Federal Aviation Administration: Reauthorization Provides	 
Opportunities to Address Key Agency Challenges (10-APR-03,	 
GAO-03-653T).							 
                                                                 
Much has changed since the Wendell H. Ford Aviation Investment	 
and Reform Act for the 21st Century (AIR-21) reauthorized the	 
Federal Aviation Administration's (FAA) programs 3 years ago. At 
that time, air traffic was increasing, and concerns about	 
congestion and flight delays were paramount. Since then, the	 
downturn in the nation's economy, the terrorist attacks of	 
September 11, 2001, and, most recently, the war in Iraq have	 
taken a heavy toll on aviation. Analysts nonetheless expect the  
demand for air travel to rebound, and the nation's aviation	 
system must be ready to accommodate the projected growth safely  
and securely. The current reauthorization of FAA's programs	 
provides an opportunity for the Congress and the administration  
to focus on challenges in increasing aviation capacity, 	 
efficiency, and safety and in controlling aviation program costs.
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-653T					        
    ACCNO:   A06653						        
  TITLE:     Federal Aviation Administration: Reauthorization Provides
Opportunities to Address Key Agency Challenges			 
     DATE:   04/10/2003 
  SUBJECT:   Air transportation operations			 
	     Airline regulation 				 
	     Airport security					 
	     Cost control					 
	     Safety regulation					 
	     Strategic planning 				 
	     Airport and Airway Trust Fund			 
	     FAA Airport Improvement Program			 

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GAO-03-653T

Testimony Before the Committee on Commerce, Science, and Transportation,
U. S. Senate

United States General Accounting Office

GAO For Release on Delivery Expected at 9: 30 a. m. EDT Thursday, April
10, 2003 FEDERAL AVIATION

ADMINISTRATION Reauthorization Provides Opportunities to Address Key
Agency Challenges

Statement of Gerald L. Dillingham Director, Civil Aviation Issues

GAO- 03- 653T

Increasing capacity and service in the national airspace system poses
several challenges. While airports currently receive enough funding to
cover FAA*s estimate of their planned capital development costs, a
declining surplus in the trust fund that helps to support development and
the need to spend up to $5 billion over the next 5 years for security-
related capital improvements make the financial outlook for the next 5 to
8 years uncertain. Runway development, the principal means of increasing
capacity, is now taking 10 to 14 years to complete, in large part because
of time- consuming environmental reviews and community concerns. Providing
air service for small

communities is also becoming more difficult as costs increase and
passenger ticket revenues decline. Intermodal alternatives may hold
promise. Efforts to improve the efficiency of the national airspace system
by modernizing the air traffic control system face challenges despite
actions taken by the Congress and the administration to eliminate the cost
overruns, schedule delays, and performance shortfalls that have plagued
FAA's

modernization efforts. Overall, FAA is improving its management of the air
traffic modernization program and has implemented some systems, but key
projects continue to experience problems. To enhance aviation safety, FAA
and the aviation industry have undertaken

an initiative to reduce the fatal accident rate, and FAA is working to
strengthen its safety inspections of airlines* operations. Interagency
coordination of aviation safety and aviation security activities has
emerged as a challenge with the transfer of aviation security
responsibilities from FAA to the Transportation Security Administration.

FAA faces challenges in implementing controls over its costs. Although it
has partially implemented a new cost accounting system that enables it to
track 70 percent of its air traffic services costs, this system lacks
internal controls over $3.1 billion in labor costs, according to the
Department of Transportation*s Inspector General. Congressional oversight
is important to ensure that FAA implements controls and spends its
resources effectively.

Increasing Capacity through Runway Construction Much has changed since the
Wendell H. Ford Aviation Investment and Reform Act for the

21st Century (AIR- 21) reauthorized the Federal Aviation Administration*s
(FAA) programs 3 years ago. At that time, air traffic

was increasing, and concerns about congestion and flight delays were
paramount. Since then, the

downturn in the nation*s economy, the terrorist attacks of September 11,
2001, and, most recently, the war in Iraq have taken a heavy toll on
aviation. Analysts nonetheless expect the demand for air travel to

rebound, and the nation*s aviation system must be ready to accommodate the
projected growth safely and securely. The current reauthorization of FAA*s
programs provides an

opportunity for the Congress and the administration to focus on challenges
in increasing aviation capacity, efficiency, and safety and

in controlling aviation program costs. This testimony does not contain

recommendations. However, GAO reports containing relevant recommendations
are listed among the Related GAO Products following the testimony. www.
gao. gov/ cgi- bin/ getrpt? GAO- 03- 653T. To view the full report,
including the scope

and methodology, click on the link above. For more information, contact
Gerald L. Dillingham at (202) 512- 2834 or dillinghamg@ gao. gov.
Highlights of GAO- 03- 653T, a testimony

before the Senate Committee on Commerce, Science, and Transportation

April 10, 2003

FEDERAL AVIATION ADMINISTRATION

Reauthorization Provides Opportunities to Address Key Agency Challenges

Page 1 GAO- 03- 653T FAA Reauthorization Mr. Chairman and Members of the
Committee: We are here today to discuss the reauthorization of federal
aviation

programs and issues relevant to ensuring the safe and efficient operation
of the national airspace system. 1 Much has changed since the Wendell H.
Ford Aviation Investment and Reform Act for the 21st Century (AIR- 21)
reauthorized the Federal Aviation Administration*s (FAA) programs 3 years
ago. At that time, as you know, air traffic was increasing, and concerns
about congestion and flight delays were paramount. Since then, the
downturn in the nation*s economy, the terrorist attacks of September 11,
2001, and, most recently, the war in Iraq have taken a heavy toll on
aviation. Flights that were once filled are now being canceled for lack of
business, and major air carriers are in serious financial difficulty.
Furthermore, as the federal budget deficit has increased, competition for
federal resources has intensified. Analysts nonetheless expect the demand
for air travel to rebound, and the nation*s aviation system must be ready
to accommodate the projected growth safely and securely. The current

slowdown in the economy and in the aviation industry has created a window
of opportunity to prepare for this growth without the pressures of
congestion and flight delays. My statement today focuses on the challenges
that the Congress, the administration, and FAA face in increasing aviation
capacity, efficiency, and safety, and maintaining controls over costs. My
statement is based primarily on our published reports, as well as our
ongoing work for this Committee discussed in the scope and methodology
section at the end of the statement.

In summary:  Increasing capacity and service in the national airspace
system poses

several challenges for the Congress and the administration during this
reauthorization process. Chief among them is deciding how much of
airports* planned capital development should be funded to increase
capacity and service, as well as improve the efficiency and safety of the
national airspace system. Funds for airports* capital development have
increased over the last 5 years, in part because of increases in the
federal grant funding provided to airports under the Airport Improvement
Program. Current funding levels are sufficient to cover much of the
estimated cost of planned capital development. However, future funding

1 See the Aviation Investment and Revitalization Vision Act, a Senate bill
to reauthorize federal aviation programs and the administration*s draft
reauthorization proposal, the Centennial of Flight Aviation Authorization
Act, or *Flight 100.*

Page 2 GAO- 03- 653T FAA Reauthorization levels may be affected by changes
in the allocation of Airport Improvement Program grant funds and by
projected decreases in the

Airport and Airway Trust Fund, which supports the Airport Improvement
Program and other FAA accounts. Other challenges include building runways
expeditiously to increase capacity and providing air service to small
communities. Runway development now takes 10 to 14 years, primarily
because of time- consuming environmental reviews and community concerns.
Two federal programs, the Essential Air Service and the Small Community
Air Service Development Pilot programs, help bring air service to small
communities, but the costs of this service are increasing while passenger
ticket revenues are declining. The administration is proposing an approach
to streamline the environmental reviews required for runway development,
and intermodal alternatives, such as rail or bus service, could provide
access to the national air transportation system for some small
communities.

