The USMS generally maintained its aircraft properly. However, it does need to improve documentation to reduce the possibility of required maintenance being overlooked and to reduce potential liability. Aircraft without properly documented maintenance increase the potential liability of the Department and the pilots-in-command in the event of an accident or incident. Where Federal Aviation Administration inspectors noted deficiencies, the Air Operations Division quickly took corrective action.
The Division Air Operations Procedures Manual states that USMS aircraft will be maintained in accordance with the Federal Aviation Regulations, Part 91. Aircraft operated under Part 91 are required to have a current and appropriate type airworthiness certificate.5 The certificate verifies that the aircraft was airworthy on the date of certificate issuance. Once issued, the certificate remains valid as long as the aircraft is maintained according to Part 91, Subpart E, unless the certificate is surrendered, suspended, or revoked. Airworthiness is defined as an aircraft operating in conformance with the type of certificate issued and in a condition safe for operation. Airworthiness is a very stringent standard. An aircraft can be declared "not airworthy" merely because maintenance, even if performed, was not documented.
We inspected 10 aircraft6 at the Air Operations Division in Oklahoma City to verify that aircraft had appropriate airworthiness certificates. For the aircraft reviewed, all had appropriate airworthiness certificates. Further, at our request, Federal Aviation Administration inspectors conducted airworthiness checks on the aircraft assigned to Oklahoma City. A summary of their findings starts on page 12. We provided the Federal Aviation Administration report to the Chief of the Air Operations Division, and solicited his comments. The report, as provided to the Division, and the Chief's comments are included as Appendices II and III, respectively, of this report.
Maintenance Operations - Oklahoma City
The Air Operations Division operates its own facility for routine maintenance in Oklahoma City with the maintenance being performed by contract. At the time of our review, the contractor had been performing under a contract in effect since October 1, 1991. Just prior to our field work, the contract was awarded to a new contractor effective May 1, 1994. The Division also contracted for unscheduled maintenance with facilities along its scheduled routes, as needed. Specialized and non-routine maintenance was subcontracted or obtained through other aviation vendors when needed.
The Division's equipment specialist was the prime Contracting Officer's Technical Representative for the contract for routine maintenance. However, the maintenance supervisor and two maintenance coordinators were responsible for day-to-day oversight of the maintenance operations and contractor. An additional maintenance coordinator position was authorized, and the Division selected a candidate, but the position was frozen prior to the selectee coming on board.
The Air Operations Division followed recommended maintenance and inspection programs7 for the 11 USMS aircraft based in Oklahoma City. In addition, outside vendors monitored the maintenance for the following larger, more complex aircraft in the fleet:
· two Boeing 727 aircraft;
· four Sabreliner aircraft8; and
· one Cessna Citation aircraft.
These vendors provided monthly reports to the Division showing the maintenance and inspections required.
As an internal control, the Division maintained automated reports to monitor major inspections and maintenance items for the large aircraft as well as for the three small aircraft. Further, the maintenance coordinators compared these automated reports with the reports received from outside vendors, if applicable, and reconciled any differences to ensure required maintenance was scheduled.
Maintenance Operations - Alaska
Three smaller aircraft under the control of the Air Operations Division were stationed at the USMS Alaska District Office in Anchorage. Maintenance operations for those aircraft were also performed by contract. The Air Operations Division was responsible for directing and monitoring the maintenance; however, a pilot in the district office was designated as the Contracting Officer's Technical Representative.
The maintenance and inspection programs for the Anchorage-based aircraft followed the manufacturers' recommendations, according to Air Operations Division personnel. We noted, however, that limited information with regard to those aircraft was available in Oklahoma City. For example, the manufacturer maintenance manuals for the aircraft were not available if needed for reference by maintenance personnel. Further, the automated maintenance information for two of the three aircraft was not current. The maintenance coordinator responsible for monitoring these aircraft, told us that he notified the district office when maintenance was due. However, he said that there was often a delay between the time the maintenance was performed and when the information was sent to the Division for update.
Although the required maintenance and inspections for these smaller aircraft were not as complex as that required for most of the aircraft in Oklahoma City, inspections were required more frequently; i.e., every 50 hours. As a result, it was important for the Division's information to be current so that the maintenance coordinator could ensure required maintenance and inspections were accomplished timely.
