a prerequisite to employ-
ment, and (3) include that determination in the next update
to FAA’s Controller Workforce Plan. These actions would
save FAA between $16.8 million and $21.3 million over the
next 9 years (2006 to 2014) and would allow the Academy
to concentrate resources on providing training that focuses
more on FAA-specific operations and equipment.
28   Semiannual Report to Congress
Texas Highway Construction Firm to Pay $3 Million in Civil
Settlement for Alleged DBE Program Fraud
Williams Brothers Construction Co., Inc., Houston, Texas agreed to pay
$3 million to resolve claims that it violated DBE program contracting
requirements by using two concrete-supply DBE companies which it con-
trolled and by claiming DBE contracting credit for equipment lease expens-
es incurred by the two DBE subcontractors for equipment owned by an affil-
iate of Williams Brothers. These claims involved multiple federally-funded
highway construction projects in Texas. The DBE program provides a vehicle
for increasing the participation by women and minority businesses in state and
local procurement. In addition to the $3 million payment to resolve civil
claims, Williams Brothers has also entered into a separate administrative agree-
ment with the Department of Transportation involving the hiring of a DBE
compliance monitor and an agreement by Williams Brothers to voluntarily con-
tribute assistance and other services to the Texas Department of
Transportation&#39;s DBE Supportive Services Program. FHWA participation was
key in reaching both settlements.
Review of Air Carriers’ Use of Non-Certificated Repair Facilities
We issued our audit of FAA’s oversight of air carriers’ use of non-certificat-
ed repair facilities. This audit was requested by Representative James Oberstar,
Ranking Minority Member of the House Transportation and Infrastructure
Committee. We found that although air carriers have used non-certificated
facilities for years to perform minor or emergency repairs, they are now using
these facilities to perform scheduled and critical maintenance. The work per-
formed at non-certificated facilities is approved by FAA-certificated mechanics;
however, these facilities do not have the same safeguards and controls for main-
tenance repair and oversight that are required at FAA-certificated facilities.
Also, neither FAA nor air carriers are providing adequate oversight of the main-
tenance work performed at these facilities. FAA agreed with our recommen-
dations, acknowledging that the recommended actions were reasonable and
that the Agency would be able to accomplish them.
a c t i v i t i e s   29
Perspectives on Aviation Safety
FAA’s Oversight and Changes in the Airline Industry
I                                                   c h a r t s                                          &amp;
n November, the Inspector General testified before the Senate Committee on Commerce, Science, and Technology,
Subcommittee on Aviation. He noted that while the United States maintains a remarkable safety record amidst a
sea of change occurring in the aviation industry, FAA can do more to enhance safety. Competition from low-cost
carriers and financial uncertainty have led commercial carriers to work aggressively to move away from high-cost struc-
tures, and these changes have brought certain oversight issues to light. For example, carriers are reducing in-house
staff and increasing the use of outside repair facilities; currently, 54 percent of maintenance work is performed by
external repair facilities. As both in-house and outside maintenance must be monitored, FAA will need to take steps
to adequately oversee all repairs. Our work has also shown that FAA needs to improve its risk-based safety oversight
systems to ensure inspectors are able to keep pace with current and anticipated industry changes.
Challenges for FAA
■ Following through on commitments to
improve oversight of domestic and foreign repair
stations. Maintenance, regardless of where it is per-
formed, requires oversight. We previously reported that
FAA’s oversight had not shifted to where the majority of
maintenance is being performed; rather, it remained
focused on air carriers’ in-house maintenance.
In July 2003, we made recommendations for FAA to
improve its repair station oversight; these included iden-
tifying repair stations used for critical maintenance and
targeting surveillance based on risks.
In July 2005, we found that FAA’s planned implementa-
tion dates for improved oversight had slipped to FY 2007.
Given the continued trend of increased use of outside
repair facilities, it is important that FAA expedite its
efforts to fully implement its risk-based oversight system
for repair stations.
■ Focusing oversight on air carriers’ use of non-
certificated repair facilities. In December, we report-
ed on another segment of the repair industry that is widely used by air carriers, but is neither certificated nor routinely
reviewed by FAA-non-certificated repair facilities. In fact, FAA was unaware of the fact that these facilities now per-
form scheduled maintenance and critical repairs. FAA regulations permit use of these facilities if the work is approved
by an FAA-certificated mechanic. However, our report identified six air carriers that did not provide adequate over-
sight of the work that non-certificated facilities performed.
These carriers primarily relied on telephone contact to monitor the maintenance performed by non-certificated facil-
ities rather than on-site reviews of the actual work.
We recommended that FAA determine whether it should limit the type of work these facilities can perform and ensure
30               Semiannual Report to Congress
that air carrier oversight systems verify that maintenance is performed correctly. FAA agreed with these recommen-
dations but is still working on its action plans.
■ Advancing risk-based systems to identify potential safety risks at air carriers experiencing major
change. In addition to repair station oversight, FAA needs to continue advancing its risk-based oversight systems to
monitor air carrier operations. In June 2005, we reported that while FAA’s risk-based oversight systems are conceptu-
ally sound, and FAA has come a long way in advancing this new approach, system implementation is not at an end
state. We also found the following:
Twenty-six percent of planned inspections were not completed when air carriers were at the height of streamlining
operations, and more than half of those were in identified risk areas.
FAA’s inspectors had difficulties using its risk-based oversight systems to respond to major air carrier changes. For
example, during the August 2005 mechanics strike at Northwest Airlines, inspectors abandoned the risk-based system
in favor of a more simplified checklist approach.
FAA committed to begin developing procedures to ensure that inspectors continually monitor the effects of industry
changes, and prioritize inspections to high-risk areas first.
Future Outlook: Emerging Issues for FAA
■ FAA inspector staffing. If used properly, FAA’s risk-based oversight systems should allow it to deploy inspection
resources to the greatest risk areas. This is key because the number of aircraft needing inspections will always out-
number available inspectors. FAA currently has 3,200 aviation safety inspectors in its field offices and, like many of
the airlines, is facing budgetary challenges. Much attention has been paid to controller staffing and retirements-FAA
plans to hire 12,500 air traffic controllers in the next 10 years. While that is a critical issue, the Agency must balance
these plans with the need to maintain a sufficient safety inspector workforce. In FY 2007, FAA’s budget calls for an
increase of 116 safety inspectors. However, it is unlikely that staffing gains over the next few years will be enough to
offset the number of safety inspectors eligible to retire in coming years. For example, this year, 28 percent of the cur-
rent inspector workforce (1,008 of 3,628) will be eligible to retire. By 2010, however, half of the safety inspector work-
force (1,820 of 3,628) will be eligible to retire. Until FAA is effectively targeting resources to the greatest risk areas, it
needs to carefully evaluate inspector staffing levels to sustain sufficient oversight given the potential attrition within
that workforce.
■ Microjets. A class of aircraft operations called microjets is rapidly becoming a new method of air travel. These
are small, low-cost jet aircraft that will carry up to six passengers. Priced as low as $1 million per aircraft, microjets
may be more attractive to the business market than the current comparable aircraft priced at about $6 million.
Manufacturers anticipate that these aircraft will find a niche among corporate and private owners and as on-demand
air taxi services. Microjets could lead to the influx of a new class of pilots, which could lead to human factor and main-
tenance issues. They could also affect air traffic controllers’ workload and FAA’s aviation safety workforce.
■ Foreign manufactured aircraft parts. Aircraft manufacturing has become a global operation. Large sections
of aircraft are now built by industry partners and shipped to the aircraft manufacturer for assembly. FAA and the
industry will have to ensure that the suppliers’ quality assurance systems are effective and that all parts meet industry
f o c u s                               31
Former Owners and Driver for Nebraska Trucking Company
Ordered to Pay $50,000 in Logbook Falsification Case
Rose and Robert Vyhnalek, former co-owners of R.J. Vyhnalek
Trucking (RJVT), Wilber, Nebraska were fined $12,500 each and
ordered to jointly pay $20,000 in restitution by a U.S. District
Court judge in Omaha, Nebraska for conspiracy to violate
FMCSA regulations governing maximum daily driving hours and
for falsifying driver logbooks. Rose Vyhnalek pled guilty in
October to the felony conspiracy charge, admitting to directing
drivers to violate hours-of-service regulations. Robert Vyhnalek
pled guilty in October to misdemeanor charges. Richard
Crawford, a driver/mechanic for RJVT was also fined $5,000 for
falsifying driver logbooks subsequent to his October guilty plea.
FMCSA assisted with this investigation.
FY 2006 First Amtrak Quarterly Report
Pursuant to the requirements of the FY 2006 Appropriations Act funding
the Department of Transportation, we established and reported to Congress an
operating subsidy baseline against which Amtrak’s progress will be measured.
