[Federal Register Volume 65, Number 203 (Thursday, October 19, 2000)]
[Notices]
[Pages 62794-62795]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26827]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration


Passenger Facility Charge Audit Guide for Public Agencies--
Procedures for Examining Public Agency Passenger Facility Charge 
Revenue

AGENCY: Federal Aviation Administration, Department of Transportation.

ACTION: Notice of availability.

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SUMMARY: The Federal Aviation Administration (FAA) is issuing guidance 
for conducting annual audits of public agency Passenger Facility Charge 
(PFC) revenue. Beginning in the year that PFC revenues are first 
collected by air carriers on behalf of a public agency, such public 
agencies approved for PFC collection are required to provide an annual 
independent audit of PFC revenue. Use of the guidance is voluntary and 
is not the sole means of complying with the audit requirements. 
However, 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 Public Agencies through the Internet at http://www.faa.gov/arp/530home.htm. Alternatively, the guide may be obtained by contacting 
the individual listed below under the heading FOR FURTHER INFORMATION 
CONTACT.

DATES: Guidance effective November 20, 2000.

FOR FURTHER INFORMATION CONTACT: Joseph Hebert, Program Analyst,

[[Page 62795]]

Passenger Facility Charge Branch, Airports Financial Assistance 
Division (APP-530), Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington, DC 20591, (202) 267-3845.

SUPPLEMENTARY INFORMATION: Title 49 of the United States Code (U.S.C.), 
section 40117, authorizes the Secretary of Transportation (further 
delegated to the FAA Administrator) to approve the local imposition of 
a PFC of $1, $2, $3, $4, or $4.50 per enplaned passenger for use on 
certain airport projects. Legislation effecting PFC charge levels and 
criteria for approvals, enacted shortly before the issuance of this 
notice, provides for the PFC level to increase to $4 or $4.50. The 
increased PFC level is contingent on a public agency demonstrating that 
it meets certain additional approval criteria. Certain of these 
criteria apply only to medium and large hub airports. On May 29, 1991, 
the FAA issued 14 Code of Federal Regulations (CFR) part 158 outlining 
policies and procedures for the PFC program. On May 30, 2000, the FAA 
issued a final rule to amend part 158 to allow, among other things, an 
increase in the PFC level to $4 or $4.50. The final rule also included 
additional criteria for the approval of the higher PFC levels.
    Under part 158, public agencies controlling commercial service 
airports can apply to the FAA for authority to impose and/or use a PFC 
to finance approved, eligible airport-related projects. Section 158.3 
defines a public agency to be a state or any agency or one or more 
states; a municipality or other political subdivision of a state; an 
authority created by Federal, state, or local law; a tax-supported 
organization; or an Indian tribe or pueblo that controls a commercial 
service airport. A private entity controlling an airport participating 
in the Pilot Program for Private Ownership of Airports (49 U.S.C. 
47134) may also apply to impose a PFC.
    The FAA must issue a final decision approving or disapproving a PFC 
application, in whole or in part, no later than 120 days after the 
application is received by the FAA from the public agency (section 
158.27(c)(4)). Following the FAA's full or partial approval of an 
application to impose a PFC, the public agency must notify air carriers 
and foreign air carriers required to collect PFC's at its airport(s) of 
the FAA's approval. The charge effective date of the PFC collection is 
the first day of a month which is at least 60 days from the date the 
public agency notifies the carriers of approval to impose the PFC. Air 
carriers collecting PFC's are required by section 158.51 to remit the 
revenue collected to the appropriate public agency on a monthly basis. 
PFC revenue collected by the carrier shall be remitted to the public 
agency no later than the last day of the calendar month following the 
month in which the PFC was collected (or if that date falls on a 
weekend or holiday, the first business day thereafter).
    Beginning in the year that PFC revenues are first collected by air 
carriers on behalf of a public agency, such public agencies approved 
for PFC collection are required by section 158.67(c) to provide an 
annual independent audit of PFC revenue. Auditors engaged to audit PFC 
programs are required to ``express an opinion of the fairness and 
reasonableness of the public agency's procedures for receiving, 
holding, and using PFC revenue.'' In addition, auditors must report 
whether the quarterly reports filed by the public agencies under 
section 158.63(a) ``fairly represent the net transactions within the 
PFC account.''
    The PFC audit can be performed separately and specifically for the 
PFC program or as part of an audit conducted under the Single Audit Act 
(as amended). This latter option allows the examination of PFC revenues 
during the performance of a Single Audit Act audit, although PFC 
revenues are not considered to be Federal financial assistance as 
defined by OMB Circular A-133 and the requirements of the A-133 
Compliance Supplement do not apply to the PFC program. Due to 
inconsistencies between the PFC program and the requirements of A-133, 
PFC revenues should be reported on a separate schedule and findings and 
questioned costs relating to PFC's should be called out separately. 
Only in the case where a project is jointly funded with Federal funds 
and PFC revenues would the requirements of A-133 also apply to an audit 
of PFC revenues.
    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 Public Agencies.'' The procedures 
contained in the guide for testing and reporting on PFC's received, 
held, and used during the year are intended to assist the auditor in 
meeting audit requirements. 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 compliance requirements.
    The guidance describes the receipt, holding, use, and reporting 
requirements of part 158. The suggested 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 use of this guide by 
auditors on behalf of the public agencies will provide the FAA, air 
carriers, and the public with an acceptable level of assurance that the 
public agency has followed regulatory procedures or, through the audit 
process, noted weaknesses in its policies and procedures, and has or 
will take corrective action to improve its process.
    Although the guide is not intended to define the sold method of 
complying with the audit requirements of section 158.67(c), the FAA has 
determined that the use of procedures in this audit guide by the 
auditors for a public agency will provide sufficient assurance that the 
public agency has met the requirements of part 158 such that the FAA 
would not normally require additional reports, undertake an audit of 
the public agency, or request Department of Transportation, Office of 
the Inspector General (DOT OIG), intervention on the FAA's behalf. This 
guidance shall not, however, foreclose other FAA options for responding 
to and enforcing correct holding and use procedures. The FAA expects 
public agencies to attain a reasonable level of accuracy with regard to 
PFC remittances.

    Issued in Washington, DC on October 11, 2000.
Catherine M. Lang,
Director, Office of Airport Planning and Programming.
[FR Doc. 00-26827 Filed 10-18-00; 8:45 am]
BILLING CODE 4910-13-M