 Efforts to improve the efficiency of the national airspace system by
modernizing its principal component, the air traffic control system, face
ongoing challenges despite actions taken by the Congress and the
administration to eliminate the cost overruns, schedule delays, and
performance shortfalls that have plagued FAA*s air traffic modernization
program and led us to designate this program as high risk. These actions
include granting FAA acquisition and human capital flexibilities in 1996
and creating a new, three- component structure to improve the oversight,
management, and operation of the air traffic control system in 2000. Our
work has shown that FAA has responded to these actions to varying degrees,
but more remains to be done. Overall, FAA is improving its management of
the air traffic modernization program and has implemented some systems,
but key projects continue to experience cost, schedule, and performance
problems. Additionally, FAA has used its acquisition flexibilities to
establish an acquisition management system and its human capital
flexibilities to fully or partially implement human capital reform
initiatives. The acquisition management system has provided FAA

with a structured management approach for selecting and controlling its
investments, and the human capital reform initiatives are affording
opportunities for FAA to manage its workforce more efficiently. However,
in implementing both of these reforms, FAA has not yet incorporated
important processes or elements for evaluating the results of its efforts,
modifying these efforts as necessary, and holding its managers
accountable. Finally, one of the three components of the new structure for
improving the performance of the air traffic control system has been
implemented. The oversight component, the Air Traffic Services
Subcommittee, has been meeting since January 2001 and emphasizing
performance management, but without the management and operating

Page 3 GAO- 03- 653T FAA Reauthorization components, the new structure is
not yet functioning as intended. Completing the implementation of, and
continuing to improve, these

efforts will be important to enhancing the efficiency of the air traffic
control system.

 Important steps have been taken to enhance aviation safety, but some
challenges remain. Safer Skies, an initiative designed by FAA and the
aviation industry to reduce the nation*s fatal aviation accident rate by
80 percent by 2007, is the centerpiece of these efforts to improve
aviation safety. This initiative began in 1998, and many preventive
actions are under way but have not yet been fully implemented. Another key
effort to improve aviation safety is FAA*s Air Transportation Oversight
System,

which was redesigned to provide more effective inspections of the nation*s
airline operations. In reporting on this system in 1999, we noted that it
incorporated important features to ensure that airlines have systems to
control risks and prevent accidents, but that it had encountered startup
problems with data collection and program guidance. 2 Many of these
problems were not yet fully resolved when the Department of
Transportation*s Inspector General reported on the inspection system last
year. 3 Finally, because of the often vital link between aviation safety
and aviation security, it will be critical for FAA to ensure that aviation
safety is maintained as the Department of Homeland Security*s
Transportation

Security Administration implements new security enhancements.  With the
decline in revenues to the Airport and Airway Trust Fund* the

principal source of funding for most of FAA*s operations, facilities and
equipment, and grant programs* it is especially important that FAA control
or reduce costs, run its programs efficiently, and detect and prevent
fraudulent activities. FAA, however, faces challenges in implementing
controls over its costs. For example, during fiscal year 2000, weaknesses
in the internal controls over FAA*s purchase card program contributed to
$5.4 million in improper purchases by FAA employees and

over $630,000 in purchases that were considered wasteful or questionable.
In addition, FAA has partially implemented a new cost accounting system
that enables it to track 70 percent of its air traffic services costs;
however, according to the Department of Transportation*s Inspector
General, this

2 U. S. General Accounting Office, Aviation Safety: FAA*s New Inspection
System Offers Promise, but Problems Need to Be Addressed, GAO/ RCED- 99-
183 (Washington, D. C.: June 28, 1999). 3 U. S. Department of
Transportation, Office of Inspector General, Report on the Air
Transportation Oversight System: Federal Aviation Administration, AV-
2002- 088 (Washington, D. C.: Apr. 8, 2002).

Page 4 GAO- 03- 653T FAA Reauthorization system lacks internal controls
over $3.1 billion in labor costs. The Inspector General further noted that
a portion of this system, if

implemented as designed, could provide workforce data that would be
helpful in determining how many controllers are needed and where. These
data would assist FAA in planning for the anticipated retirement of large
numbers of air traffic controllers in the near and long term.

During this reauthorization period, the Congress and the administration
face several key challenges in attempting to increase the capacity of the
national airspace system and expand service to small communities. These
challenges include determining (1) how much airport capital development is
needed, (2) how that development will be funded, (3) how assistance for
enhancing air service to small communities will be provided, and (4) how
the current process for enhancing capacity, particularly the runway
development process, can be expedited.

FAA and the Airport Council International (ACI), an organization
representing the airport industry, have developed two different estimates
of airports* planned capital development costs that are based on two
different sets of projects. According to FAA*s estimate, which includes
only projects that are eligible for Airport Improvement Program (AIP)
grants, such as runways, taxiways, and noise mitigation and noise
reduction efforts, the total cost of airport development will be about $46
billion, or over $9 billion per year, for 2001 through 2005. FAA*s
estimate is based on the agency*s National Plan of Integrated Airport
Systems, which FAA published in August 2002. ACI*s estimate includes all
of the projects in FAA*s estimate, plus other planned airport capital
projects that may or may not be eligible for AIP grants. Projects that are
not eligible for AIP funding include parking garages, hangars, and
expansions of commercial space in terminals. ACI estimates a total cost of
almost $75 billion, or nearly $15 billion per year, for 2002 through 2006.
Neither ACI*s nor FAA*s estimate includes funding for the terminal
modification projects that are needed to accommodate the new explosives
detection systems required to screen checked baggage. ACI estimates that
these projects will cost about

$3 billion to $5 billion over the next 5 years. Although there is a
difference of $6 billion a year between FAA*s and ACI*s estimates of
planned development costs, both estimates cover projects for every type of
airport. As table 1 indicates, the estimates are identical for all but the
large- and medium- hub airports, which are responsible for transporting
about 90 percent of the traveling public. For these airports, Efforts to
Increase

Aviation Capacity and Service Face Funding and Other Challenges

FAA and the Airport Industry Have Developed Different Estimates of
Airports* Planned Capital Development Costs

Page 5 GAO- 03- 653T FAA Reauthorization ACI*s estimate of planned
development costs is about twice as large as FAA*s. As the Congress moves
forward with reauthorizing FAA*s

programs, it will have to determine what level of planned capital
development is appropriate to increase the capacity, efficiency, and
safety of the national airspace system.

