[Federal Register Volume 64, Number 158 (Tuesday, August 17, 1999)]
[Notices]
[Pages 44777-44778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21276]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Passenger Facility Charge Audit Guide for Air Carriers--
Procedures for Examining Air Carrier Passenger Facility Charge
Collection, Remittance, and Reporting Practices
AGENCY: Federal Aviation Administration, Department of Transportation.
ACTION: Notice of availability; Request for comments.
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SUMMARY: The Federal Aviation Administration (FAA) is issuing interim
guidance for conducting annual audits of air carrier Passenger Facility
Charge (PFC) collection, remittance, and reporting practices. An air
carrier collecting PFC's from at least 50,000 passengers annually is
required to provide for an annual audit of its PFC accounts by an
accredited independent public accountant. An auditor engaged to audit
the air carrier's PFC accounts is required to report ``on the fairness
and reasonableness of the carrier's procedures for collecting, holding,
and dispersing PFC revenues.'' In addition, an auditor is required to
report whether the quarterly reports of PFC accounts that the air
carriers must provide to airports ``fairly represent the net
transactions in the PFC account.''
The interim guidance is issued for a one-year review and comment
period. It is intended that this interim guidance be used for air
carrier PFC audits will final guidance is issued, which will occur
after the evaluation and disposition of comments from the review
period. Use of the interim and final guidance is voluntary, although
the FAA will have greater confidence in audits conducted in accordance
with the guide.
Interested parties may access the Passenger Facility Charge Audit
Guide for Air Carriers through the Internet at http://www.faa.gov/arp/
audit.htm. Alternatively, the guide may be obtained by contacting the
individual listed below under the heading FOR FURTHER INFORMATION
CONTACT.
DATES: Interim guidance effective August 17, 1999; Comments must be
submitted must be submitted on or before August 16, 2000.
ADDRESSES: Comments should be mailed, in triplicate, to Federal
Aviation Administration, Airports Financial Assistance Division,
Attention: Passenger Facility Charge Branch (APP-530), 800 Independence
Avenue, S.W., Room 619, Washington, DC 20591.
FOR FURTHER INFORMATION CONTACT: Joseph Hebert, Program Analyst,
Passenger Facility Charge Branch, Airports Financial Assistance
Division (APP-530), Federal Aviation Administration, 800 Independence
Avenue, S.W., Washington, DC 20591, (202) 267-3845.
SUPPLEMENTARY INFORMATION: Title 49, USC, Section 40117, authorizes the
Secretary of Transportation (further delegated to the FAA
Administrator) to approve the local imposition of a PFC of $1, $2, or
$3 per enplaned passenger for use on certain airport projects. On May
29, 1991, the FAA issued 14 CFR Part 158 outlining policies and
procedures for the PFC program. Under Part 158, public agencies
controlling commercial service airports can apply to the FAA for
authority to impose a PFC for use on eligible projects. The proceeds
from such PFC's are to be used to finance approval, eligible airport-
related projects.
Once a public agency's application for the imposition of a PFC is
approved by the FAA, it must notify air carriers and foreign air
carriers required to collect PFC's at its airport(s) of the approval.
Once notified, an air carrier is required to collect PFC's on tickets
it issues showing an enplacnement at that airport (with certain
exceptions). The air carrier is also required to notify its agents,
including other issuing carriers, of the collection requirements. Air
carriers or their agents collect PFC's from passengers on behalf of the
public agency at the time of air travel ticket (or its equivalent)
issuance. Air carriers are responsible for all PFC funds from the time
of collection to remittance to the public agency and must provide
quarterly reports to the public agency showing the total amounts of PFC
revenue collected and refunded, as well as any amount withheld by the
air carrier as collection compensation in accordance with section
158.53 of Part 158. For the purposes of an audit under section 158.69,
collection is defined as the point when agents or other intermediaries
remit PFC revenue to the carrier.
An air carrier collecting PFC's from at least 50,000 passengers
annually is required to provide for an annual audit of its PFC accounts
by an accredited independent public accountant. The audit shall be made
available to the public agency, upon request. Although not specifically
required by the regulation, the audit should also be submitted to the
FAA, upon request. Auditors engaged to audit the air carrier's PFC
accounts are required to report `` on the fairness and reasonableness
of the carrier's procedures for collecting, holding, and dispersing PFC
revenues.'' In addition, auditors are required to report whether the
quarterly reports of PFC accounts that the air carriers must provide to
airports ``fairly represent the net transactions in the PFC account''
(section 158.69(b)(1) of Part 158). The FAA expects these audits to be
filed in a timely manner and should normally coincide with the
carrier's fiscal year and annual corporate audit cycle.
To facilitate the conduct of audits that meet the requirements of
the statute and regulation, the FAA has prepared the Passenger Facility
Charge Audit Guide for Air Carriers. The procedures contained in the
guide for testing and reporting on PFC's collected, withheld, refunded/
exchanged, and remitted during the year are intended to assist the
auditor in accomplishing the audit and internal control structure
attestation. This guide is not intended to supplant the auditor's
judgment of procedures to be performed. The auditor should use
professional judgment to tailor the procedures so that the audit
objectives are achieved. However, the auditor must address all
applicable internal control requirements.
The interim guidance describes the collection, remittance, and
reporting requirements of 14 Code of Federal Regulations (CFR) Part 158
(the implementing regulation for Title 49, United States Code (USC),
Section 40117, that established PFC authority) in a requirements-
objective-procedure format. This format is similar to that used in the
FAA Airport Improvement program supplement to OMB Circular A-133 and
should appear familiar to auditors.
The guide also relies on the testing of nonstatistical samples of
lifted tickets or equivalent records as an agreed-upon procedure for
providing an airport-level assessment of air carrier compliance with
part 158 collection and remittance requirements. An air carrier
utilizing these procedures should provide copies of the agreed-upon
procedures to requesting public agencies. The carrier should also
provide a copy of the reports to the FAA, if requested.
The use of this guide by auditors on behalf of the air carriers
will provide the FAA and airports collecting PFC's with
[[Page 44778]]
an acceptable level of assurance that the air carrier has followed
regulatory procedures. Although the guide is not intended to define the
sole method of complying with the audit requirements of section 158.69
of Part 158, the FAA has determined that the use of the procedures in
this audit guide by the auditors for an air carrier will provide
sufficient assurance that the air carrier has met the requirements of
Part 158 such that the FAA would not normally require additional
reports, undertake an audit of the carrier, or request Department of
Transportation, Office of the Inspector General (DOT OIG), intervention
on the FAA's behalf. The FAA would not normally initiate further
monitoring efforts unless an airport or other source subsequently
substantiates a significant violation of the regulation.
The FAA will not have the same level of confidence with an air
carrier whose auditors have not used the procedures outlined in this
guide. Accordingly, alleged collection and remittance discrepancies
raised by airports through their monitoring of local PFC revenue
against air carriers whose auditors have not used this guidance are
more likely to trigger additional FAA monitoring activities, including
requiring additional reports, the undertaking of an audit, or a request
for DOT OIG intervention. This guidance shall not, however, foreclose
other FAA options for enforcing correct collection and remittance
procedures and responding to allegations of improper collection and
remittance practices. The FAA expects air carriers to attain a
reasonable level of accuracy with regard to PFC remittances.
Issued in Washington, DC on August 10, 1999.
Catherine M. Lang,
Acting Director, Office of Airport Planning and Programming.
[FR Doc. 99-21276 Filed 8-16-99; 8:45 am]
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