Record Keeping Procedures
Part 91 of the Federal Aviation Regulations requires the aircraft owner to retain records of routine aircraft maintenance, preventive maintenance, inspections, and alterations until the work is superseded or for 1 year after the work is performed. Other maintenance documentation must be maintained indefinitely and transferred with the aircraft when sold. The regulations also require the records be available for inspection by the Federal Aviation Administration or any authorized representative of the National Transportation Safety Board.
Our review in Oklahoma City disclosed that limited maintenance information was documented in aircraft log books. Inflight discrepancies9 were recorded; however, they were not always recorded when detected. We found that corrective actions were usually appropriately documented in the log books.
The detailed descriptions of work performed in conjunction with maintenance and inspections at the Oklahoma City facility were documented on a form provided by the contractor and maintained as part of the aircraft historical records. According to the maintenance supervisor, the Division did not obtain records detailing work performed by repair stations other than the contractor.
The results of the airworthiness checks conducted by the Federal Aviation Administration, as described below, showed that the Air Operations Division often did not have the necessary records available. Since, according to the Federal Aviation Administration, repair stations are only required to keep records for 2 years, it is necessary that the Air Operations Division maintain independent, detailed records required by Part 91 of the Federal Aviation Regulations to support aircraft airworthiness.
Airworthiness Checks
The Federal Aviation Administration is responsible for oversight and enforcement of the Federal Aviation Regulations. Therefore, we obtained assistance from Federal Aviation Administration inspectors at the Oklahoma City Flight Standards District Office to determine the Division's compliance with Part 91. We asked the inspectors to determine whether:
· maintenance and inspections were accomplished at the frequencies specified by the manufacturer;
· maintenance and inspections were properly performed, recorded, and annotated in the maintenance logs;
· replacement parts installed met Federal Aviation Administration requirements;
· airworthiness directives were complied with; and
· aircraft were properly approved for return to service by a Federal Aviation Administration-authorized person after maintenance or inspections were performed.
The inspectors also reviewed the maintenance function to determine whether operations were consistent with procedures outlined in the Division's Air Operations Procedures Manual and the General Maintenance Manual.
The inspectors reviewed all operating aircraft assigned to Oklahoma City. The types and quantities of aircraft were as follows:
· four Sabreliners;
· two Boeing 727s;10
· two Cessna 210s;
· one Cessna Citation; and
· one Cessna 310.
The inspectors also reviewed the maintenance records which were available in Oklahoma City for the three aircraft based in Anchorage.
For the aircraft reviewed, the inspectors' findings-although not quantified by the number of aircraft or instances-disclosed that:
· maintenance was not always performed at the required frequencies;
· maintenance was not always properly recorded;
· maintenance for some aircraft did not comply with all applicable airworthiness directives; and
· proper return to service after maintenance was not performed for some aircraft.
With regard to the five specific areas for which we requested the Federal Aviation Administration to make a determination, the inspectors' results were as follows.
Frequency of Maintenance and Inspections. The inspectors reported that the Sabreliners were not being maintained under the manufacturer's maintenance program, and that the USMS had not requested approval to use any other program. Nonetheless, the inspectors commented that the program in use was acceptable. With regard to inspections, the maintenance records supported that they were performed at the required intervals, with the exception of one aircraft based in Anchorage.
Proper Performance and Recording of Maintenance and Inspections. The inspectors were familiar with the Air Operations Division maintenance contractor (as of April 1994). They did not express any concerns that maintenance and inspections were not properly performed. They reported, however, that maintenance was not properly recorded.
· For those aircraft that flew multiple legs, inflight maintenance discrepancies were not recorded in the log books until the last leg inbound to Oklahoma City.
· Inflight discrepancies were not entered in the log books for the aircraft based in Anchorage.
· The Division did not maintain detailed records of work accomplished by certified repair stations.
· The Division did not use trend data provided by the contractor to initiate corrective action for recurring maintenance items.
· Corrective action for non-routine maintenance items identified during inspections was not properly recorded. This practice was apparently corrected during 1994.