Table 1: Average Annual Planned Development Costs Estimated by FAA and
ACI, by Airport Type, 2001- 2006 Dollars in millions

Estimated average annual costs Airport type Number of airports FAA ACI

Large hub 31 $4,855 $8,554 Medium hub 37 1,073 3,109 Small hub 71 675 675
Nonhub 280 807 807 Other commercial service 124 142 142 Reliever 260 526
526 General aviation 2,558 1,167 1,167

Total 3,364 $9,245 $14,980

Source: FAA and ACI. Over the past 5 years, the ability of airports*
especially smaller airports* to fund their capital development projects
has improved, in part because AIR- 21 increased both the total amount of
funding for AIP grants and the proportion of AIP funding that went to
smaller airports. In 1998, we reported that large- and medium- hub
airports could fund about 79 percent of their planned capital development
and smaller airports could fund about 52 percent of their planned capital
development if they continued to receive funding at prior years* levels.
In 2003, the funding ability of both

groups of airports increased. As shown in figure 1, large- and medium- hub
airports could fund about 80 percent of their planned capital development,
an increase of 1 percentage point, while smaller airports could fund about
73 percent of their planned capital development, an increase of 21
percentage points, assuming the continuation of prior years* funding
levels. 4 4 Over the past 5 years, the amount of funding available to
airports for planned capital

development ranged from about $7 billion to $13 billion annually.
Airports* Ability to Fund

Planned Capital Development Has Improved

Page 6 GAO- 03- 653T FAA Reauthorization Figure 1: Ability of Smaller and
Larger Airports to Fund Estimated Planned Capital Development in 1998 and
2003

The primary reason why smaller airports are able to fund 73 percent of
their planned development in 2003, rather than the 52 percent we reported
in 1998, is that they have benefited significantly from the increases in
AIP grants, which are a larger source of funding for smaller airports than
for larger airports. In addition, smaller airports have received an
increasing share of AIP grants because of statutorily required changes in
the distribution of AIP grants. For example, in AIR- 21, the Congress
increased the funding for two grant categories that primarily or
exclusively benefit smaller airports* the state apportionment fund and the
small airport fund* and created general aviation entitlement grants, which
also benefit smaller airports. The Senate*s and the administration*s
reauthorization

proposals continue to support increases in the amount of AIP grant funding
awarded to smaller airports. In spite of the progress that has been made,
over 25 percent of planned capital development is not funded. The

Page 7 GAO- 03- 653T FAA Reauthorization Congress needs to be mindful of
this situation as it considers reauthorization issues.

The use of AIP grants to fund new airport security requirements and
additional decreases in the Airport and Airway Trust Fund*s 5 revenues
could affect the future ability of airports to fund their planned capital
development. In recent fiscal years, airports obtained most of their
funding for planned capital development from bonds, AIP grants, and
passenger

facility charges. 6 Because the Trust Fund is the source of funding for
AIP grants, its financial condition is important to the ability of
airports to fund capital development, and decreases in its revenues could
reduce the amount of funding for airport planned capital development.
Reductions in AIP grant funds would have the greatest effect on smaller
airports, which

derive most of their planned capital development funding from AIP grants,
whereas large- and medium- hub airports derive most of their funding from
bonds.

According to FAA officials, FAA plans to allocate the same amount of AIP
grant funds for new security projects at airports in fiscal year 2003 as
it allocated in fiscal year 2002*$ 561 million. As we reported in October
2002, 7 the use of AIP grants for security projects reduced the funding
available for other airport development projects, such as projects to
bring airports up to FAA*s design standards and reconstruction projects,
and

caused FAA to defer three letter- of- intent payments totaling $28 million
to three airports until fiscal year 2003 or later. 8 Among the key
reauthorization issues facing the Congress are how the funding needs for
capacity and security projects will be balanced and how the new security
requirements, including the terminal modification projects that are
expected to cost $3 billion to $5 billion, will be funded.

5 The Airport and Airway Trust Fund was established by the Airport and
Airway Revenue Act of 1970 (P. L. 91- 258) to aid in funding the
development of a nationwide airport and airway system and to fund FAA
investments in air traffic control facilities. The Trust Fund is supported
by a number of excise taxes, including taxes on passenger tickets, fuel,
and cargo.

6 Under the Passenger Facility Charge program, airports with FAA*s
approval may charge passengers up to $4.50 for boarding airplanes at their
facilities. 7 U. S. General Accounting Office, Airport Finance: Using
Airport Grant Funds for

Security Projects, GAO- 03- 27 (Washington, D. C.: Oct. 15, 2002). 8
Letters of intent represent a nonbonding commitment from FAA to provide
multiyear funding to an airport beyond the current AIP authorization
period. Changes in the Use of AIP

Grants and Additional Decreases in Trust Fund Revenue Could Affect
Airports* Future Funding Ability

Continued Use of AIP Grant Funds for Security Projects Would Reduce
Funding for Capacity Projects

Page 8 GAO- 03- 653T FAA Reauthorization The future ability of airports to
fund planned capital development may be affected by uncertainties
surrounding the condition of the Trust Fund. As

you know, the Trust Fund is the source of funding not only for AIP grants
but also for other FAA accounts, including facilities and equipment;
research, engineering, and development; and most operations. Revenues to
the Trust Fund come from several types of taxes, including passenger
ticket and fuel taxes. Although projections made in November 2002 indicate
that the Trust Fund will be able to meet its traditional obligations over
the next 10 years, the financial outlook for the next 5 to 8 years is

uncertain, in part, because passenger traffic has decreased with the
slowdown in the economy. Current estimates indicate that between fiscal
year 2003 and fiscal year 2007, the Trust Fund*s 2002 uncommitted balance
of about $4.8 billion will decline by about $4 billion, leaving a balance
of less than a billion dollars. In addition, if revenues fall short of
current projections, the Trust Fund*s uncommitted balance may be zero.
Under this scenario, AIP grants and other FAA accounts supported by the
Trust Fund could potentially receive less funding, and the Congress and
the

administration would have to decide how to offset the potential decreases.
As figure 2 shows, from 1999 through 2002, revenues to the Trust Fund have
declined, while expenditures from the fund have increased. Revenues fell
from about $11 billion in 1999 to almost $10 billion in 2002, a decrease
of almost 10 percent. During the same period, expenditures increased from
about $8 billion to about $12 billion, an increase of about 47 percent. As
a

result, the uncommitted balance (surplus) has fallen by nearly 35 percent,
from $7 billion in 1999 to almost $5 billion in 2002. Additional Declines
in Airport

and Airway Trust Fund Revenue Could Also Affect Amount of AIP Grant Funds
Available for Future Capital Development

Page 9 GAO- 03- 653T FAA Reauthorization Figure 2: Financial Condition of
the Airport and Airway Trust Fund

The major reason for the decline in Trust Fund revenues was a drop in
passenger ticket tax revenues, which fell by nearly $1.2 billion from 1999
to 2002. The increase in Trust Fund expenditures from 1999 through 2002,
amounting to almost $4 billion, can be attributed primarily to increases
in funding for FAA operations and AIP grants, which accounted for about 47

percent and about 34 percent of the total increase, respectively. In
addition, the administration is proposing actions that would further
reduce the Trust Fund balance over the next several years. Specifically,
the President*s fiscal year 2004 budget request would increase the
percentage of FAA operations funded by the Trust Fund from 75 percent 9 to
79 percent. The decrease in Trust Fund revenues and increase in Trust

Fund expenditures presents an issue that the Congress may want to address
as it moves forward with the reauthorization process.

