Finding Text
Special Tests and Provisions – Revenue Diversion Federal Agency: U.S. Department of Transportation Federal Program Title: Airport Improvement Program ALN: 20.106 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 3-48-0007-056-2024, 3-48-0007-057-2024, 3-48-0007-058-2024, 3-48-0007-059-2024, 3-48-0007-060-2025, 3-48-0007-061-2025 December 29, 2023 – December 29, 2027, December 27, 2023 – December 27, 2027, August 16, 2024 – August 16, 2028, August 16, 2024 – August 16, 2028, September 18, 2025 – September 18, 2029, September 10, 2025 – September 10, 2029 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), the City of Amarillo (the City) must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 49 U.S.C.47107(b), The Secretary of Transportation may approve a project grant application under this subchapter for an airport development project only if the Secretary receives written assurances, satisfactory to the Secretary, that local taxes on aviation fuel (except taxes in effect on December 30, 1987) and the revenues generated by a public airport will be expended for the capital or operating costs of— • the airport; • the local airport system; or • other local facilities owned or operated by the airport owner or operator and directly and substantially related to the air transportation of passengers or property. Condition: The City did not maintain a formal written policy or documented procedure to ensure airport-generated revenues are used only for allowable airport-related purposes in accordance with federal revenue-use restrictions. Questioned costs: None. Context: See “Condition.” Cause: The City had not formalized its process for translating federal airport revenue-use requirements into written policies and control procedures. Effect: The absence of a written policy increases the risk that airport revenues could be used for unallowable purposes or that federal revenue-use requirements may be applied inconsistently. Although no specific instances of revenue diversion were identified, the lack of formalized guidance and related controls increases the risk of noncompliance with 49 U.S.C. § 47107(b). Repeat Finding: No Recommendation: The City should develop, formally adopt, and implement a written airport revenue policy that defines allowable and unallowable uses of airport-generated revenues, aligns with federal revenue-use requirements and applicable FAA guidance, establishes expenditure review and approval procedures, and requires periodic monitoring for compliance. Relevant personnel should be trained on the policy. Views of responsible officials: See management response on corrective action plan.