· Engine trend monitoring checks were not documented as required by the Division's General Maintenance Manual.
Use of Approved Replacement Parts. There were no reported instances of parts that did not meet Federal Aviation Administration requirements.
Compliance with Applicable Airworthiness Directives. The inspectors reported that maintenance records did not demonstrate that all applicable airworthiness directives were followed for the four Sabreliners because the records did not reflect the directive number, revision date (if applicable), and the method of compliance. However, the inspectors recognized that the continuous airworthiness maintenance program for these aircraft was being revised to enhance reporting. Nonetheless, the inspectors reported that the interval for complying with one airworthiness directive for the two Boeing 727s was inadequate.
Proper Approval and Return to Service of Aircraft. Three of the six weaknesses noted above with regard to proper recording of maintenance and inspections demonstrated that aircraft were not properly returned to service. Aircraft which are operated with open discrepancies (where inflight problems were not recorded until inbound to Oklahoma City, or not recorded at all, and where corrective action was not recorded for non-routine maintenance items discovered during inspection) may not be suitable for return to service, depending on the seriousness of the discrepancies.
As mentioned previously, the USMS responded to the Federal Aviation Administration's report. We commend the Air Operations Division for immediately initiating corrective actions, which included:
· revising the Air Operations Procedures Manual and the General Maintenance Manual where necessary.
· implementing procedures to obtain copies of work orders when maintenance is performed by repair stations.
· conducting an on site review of the Alaska operations.
We also commend Division management for initiating corrective action for weaknesses it identified prior to our field work. For example, the Division:
· terminated the October 1991 maintenance contract after the first option year due to nonperformance and because the cost was excessive for the services received.
· submitted the inspection program for the Boeing 727s to the local Federal Aviation Administration office for approval since the program had not been approved specifically for the USMS aircraft.
· drafted a General Maintenance Manual which was accepted by the Federal Aviation Administration in December 1993. The maintenance supervisor told us that the manual was formally implemented on May 1, 1994.
· established a "deferred discrepancy program" as part of the General Maintenance Manual to provide procedures for maintenance items which were identified but not immediately corrected.
· established a "minimum equipment list11 management program" as part of the General Maintenance Manual. The maintenance supervisor told us that the Division currently used master minimum equipment lists from the Federal Aviation Administration and the aircraft manufacturers, but drafting of equipment lists for the larger aircraft was in process.
· recognized the need for an additional maintenance coordinator to ensure adequate contract oversight and initiated steps to hire this employee. (As of September 23, 1994, the position had not been filled due to budget constraints.)
Conclusion
Notwithstanding the corrective actions initiated, the Air Operations Division often did not have the necessary records to support aircraft airworthiness as evidenced by the airworthiness checks. Aircraft without properly documented maintenance increase the potential liability of the Department and the pilots-in-command in the event of an accident or incident. Further, aircraft not properly maintained increase the risk of maintenance-related accidents and incidents. In our judgment, the liability is significant due to the Air Operations Division mission of prisoner transportation.
Our audit tests and the Federal Aviation Administration airworthiness checks disclosed that the USMS generally maintained its aircraft in an acceptable manner; however, improvements in documentation are needed to ensure that the aircraft are being operated in an airworthy condition. Detailed documentation necessary to support the airworthiness of all aircraft was not maintained by the Air Operations Division. Although we commend the Division for promptly addressing findings reported by the Federal Aviation Administration and other weaknesses identified by the Division, additional measures are needed to ensure that all aircraft operate in an airworthy condition.
We recommend that the Director, USMS:
1. Implement a maintenance record keeping system which will adequately support the airworthy condition of all aircraft.
Closed. Based on the enhancements that the Air Operations Division made to its record keeping system during and after the audit (as detailed in documentation that we received through March 17, 1995), the Division has assured us that the system in place adequately supports the airworthy condition of all aircraft.
2. Implement procedures to ensure the timely transfer of maintenance information between Anchorage and Oklahoma City.
Closed. Based on an Air Operations Division memorandum that we received March 15, 1995, procedures have been established to ensure the timely transfer of maintenance information.