9 This was the average for 1998 through 2002.

Page 10 GAO- 03- 653T FAA Reauthorization While there is a general
consensus that building runways is one of the most effective ways to
increase capacity in the national airspace system,

resolving the challenges associated with planning and building runways is
an important issue that is directly related to enhancing capacity. In
December 2002, FAA published the most recent version of its Operational
Evolution Plan, a 10- year plan to increase the capacity and efficiency of
the national airspace system, primarily by building runways. 10 Figure 3
illustrates how capacity will be increased at one airport through runway
construction.

10 In addition to runways, the plan addresses capacity enhancements
designed to make more efficient use of the airspace. Resolving Challenges
to

Runway Development Remains an Important Issue

Page 11 GAO- 03- 653T FAA Reauthorization Figure 3: Increasing Airport
Capacity through Runway Development If successfully carried out, FAA*s
Operational Evolution Plan would substantially increase capacity and
improve efficiency. However, FAA

faces several challenges in implementing the plan. First, the success of
the plan depends on adequate funding and on the consensus of FAA*s
aviation

Page 12 GAO- 03- 653T FAA Reauthorization industry partners. Yet according
to the most recent version of the plan, the timing and implementation of
some activities may be in jeopardy because of the current economic
situation and the uncertain viability of some

industry participants. For example, the plan calls for the airline
industry to invest $11 billion in new equipment for aircraft. FAA is
currently reviewing the ability of the airlines to make this investment.
Second, as noted, the plan relies heavily on runway development to
increase capacity, but the most recent version of the plan reports mixed
results in building new runways. While the plan indicates that one new
runway will be built during the next 10 years, it points out that another
runway has been canceled and the construction of six additional runways
has been delayed because of local situations.

In January 2003, we reported that airports spent about 10 years planning
and building recently completed runways and expect to spend about 14 years
on runways that are not yet completed. 11 We also reported that several
external factors affect how much time is spent planning and building
runways, and several airports with unfinished runway projects identified
significant challenges that had delayed the completion of their projects.
While many airports believed that completing the environmental review
phase was a significant challenge and is an issue that warrants immediate
attention, airports also faced obstacles that some said were as onerous as
the environmental review phase. They identified significant challenges in
reaching agreement with community interest groups during the planning
phase and in mitigating the potential impact of aircraft noise on the
surrounding community. Although there may be no single solution to
resolving all of the issues involved in planning and building runways,

the federal government and airport authorities are taking some action. For
example, the Senate*s and the administration*s reauthorization proposals
call for streamlining the environmental review of transportation
infrastructure projects.

Recognizing that building new runways is not always a practicable way to
increase capacity at some airports, we identified three alternatives to
building runways in our December 2001 report: 12 11 U. S. General
Accounting Office, Aviation Infrastructure: Challenges Related to Building

Runways and Actions to Address Them, GAO- 03- 164 (Washington, D. C.: Jan.
30, 2003). 12 U. S. General Accounting Office, National Airspace System:
Long- term Capacity Planning Needed Despite Recent Reduction in Flight
Delays, GAO- 02- 185 (Washington, D. C.: Dec. 14, 2001).

Page 13 GAO- 03- 653T FAA Reauthorization  Find ways to manage and
distribute demand within the system*s existing capacity at busy airports
such as LaGuardia, by, for example, limiting the

number of takeoffs and landings during peak periods or limiting the
ability of general aviation aircraft to use especially congested airports
(under current law, all aircraft have equal access to even the largest
airports). Airports are restricted in using pricing to reflect the
scarcity and congestion of airspace.  Add capacity by using nearby
airports that have available capacity.

 Examine other modes of intercity travel, such as high- speed rail, where
metropolitan areas are relatively close, to form an integrated, intermodal
transportation network.

Accordingly, we recommended that the Department of Transportation (DOT)
begin a more extensive evaluation of initiatives, including intermodal
solutions and a dialogue with transportation stakeholders, as a basis for
developing a comprehensive blueprint for addressing the nation*s long-
term transportation needs. DOT has recognized the need for more and better
long- range planning on the potential use of such measures and agreed with
our recommendation. The Department*s evaluation efforts are in the
beginning stages. The current hiatus in air traffic growth creates an
opportunity for the development of long- term transportation plans.

While the need for greater capacity is a vital issue for some large- and
medium- hub airports, the primary issue at other airports that serve small
communities is to obtain or retain commercial air service. The
reauthorization process provides an opportunity for the Congress to
clarify the federal strategy for helping small communities acquire the
commercial air service they desire. Currently, the challenges that small
communities have long faced in obtaining or retaining commercial air
service are increasing as many U. S. airlines try to stem unprecedented
financial losses through numerous cost- cutting measures, including
reducing or eliminating service in some markets. Small communities feel
such losses disproportionately because they may have service from only one
or two airlines. For them, reductions can mean no air service at all.

The Essential Air Service (EAS) program, authorized under the Airline
Deregulation Act of 1978, guarantees that small communities served before
deregulation will continue to receive a certain level of scheduled air
service. Its costs have more than tripled since fiscal year 1995, and
indications are that without changes to the program, the demand for
Federal Programs to Help

Small Communities Improve Air Service Face Budgetary Pressures and
Questions about Their Effectiveness

Page 14 GAO- 03- 653T FAA Reauthorization subsidies will soon exceed the
program*s $113 million appropriation for fiscal year 2003. At the same
time, aggregate passenger levels at EASsubsidized

airports continue to fall. Often fewer than 10 percent of a community*s
potential passengers use the subsidized local service; the rest choose to
drive to their destination or drive to a larger airport that offers

lower fares or more frequent service to more destinations. In 2000, the
median number of passengers on each EAS- subsidized flight was three. The
administration*s budget proposal for fiscal year 2004 would substantially
reduce the federal subsidy for small community air service and require
communities that wish to retain the service to help subsidize it.
Specifically, the budget proposal would reduce federal EAS funding from
$133 million in 2003 to $50 million in 2004, alter the eligibility
criteria for funding, and require nonfederal matching funds. Consistent
with its

budget proposal, the administration*s reauthorization proposal would
restructure the EAS program to direct its resources to the small
communities with the greatest need to maintain access to national air
transportation service. The Senate bill proposes to reauthorize funding
for the program at current levels.

The Small Community Air Service Development Pilot Program, authorized as
part of AIR- 21, provides grants to communities to enhance local air
service. In fiscal year 2002, 180 communities requested over $142 million
in air service development grants, and $20 million was appropriated. In
March 2003, we reported that the program funded some innovative
approaches. 13 For example, Mobile, Alabama, received about $450,000 to
provide ground- handling services to an airline, and Caspar, Wyoming,
received $500, 000 to purchase and lease back an aircraft to an airline to
ensure service to the community. The program also funded the same types of
projects that many small communities have undertaken in recent years, such
as evaluations of marketing activities and the use of financial incentives
to encourage airlines to either start or enhance service. According to our
analysis of similar approaches used by about 100 small communities,
financial incentives offered the most promise for attracting new or
additional service. However, the additional service typically ended with
the incentives. The sustainability of such improvements in air service
over the longer term appeared to depend on the community*s size and
ability to demonstrate a commitment to that air service, either by

13 U. S. General Accounting Office, Commercial Aviation: Issues Regarding
Federal Assistance for Enhancing Air Service to Small Communities, GAO-
03- 540T (Washington, D. C.: Mar. 11, 2003).

