Finding Text
Finding 2025-001 Assistance Listing # 20.106, Airport Improvement Program Immaterial Noncompliance Reporting Criteria: The federal award reporting instructions require the entity to submit specified financial and/or performance reports by stated due dates. In addition, the OMB Compliance Supplement includes timely submission of required reports in accordance with the terms and conditions of federal awards as part of the Reporting compliance requirement. Timely reporting is necessary for proper administration and oversight of the federal program. Condition: During testing, we noted instances in which required reports were not submitted by the applicable due dates specified in the applicable federal award. The reports tested were supported by underlying accounting records and other documentation, and the amounts and other information reported were accurate in all material respects; however, they were not submitted in a timely manner. Cause: The Authority did not have direct access to the Federal Aviation Administration (FAA) Delphi reporting system and therefore relied on information provided by the state to complete certain required reports. The information from the state was initially incomplete for certain active grants, therefore, the Authority was unable to obtain all the underlying data necessary to timely prepare and submit the required reports. Effect: The required reporting timeliness provisions were not met. However, this matter did not result in questioned costs, did not affect the allowability of expenditures or reimbursement under the program, and did not result in sanctions, penalties, or threats to continued funding based on information available at the time of the audit. Context: The year ended December 31, 2025 was the first year the Authority was responsible for filing the entirety of the reports for the Airport Improvement Program grants, as this responsibility has been shifted gradually from the state grantor to the Authority in recent years. As a result of this change in responsibilities, the Authority did not yet have access to the FAA's Delphi system where the underlying grant data is stored and therefore had to rely on the state grantor for that information; however, the information initially provided by the state grantor was incomplete. Without access to the underlying data system and complete information from the state, the Authority was unable to obtain the data necessary to file certain reports when due. Once complete underlying data was made available to the Authority, the delinquent reports were filed immediately. Questioned Costs: None. Recommendation: We recommend that management coordinate with the grantor in advance of future reporting periods to confirm reporting responsibilities, obtain timely access to all data necessary to complete required reports, and monitor filing deadlines to ensure reports required under the grant agreements are submitted on a timely basis. Management's Response and Planned Corrective Action: This finding relates primarily to the submission of annual grant reports SF-271 and SF-425, which are required by the FAA to be filed each year. The SF-271 (Outlay Report and Request for Reimbursement) are used to report project expenditures and request reimbursement of federal funds. It shows how much of the grant has been spent (outlays) and how much reimbursement is being requested from the funding agency. SF-425 (Federal Financial Report) provides a comprehensive summary of the financial status of a grant, including total expenditures, federal funds used, recipient cost share (if applicable), and remaining balances, to ensure proper accountability and compliance with grant requirements. Although these reports were submitted after the established due dates, management maintained the reporting requirements as an active and ongoing priority. These reports were regularly discussed during monthly coordination meetings involving Airport staff and the FAA Airports District Office (ADO), as well as during weekly internal staff meetings. During these regular discussions with the FAA ADO, the Airport was not advised that it was out of compliance with reporting deadlines. Rather, the FAA consistently indicated that reports should be submitted as soon as practicable. The Airport remained aware of its reporting obligations and their importance, particularly in support of ongoing efforts to secure funding for the terminal expansion project. Notwithstanding the above, management acknowledges that formal tracking mechanisms and documented follow-up procedures can be strengthened to ensure earlier identification and resolution of incomplete or missing grant data. To address this, management will enhance internal controls over grant reporting to ensure timely and complete submissions. Improvements will include implementing calendar-based tracking tools and structured notification procedures, with reminders and follow-up communications beginning at the FAA fiscal year-end (September 30) and continuing through the reporting due date (December 31). Additionally, management will coordinate with the FAA and MDOT to secure reliable access to the FAA’s Delphi System, where the data necessary to complete these reports resides. Communication with both the FAA ADO and MDOT will be further strengthened during the critical period leading up to reporting deadlines to ensure that any missing or incomplete information is promptly identified and addressed. Regular internal discussions regarding grant reporting status will also continue to support timely resolution of outstanding items. Management believes these corrective actions will mitigate the risk of delayed or incomplete reporting and strengthen overall compliance with grant requirements. Responsible Party for Corrective Action: Mark Bishop, Chief Financial Officer Anticipated Completion Date: June 2026.