This is required so that OIG, DOT, and Congress will be able to determine
whether and to what extent Amtrak has achieved savings as a result of opera-
tional reforms. We have set Amtrak’s overall operating subsidy baseline at
$586 million. This baseline represents Amtrak’s FY 2006 budget results before
implementation of new strategic reforms and corresponds to Amtrak’s FY 2006
estimated operating losses. It also includes savings from initiatives begun in
FY 2005 and scheduled to begin in FY 2006. Under the Act, unless we certi-
fy that Amtrak has achieved operational savings by July 1, 2006, Amtrak will be
restricted from using appropriated funds to subsidize the net losses from food,
beverage, and sleeper car service on any Amtrak route.
Report on Audit of Security of the Federal Railroad Computer
We reviewed the security of FRA’s network infrastructure and found that it
was vulnerable to unauthorized access from both inside and outside the
Department. Given its interconnectivity with other DOT networks, FRA’s lack
of security puts other departmental systems at risk. We made recommendations
to better protect computers on the network by enhancing its capabilities to
32   Semiannual Report to Congress
detect security breaches, increasing personnel security, and strengthening man-
agement oversight. FRA management agreed with our recommendations and
has started taking corrective actions.
Former Supervisor of Pennsylvania Township Gets 12 Months in
Jail for His Role in a Corruption Scheme Involving Over $133,000
in Public Transportation-Funded Paving Contracts
Harold Long, a former Drumore Township, Pennsylvania
supervisor and owner of Long&#39;s Asphalt, Inc. (LAI), Quarryville,
PA, was sentenced in U.S. District Court in Allentown,
Pennsylvania to 12 months in prison, 3 years supervised release,
and fined $5,000 for mail fraud related to Drumore Township
paving contracts. As an elected official and township roadmaster,
Long was responsible for awarding nearly all the township&#39;s road
contracts and overseeing work performed by both contractors
and the Township&#39;s road crew. Between 2000 and 2002, Long
circumvented the competitive bid process by awarding paving
contracts totaling over $133,000 to fictitious companies he cre-
ated and then subcontracting the work to LAI. Long pled guilty
in October 2005 and resigned as Township supervisor in 2004. Both LAI
and Long were referred on December 15, 2005 to FHWA for consideration
of debarment; FHWA action is pending as of March 31, 2006. The investi-
gation was conducted jointly with the FBI.
Federal Motor Carrier Safety Administration Oversight of
Our review of FMCSA oversight of the Commercial Driver’s License (CDL)
Program found that the Agency has implemented specific actions to counter
CDL fraud, but more must be done to identify those suspected of obtaining
CDLs fraudulently and remove CDLs when necessary. We recommended that
FMCSA (1) direct the states to report on the final disposition of suspect driv-
ers, (2) determine that state CDL programs are out of compliance if the state
fails to impose adequate internal controls to prevent fraud or fails to take or
propose necessary corrective action, and (3) impose sanctions against states that
a c t i v i t i e s   33
fail to establish adequate fraud control measures. FMCSA generally agreed with
our recommendations although the Agency did not believe it had authority to
direct states to report on the disposition of suspect drivers when no specific or
direct evidence of fraud exists. The report discusses our view on this issue and
points out how FMCSA can use its authority under Federal regulations to pro-
mote strong state programs to counter CDL fraud.
Former Trucking Executive Fined $18,000 in
Hours-of-Service Case
A U.S. District Court judge in Lynchburg, Virginia imposed an $18,000 fine
on James E. Sanders, former president and co-owner of K&amp;C Trucking Co., Inc.
(K&amp;C), Rustburg, Virginia, for his role in a scheme to falsify driver logbooks
in order to conceal violations of FMCSA &#39;hours-of-service&#39; regulations.
Regulations governing the number of hours driven by truckers are designed to
protect the public from trucking-related accidents caused by driver fatigue.
Sanders pled guilty in March 2005 to making false statements and to conspir-
acy to defraud the government. Sanders is the last person to be sentenced in
this case. In January, former K&amp;C co-owner, Norvell Preston, was fined
$10,000 and sentenced to 30 days in jail, and former K&amp;C dispatcher, David
Martin, was fined $3,400. Each had pled guilty on related charges. Seven for-
mer K&amp;C tractor-trailer drivers were previously sentenced to home confine-
ment or to fines ranging from $500 to $2,000 each. FMCSA assisted with this
New Approaches Needed in Managing the Physical Security of FAA
Facilities and the DOT Headquarters Building
We issued a report to the FAA and the Department regarding physical
security of FAA facilities and the Department’s Headquarters building. We
examined the (1) security processes and standards applied to FAA facilities;
(2) access controls to FAA’s staffed National Airspace System (NAS) critical
facilities; and (3) security at FAA-staffed facilities to ensure that contract secu-
rity guards meet FAA’s requirements for security training, weapons qualifica-
tion, and background checks. As a result of our initial testing of the access con-
trols at the two FAA Headquarters buildings and because the same company
provides security services at both the FAA and DOT Headquarters buildings,
the Department asked that we include its Headquarters building in our testing
and security guard review. We made specific recommendations to strengthen
physical security over the FAA facilities and DOT Headquarters buildings.
FAA and DOT management generally agreed with our findings and have taken
34   Semiannual Report to Congress
steps to strengthen existing access controls and to accelerate and complete
security upgrades on the most mission-critical facilities. The Department of
Transportation has determined that this report contains Sensitive Security
Information as defined by 49 CFR Part 1520. Accordingly, it was not available
Asbestos Removal Contractor Ordered to Pay Over $500,000 for
Clean Air Act Violations in Connection with Fraud on Buffalo-
Niagara Airport Expansion Project
USA Remediation Services, Inc. (URSI), Warrenton,
Virginia, was ordered to pay $501,600 in fines and special
assessments by a U.S. District Court judge in Buffalo, NY fol-
lowing the firm&#39;s October 2005 &quot;no contest&quot; plea to a felony
charge of violating the Clean Air Act and conspiracy to violate
the Clean Air Act. As part of a $4.3 million demolition con-
tract awarded by the Niagara Frontier Transportation
Authority (an FAA grantee), URSI was awarded a $981,000
subcontract in 1999 for removal of asbestos at an industrial
facility adjacent to the Buffalo-Niagara Airport. Three URSI employees were
convicted in September 2002 on numerous charges related to illegal removal
of asbestos from pipes in the building. The employees were sentenced to jail
terms. The Environmental Protection Agency (EPA) has declared one of the
employees ineligible for awards to be performed at the URSI facility in
Sauquoit, NY, and both URSI and the other two employees have been
referred to the EPA for consideration of statutory debarment. This investiga-
tion was conducted jointly with the EPA&#39;s Criminal Investigations Division
(EPA-CID), the FBI, and the New York State Department of Environmental
Florida Inspector Sentenced for Conducting Fraudulent
Commercial Motor Vehicle Safety Inspection
Jose Miguel Basto (a/k/a Joe Basto), a self-employed third-party commer-
cial motor vehicle safety inspector in Hialeah, Florida, was sentenced in U.S.
District Court in Miami to ten months home confinement (with electronic
a c t i v i t i e s   35
monitoring) and three years probation for making material false statements.
Basto pled guilty in December 2005 to making false statements in connection
with unlawfully providing an annual inspection report and decal for a com-
mercial motor vehicle (used for transporting flammable liquids). Periodic
inspections of commercial motor vehicles help to protect the safety of the trav-
eling public. Undercover investigation confirmed allegations that Basto
accepted money in exchange for inspection reports and decals issued on vehi-
cles which he had not inspected at all. As a specific condition of probation,
Basto is prohibited from being involved in any truck inspections within the
jurisdiction of the State of Florida and the U.S. Department of
Transportation. This case was jointly investigated with FMCSA and the Florida
Department of Transportation which will continue to pursue potential rein-
spections of other vehicles which Basto had inspected.
Guilty Plea in Michigan Commercial Driver&#39;s License
(CDL) Fraud Case
Kenneth MacKay, a former certified third-party tester for the Michigan
Secretary of State (MSOS), pled guilty in U.S. District Court in Detroit,
Michigan to making false statements related to certificates he issued for appli-
cants of CDL and other drivers licenses. Our investigation found that, between
the summers of 2000 and 2002, MacKay conspired with the now out-of-busi-
ness proprietors of A&amp;K Truck Driving School to falsely certify students as
qualified on driving and skills tests. MacKay admitted to falsifying more than
25 CDL and other license exams, in exchange for payment of $100 per certifi-
cate. MSOS records indicate that over 900 individuals received licenses
through MacKay&#39;s certificates and re-testing has been required of those indi-
viduals in order to retain Michigan licenses. FMCSA has followed up on license
holders who subsequently moved to about 26 different states, and all of the
over 900 individuals have either successfully re-tested (with some CDLs down-
graded to standard state drivers licenses), or had their licenses cancelled. The
ongoing investigation is being conducted jointly with the FBI and IRS, with
assistance from MSOS and FMCSA.
