Grant Financial Management Presented to By Oklahoma Airport

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Grant Financial Management Presented to: By: Oklahoma Airport Operators Association Susan Johnson, Financial &

Grant Financial Management Presented to: By: Oklahoma Airport Operators Association Susan Johnson, Financial & Audit Program Manager, FAA Kathy Franklin Program Manager, FAA Date: April 30, 2018 Federal Aviation Administration

Grant Financial Management • AIP Audits • AIP Handbook Requirements • System for Award

Grant Financial Management • AIP Audits • AIP Handbook Requirements • System for Award Management (SAM) • Grant Payment Policy/Delphi Federal Aviation Administration 2

AIP Audits • DOT/OIG Audits • IPERA KPMG for DOT/OIG Audits • Financial Statement

AIP Audits • DOT/OIG Audits • IPERA KPMG for DOT/OIG Audits • Financial Statement Audits Federal Aviation Administration 3

DOT/OIG Audits • 2017 -2018 Audit – Reviewed grant disbursements & implementation of e.

DOT/OIG Audits • 2017 -2018 Audit – Reviewed grant disbursements & implementation of e. Invoicing – Ensure FAA is providing adequate oversite – Visited Sponsors to review supporting grant payment documentation Federal Aviation Administration 4

DOT/OIG Audits • 2005 Audit – Audit of the Airport Improvement Program • Observed

DOT/OIG Audits • 2005 Audit – Audit of the Airport Improvement Program • Observed potential misuse of AIP Funds • Concluded lack of FAA risk-based oversite increase risk of misused of funds – Result: 2007 Program Guidance Letter • Established 3 sponsor risk levels • Established criteria to determine risk level • Defined minimum grant documentation Federal Aviation Administration 5

DOT/OIG Audits • FY 2011 Improper Payments in AIP Program – Found Over $13

DOT/OIG Audits • FY 2011 Improper Payments in AIP Program – Found Over $13 million of improper AIP payments • Work insufficiently documented • Ineligible or unallowable services • Incorrect amounts or duplicate payments • FY 2013 ARRA Lessons Learned – Found Over $1. 4 million of improper AIP payments • Unapproved services payments • Ineligible expenses • Payments billed to wrong grant • Result: 2013 Program Guidance Letter • Updated & Finalized Risk Model Policy Federal Aviation Administration 6

Re-Occurring Audits • IPERA Audits – Testing occurs every year for 5 DOT grant

Re-Occurring Audits • IPERA Audits – Testing occurs every year for 5 DOT grant programs. – FY 2016 FAA AIP was in compliance with IPERA. • Financial Statement Audits – Resulted in PGL 05 -02 for Letter of Credit oversight Federal Aviation Administration 7

AIP Handbook Requirements • Chapter 3 Projects Eligible for Funding – Allowable Costs –

AIP Handbook Requirements • Chapter 3 Projects Eligible for Funding – Allowable Costs – Necessary Costs – Reasonable Costs • Chapter 5 Section 6 Grant Payments – Financial Payment Policy – ADO Requirements Federal Aviation Administration 8

AIP Handbook Requirements • Costs Must Be Reasonable • Pre-grant: Sponsor must perform a

AIP Handbook Requirements • Costs Must Be Reasonable • Pre-grant: Sponsor must perform a cost analysis for every procurement – Land Acquisition: Appraisal and review appraisal – Construction/equipment: Engineer’s estimate and competitive bids – Professional services: IFE, record of negotiation and signed contract – Change Orders: Cost analysis and justification Federal Aviation Administration 9

AIP Handbook Requirements • Open Grant Period – Quarterly Reports – Annual SF 271

AIP Handbook Requirements • Open Grant Period – Quarterly Reports – Annual SF 271 and SF 425 – DELPHI Payment Reviews Federal Aviation Administration 10

AIP Handbook Requirements • Grant Closeout – Final SF 271, SF 425 and Distribution

AIP Handbook Requirements • Grant Closeout – Final SF 271, SF 425 and Distribution of Costs and Credits Form – Change Orders and Amendment Requests – Were funds spent consistent with Grant Agreement? Federal Aviation Administration 11

System for Award Management • Integrated Award Environment (IAE) • Includes 10 IAE Systems

System for Award Management • Integrated Award Environment (IAE) • Includes 10 IAE Systems • Main data base for anyone who does business with the federal government Federal Aviation Administration 12

Federal Aviation Administration 13

Federal Aviation Administration 13

System for Award Management • Must have an active registration to have a federal

System for Award Management • Must have an active registration to have a federal grant. It’s free! • Is sponsor’s DUNS Number current? When does it expire? • Does the DUNS Number on the grant application match FAA records? Federal Aviation Administration 14

Grant Payment Policy • AIP Grant Payment and Sponsor Financial Reporting Policy published Dec.

