Finding Text
Finding No. 2022-004 Federal Agency: U.S. Department of Transportation Assistance Listings Program: 20.106 Airport Improvement Program Federal Award No.: 3-66-0001-101-2017 (AIP 101) Area: Period of Performance Questioned Costs: $0 Criteria: In accordance with applicable period of performance (POP) requirements and with grant terms and conditions, the Sponsor may only charge allowable costs for obligations incurred prior to the end date of the POP. Unless explicitly stated otherwise in an amendment from the FAA, the end date of the period of performance is four years. Unless the FAA authorizes a written extension, the sponsor must liquidate (pay off) all obligations incurred under the award no later than 90 calendar days after the end date, Condition: For 1 (or 4%) of 25 transactions, aggregating $18M of a total of $31.3M in total program expenditures, costs charged to AIP 101 were incurred between December 2021 and January 2022. Such period is after the POP end date of 09/10/2021. Furthermore, such costs were liquidated in February 2022, which is after the liquidation end date of 12/09/2021. The Authority did receive a written amendment from FAA dated 12/15/2020, to increase the maximum obligation of AIP 101 by $525,000; however, such amendment did not explicitly state an amended period of performance. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The Authority believed the FAA amendment was also an extension of the POP dates. Effect: The Authority is in noncompliance with applicable period of performance requirements. No questioned cost is presented because the Authority effected corrective action, as described below. Subsequently, during April 2023 through June 2023, the Authority corresponded with, and received guidance from, U.S. Department of Transportation, Federal Aviation Administration (FAA), relative to corrective action. The Assistant Manager, FAA Honolulu Airports District Office, stated in an email dated 05/24/2023,?Grant-105 hasn?t been closed out yet,? and in an email dated 06/03/2023, ?Can?invoice on project costs incurred after Grant-101?s POP End Date be paid under Grant 105? Both grants are for the same project.? On June 23, 2023, the Authority provided sufficient documentation to demonstrate that the invoice total and Federal expenditures above now represent allowable costs incurred prior to the grant?s expiration date. Finding No. 2022-004, continued Federal Agency: U.S. Department of Transportation Assistance Listings Program: 20.106 Airport Improvement Program Federal Award No.: 3-66-0001-101-2017 (AIP 101) Area: Period of Performance Questioned Costs: $0 Recommendation: Responsible personnel should enforce controls over compliance with applicable period of performance requirements and with grant terms and conditions. Prior to charging costs to a grant, the responsible personnel should verify that the obligations were incurred prior to the grant?s POP end date, as specified in the grant terms and conditions or subsequent written amendments. Views of Responsible Officials: This finding is a result of a grant amendment having only covered a change in the grant amount and not the period of performance. The Authority had requested for an amendment to AIP 101 on December 15, 2020?nine months prior to the period of performance (POP) expiration. The amendment was issued by the Federal Aviation Administration (FAA) on January 4, 2022?over three months after the POP expiration. Upon clarification with the FAA, the Authority took corrective measures to address the miscommunication on the agreement extension and has settled the issue. The Authority will ensure it reviews the terms of grant amendments for critical information, such as changes to POP dates, to reinforce its current controls over compliance with applicable matching, level of effort, and earmarking requirements to prevent similar findings in the future.