Former Executive of Advertising Company Pleads Guilty in
Corruption Scheme Involving $15 Million in Philadelphia Airport
Eric Selby, former regional vice president for Sky Sites, Inc. (Sky Sites),
pled guilty in U.S. District Court in Philadelphia to charges related to a cor-
ruption scheme involving FAA-regulated advertising concession contracts at
36   Semiannual Report to Congress
the Philadelphia International Airport. Selby was one of four people indicted
by a federal grand jury in February on charges of conspiracy, mail fraud, and
wire fraud in connection with approximately $15 million in such contracts
awarded by the City of Philadelphia. Selby admitted that, in an effort to
secure or extend airport advertising contracts, the conspirators used Sky Sites
to illegally fund $40,000 in contributions to a political action committee
(PAC) which supported Philadelphia politicians, including the mayor. One of
the conspirators used his certified DBE as a conduit to create a false
$30,000 invoice that was paid by Sky Sites; Selby and two other conspira-
tors subsequently each paid $10,000 of this amount to the PAC. Selby also
conspired in disguising the source of another $10,000 contribution as a con-
sulting bonus paid by Sky Sites to one of the defendants. The DBE owner,
Terry Crockett, pled guilty on March 2 to conspiracy and wire fraud. Sentencing
for Crockett is set for July 31, 2006 and for Selby on August 2, 2006. Both Selby
and Crockett were referred to FAA for potential suspension from doing busi-
ness with the Government on March 5, 2006; FAA action is pending as of
March 31, 2006. The continuing investigation is being conducted jointly with
Former Commercial Pilot Jailed for Operating an Aircraft
Scott Marvin Russell, a former pilot for Sky King Airlines of Sacramento,
California, was sentenced in U.S. District Court in Scranton, Pennsylvania to
six months in prison, two years supervised release, and fined $2,000 for oper-
ating a common carrier while under the influence of alcohol. He pled guilty to
the felony charge in October 2005. On May 12, 2004, Russell was scheduled
to copilot a Boeing 737 charter flight departing Wilkes-Barre/Scranton
International Airport bound for Myrtle Beach, South Carolina with 57 passen-
gers. While Russell and the pilot taxied from the commuter terminal to the
passenger terminal, an FAA inspector smelled alcohol on Russell&#39;s breath. A
test administered about three hours after the scheduled departure time indicat-
ed that Russell&#39;s blood-alcohol level was 0.083. (A level of 0.04 is the limit
under FAA regulations for anyone piloting an aircraft.) Russell removed him-
self from the flight before take-off and resigned from Sky King Airlines the
same day. FAA issued an emergency revocation of Russell&#39;s pilot&#39;s license in
July 2004. FAA assisted in this investigation.
a c t i v i t i e s   37
Pipeline Safety: Progress and Remaining Challenges
On March 16th, the Acting Inspector General testified on the progress and
remaining challenges in strengthening pipeline safety before the House
Highways, Transit, and Pipelines. Key focus points included (1) progress made
in implementing integrity management programs for hazardous liquid and gas
transmission pipeline systems, (2) establishment of an integrity management
program for gas distribution pipeline systems, and (3) the need for clearer lines
of authority to address pipeline security and respond to disasters.
Intercity Passenger Rail and Amtrak
On March 16th, the OIG Senior Economist testified before the Senate
Appropriations Transportation Subcommittee on Federal funding for Amtrak
in FY 2007. He stated that in order to maintain the currently reconfigured sys-
tem in a steady state of repair, the FY 2007 appropriation for
Amtrak would need to be about $1.4 billion (after account-
ing for the reform efforts already underway). This includes
$485 million for cash operating losses, $600 million for cap-
ital spending, and $295 million for debt service. The operat-
ing subsidy amount, put in place by Congress last year, would
continue the pressure on Amtrak for reform; the capital
amount would simply keep the system from falling into fur-
ther disrepair; and the debt service amount is Amtrak’s fixed
costs for repayment of principal and interest. He also cited
previous OIG testimony that the current system needs to be
fundamentally restructured and that any restructuring would
require new authorizing language for Amtrak programs and
Audit of Oversight of Load Ratings and Postings on Structurally
Deficient Bridges on the National Highway System
We issued a report on (1) state transportation departments’ actions in cal-
culating load ratings and posting weight limits on structurally deficient
National Highway System bridges and (2) FHWA’s oversight of state actions.
We found that inaccurate or outdated maximum weight limit calculations and
posting entries were recorded in bridge databases of the state transportation
38   Semiannual Report to Congress
departments and in the National Bridge Inventory. We reported that FHWA
can do more to oversee states’ actions in inspecting bridges, calculating load
limits, and posting maximum weight limits. FHWA concurred with our rec-
ommendations to revise its annual compliance reviews of state bridge programs
and evaluate greater use of computerized bridges management systems.
Perspectives on FAA’s FY 2007 Budget Request and the
On March 28th, the Acting Inspector General testified before the Senate
Aviation regarding FAA’s FY 2007 budget request and the status of the
Aviation Trust Fund. Key focus points included (1) progress and challenges
within FAA’s three major accounts-Operations, Facilities and Equipment
(F&amp;E), and the Airport Improvement Program (AIP) and (2) observations on
the current funding mechanisms for FAA.
Observations on the Progress and Actions Needed To Address the
On March 29th, the Assistant Inspector General
for Aviation and Special Program Audits testified
before the House Committee on Science,
Subcommittee on Space and Aeronautics regarding
FAA’s Joint Planning and Development Office
(JPDO) and the plans for the next generation air
transportation system. Key focus points included
(1) the JPDO’s critical role in leveraging resources
for the next generation air transportation system,
(2) progress and challenges to date in aligning
Agency budgets and plans, and (3) actions that will
help the JPDO to keep moving forward in both the
short-and long-term.
a c t i v i t i e s   39
Owner of Disadvantaged Business Enterprise (DBE) Firm Fined
$40,000 for Defrauding the Federal Government on a $12 Million
Oklahoma Highway Project
Walter Alan Patton, owner and president of Patton Construction, Inc.
(PCI), Tahlequah, Oklahoma was sentenced in U.S. District Court in
Muskogee, Oklahoma to five years probation and fined $40,000 for conspiring
to defraud the United States in connection with a scheme to violate DBE reg-
ulations on a nearly $12 million federally-funded highway widening project. As
a certified DBE, PCI&#39;s $280,000 subcontract for concrete work on drainage
ditch boxes and culverts would have satisfied the contractor&#39;s DBE set-aside
requirement. However, Patton conspired instead with a non-DBE to perform
the work and made false representations in the form of fraudulent payroll
reports to make it appear that PCI employees were doing the work.
Investigation determined that employees listed on PCI payroll reports actually
were employees of the non-DBE. Patton pled guilty to the felony conspiracy
charge in October 2005. The investigation was conducted jointly with the
Oklahoma DOT.
Former Maryland MVA Employee and Owner of Driving
School Pleads Guilty to Conspiracy to Commit Identification
Ahmed Abdul Moiz, a former Maryland Motor Vehicle Administration
(MD-MVA) driver&#39;s license examiner and later the owner of the All American
Driving School (now All American Driving Academy, a third-party driver test-
ing facility located in Baltimore, Maryland) pled guilty in U.S. District Court
in Baltimore to conspiracy to commit identification document fraud. Between
1998 and 2003, Moiz conspired with MD-MVA employees and others in
assisting over 500 individuals (mostly from southwestern Asian countries) to
fraudulently obtain Maryland driver&#39;s licenses, commercial driver&#39;s licenses
(CDLs) and related documents in exchange for payments totaling more than
$200,000. Sentencing for Moiz, a naturalized citizen of the United States,
has been scheduled for July 6, 2006. MD-MVA has been provided a list of
individuals who obtained licenses fraudulently in order to re-test them. The
ongoing investigation is being conducted jointly with the FBI and the
Department of Homeland Security&#39;s U.S. Immigration and Customs
Enforcement (DHS-ICE).
40   Semiannual Report to Congress
OVERSIGHT OF HURRICANE RELIEF AND RECOVERY EFFORTS
oon after Hurricane Katrina struck on August 29, 2005, OIG investigators were on the ground in Mississippi and
Louisiana protecting DOT people and assets, assisting DOT with damage assessments, and conducting liaison with
other law enforcement agencies. OIG auditors were working to assess risks associated with the expenditure of
funds related to this hurricane. Shortly thereafter, two other devastating hurricanes-Rita and Wilma-hit the U.S. Gulf
Coast. On October 6, 2005, as our focus moved from immediate efforts to
longer-term recovery and reconstruction, we announced plans to conduct
a series of audits and investigations of DOT’s hurricane activities.