Grant Payment Policy • AIP Grant Payment and Sponsor Financial Reporting Policy published Dec. 2015 & updated Jan. 2, 2016 • Establishes requirements for submitting, reviewing and approving payment requests • Available at the FAA website: www. FAA. gov/Airports/AIP/Grant_Payments Federal Aviation Administration 15

Grant Payment Policy • Section 3: Payment Request Frequency • Section 4: Authorized Payment

Grant Payment Policy • Section 3: Payment Request Frequency • Section 4: Authorized Payment Requesters • Section 5: Documentation Requirements • Section 7: Improper Payment Actions • Section 9: Financial Reporting Federal Aviation Administration 16

Grant Payment Policy • Section 5: Pay Request Supporting Documentation Requirements • Grant Payment

Grant Payment Policy • Section 5: Pay Request Supporting Documentation Requirements • Grant Payment Risk Level – Nominal, Moderate or Elevated • Supporting Documentation – Invoice Summary – Do not need the SF-271 Federal Aviation Administration 17

Grant Payment Policy Federal Aviation Administration 18

Grant Payment Policy Federal Aviation Administration 18

Grant Payment Policy • Section 3: Payment Request Frequency • Section 4: Authorized Payment

Grant Payment Policy • Section 3: Payment Request Frequency • Section 4: Authorized Payment Requesters • Section 5: Payment Request Supporting Documentation Requirements • Section 7: Improper Payment Actions • Section 9: Financial Reporting Federal Aviation Administration 19

Grant Payment Policy • Section 9: Financial Reporting – SF-425 Federal Financial Report submitted

Grant Payment Policy • Section 9: Financial Reporting – SF-425 Federal Financial Report submitted annually & closeout – SF-271 Outlay Report & Request for Reimbursement for Construction Projects submitted annually & closeout Federal Aviation Administration 20

Federal Aviation Administration 21

Federal Aviation Administration 21

Grant Payment Policy/DELPHI • Risk Assessments – Conducted a minimum of every 3 years

Grant Payment Policy/DELPHI • Risk Assessments – Conducted a minimum of every 3 years – AIP Grant Oversight Sponsor Risk Assessment Checklist sent Feb. /Mar. 2018 – PM’s completed Risk Assessment Questionnaire • • Performance on grant payments Bidding practices Compliance with grant assurances Sponsor’s expertise in grant/project management – Determines Sponsor’s Risk Level Federal Aviation Administration 22

Grant Payment Policy/DELPHI • Quarterly Payment Reviews – One payment per sponsor • •

Grant Payment Policy/DELPHI • Quarterly Payment Reviews – One payment per sponsor • • Is an invoice summary attached? Does the summary match the request? Is the request consistent with project’s progress? Do the costs appear allowable and reasonable? – If no to any question, PM will provide feedback to sponsor. Federal Aviation Administration 23

Grant Payment Policy/DELPHI • Final Payment Review – All payment requests are manual approval

Grant Payment Policy/DELPHI • Final Payment Review – All payment requests are manual approval within the final 10% of AIP grant amount. – Review all the elements in Quarterly Review. – Review all financial documents. • Ensure costs are consistent with grant agreement • Does final request match financial documents? Federal Aviation Administration 24

Grant Financial Management • AIP Audits – Check the law and guidance are being

Grant Financial Management • AIP Audits – Check the law and guidance are being followed – Provide feedback on how to improve • AIP Handbook Requirements – Costs must be reasonable – Payments consistent with Grant Agreement • Grant Payment Policy/Delphi – Risk Based Approach – Well documented payments consistent with project progress Federal Aviation Administration 25

Questions? Federal Aviation Administration 26

Questions? Federal Aviation Administration 26