Page 15 GAO- 03- 653T FAA Reauthorization providing a profitable passenger
base or through direct financial assistance. As you know, the
administration*s fiscal year 2004 budget

proposal would eliminate the funding for this pilot program. It is too
soon to determine how effective the various types of initiatives funded
through this program might prove to be. Other options for making the
national air transportation system more accessible to small communities
might include intermodal initiatives such as those we proposed as
alternatives to runway development.

Improving the efficiency of the air traffic control system will be
important to accommodate the expected return to pre- September 11 air
traffic levels. Efforts to achieve this improvement pose continuing
challenges, as FAA attempts to put acquisition management and human
capital reforms in place and establish an effective oversight and
organizational structure to help ensure that resources are spent cost-
effectively and improvements are realized. To increase the safety,
capacity, and efficiency of the national airspace

system, FAA undertook a major effort in 1981 to modernize and replace
aging air traffic control equipment. This effort, which includes major
projects in such areas as communications, surveillance, navigation, and
weather, has been plagued by cost overruns, schedule delays, and
performance shortfalls. As a result, we designated FAA*s air traffic
modernization program as high risk in 1995, and we continue to designate
it as such. 14 Figure 4 combines our and the DOT Inspector General*s
analysis of FAA*s progress in meeting cost and schedule goals for selected
air traffic control projects* the Standard Terminal Automation

Replacement System (STARS), Wide Area Augmentation System (WAAS), Next-
Generation Air/ Ground Communication (NEXCOM), free flight, Local Area
Augmentation System (LAAS), and Integrated Terminal Weather System (ITWS).

14 U. S. General Accounting Office, High- Risk Series: An Update, GAO- 03-
119 (Washington, D. C.: Jan. 2003). Efforts to Improve the

Efficiency of the Air Traffic Control System Face Ongoing Challenges

FAA*s Air Traffic Modernization Remains High Risk

Page 16 GAO- 03- 653T FAA Reauthorization Figure 4: Status of Selected FAA
Air Traffic Control Projects

FAA is making progress in managing the air traffic control modernization
effort and has implemented some key projects. For example, the agency has
replaced the automated color display equipment used by air traffic
controllers to control traffic in some facilities (Display System
Replacement); installed the initial phase of the computer that receives,
processes, and tracks aircraft movement throughout the airspace system
(HOST computer); and implemented some free flight technologies that are

expected to allow for more efficient use of the system by improving
operations in various segments of flight. Figure 5 shows an FAA
representative using the Display System Replacement to monitor and handle
air traffic.

Page 17 GAO- 03- 653T FAA Reauthorization Figure 5: Air Traffic Controller

However, other key projects continue to experience cost, schedule, and
performance problems. The Inspector General has reported that the costs of
five acquisitions have grown by $3 billion* the equivalent of 1 year*s

budget for the modernization program* and the delay in completing these
acquisitions has ranged from 3 to 5 years. 15 Problems in implementing the
Standard Terminal Automation Replacement System are indicative of the
problems that have plagued the modernization program. Since September
1996, FAA has been developing the STARS project to replace the outdated

15 These five programs are the Wide Area Augmentation System, Standard
Terminal Automation Replacement System, Airport Surveillance Radar- 11,
Weather and Radar Processor, and Operational, Supportability, and
Implementation System. See U. S. Department of Transportation, Office of
Inspector General, Reauthorization of the Federal Aviation Administration,
CC- 2003- 058 (Washington, D. C.: Feb. 12, 2003).

Page 18 GAO- 03- 653T FAA Reauthorization computer equipment that air
traffic controllers currently use in some facilities to control air
traffic within 5 to 50 nautical miles of an airport. The current program
presently bears little resemblance to the program envisioned in 1996.
Initially FAA anticipated very little software

development, planned to install STARS in 172 facilities at a cost of $940
million, and expected implementation to begin in 1998 and end in 2005. In
1999, FAA modified its acquisition approach (from off- the- shelf software
to a combination of customized and off- the- shelf software) and increased
to 188 the number of facilities scheduled to receive STARS. Then the
agency concluded that it did not have adequate funding to deploy STARS to
188 facilities, and in March 2002, it received approval to deploy STARS at
74 facilities that had frequent equipment failures, were new, or had the
digital radar needed to operate STARS.

FAA does not yet know to what extent its estimate of STARS*s remaining
development costs is reliable because, as we reported in January 2003, FAA
lacks accurate, valid, current data on the STARS program*s remaining costs
and progress. 16 Without such data, FAA is limited in its ability to
effectively oversee the contractor*s performance and reliably estimate
future costs. Although FAA has adopted clear procurement management
policies and procedures, it did not consistently apply this guidance in
managing the STARS contract. For example, the development cost

estimate is based on the contractor*s projections, which FAA had not yet
independently analyzed as its guidance directs. We made several
recommendations to improve the management of STARS and subsequent terminal
modernization programs and to provide the Congress with more reliable
information for oversight. FAA agreed with our recommendations and is
implementing them.

As part of its procurement reforms, FAA introduced an acquisition
management system in 1996 to reduce the time and cost to deploy new
products and services. In 1999, we reported that this system provided a
structured management approach for selecting and controlling investments,
but still had weaknesses, such as incomplete data on projects* costs,
schedule, benefits, performance, and risks, that limited

16 U. S. General Accounting Office, National Airspace System: Better Cost
Data Could Improve FAA*s Management of the Standard Terminal Automation
Replacement System,

GAO- 03- 343 (Washington, D. C.: Jan. 31, 2003). Acquisition Management

System Is in Place, but Weaknesses Limit FAA*s Ability to Manage Its
Investments Effectively

Page 19 GAO- 03- 653T FAA Reauthorization FAA*s ability to manage its
investments effectively. We made several recommendations to address these
weaknesses and FAA has made

changes to better manage its investments. We have since found that FAA is
overseeing investment risk and capturing key information from the
investment selection process in a management information system and is
also developing guidance for validating costs, benefits, and risks.
However, FAA is not yet incorporating actual costs from related system
development efforts in its processes for estimating the costs of new

projects. Moreover, FAA has not yet implemented processes for evaluating
projects after implementation in order to identify lessons learned and
improve the investment management process. These weaknesses have impeded
FAA*s ability to manage its investments effectively and make sound
decisions about continuing, modifying, or canceling projects. Because its
acquisition reform effort is not complete, major projects continue to face
challenges that could affect their costs, schedule, and performance.