The costs of rebuilding the Gulf Coast are still being calculated,
but we already know that Hurricane Katrina has topped 1992’s
Hurricane Andrew in Florida as the most costly natural disaster in
U.S. history. History has shown that substantial infusions of funding for
relief and recovery efforts increase the risk of fraud by those who exploit
weaknesses in Government oversight.
The Federal Government has committed more than $87 billion for                 New Orleans, LA - East-bound I-10 near the I-90
hurricane relief and recovery efforts related to Hurricanes Katrina,                                              interchange.
Rita, and Wilma. DOT expects to spend nearly $4.5 billion for work pri-
marily related to emergency and permanent repairs of hurricane-damaged roadways and bridges on Federal-aid high-
ways. Approximately 75 percent of the $4.5 billion will be used for transportation infrastructure reconstruction grants
to states under FHWA’s Emergency Relief Program and other direct expenses. For example, in late December 2005,
Congress authorized $629 million for repair and reconstruction of the I-10 Twin Spans Bridge in New Orleans, LA.
During congressional testimony concerning DOT’s response to these hurricanes, Secretary Mineta stated, “Oversight
and accountability of taxpayer funds is a top priority for me-relief aid must be spent wisely and well.” In support of
the Secretary, we are committed to working with the Department to ensure proper stewardship and oversight. The
scope of these disasters presents a significant challenge for the Department, its Operating Administrations, and state
departments of transportation to ensure that taxpayers’ interests are fully protected.
The Department is taking extraordinary steps to protect taxpayers’ funds spent for hurricane repair and
reconstruction work. For example, the Department created a special financial integrity team to oversee that
Hurricane Katrina spending is thoroughly documented and funds are properly accounted for. DOT also submitted to
OMB a detailed Hurricane Financial Stewardship Plan that outlines existing and additional internal controls intended
to safeguard taxpayer funds.
We are working closely with others in the Federal IG community as a member of the PCIE Homeland Security
Roundtable and coordinating with the Department of Justice, congressional committees, the Government
Accountability Office, and state auditors and inspectors general, as appropriate. These efforts are directed at coordi-
nation to prevent overlap and duplication of respective work efforts and to share information of mutual interest. For
example, as a member of the Roundtable, we helped the PCIE Hurricane Procurement Audit Working Group develop
a risk assessment guide by recommending specific audit steps and criteria. This guide was intended to facilitate con-
sistent risk assessments of hurricane-related contracts by staff of all Federal Offices of Inspector General. We also pro-
vided suggestions that were incorporated into other audit guides addressing issues such as no-bid contracting, price
evaluation, local business preference, and small business utilization.
f o c u s s                                41
OIG Oversight Efforts
Our oversight efforts focus on obligations and expenditures of DOT appropriations and reimbursable
mission assignments and agreements from FEMA and others. Our overall efforts are directed at preventing
fraud, waste, and abuse and detecting and prosecuting fraud. Specifically, we are:
■ verifying that expenditures of Federal funds on transportation services and programs are being appropriately
tracked;
■ proactively ensuring that Operating Administrations and state transportation departments exercise adequate
oversight of Department expenditures and put systems in place to make certain that funds are appropriately spent;
■ auditing selected projects, grants, and contracts;
■ conducting fraud awareness and prevention activities to alert Federal, state, and local government agencies; and
■ investigating allegations of fraud involving transportation-funded projects.
This work has already produced significant results. For example, a recent OIG audit led to the recovery of
$32 million on the Department’s emergency transportation services contract after we raised questions about the
actual number of buses used for evacuating flood victims from New Orleans, compared to initial estimates. This
audit also identified opportunities for improving
how the contract is administered during future
emergencies. FAA implemented our recommended
changes to obtain better information for evaluating
contractor price quotes and documentation of goods
and services received. Examples of other audit-relat-
ed accomplishments follow.
■ Reviewed MARAD’s Support of Hurricane
Relief Efforts.     For the first time in its history,
MARAD was tasked by the FEMA to activate and
operate Ready Reserve Force and training ships for a
domestic emergency (Hurricane Katrina). The ships
provided the Gulf Coast with urgently needed sup-
plies, water, generation of electricity, assistance for
oil spill cleanup, and food and shelter for rescue and
Bay Saint Louis, MS - US-90 bridge.
recovery workers. The OIG verified that the ships were
used for their intended purpose and that MARAD was
exercising oversight controls available under existing contracting structures. To follow up, the OIG participated in a
conference panel on the Hurricane Katrina Maritime Disaster Response, where lessons learned for future disaster
planning were shared with representatives from MARAD, the U.S. Coast Guard, the maritime industry, and various
state and local disaster response groups.
■ Improved Financial Management Oversight for Hurricane-Related Expenditures. At the request of the
Department’s Assistant Secretary for Budget and Programs/Chief Financial Officer, we assisted DOT in developing a
detailed Hurricane Financial Stewardship Control Plan. The plan represented DOT’s initial concept for overseeing
expenditures related to Hurricanes Katrina and Rita and outlined existing and needed internal controls to safeguard
42               Semiannual Report to Congress
taxpayer funds spent on hurricane relief and recovery activities. We pro-
vided input regarding (1) possible financial management risks identified
in our prior audit reports and congressional testimonies and (2) specific
actions planned for OIG oversight of the Department’s hurricane-related
spending. The plan was submitted to OMB.
■ Streamlined DOT Reporting for Hurricane Contracts.                      We
worked with the DOT Office of the Senior Procurement Executive to
incorporate OMB and PCIE reporting requirements for hurricane con-
Ocean Springs, MS — US 90 bridge.
tracts into departmental stewardship and oversight reports. In part,
these efforts (1) eliminated the tracking of duplicate reporting require-
ments, (2) helped ensure that a process exists for collecting information needed to fulfill unique requirements, and
(3) facilitated effective coordination and timely reporting by the Operating Administrations to satisfy short notice
inquiries from Administration and legislative stakeholders.
We have also fully integrated OIG investigators with the Department of Justice Hurricane Katrina Fraud
Task Force and the FBI Public Corruption Task Force. In addition, our investigators are actively working with FAA
to ensure proper disposition of wind- and flood-damaged aircraft considered unairworthy. For example, our investi-
gators recently arrested an individual for flying without a pilot’s license; we later learned he was ferrying a hurricane-
damaged aircraft allegedly for resale to an unsuspecting buyer rather than for destruction or salvage. We notified FAA
officials and helped them develop a national strategy to identify and track hurricane-damaged aircraft and to dis-
seminate information about this important safety concern. Among other actions, the FAA Safety Team has (1) sent a
“Special Notice” to all registered airmen (approximately 250,000) concerning this issue, (2) placed information about
hurricane-damaged aircraft on its web site at www.faasafety.gov, and (3) begun working with insurance companies
to obtain listings of damaged aircraft for follow-up attention, as appropriate. Examples of other investigative-relat-
■ Provided Fraud Prevention Briefings. OIG special agents conducted nearly 50 fraud awareness briefings to various
oversight providers, FHWA and state transportation department personnel, and trade association officials as part of our
hurricane-related fraud prevention activities. The briefings addressed fraud risks and indicators and provided an oppor-
tunity to share information of mutual interest. Also addressed were fraud schemes that historically occur on highway and
bridge projects, including false claims, product substitution, bid-rigging, Disadvantaged Business Enterprise fraud, and
kickback and bribery schemes. The briefings also resulted in the identification of several allegations of criminal activity.
■ Supported the PCIE Hurricane Relief Fraud Hotline. At the request of the Department of Defense OIG, we
detailed an investigator to support the PCIE Hurricane Relief Fraud Hotline. DOD manages the Hotline on behalf of
all Federal Inspectors General involved in hurricane recovery oversight. Our investigator assisted with implementation
of the Hotline’s database and helped to evaluate and process approximately 9,000 fraud complaints related to
During the next semi-annual period, we will determine risks associated with contracts for repairing air traffic facilities,
ensure that FHWA emergency relief funds were spent in accordance with program guidelines, and focus on award cri-
teria and grantee oversight for significant infrastructure construction projects.
f o c u s                                  43
44   Semiannual Report to Congress
his section extends beyond the legal reporting requirements of the
Inspector General Act to highlight other accomplishments and contri-
butions by Office of Inspector General staff. These accomplishments
are part of our statutory responsibilities to review existing and proposed legis-
lation and regulations; respond to congressional and departmental requests for
information; and review policies for ways to promote effectiveness and effi-
ciency and detect and prevent fraud, waste, and abuse.
