Finding Text
Lack of Documented Use of Airport Revenue Policy (Significant Deficiency)
Federal Agency: Department of Transportation
Cluster/Program: Airport Improvement Program
Assistance Listing Number: 20.106
Passed-through Identification: #3-33-0010-059-2019, #3-33-0010-062-2020, #3-33-0010-064-2021, #3-33-0010-065-2021, #3-33-0010-066-2021, #3-33-0010-067-2021, #3-33-0010-068-2021, #3-33-0010-069-2022, and
#3-33-0010-070-2022
Compliance Requirement: Special Test and Provision – Revenue Diversion
Type of Finding:
Internal Control over Compliance – Significant Deficiency
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the City, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.
In addition, the requirements of the program states that the use of airport revenues generated by a public airport must be expended for the capital or operating costs for the airport. The Federal Aviation Administrator issued a notice titled “Policies and Procedures Concerning the Generation and Use of Airport Revenue” which contains definitions, and unlawful revenue diversion, example of airport revenue, and describes permitted and prohibited uses of airport revenue.
Condition: During our review of the program, the City does not have a policy over the use of airport revenues.
Cause: The City has not documented a use of airport revenue policy that complies with the Code of Federal Regulations (CFR) or the Federal program.
Effect: Lack of a formal, documented policy may result in inappropriate use of revenues that may not be in compliance with federal standards.
Questioned Costs: None
Identification as Repeat Finding: As identified in Schedule III, Summary Schedule of Prior Audit Findings, this is a repeat of finding 2021-002.
Recommendation: We recommend that the City formally establish and implement a policy over the use of airport revenues to ensure compliance with Federal regulations.
Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.