3. Submit the continuous airworthiness maintenance program for the Sabreliners to the Federal Aviation Administration for approval, once the enhancements are complete.
Closed. The USMS response to the draft audit report (See Appendix VIII) stated that, upon completion of the computer enhancements and appropriate input, the Air Operations Division will submit the program for approval.
2. PILOT CERTIFICATION AND RECENT FLIGHT EXPERIENCE
Overall, the USMS met all of the required pilot certifications and recent flight experience, except that some pilots need to document night flying experience. Pilots without supported flight experience increase the potential liability of the Department in the event of an accident or incident.
Twenty pilots were flying for the USMS at the time of our audit. Of these, 15 pilots stationed in Oklahoma City were considered full-time pilots. Two other pilots stationed in Oklahoma City sometimes served as pilots, but primarily performed other duties; i.e., the Deputy Chief of the Division, and the Chief of the Flight Operations Branch. Additionally, three Deputy U.S. Marshals assigned to the Alaska District Office, in addition to performing law enforcement duties, served as pilots for the three aircraft assigned to that office.
We reviewed pilot documentation in Oklahoma City for the 20 pilots. Of the 17 pilots in Oklahoma City, 14 were designated as pilots-in-command12 and 3 were designated as second-in-command pilots for the jet aircraft. The three pilots in Anchorage were designated as pilots-in-command of the smaller aircraft based there. Our audit testing included determining whether pilots maintained the pilot certifications, as well as the recent flight experience, required by the Federal Aviation Regulations and the USMS Air Operations Division.
Pilot Certification
The Division Air Operations Procedures Manual required the following pilot certifications for pilots-in-command:
· airline transport pilot certificate13 for jet aircraft and aircraft weighing over 12,500 pounds;
· commercial pilot certificate for multi-engine and single-engine aircraft weighing less than 12,500 pounds;
· appropriate type rating, if required by the Federal Aviation Regulations, for the aircraft flown;
· instrument rating14 for commercial pilots (the airline transport pilot certificate conveys the instrument rating); and
· second-class medical certificate.15
For aircraft rated for two pilots, the Air Operations Division required the following pilot certifications for second-in-command pilots:
· commercial pilot certificate;
· appropriate type rating;
· instrument rating; and
· second-class medical certificate.
We found that all 20 pilots held appropriate pilot certificates for their aircrew position (pilot-in-command or second-in-command). All pilots held appropriate type ratings when required by the Federal Aviation Administration for those aircraft that they flew.
Pilot Flight Experience
The Federal Aviation Regulations, Part 61, require pilots to maintain recent flight experience-commonly referred to as currency-in order to exercise the privileges of the pilot certificate. Currency requirements include:
· a minimum of three takeoffs and landings within the past 90 days;
· a minimum of three night takeoffs and night landings within the past 90 days, if carrying passengers at night;
· an instrument competency check, or 6 hours instrument time and six instrument approaches, logged within the past 6 months;
· an annual proficiency check, if the pilot was designated as pilot-in-command of an aircraft rated for more than one pilot (e.g., aircraft weighing more than 12,500 pounds); and
· a biennial flight review (a proficiency check, administered by an appropriately rated instructor, given in an aircraft for which the pilot is rated).
Part 61.51 of the Federal Aviation Regulations states that pilot currency must be supported by a reliable record. The Air Operations Division management relied on the training records and information compiled from daily flight logs to support pilot currency.
We reviewed the daily flight logs for the period October 1, 1993, to March 31, 1994, and individual pilot training records to assess currency. Our review disclosed that almost all of the USMS pilots were current with regard to recent flight experience requirements. Our testing of the 20 pilots disclosed the following results:
Takeoffs and Landings. All 20 pilots (100 percent) were current with this requirement.
Night Takeoffs and Landings. Only 2 of the 20 pilots (10 percent) were documented as current with this requirement. In our judgment, USMS pilots should maintain currency for this requirement since pilots have had to fly at night.
Instrument Competency. Eighteen of the 20 pilots (90 percent) were current with this requirement.