EMPLOYEE INVESTIGATIONS BY RAILROAD POLICE
In November 2003, the Senate Commerce Committee requested our
assessment of the responsibilities of railroad police, including any addi-
tional duties they perform as railroad employees that may involve enforc-
ing company rules and policies. We also investigated a number of
instances brought to our attention involving the potential for abuse of
railroad police authority.
In our November 2004 response, we noted that railroads can benefit
from: (1) guidance governing the conduct of employee investigations,
(2) policies governing employee-related matters for which police involve-
ment would be merited, (3) internal affairs programs, and (4) collection
and maintenance of accurate and sufficiently comprehensive police activ-
ity data.
Based on our report, the Committee incorporated a provision in leg-
islation to improve rail security (S. 1052) that would have restricted the
authority of railroad police to investigate railroad employees for viola-
tions of company policies and regulations not related to safety or securi-
ty. At markup, this section was removed based on a letter dated
November 16, 2005, from the Association of American Railroads to
Senator Frank R. Lautenberg stating that Class I railroads have “fully
implemented the recent recommendations of the Inspector General…concern-
ing the proper use of law enforcement authority in the investigation of railroad
PROTECTING HIGHWAY TRUST FUND REVENUES
Responding to a Senate Appropriations Committee directive, the OIG con-
sulted with the Treasury Inspector General for Tax Administration (TIGTA)
on its audit of the Internal Revenue Services (IRS) management of Highway
other accomplishments   45
Trust Fund monies used to develop an
excise fuel tax reporting system for enhanc-
ing motor fuel tax enforcement. TIGTA
found that the IRS was not maximizing
DOT’s nearly $40 million investment in
this system. Specifically, the IRS was not
using the system to identify potential
instances of fuel tax evasion and to ensure
the collection of the appropriate excise tax
revenues. As a result, DOT has not
received any appreciable return on its
investment in the system. In November
2005, we recommended that FHWA
become much more involved with the stew-
ardship and oversight of Highway Trust
Fund monies that were provided to the
IRS. This would help ensure the effective
use of planned future investments of about $122 million for continued system
development, operations and maintenance, and other compliance activities.
FHWA took immediate steps to bolster its stewardship and oversight efforts in
this area and ensure that the appropriate congressional committees remain
46   Semiannual Report to Congress
charts &amp; tables
Reports issued                                 44
Recommendations Issued                        182
Congressional Testimonies                       5
Total financial recommendations   $   798,061,150
— that funds be better used     $   757,000,000
— that questioned costs         $    41,061,150
Indictments                                    86
Convictions                                  103
Fines, restitutions, recoveries   $    21,406,821
c h a r t s   &amp;   ta b l e s   47
Employee Terminations                                                     1
Employee Suspensions                                                     14
Employee Downgrade                                                        1
Employee Reprimand                                                        8
Employee Resignations/Retirements                                         1
Employee Counseling                                                       7
Debarments/Suspensions                                                   14
Certificates/License suspended/revoked/terminated                         7
Indictments                                                              86
Convictions                                                             103
Years Sentenced                                                          64
Years Probation                                                         195
Years Supervised Release                                                 42
Hours of Community Service                                              554
Fines                                                               $973,030
Restitution/Civil Judgments                                        $8,791,272
Federal Recoveries                                                $11,096,480
Administrative Recoveries                                           $546,039
Total                                                            $21,406,821
uring the 6 month period covered by this report, 113 cases were
opened and 94 were closed, leaving a pending caseload of 589. In
addition, 123 cases were referred for prosecution, 85 were accept-
ed for prosecution, and 40 were declined. As of March 31, 2006, 48 cases
were pending before prosecutors.
48   Semiannual Report to Congress
Profile of All Pending Investigations
Number      Contract/    Employee     Aviation   Motor Carrier
of Cases   Grant Fraud    Integrity    Safety       Safety     Hazmat             Other
Federal Aviation Administration                               231          37            73           107            0             8               6
Federal Highway Administration                                155          144            4            0             0             0               7
Federal Railroad Administration                               12            2             3            0             0             4               3
Federal Transit Administration                                33           30             2            0             0             0               1
Maritime Administration                                        5            2             1            0             0             0               2
Federal Motor Carrier Safety Administration                   96            3             7            0           59             20               7
Office of the Secretary                                       17            4             7            0             0             0               6
Pipeline and Hazardous Materials Safety Administration        25            0             1            0             0            24               0
Research and Innovative Technology Administration              2            2             0            0             0             0               0
National Highway Traffic Safety Administration                11            3             4            0             1             0               3
St. Lawrence Seaway Development Corporation                    1            0             1            0             0             0               0
National Transportation Safety Board                           1            0             1            0             0             0               0
Totals                                                        589          227          104           107         60              56              35
Percent of Total:                                            100%         39%           18%           18%         10%            10%              6%
Application of Investigative Project Hours by Priority Area
Hazmat Safety 6%
Contract/Grant Fraud 44%                                                                      Motor Carrier Safety 12%
Employee Integrity 13%
Aviation Safety 15%
Note: May not equal 100 percent due to rounding.
c h a r t s    &amp;       ta b l e s                49
Status of Unresolved Investigations Recommendations
Administration       Recommendation(s)                                                                                            Status
For Semiannual Report Period of October 1, 2004–March 31, 2005
FAA	             That FAA ensure its Dallas/Forth Worth (DFW) Terminal Radar Approach Control                 Working with FAA to resolve open issues
facility complies with national policy for investigating and reporting operational
errors; initiate close oversight and appropriate administrative actions.
For Semiannual Report Period of April 1, 2005–September 30, 2005
OST/OCIO	            That OCIO account for all missing invoices and review costs for reasonableness             Working with OST/OCIO to resolve open issues
on an inappropriately expanded and inadequately managed subcontract for
OST/OCIO	            That OCIO review other contracts and task orders for deficiencies in award and             Working with OST/OCIO to resolve open issues
oversight (e.g., excessive numbers/dollar value of modifications or modifications
finalized after performance) with corrective action taken on those found.
RITA	            That RITA (a) disallow all or part of the matching contributions of a university             Working with RITA to resolve open issues
[a grantee under RITA&#39;s University Transportation Center (UTC) Program]
for building construction costs misrepresented by the university as a
&quot;matching asset&quot; under the grant; and (b) that RITA recoup the corresponding
grant funding or require the university to provide appropriate matching contributions.
RITA	            That RITA develop and disseminate clear guidelines for determining if matching               Working with RITA to resolve open issues
contributions under the UTC Program comply with OMB Circular A-110
and 49 CFR 19.
FAA	             That FAA (a) work with the Social Security Administration and other disability               Working with FAA to resolve open issues
benefits providers to develop a strategy to (i) identify certificated pilots nationwide
who are receiving medical disability benefits from any provider, and (ii) determine
whether the documented medical conditions of those disability recipients would
disqualify them from maintaining their Airman Medical Certificates; and (b) take
appropriate certificate enforcement action where falsifications are found.
FAA	             That FAA consider revising its Application for Airman Medical Certificate to require         Working with FAA to resolve open issues
applicants to explicitly identify whether they are receiving medical disability benefits
50                Semiannual Report to Congress
Application of Investigative Project Hours by Operating Administration
FRA 3%
FTA 7%
OST 14%
FHWA 25%                                                                                    FMCSA 17%
Completed OIG Reports
Number of                 Number of                  Questioned             Funds to Be Put
Type of Review                                                 Reports               Recommendations                Costs**                to Better Use
— Program/Functional                                               14                          77                    $33,292                 $757,000
— Chief Financial Officer Financial Statements                      8                          76                    $0                      $0
Other OIG Reports***                                                1                          0                     $0                      $0
Total Internal Audits and Reports                                  23                         153                    $33,292                 $757,000
— Audits of Grantee Under Single Audit Act                         21                          29                    $7,769                  $0
Totals                                                             44                         182                    $41,061                 $757,000
*The dollars shown are the amounts reported to management. The actual amounts may change during final resolution.
**There were no recommendations for unsupported costs during the reporting period.
***These reports do not meet Government Auditing Standards.
Department of Transportation programs and operations are primarily carried out by the Department&#39;s own personnel and recipients of Federal grants. Audits by
DOT&#39;s Office of Inspector General, as a result, generally fall into three categories: internal audits of Departmental programs and operations, audits of grant recipi-
ents, and other OIG reports. The table above shows OIG&#39;s results in the three categories for the 6 months covered by this report.
c h a r t s         &amp;    ta b l e s                       51
OIG Reports with Recommendations That Questioned Costs
Number of             Number of        Questioned
Reports           Recommendations       Costs*
A     For which no management decision had been made
by the start of the reporting period                             20                   25              $12,312
B     Which were issued during the reporting period                    15                   19              $41,061
Totals (A+B)                                                           35                   44              $53,373
C     For which a management decision was made during
the reporting period                                             15                   18              $39,073
(i) dollar value of disallowed costs**                           11                   12              $39,072
(ii) dollar value of costs not disallowed**                       8                    9              $3,316
D     For which no management decision had been made
by the end of the reporting period                               20                   26              $14,301
*There were no recommendations for unsupported costs during the reporting period.
