The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) directed the Office of Inspector General (OIG) to report annually on the Federal Aviation Administrations (FAA) progress in implementing its cost accounting system through calendar year 2004. AIR-21 requires an assessment of eight specific areas covering FAAs methods for calculating and assigning costs to specific users and whether those methods are appropriate, reasonable, and understandable. This is our fourth annual assessment. See Exhibit A for detailed results of the assessment areas. Our objectives were to determine the status of the system and to assess each area. Our audit objectives, scope, and methodology are presented in Exhibit B. Cost accounting is a basic tool that private sector organizations use to improve operational efficiency and control costs. FAA needs to complete its cost accounting system to help find ways to meet its air traffic control modernization and growing operational needs within tight budgetary constraints. For example, the $7.8 billion requested for fiscal year (FY) 2005 operations represents an increase of about $370 million over FY 2004 appropriations. However, FAA estimates that approximately $200 million of the $370 million will be consumed by pay increases alone. FAAs FY 2005 budget request exceeds estimated FY 2005 Aviation Trust Fund revenues by about $3 billion.


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    Title :

    2003 Status Assessment of Cost Accounting System and Practices


    Contributors:

    Publication date :

    2004


    Size :

    40 pages


    Type of media :

    Report


    Type of material :

    No indication


    Language :

    English





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