Proficiency Checks. Three types of aircraft in the Air Operations Division fleet were type rated for more than one pilot; i.e., the Boeing 727, the Sabreliner, and the Cessna Citation. Fourteen of the 20 pilots were designated pilot-in-command of at least one of these aircraft. All 14 of those pilots (100 percent), as well as all 3 of the pilots designated as second-in-command for these aircraft, received the required annual proficiency checks for the appropriate type aircraft.
Biennial Flight Review. All 20 pilots (100 percent) were current with this requirement.
As detailed above, the USMS pilots were current with the recent flight experience requirements at least 90 percent of the time, except with regard to night takeoffs and landings. We discussed this issue with the Air Operation Division management during our field work. Subsequent to our exit conference, the Chief provided us a memorandum on September 23, 1994, which stated that he was going to incorporate the night currency requirement in the Air Operations Procedures Manual. The memorandum further stated that the Division would ensure that all USMS pilots maintain and appropriately document their night experience.
Conclusion
Although our audit disclosed that, overall, the USMS had a high rate of compliance, the Air Operations Division needs to strengthen its controls to ensure that all pilots maintain the required recent flight experience. Pilots not properly documented to be current increase the potential liability of the Department in the event of an accident or incident. In our judgment, this is significant since the USMS transports thousands of people (primarily prisoners) each year. In the first 6 months of FY 1994 alone, the USMS transported approximately 28,000 people.
We recommend that the Director, USMS:
4. Ensure that the Air Operations Procedures Manual reflects all applicable recent flight experience requirements.
Closed. A USMS memorandum dated September 23, 1994, stated that the requirements were in the process of being added to the Manual.
5. Ensure pilot currency with applicable recent flight experience requirements.
Closed. The above mentioned memorandum stated that Air Operations Division management would enforce documenting applicable flight experience in the daily flight logs in order to support pilot currency.
The USMS' cost of aircraft operations reported to GSA for FY 1993 was understated by approximately $4.4 million. This was due to the USMS not accurately accumulating and reporting aircraft costs as required by OMB Circular A-126. These shortcomings resulted in the USMS not being able to accurately justify the use of government aircraft in lieu of commercially available aircraft, recover operating costs, and determine program cost effectiveness. Nonetheless, in a positive light, the USMS has the capability to accumulate and report accurate costs.
OMB Circular A-126 was promulgated to improve the management of government aviation resources and provide guidance for their use. Included in that guidance is a requirement that agencies must maintain systems for their aircraft operations which will permit them to:
· justify the use of government aircraft in lieu of commercially available aircraft, and the use of one government aircraft in lieu of another;
· recover the costs of operating government aircraft when appropriate; and
· determine the cost effectiveness of various aspects of agency aircraft programs.
41 Code of Federal Regulations 101-37 entitled, "Government Aviation Administration and Coordination," includes the provisions and procedures contained in OMB Circular A-126, and prescribes additional policies and procedures for the efficient and effective management of aviation resources. One of the additional policies concerns the Federal Aviation Management Information System, commonly referred to as FAMIS. This system collects and consolidates aviation inventory, utilization, and cost data and produces reports. The regulations designate the GSA Transportation Management Division as the single coordinating office for government aircraft management. GSA's responsibilities include managing the Federal Aviation Management Information System.
GSA requires all applicable agencies to submit annual aircraft cost and utilization reports for each aircraft by January 15, for the prior fiscal year. Within the DOJ, components are required to submit such reports to the Property Management Services Office, Justice Management Division. That office is then responsible for forwarding the required reports to GSA.
Both OMB Circular A-126 and the Code of Federal Regulations specify cost elements to be used when reporting aircraft costs. We noted, however, that the cost elements required by each regulation were not identical. For example, OMB requires the reporting of the cost of capital as a cost element, while the Code of Federal Regulations does not. On the other hand, the Code of Federal Regulations requires a cost element for spares inventory expense, while OMB does not. (See Appendix IV for a complete listing of the cost element differences between the two regulations.) As a result, an agency's reported cost elements will vary depending on which criteria were used.16 The USMS used the cost elements prescribed by OMB Circular A-126 in its reporting.