**Includes reports and recommendations where costs were both allowed and disallowed
OIG Reports with Recommendations That Funds Be Put to Better Use
Number of              Number of      Funds to Be Put
Reports            Recommendations    to Better Use
A For which no management decision had been
made by the start of the reporting period                             6                    9             $1,988,110
B Which were issued during the reporting period                         1                    1             $757,000
Totals (A+B)                                                            7                   10             $2,745,110
C For which a management decision was made
during the reporting period                                           3                    4             $1,001,610
agreed to by management *                                          2                    3             $999,300
(ii) dollar value of recommendations that were
not agreed to by management *                                      1                    1             $2,310
D For which no management decision had been made
by the end of the reporting period                                    4                    6             $1,743,500
*Includes reports and recommendations where costs were both allowed and disallowed.
52                     Semiannual Report to Congress
OIG Reports Recommending Changes for Safety, Economy or Efficiency
Reports               Recommendations
A    For which no management decision had been
made by the start of the reporting period                                   31                         118
B    Which were issued during the reporting period                               25                         162
Totals: (A+B)                                                                   56                         280
C    For which a management decision was made
during the reporting period*                                                18                         133
D    For which no management decision had been made
by the end of the reporting period*                                         40                         147
* Includes reports where management both made and did not make a decision on recommendations.
Management Decisions Regarding OIG Recommendations
Number of                Number of                        Questioned          Funds to Be Put
Reports              Recommendations                       Costs*             to Better Use
Unresolved as of 10/01/05                                     48                        152                          $12,312             $1,988,110
Audits with Findings During Current Period                    37                        182                          $41,061             $757,000
Total to be Resolved                                         85                        334                           $53,373             $2,745,110
— Audits Prior Period‡                                        18                         32                          $5,388              $244,610
— Audits Current Period‡                                      15                        123                          $33,684             $757,000
Total Resolved                                               33                        155                           $39,073             $1,001,610
Aging of Unresolved Audits: **
Less than 6 mos. old                                          22                         59                          $7,377              $0
— 6 mos.–1 year                                               8                          25                          $86                 $975,000
— 1 year–18 mos.                                              10                         36                          $1,722              $0
— 18 mos.–2 years                                             2                          4                           $4,380              $0
— Over 2 years old                                            12                         55                          $736                $768,500
Unresolved as of 03/31/06                                    54                        179                           $14,301             $1,743,500
*Rounding of dollars may affect totals; there were no recommendations for unsupported costs during this reporting period.
‡Includes reports and recommendations where costs were both allowed and disallowed.
**Considered unresolved if management decisions have not been made on all report recommendations.
c h a r t s         &amp;   ta b l e s             53
Office of Inspector General Published Reports
Report        Date                                            Title                                                   Focus of Report/
Internal Audits: Program/Functional–4 reports
AV-2006-021     12/07/05          FAA Has Opportunities to Reduce Academy Training Time and Costs by              Require general coursework as prerequi-
Increasing Educational Requirements for Newly Hired Air Traffic Controllers     site for new controller employment
AV-2006-031     12/15/05          Air Carriers&#39; Use of Non-Certified Repair Facilities                            Improve critical safeguards and controls
for aircraft maintenance repair
AV-2006-038     02/14/06	          New Approaches Needed in Managing the Physical Security of FAA                 Strengthen existing access controls and
Facilities and the DOT Headquarters Building (also listed under Office of       accelerate and complete security upgrades
the Secretary; report contains Sensitive Security Information as defined
by 49 CFR Part 1520; not available for public inspection or copying)
FI-2006-039     02/21/06	          Security and Controls over the Remote Maintenance Processing System            Eliminate weaknesses and strengthen
(report contains Sensitive Security Information as defined by 49 CFR Part       security protection
1520; not available for public inspection or copying)
Internal Audits: Chief Financial Officer Financial Statement–2 reports
QC-2006-010     11/14/05	         Quality Control Review of Audited FAA Financial Statements for FY 2005, FY 2004 Unqualified opinion on financial statements
QC-2006-013     11/15/05	          Quality Control Review of the Audited FAA Administrative Services Franchise    Unqualified opinion on balance sheet
Fund Balance Sheet for FY 2005
Grant Audits: Audits of Grantee Under Single Audit Act–4 reports
QC-2006-006     11/02/05          Virgin Islands Port Authority                                                   $66,500 questioned
QC-2006-018     12/07/05          County of Chautauqua, NY                                                        Improve grantee oversight
QC-2006-027     12/07/05          Dallas/Fort Worth International Airport, TX                                     $592,467 questioned
QC-2006-042     03/09/06          Gulfport-Biloxi Regional Airport Authority, MS                                  $618,673 questioned
Internal Audits: Program/Functional–2 reports
FI-2006-011     11/14/05	          Inactive Obligations                                                           Put $757,000,000 to better use
MH-2006-043     03/21/06	          Oversight of Load Ratings and Postings on Structurally Deficient Bridges on    Revise annual compliance reviews and
the National Highway System                                                     evaluate use of computerized bridges
Internal Audits: Chief Financial Officer Financial Statement–1 report
QC-2006-012     11/14/05	          Quality Control Review of Audited Highway Trust Fund Financial Statements      Unqualified opinion on financial statements
for FY 2005, FY 2004
Grant Audits: Audits of Grantee Under Single Audit Act–3 reports
QC-2006-005     11/02/05          State of Alabama                                                                $326,146 questioned
QC-2006-022     12/07/05          State of Georgia                                                                $776,520 questioned
QC-2006-024     12/07/05          Michigan Department of Transportation                                           Improve grantee oversight
54               Semiannual Report to Congress
Report          Date	                                         Title                                                  Focus of Report/
Internal Audits: Program/Functional–1 report
MH-2006-037     02/07/06	      Oversight of the Commercial Driver&#39;s License Program                           Promote stronger state programs to count-
er CDL fraud
Grant Audits: Audits of Grantee Under Single Audit Act–2 reports
QC-2006-035     02/02/06      Commonwealth of Puerto Rico Public Service Commission                           $70,898 questioned
QC-2006-040     03/09/06      Commonwealth of Puerto Rico Public Service Commission                           $331,558 questioned
MH-2006-016     11/28/05	      Oversight of Highway-Rail Grade Crossing Accident Reporting, Investigations,   Greater attention needed in reporting and
and Safety Regulations                                                          investigating grade crossing collisions and
enforcement of safety defect citations
FI-2006-029     01/09/06	      Security of the Federal Railroad Computer Systems Network                      Strengthen network security and Internet
communication points; prevent unautho-
FEDERAL TRANSIT ADMINISTRATION                                                                                rized remote access
Grant Audits: Audits of Grantee Under Single Audit Act–10 reports
QC-2006-004     11/02/05      Central Puget Sound Regional Transit Authority, WA                              $40,000 questioned
QC-2006-020     12/07/05      Central Puget Sound Regional Transit Authority, WA                              Improve grantee oversight
QC-2006-023     12/07/05      Sunset Empire Transportation District, OR                                       $180,639 questioned
QC-2006-025     12/07/05      Metropolitan Transit Authority of Harris County, TX                             Improve grantee oversight
QC-2006-026     12/07/05      Chicago Transit Authority, IL                                                   Improve grantee oversight
QC-2006-028     12/07/05      Massachusetts Bay Transportation Authority                                      $393,275 questioned
QC-2006-030     12/14/05      Dallas Area Rapid Transit, TX                                                   Improve grantee oversight
QC-2006-034     02/02/06      Greenville Transit Authority, SC                                                $210,684 questioned
QC-2006-036     02/02/06      Santa Clara Valley Transportation, CA                                           $1,787,329 questioned
QC-2006-044     03/22/06      Rock Island County Metropolitan Transit District, IL                            $780,000 questioned