In response to claims by FAA that burdensome governmentwide human capital
rules impeded its ability to hire, train, and deploy personnel, the
Congress exempted FAA from many federal laws 17 governing human capital,
and the agency began implementing sweeping human capital reforms in 1996.
18 These reforms addressed three broad areas: (1)

compensation and performance management, (2) workforce management, and (3)
labor and employee relations. Figure 6 summarizes our analysis of FAA*s
progress in implementing initiatives in each of these areas.

17 This is a result of 1995 legislation that granted FAA broad exemptions
from laws governing federal civilian personnel management found in title 5
of the United States Code. 18 U. S. General Accounting Office, Human
Capital Management: FAA*s Reform Effort Requires a More Strategic
Approach, GAO- 03- 156 (Washington, D. C.: Feb. 3, 2003). Human Capital
Reform

Initiatives Do Not Incorporate Elements Important for Effective Management

Page 20 GAO- 03- 653T FAA Reauthorization Figure 6: Implementation Status
of Selected FAA Personnel Reform Initiatives

While FAA has fully or partially implemented the initiatives in each of
its three broad reform areas, it has not fully incorporated elements that
are important to effective human capital management into its overall
reform effort. These elements include data collection and analysis,
performance

goals and measures, and links between reform goals and program goals.
Furthermore, as we reported in February 2003, FAA has not developed
specific steps and time frames for building these missing elements into
its human capital management and for using these elements to evaluate the
effects of its personnel reform initiatives, make strategic improvements,
and hold the agency*s leadership accountable.

In 2000, AIR- 21 and an executive order established a new structure to
accelerate the modernization and improve the performance of the air
traffic control system. This structure was to consist of (1) a five-
member board, called the Air Traffic Services Subcommittee (Subcommittee),
to oversee the air traffic control system, (2) a chief operating officer
to manage the air traffic control system, and (3) a new performance- based
organization, to be known as the Air Traffic Organization, to operate the
air traffic control system. Under the act, the Subcommittee provides
oversight by, among other things, reviewing and approving strategic plans,
large contracts, and budget requests for the air traffic control system.

The Subcommittee has been meeting since January 2001, but a chief
operating officer has not yet been appointed, and FAA is waiting for an
New Structure for

Improving the Performance of the Air Traffic Control System Has Not Been
Fully Implemented

Page 21 GAO- 03- 653T FAA Reauthorization appointment before putting the
new air traffic organization in place. To date, the Subcommittee has
focused on bringing performance management, accountability, and a more
businesslike structure to the air

traffic control system, and it has taken some specific actions, including
reviewing and approving performance metrics, a budget, and three large
procurements that FAA initiated. However, without a chief operating

officer or a performance- based organization, the new structure is not
functioning as intended. FAA and other stakeholders have suggested reasons
for the difficulties in

implementing the new structure and have proposed changes to AIR- 21 that
they believe would address these reasons. For example, they have noted
that the Subcommittee*s authority to approve the budget request for the
air traffic control system challenges the administration*s prerogative to
submit a budget request reflecting its priorities, and they have cited
uncertainties in the responsibilities and reporting relationships of the
chief operating officer, the FAA Administrator, and the Subcommittee that,
they say, have made it difficult to hire a chief operating officer. To
address these issues, the administration*s reauthorization proposal would
(1) eliminate the Subcommittee*s approval authority, making the
Subcommittee an advisory body, and (2) designate the FAA Administrator as
the chair of the Subcommittee, thereby strengthening the Administrator*s
authority over, and accountability for the performance of, the chief
operating officer. While these changes would eliminate the challenge that
the Subcommittee*s approval authority poses to the administration*s
prerogatives; would clarify the lines of authority between the chief
operating officer, the FAA Administrator, and the Subcommittee;

and could make it easier to hire a chief operating officer, they would
also limit the power of the Subcommittee. The Senate*s reauthorization
proposal would also designate the FAA Administrator as the chair of the
Subcommittee, but it would retain the Subcommittee*s approval authority.
The merits of these and other proposed changes depend, in large part, on
the extent to which approval authority is viewed as necessary or desirable
to bring about improvements in the performance of the air traffic control

system.

Page 22 GAO- 03- 653T FAA Reauthorization Safety has always been and
continues to be FAA*s highest priority. FAA has taken a number of
important steps to improve aviation safety;

however, its planning and implementation could sometimes be more
effective. In addition, with the transfer of most aviation security
responsibilities to the Transportation Security Administration (TSA), FAA

faces the challenge of maintaining close coordination with TSA to ensure
that aircraft safety is maintained as TSA implements new security
enhancements.

Reducing fatal aviation accidents is key to improving aviation safety.
FAA*s centerpiece for reaching this goal is Safer Skies, an initiative
that dates back to 1998, when FAA and aviation industry representatives
worked together to identify the major causes of fatal accidents and to
design and implement actions to prevent future accidents. Safer Skies is
intended to reduce the fatal accident rate for commercial aviation by 80
percent and to reduce the number of fatal accidents for general aviation
to 350 a year by 2007. 19 Because many preventive actions have not yet
been

fully implemented, it may be too early to assess their effectiveness.
Achieving the initiative*s goals will require FAA to systematically
implement preventive actions, such as requiring additional safety
inspections of aircraft, and to maintain good data to monitor the progress
of these actions and evaluate their effectiveness. As of February 2003, 44
preventive actions had been undertaken* of which 16 are completed and 28
are under way, according to FAA.

19 Commercial aviation includes both large air carrier operations and
smaller commuter operations. General aviation includes a wide variety of
aircraft, ranging from corporate jets to small piston- engine aircraft as
well as helicopters, gliders, and aircraft used in operations such as
firefighting and agricultural spraying. FAA Is Implementing

Safety Initiatives and Faces New Challenges in Ensuring That Security
Enhancements Maintain Aircraft Safety

FAA and Industry Have Taken Actions to Reduce the Fatal Accident Rate

Page 23 GAO- 03- 653T FAA Reauthorization Improving the effectiveness of
FAA*s inspections of airline operations is key to improving aviation
safety. The FAA Administrator has noted that

perhaps the greatest support the agency can provide to the industry is a
robust safety oversight role that will not waver in difficult times. FAA*s
new inspection program, the Air Transportation Oversight System, is
central to this oversight role. This program, which was implemented in
1998, aims to ensure not only that airlines comply with FAA*s safety
requirements but also that they have operating systems to control risks
and prevent accidents. Figure 7 shows an FAA inspector inspecting an
aircraft for compliance with FAA*s safety requirements.

Figure 7: FAA Safety Inspection in Progress

Source: FAA.

We reported in 1999 that FAA had not completed many critical steps, such
as developing guidance for inspectors and creating databases to use in
prioritizing inspection resources, before implementing the new inspection
system in 1998. 20 As a result, the agency*s ability to conduct effective

20 U. S. General Accounting Office, Aviation Safety: FAA*s New Inspection
System Offers Promise, but Problems Need to Be Addressed, GAO/ RCED- 99-
183 (Washington, D. C.: June 28, 1999). FAA*s New Safety

Inspection System Offers Promise, but Problems Still Need to Be Addressed

Page 24 GAO- 03- 653T FAA Reauthorization inspections remains limited. FAA
has begun to address some of the problems that we identified with the
guidance and the databases.