FY 1993 USMS Federal Aviation Management Information System Reports
The USMS' annual Federal Aviation Management Information System cost reports were prepared by the Air Operations Division in Oklahoma City. The Division is a cost center in the USMS accounting system and is on-line to the Department's Financial Management Information System. Additionally, the Division maintains numerous stand-alone systems for management and costing support. Some of the reported Federal Aviation Management Information System costs were estimates or prorations of cost data obtained from the Division's systems. We did not take exception to these computation methods because it is not unusual, in any costing scheme, for total costs to be applied to individual cost entities (aircraft in this case), based on estimates or to prorate total costs based on logical assumptions.
The USMS' FY 1993 Federal Aviation Management Information System reports submitted to the Justice Management Division included cost reports for 15 aircraft,17 1 of which showed zero flight hours.18 There were eight types of aircraft reported, but only four types reflected more than 1 aircraft. Our testing to verify the accuracy of reported costs was based on a sample of 1 aircraft from each of the four types reflecting multiple aircraft. We selected the aircraft with the greatestnumber of FY 1993 flight hours, except for the Boeing 727,19 and reconstructed their costs based on available USMS data. We then compared the reconstructed costs with the USMS' Federal Aviation Management Information System cost reports. Each USMS reported cost element is discussed in Appendix V, along with the bases used to calculate the reconstructed amounts. Appendix VI details the reported and reconstructed costs for the four sampled aircraft.
The results of our testing disclosed that the costs reported on the USMS' FY 1993 Federal Aviation Management Information System report20 were understated approximately $4.4 million when compared with USMS financial and operations data. While we noted differences between reported and reconstructed amounts for 8 of the 11 cost elements, 2 of the elements were considered to be overstated and 6 were understated.
The discussion below relates to the reported aviation cost elements specified in OMB Circular A-126. (See Appendices V and VI for detail.)
· Fuel and Lubricants. We did not take any exception to the total amounts reported or the amounts for the sampled aircraft.
· Crew Costs. The USMS did not report any crew costs for the Anchorage-based aircraft even though it should have. For the Oklahoma City-based aircraft, the Air Operations Division applied total crew costs to individual aircraft on an equal basis. We took exception to this method because it did not result in realistic costs since the number of crew actually used varies by type of aircraft. Further, the USMS' reported costs inappropriately included costs for prisoner escort personnel. We took exception to this because escort personnel are required regardless of the transportation mode and are not peculiar to aircraft operations. We adjusted for the over- and understatements in our reconstructed cost figures. The result was a net overstatement of approximately $700,000.
· Maintenance. Our reconstructed maintenance costs were slightly greater than those costs ($5.6 million) reported by the USMS. Since reported costs were based on expenditures rather than obligations, the difference was due to additional invoices, totaling approximately $252,000, being paid by the Air Operations Division between their reporting date and the date of our site work.
· Overhead. The reported FY 1993 operations overhead total was understated approximately $4,944,000 because it did not include all applicable costs; e.g., the Air Operations Division did not include all Division salary and fringe benefit, transport, communications, and equipment costs. We adjusted for the understatement in our reconstructed cost figures. We did not include any administrative overhead in our reconstructed costs as the support provided by external entities was not significant.
· Landing and Tie-down Fees. We did not take any exception to the total amounts reported or the amounts for the sampled aircraft.
· Depreciation. We took exception to some of the assumptions that the Air Operations Division used to compute reported airframe and capital improvements depreciation. For example, the Division used inconsistent bases to compute airframe depreciation expense; e.g., asset lives ranged from 0 to 20 years and residual values had a range of $0 to the capitalized value of the aircraft. Further, capital improvements computations inappropriately included residual values. Our reconstructed amounts reflect the generally accepted methods of computation. The reported understatement of the two cost elements was approximately $97,000.
· Aircraft Lease. The USMS reported an aircraft lease expense of $874,247 for one aircraft. That amount was actually an equity payment under a lease-purchase agreement. We eliminated the expense from our reconstruction as the depreciable value of the aircraft would be amortized through future depreciation charges. As a result, the costs were overstated by the reported amount.
· Self Insurance. Computation instructions were provided to the USMS by the Interagency Committee for Aviation Policy. Therefore, we did not take any exception to the computed amounts reported for the sampled aircraft.