FI-2006-033     02/01/06	      Inspector General Review of FY 2005 Drug Control Funds                         Conforms with the Office of National Drug
Control Policy Circular
QC-2006-019     12/07/05      New Mexico Department of Transportation                                         Improve grantee oversight
QC-2006-041     03/09/06      State of New Jersey                                                             $1,594,760 questioned
AV-2006-003     10/20/05	      Actions Taken and Needed in Implementing Mandates and Recommendations Continue to focus on outstanding congres-
Regarding Pipeline and Hazardous Materials Safety (also listed under Pipeline sional mandates and NTSB recommenda-
and Hazardous Materials Safety Administration and Office of the Secretary)    tions
FI-2006-001     10/07/05	      Information Security Program                                                   Information security program remains a
c h a r t s        &amp;    ta b l e s                    55
Office of Inspector General Published Reports (continued)
Report        Date                                          Title                                                     Focus of Report/
QC-2006-008     11/07/05          Quality Control Review of Audited NTSB Consolidated Financial Statements for Unqualified opinion on financial statements
FY 2005, FY 2004
FI-2006-002     10/07/05          Information Security Program                                                    Strengthen information security and reduce
vulnerabilities to economic or operational
AV-2006-003     10/20/05          Actions Taken and Needed in Implementing Mandates and Recommendations           Continue to focus on outstanding congres-
Regarding Pipeline and Hazardous Materials Safety (also listed under Pipeline   sional mandates and NTSB recommenda-
and Hazardous Materials Safety Administration and National Transportation       tions
AV-2006-032     01/20/06          Internal Controls Over the Emergency Disaster Relief Transportation Services    $33,291,701 questioned
AV-2006-038     02/14/06          New Approaches Needed in Managing the Physical Security of FAA Facilities       Strengthen existing access controls and
and the DOT Headquarters Building (also listed under Federal Aviation           accelerate and complete security upgrades
Administration; report contains Sensitive Security Information as defined by
49 CFR Part 1520; not available for public inspection or copying)
Internal Audits: Chief Financial Officer Financial Statement–3 reports
FI-2006-014     11/15/05          Audit of DOT Consolidated Financial Statements for FY 2005, FY 2004             Unqualified opinion on financial statements
FI-2006-015     11/18/05          Audit of Special-Purpose Financial Statements for FY 2005, FY 2004              Unqualified opinion on financial statements
FI-2006-017     12/02/05          Independent Accountant’s Agreed-Upon Procedures for Intragovernmental           Report submitted for preparation of
Activity and Balances                                                           Governmentwide financial statements
Other OIG Reports –1 report
PT-2006-007     11/15/05          Top Management Challenges                                                       Nine challenges identified
AV-2006-003     10/20/05          Actions Taken and Needed in Implementing Mandates and Recommendations Continue to focus on outstanding congres-
Regarding Pipeline and Hazardous Materials Safety (also listed under National sional mandates and NTSB recommenda-
Transportation Safety Board and Office of the Secretary)                      tions
QC-2006-009     11/08/05          Quality Control Review of Audited SLSDC Financial Statements for FY 2005,       Unqualified opinion on financial statements
56               Semiannual Report to Congress
Office of Inspector General Congressional Testimonies
Control No.          Date             Subject                                                  Before
CC-2006-003        11/17/05           Aviation Safety — Observations on FAA&#39;s Oversight        Committee on Commerce, Science, and
and Changes in the Airline Industry                      Transportation, Subcommittee on Aviation
CC-2006-023        03/16/06           Pipeline Safety: Progress and Remaining Challenges       Committee on Transportation and Infrastructure,
Subcommittee on Highways, Transit, and
Pipelines, U.S. House of Representatives
CC-2006-026        03/16/06           Intercity Passenger Rail and Amtrak                      Committee on Appropriations,
Subcommittee on Transportation, Treasury, the
Judiciary, Housing and Urban Development, and
Related Agencies, U. S. Senate
CC-2006-027        03/28/06           Perspectives on FAA&#39;s FY 2007 Budget Request and         Committee on Commerce, Science, and
the Aviation Trust Fund                                  Transportation, Subcommittee on Aviation,
CC-2006-032        03/29/06           Observations on the Progress and Actions Needed to       Committee on Science,
Address the Next Generation Air Transportation System    Subcommittee on Space and Aeronautics
Status of Unresolved Recommendations Over Six Months Old
Cited in Semiannual Report for April 1, 2000–September 30, 2000
Contract Towers: Observations on FAA&#39;s Study of Expanding the Program
AV-2000-079            04/12/00               Awaiting additional information from FAA
Cited in Semiannual Report for October 1, 2001–March 31, 2002
Downtown Waycross Development Authority, GA
QC-2002-027         10/31/01               FHWA working with Grantee to resolve open issues
Acquisition of the Weather and Radar Processor
AV-2002-084             02/28/02               Working with FAA to resolve open issues
c h a r t s    &amp;    ta b l e s               57
Status of Unresolved Recommendations Over Six Months Old (continued)
Cited in Semiannual Report for October 1, 2002–March 31, 2003
QC-2003-035            03/31/03                        FHWA working with Grantee to resolve open issues
Cited in Semiannual Report for April 1, 2003–September 30, 2003
Status Report on FAA&#39;s Operation Evolution Plan
AV-2003-048             07/23/03               Working with FAA to resolve open issues
QC-2003-056             09/03/03                       FAA working with Grantee to resolve open issues
AV-2003-058            09/09/03            Working with FAA to resolve open issues
QC-2003-085                 09/23/03                   FHWA working with Grantee to resolve open issues
Cited in Semiannual Report for October 1, 2003–March 31, 2004
Chambersburg Transit Authority
QC-2004-019            01/20/04                        FTA working with Grantee to resolve open issues
Quality Control Review of Audited Financial Statements for Fiscal Years 2003 and 2002, Highway Trust Fund
QC-2004-029             01/23/04                Working with FHWA to resolve open issues
Revenue Diversions at San Francisco International Airport
SC-2004-038            03/31/04                Working with FAA to resolve open issues
FI-2004-039                 03/31/04                   Working with FHWA to resolve open issues
Cited in Semiannual Report for April 1, 2004–September 30, 2004
QC-2004-052              04/08/04              FTA working with Grantee to resolve open issues
Highway-Rail Grade Crossing Safety Program
MH-2004-065            06/16/04            Working with FHWA, FRA, and FTA to resolve open issues
Cited in Semiannual Report for October 1, 2004–March 31, 2005
2003 Status Assessment of Cost Accounting System and Practices
FI-2005-010           11/17/04              Working with FAA to resolve open issues
58                     Semiannual Report to Congress
Managing Risk in the Federal-Aid Highway Program
MH-2005-012            11/19/04              Working with FHWA to resolve open issues
Terminal Modernization: FAA Needs to Address its Small, Medium, and Large Sites Based on Cost, Time, and Capability
AV-2005-016             11/23/04              Working with FAA to resolve open issues
QC-2005-020            12/14/04                FHWA working with Grantee to resolve open issues
State of Hawaii, Department of Transportation — Highways Division
QC-2005-024             12/20/04               FHWA working with Grantee to resolve open issues
QC-2005-039            01/04/05                  FHWA and FTA working with Grantee to resolve open issues
FI-2005-044              01/31/05                Working with FAA to resolve open issues
FHWA Needs to Capture Basic Aggregate Cost and Schedule Data to Improve its Oversight of Federal-Aid Funds
MH-2005-046           02/15/05              Working with FHWA to resolve open issues
QC-2005-053            03/15/05                  FTA working with Grantee to resolve open issues
Office of the Chief Information Officer&#39;s Budget
FI-2005-055               03/31/05               Working with OST to resolve open issues
Cited in Semiannual Report for April 1, 2005–September 30, 2005
QC-2005-056              05/12/05                FHWA working with Grantee to resolve open issues
Controller Staffing: Observations on FAA&#39;s 10-Year Strategy for the Air Traffic Controller Workforce
AV-2005-060              05/26/05               Working with FAA to resolve open issues
Status of FAA&#39;s Major Acquisitions: Cost Growth and Schedule Delays Continue to Stall Air Traffic Modernization
AV-2005-061             05/26/05               Working with FAA to resolve open issues
AV-2005-062              06/03/05                 Working with FAA to resolve open issues
FAA&#39;s En Route Modernization Program is on Schedule But Steps Can Be Taken to Reduce Future Risks
AV-2005-066            06/29/05              Working with FAA to resolve open issues
C h a r t s   &amp;   Ta b l e s   59
Chicago&#39;s O&#39;Hare Modernization Plan
AV-2005-067           07/21/05                        Working with FAA to resolve open issues
Analysis of Cost Savings on Amtrak&#39;s Long-Distance Services
CR-2005-068             07/22/05              Working with FRA to resolve open issues
QC-2005-073          08/30/05                         FHWA working with Grantee to resolve open issues
Application of Audit Project Hours by Operating Administration
NTSB 1%
PHMSA 3%
Notes:                                                                                                                                                     FTA 3%
Resources shown for OST include time spent performing                                                                                                    FRA 4%
audits of the DOT Consolidated Financial Statements (which
includes all Operating Administrations), Internal Controls        FAA 35%
Over the Emergency Disaster Relief Transportation Services
NHTSA 5%
Contract, and DOT&#39;s Information Security Program.