However, according to a 2002 review by the DOT Inspector General, many of
the problems that we identified persist, and the program*s implementation
remains inconsistent because FAA has not established strong oversight and
accountability procedures. 21 This situation limits FAA*s ability to
conduct more systematic, structured inspections; analyze the resulting
data to identify safety trends; and target its resources to the greatest
aviation safety risks.

Some key efforts under way to improve aviation security require
interagency coordination between FAA and TSA because they could also
affect aircraft safety. While TSA is responsible for most issues related
to aviation security, FAA retains responsibility for those related to
aviation safety, including approving the initial aircraft design,
structural

modifications, and procedures for emergency evacuation and the
transportation of hazardous cargo. 22 For example, strengthening cockpit
doors to increase cockpit security during flights was one of the

government*s earliest responses to the September 11 terrorist attacks.
Because the modifications could increase the weight of the doors and
change the way they are attached to the aircraft, FAA has been certifying
these modifications to ensure that they will not cause decompression

during flight or affect the aircraft*s structural integrity. In addition,
new security procedures require that the cockpit door remain locked during
flight and that access to the cockpit be restricted to the flight crew. As
a result, senior flight attendants will no longer carry keys to the
cockpit, and FAA is approving changes to the procedures for rescuing the
flight crew in an emergency.

FAA is also responsible for the safe transport of dangerous materials
onboard aircraft. Dangerous goods are chemical (including infectious)
substances (or anything containing such substances) that pose a threat to
public safety or the environment during transportation. When these goods
are properly packaged, labeled, and stowed onboard, they can be

21 U. S. Department of Transportation, Office of Inspector General, Report
on the Air Transportation Oversight System: Federal Aviation
Administration, AV- 2002- 088 (Washington, D. C.: Apr. 8, 2002).

22 FAA has responsibility for maintaining the security of its air traffic
control facilities and computer systems. Aviation Safety and

Security Require Close Coordination between FAA and TSA

Page 25 GAO- 03- 653T FAA Reauthorization transported safely, but when
they are not, they can pose significant threats to people and property.
TSA is responsible for screening all passengers and property, including
cargo, that will be carried aboard an aircraft. If,

during the screening of passengers or baggage, TSA discovers dangerous
goods that are not properly packaged or labeled, TSA will need to
coordinate and share information with FAA, which is responsible for
enforcing any regulatory violations.

In addition, aircraft crashes could fall under the jurisdiction of either
FAA or TSA, depending on whether they were the results of accidents (FAA)
or deliberate acts (TSA). It will be important for the two agencies to
work together closely during the initial stages of crash investigations.
To facilitate coordination on these and other security issues that affect
aviation safety, TSA and FAA signed a memorandum of agreement on February
28, 2003. In addition, on March 4, 2003, the Secretary of Transportation
agreed to assign a senior official within the Office of the Secretary to
serve as DOT*s primary liaison to TSA. It is important that

both FAA and TSA remain committed to coordinating closely on safety and
security issues and that congressional oversight ensures that the
memorandum of agreement is implemented.

As the administration and the Congress focus on increasing aviation
capacity, efficiency, and safety, they do so in an extremely challenging
fiscal environment* the federal budget deficit has increased and
competition for federal resources has intensified. Moreover, as we
mentioned previously in this statement, revenues to the aviation Trust
Fund, which is the source of funding for most of FAA*s operations,
facilities and equipment, and grant programs, have declined in recent
years while outlays have increased. It is, therefore, especially important
that FAA control or reduce costs, run its programs efficiently, and detect
and prevent fraudulent activities. We and DOT*s Inspector General have
reported that improvements are needed in these areas.

For example, in March 2003, we reported that weaknesses in FAA*s purchase
card 23 controls resulted in instances of improper, wasteful, and

23 As of January 2002, over 8, 000 FAA employees (17 percent of its
workforce) had been issued commercial purchase cards. In fiscal year 2001,
FAA made over 364, 000 purchases using these cards. FAA Faces Challenges

in Implementing Controls over Its Costs

Page 26 GAO- 03- 653T FAA Reauthorization questionable purchases, as well
as missing and stolen assets. 24 These internal control weaknesses
included inadequate segregation of duties

(i. e., the cardholder requested the purchase, placed the order, and
picked up or received the goods without any other review or approval), lax
supervisory review and approval, missing purchase documents, inadequate
training, and insufficient program monitoring activities, all of which
created an environment vulnerable to fraud, waste, and abuse. During
fiscal year 2000, these weaknesses contributed to $5.4 million in improper
purchases by FAA employees and over $630,000 in purchases that were
considered wasteful or questionable because they were missing a receipt to
show what was actually purchased. To reduce the likelihood of improper and
wasteful purchases, we recommended a number of actions to strengthen the
internal controls over FAA*s purchase card program,

such as developing detailed procedures that specify the type and extent of
review or approval that is expected. FAA agreed with our recommendations.

In addition, DOT*s Inspector General reported in January 2003 that FAA
needs to contain increases in its operating costs and improve its internal
controls over costs. 25 Over the past 6 years, FAA*s operations budget,
which is 73 percent personnel costs, increased by over 41 percent, from
$5.3 billion in fiscal year 1998 to $7. 5 billion in fiscal year 2003. The
Inspector General noted that FAA has made extensive use of its human
capital flexibilities to substantially increase salaries, but has done
little to reduce operating costs. FAA has improved its ability to track
its costs by

partially implementing a new cost accounting system that the Congress
directed it to develop in 1996. The new system, which FAA expects to be
fully operational by the end of 2003, now tracks 70 percent of the

personnel, overhead, and other costs related to air traffic services.
However, DOT*s Inspector General has reported problems with the labor
distribution system, which is part of the cost accounting system and is
used to account for and distribute air traffic controller labor costs of
about $3.1 billion annually to specific facilities and functions. The
Inspector General noted that the system omitted important internal
controls needed to ensure that the time worked by air traffic controllers
would be

24 U. S. General Accounting Office, FAA Purchase Cards: Weak Controls
Resulted in Instances of Improper and Wasteful Purchases and Missing
Assets, GAO- 03- 405 (Washington, D. C.: Mar. 21, 2003).

25 Department of Transportation, Office of Inspector General, DOT*s Top
Management Challenges (Washington, D. C.: Jan. 21, 2003).

Page 27 GAO- 03- 653T FAA Reauthorization accurately recorded in the
accounting system and paid from the proper account. The Inspector General
brought these deficiencies to the attention

of FAA, and the Administrator agreed to correct them. The Inspector
General further noted that the system as designed could provide workforce
data that would help determine how many controllers are needed and where.
These data would assist FAA in planning for the anticipated retirement of
large numbers of air traffic controllers in the near and long term. 26
Congressional oversight is important to ensure that FAA follows through
and corrects the problems that we and the Inspector General have
identified so that FAA can spend its resources on projects and services
that will provide the greatest return on the public*s investment.