Resources shown for FRA include time spent performing
audits of the National Railroad Passenger Corporation.
Resources shown as &quot;Other&quot; were expended on the
Research and Innovative Technology Administration, the
Federal Motor Carrier Safety Administration, and the St.                                                                                                   FHWA 23%
Lawrence Seaway Development Corporation, and totaled
less than 1 percent each.
OST 25%
The Inspector General Act requires the Semiannual Report to carry explanations, if during the reporting period, departmental management significantly revised
management decisions stemming from an audit. OIG follows up on audits reported in earlier semiannual reports. During this reporting period, departmental man-
agement did not report any significant revisions to management decisions.
The Act also requires descriptions of any significant decisions that departmental management made regarding an audit with which OIG disagrees. When the
reporting period closed, there were no such significant decisions with which OIG disagreed.
60                    Semiannual Report to Congress
he Office of Inspector General for the Department of Transportation
was created by Congress through the Inspector General Act of 1978
(Public Law 95–452). The act sets several goals for OIG:
■	 To conduct or supervise objective audits and investigations of DOT’s pro-
grams and operations;
■	 To promote economy, effectiveness, and efficiency within DOT;
■	 To prevent and detect fraud, waste, and abuse in the Department’s pro-
■	 To review existing and proposed laws or regulations affecting the
Department and make recommendations about them;
■	 To keep the Secretary of Transportation and Congress fully informed about
problems in departmental programs and operations.
OIG is divided into two major
units and four support units. The
OIG FY 2006 Program-Level Resources
major units are the Office of the        Total: $69,098,010
Principal Assistant Inspector General                  Working Capital Fund                           Advisory and Assistance Contracts
for Auditing and Evaluation and the                            $2,263,000                                                    $800,000
Office of Assistant Inspector General                   Travel $2,646,000
for Investigations. Each has head-                 Rent to GSA $4,400,000
quarters staff and field staff. The
support units are the Office of
Legal, Legislative and External
Other $6,949,000
Affairs; the Office of Human
Resources; the Office of Financial,
Technology Management; and the                               $52,040,010
Reviews/Internal Affairs.
M i s s i o n ,         O r g a n i z at i o n   &amp;   C o n ta c t s                  61
Assistant IG for
Assistant IG for                                            Principal Assistant IG for            Quality Assurance Reviews &amp; Internal Affairs
Legal, Legislative, &amp;
Investigations                                              Auditing &amp; Evaluation
Financial, Administrative, &amp;
Deputy AIG for
Assistant IG for                Assistant IG for           Assistant IG for         Assistant IG for
Aviation &amp; Special           Information Technology       Surface &amp; Maritime      Competition &amp; Economic
Program Audits                &amp; Computer Security             Programs                  Analysis
Deputy AIG for                 Deputy AIG for             Deputy AIG for
Aviation &amp; Special           Financial Management         Surface &amp; Maritime
Program Audits                      Audits                    Programs
Todd J. Zinser (acting) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1959
Todd J. Zinser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–6767
Theodore P. Alves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1992
Charles H. Lee, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1967
Rick Beitel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1972
Assistant Inspector General for Legal, Legislative, and External Affairs
Brian A. Dettelbach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–8751
Assistant Inspector General for Aviation and Special Program Audits
David A. Dobbs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–0500
Deputy Assistant Inspector General for Aviation and Special Program Audits
Robin K. Hunt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(415) 744–0420
Assistant Inspector General for Information Technology Management and Computer Security
Rebecca C. Leng . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1488
Assistant Inspector General for Surface and Maritime Programs
Kurt Hyde . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–6238
Assistant Inspector General for Competition and Economic Analysis
David Tornquist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–9970
Thomas Lehrich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–2923
David Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–6312
Director for Audit Planning, Training, and Technical Support
Michelle C. Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366-0477
Toby Burt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1440    Hotline to report fraud, waste, and abuse:
phone:     800–424–9071
Director of Financial, Administrative, and Information Technology Management
fax:    202–366–7749
Jacquelyn R. Weber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1495
e–mail:     hotline@oig.dot.gov
Director of Quality Assurance Reviews and Internal Affairs                                                                        OIG website:    http://www.oig.dot.gov
Richard Kaplan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 366–1504
M i s s i o n ,             O r g a n i z at i o n               &amp;       C o n ta c t s            63
64   Semiannual Report to Congress
AICPA . . . . . . . . . . . . . . . . . . . . . . . .American Institute of Certified Public Accountants                         HAZMAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Hazardous Material
AIG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistant Inspector General             HTF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Highway Trust Fund
AIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Airport Improvement Program                IG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Inspector General
AIR-21 . . . . . . . . . . . . . . . . . .Aviation Investment and Reform Act for the 21st Century                               IRB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Investment Review Board
ARTEMIS . . . . .Advanced Retrieval (Tire, Equipment, Motor Vehicle) Information System                                         IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Internal Revenue Service
ASDE-X . . . . . . . . . . . . . . . . . . . . . . . . . .Airport Surface Detection Equipment-Model X                           IT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Information Technology
ATC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Air Traffic Control      JPDO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Joint Planning and Development Office
ATO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Air Traffic Organization         MARAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Maritime Administration
ATOP . . . . . . . . . . . . . . . . . . . . . . . . . . .Advanced Technology and Oceanic Procedures                            MCSIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Motor Carrier Safety Improvement Act
ATOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Air Transportation Oversight System                   MOU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Memorandum of Understanding
BATF . . . . . . . . . . . . . . . . . . . . . . .Bureau of Alcohol, Tobacco, Firearms and Explosives                           NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .North American Free Trade Agreement
BTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Bureau of Transportation Statistics                NAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .National Airspace System
CDLIS . . . . . . . . . . . . . . . . . . . . . . . . .Commercial Driver’s License Information System                           NCIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Naval Criminal Investigative Service
CDL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Commercial Driver’s License                NDR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .National Driver Register
CFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chief Financial Officer          NHTSA . . . . . . . . . . . . . . . . . . . . . . . . . .National Highway Traffic Safety Administration
CFR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Code of Federal Regulations              NTSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .National Transportation Safety Board
CID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Criminal Investigations Division             OA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Operating Administration
CIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chief Information Officer          OCIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Office of Chief Information Officer
CPDLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Controller-Pilot Data Link Communications                        OIG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Office of Inspector General
DAIG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Deputy Assistant Inspector General                  OMB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Office of Management and Budget
DBE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Disadvantaged Business Enterprise                    OPM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..Office of Personnel Management
DCAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Defense Contract Audit Agency                   OSI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Office of Special Investigations
DCIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Defense Criminal Investigative Service                    OST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Office of the Secretary of Transportation
DHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Department of Homeland Security                    PCIE . . . . . . . . . . . . . . . . . . . . . . . . . . . .President’s Council on Integrity and Efficiency
DOJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Department of Justice            PHMSA . . . . . . . . . . . . . . . . . . .Pipeline and Hazardous Materials Safety Administration
DOT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Department of Transportation               QCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Quality Control Review
EPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Environmental Protection Agency                  RITA . . . . . . . . . . . . . . . . . . . . . . . .Research and Innovative Technology Administration
FAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Aviation Administration              RSPA . . . . . . . . . . . . . . . . . . . . . . . . . .Research and Special Programs Administration
FBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Bureau of Investigation              SAFETEA-LU . . . . . . . . .The Safe, Accountable, Flexible, and Efficient Transportation Equity
FHWA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Highway Administration                  Act: A Legacy for Users
FISMA . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Information Security Management Act                          SAS-70 . . . . . . . . . . . . . . . . . . . . . . . . . .Statement on Auditing Standards Number 70
FMCSA . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Motor Carrier Safety Administration                        SafeStat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Safety Status Measurement System
FRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Railroad Administration                SLSDC . . . . . . . . . . . . . . . . . . . . . . . . .St. Lawrence Seaway Development Corporation
FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Transit Administration             STARS . . . . . . . . . . . . . . . . . . . . . .Standard Terminal Automation Replacement System
FY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fiscal Year   STB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Surface Transportation Board
GAO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Government Accountability Office                 SUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Suspected Unapproved Parts
GMRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Government Management Reform Act                          TEA-21 . . . . . . . . . . . . . . . . . . . . . . . . . .Transportation Equity Act for the 21st Century
GSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .General Services Administration                VE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Value Engineering
A b b r e v i at i o n s                                                    65
66   Semiannual Report to Congress
"SAR Oct05 March06 FINAL 6-21b.qxd"
http://img.docstoccdn.com/thumb/206/120125241.png
BS March06 _Final_ 17.08.06