This statement is based primarily on issued reports that are listed under
Related GAO Products. However, the sections on the Airport and Airway
Trust Fund and the Air Traffic Services Subcommittee reflect our ongoing
work for this Committee. As a result, the results of this work that we

discuss in this testimony are still preliminary. To assess the current and
projected financial status of the Airport and Airway Trust Fund, we
obtained financial data from FAA and interviewed FAA officials familiar
with the information. To assess the status of efforts

to implement the new structure established under AIR- 21 to improve the
oversight, management, and operation of the air traffic control system, we
analyzed the legislation and related executive order, the administration*s

reauthorization proposal, and the first report of the Air Traffic Services
Subcommittee. We also interviewed officials from FAA, the Air Traffic
Services Subcommittee, and aviation industry organizations. We performed
our work in accordance with generally accepted government auditing
standards.

26 U. S. General Accounting Office, Air Traffic Control: FAA Needs to
Better Prepare for Impending Wave of Controller Attrition, GAO- 02- 591
(Washington, D. C.: June 14, 2002). Scope and

Methodology

Page 28 GAO- 03- 653T FAA Reauthorization For further information on this
testimony, please contact Gerald Dillingham at (202) 512- 2834.
Individuals making key contributions to this

testimony include Tammy Conquest, Howard Cott, Elizabeth Eisenstadt,
Edward Laughlin, Belva Martin, Maren McAvoy, John W. Shumann, Teresa
Spisak, and Richard Swayze. Contact Information

Page 29 GAO- 03- 653T FAA Reauthorization FAA Purchase Cards: Weak
Controls Resulted in Instances of Improper and Wasteful Purchases and
Missing Assets. GAO- 03- 405. Washington,

D. C.: March 21, 2003.

Commercial Aviation: Issues Regarding Federal Assistance for Enhancing Air
Service to Small Communities. GAO- 03- 540T. Washington, D. C.: March 11,
2003.

Airport Finance: Past Funding Levels May Not Be Sufficient to Cover
Airports* Planned Capital Development. GAO- 03- 497T. Washington, D. C.:
February 25, 2003.

National Airspace System: Reauthorizing FAA Provides Opportunities and
Options to Address Challenges. GAO- 03- 473T. Washington, D. C.: February
12, 2003.

Aviation Finance: Implementation of General Aviation Entitlement Grants.
GAO- 03- 347. Washington, D. C.: February 11, 2003.

Human Capital Management: FAA*s Reform Effort Requires a More Strategic
Approach. GAO- 03- 156. Washington, D. C.: February 3, 2003.

National Airspace System: Better Cost Data Could Improve FAA*s Management
of the Standard Terminal Automation Replacement System. GAO- 03- 343.
Washington, D. C.: January 31, 2003.

Aviation Infrastructure: Challenges Related to Building Runways and
Actions to Address Them. GAO- 03- 164. Washington, D. C.: January 30,
2003.

Aviation Safety: Undeclared Shipments of Dangerous Goods and DOT*s
Enforcement Approach. GAO- 03- 22. Washington, D. C.: January 10, 2003.

High- Risk Series: An Update. GAO- 03- 119. Washington, D. C.: January
2003.

Air Traffic Control: Impact of Revised Personnel Relocation Policies Is
Uncertain. GAO- 03- 141. Washington, D. C.: October 31, 2002.

Airport Finance: Using Airport Grant Funds for Security Projects Has
Affected Some Development Projects. GAO- 03- 27. Washington, D. C.:
October 15, 2002. Related GAO Products

Page 30 GAO- 03- 653T FAA Reauthorization National Airspace System: Status
of FAA*s Standard Terminal Automation Replacement System. GAO- 02- 1071.
Washington, D. C.:

September 17, 2002.

Options to Enhance the Long- term Viability of the Essential Air Service
Program. GAO- 02- 997R. Washington, D. C.: August 30, 2002.

Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of
Controller Attrition. GAO- 02- 591. Washington, D. C.: June 14, 2002.

Aviation Finance: Distribution of Airport Grant Funds Complied with
Statutory Requirements. GAO- 02- 283. Washington, D. C.: April 30, 2002.

Department of Transportation, Transportation Security Administration:
Aviation Security Infrastructure Fees. GAO- 02- 484R. Washington, D. C.:
March 11, 2002.

Applying Agreed- upon Procedures: Airport and Airway Trust Fund Excise
Taxes. GAO- 02- 380R. Washington, D. C.: February 15, 2002.

National Airspace System: Long- Term Capacity Planning Needed Despite
Recent Reduction in Flight Delays. GAO- 02- 185. Washington, D. C.:
December 14, 2001. National Airspace System: Free Flight Tools Show
Promise, but

Implementation Challenges Remain. GAO- 01- 932. Washington, D. C.: August
31, 2001.

Air Traffic Control: Role of FAA*s Modernization Program in Reducing
Delays and Congestion. GAO- 01- 725T. Washington, D. C.: May 10, 2001.

Aviation Safety: Safer Skies Initiative Has Taken Initial Steps to Reduce
Accident Rates by 2007. GAO/ RCED- 00- 111. Washington, D. C.: June 30,
2000.

National Airspace System: Problems Plaguing the Wide Area Augmentation
System and FAA*s Actions to Address Them. GAO/ TRCED- 00- 229. Washington,
D. C.: June 29, 2000.

National Airspace System: Persistent Problems in FAA*s New Navigation
System Highlight Need for Periodic Reevaluation.

GAO/ RCED/ AIMD- 00- 130. Washington, D. C.: June 12, 2000.

Page 31 GAO- 03- 653T FAA Reauthorization Federal Aviation Administration:
Challenges in Modernizing the Agency. GAO/ T- RCED/ AIMD- 00- 87.
Washington, D. C.: February 3, 2000.

Air Traffic Control: Status of FAA*s Implementation of the Display System
Replacement Project. GAO/ T- RCED- 00- 19. Washington, D. C.: October 11,
1999.

Aviation Safety: FAA*s New Inspection System Offers Promise, but Problems
Need to Be Addressed. GAO/ RCED- 99- 183. Washington, D. C.: June 28,
1999.

General Aviation Airports: Oversight and Funding. GAO/ T- RCED- 99- 214.
Washington, D. C.: June 9, 1999.

Passenger Facility Charges: Program Implementation and the Potential
Effects of Proposed Changes. GAO/ RCED- 99- 138. Washington, D. C.: May
19, 1999.

Airport Improvement Program: Analysis of Discretionary Spending for Fiscal
Years 1996- 98. GAO/ RCED- 99- 160R. Washington, D. C.: May 18, 1999.

Air Traffic Control: FAA*s Modernization Investment Management Approach
Could Be Strengthened. GAO/ RCED/ AIMD- 99- 88. Washington, D. C.: April
30, 1999.

Air Traffic Control: Observations on FAA*s Air Traffic Control
Modernization Program. GAO/ T- RCED/ AIMD- 99- 137. Washington, D. C.:
March 25, 1999.

Federal Aviation Administration: Financial Management Issues.

GAO/ T- AIMD- 99- 122. Washington, D. C.: March 18, 1999.

Airport Financing: Smaller Airports Face Future Funding Shortfalls.

GAO/ T- RCED- 99- 96. Washington, D. C.: February 22, 1999.

Airport Financing: Annual Funding As Much As $3 Billion Less Than Planned
Development. GAO/ T- RCED- 99- 84. Washington, D. C.: February 10, 1999.

(540045)

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