· Cost of Capital. The USMS did not include a cost of capital amount on its cost report. Correct computation of this amount required knowledge of the Treasury bond rates in the year the aircraft was acquired, as well as a note amortization schedule for the estimated useful life of the aircraft. However, the Air Operations Division had not been provided that information by the Justice Management Division or by GSA. We computed the cost of capital to be approximately $686,000 and included this amount in our reconstructed costs.
Our testing, aside from noting the above problems with the FY 1993 cost reports, also noted several positive aspects to the USMS' aviation cost accumulation system as follows:
· the Air Operations Division is a USMS cost center with an administrative staff and automated systems sufficient to accumulate and report accurate costs, and
· financial and operations records were available which allowed the determination of air operations costs.
In order for the USMS to be able to accurately report air operations costs, improvements are needed in the following areas:
· crew costs for all aircraft need to be reported;
· only the costs of certificated flight crew members need to be reported;
· the application of crew costs to individual aircraft needs to be weighted to reflect the greater cost to operate multi-crew aircraft;
· all maintenance costs need to be included in the reported amounts;
· all costs which comprise operations overhead need to be included when computing that amount;
· depreciation costs need to be computed in a consistent manner; and
· computation of the cost of capital cost needs to be as specified in OMB Circular A-126.
Utility of Cost Reports
The Federal Aviation Management Information System cost reporting format is a factor beyond the control of the USMS. This format commingles actual costs with computed costs, so that cost comparisons required by OMB Circular A-76 will be made on a comparable basis. The results are cost data unusable to aviation managers interested in the actual performance of their aircraft, individually or collectively. However, the data could be reformatted as in Appendix VI, for example, to present actual aircraft operating costs as well as aircraft program and overhead costs.
Reimbursable Agreements
The USMS had entered into several reimbursable agreements with Departmental components and other government agencies for the movement of prisoners and personnel. These agreements specified reimbursement on either a trip, seat, or hourly basis. For example, an agreement with the Federal Bureau of Prisons stated that it would ". . . provide 50 percent of the operational costs . . . ." to the USMS. An additional agreement with the same bureau provided for reimbursement at a rate of $1,500 per air hour. Per the Air Operations Division expenditure reports, the USMS received $4,653,527 in FY 1992 and $7,484,126 in FY 1993 from components and agencies for providing air transportation.
Although auditing the reasonableness of funds recovered by the USMS via reimbursable agreements was not part of this audit, it is questionable, based on our audit results, whether the amounts received were adequate. Because adequate reimbursement for transportation services is necessary, it is important for the USMS to develop an accurate aircraft costing system so that it can recover the full costs of providing transportation.
Conclusion
It is probable that in some instances, USMS transportation requirements take precedence over cost considerations. However, accurate aircraft cost data could complement operational aspects and result in more effective overall management of aviation operations. For example, the USMS would be able to accurately justify the use of government aircraft, recover operating costs, determine program cost effectiveness, and conduct required cost comparisons, when appropriate. Additionally, accurate aircraft costing data would enable the USMS to comply with the requirements of OMB Circular A-126 and pertinent sections of the Code of Federal Regulations. As noted previously, there are inconsistencies among the regulations governing aircraft cost reporting. As the lead agency for the audit, GSA will pursue appropriate resolution.
We recommend that the Director, USMS:
6. Ensure that Federal Aviation Management Information System costs are computed as specified in 41 Code of Federal Regulations 101-37.
Closed. Based on Air Operations Division documentation received through March 17, 1995, the Division has modified its procedures so that future Federal Aviation Management Information System costs will be computed in accordance with the above mentioned regulations.
7. Ensure that reported Federal Aviation Management Information System costs include all relevant costs and only those which are applicable.
Closed. Air Operations Division staff and the documentation mentioned above assured us that future Division-prepared subject cost reports will include all relevant and applicable costs.
5 There are three different types of airworthiness certificate-standard, multiple, and special (ferry flights for repairs, restricted operations; e.g., pest control, etc.).
6 Included one Sabreliner which was in the process of being transferred to another agency and was not currently flying.
7 Included both manufacturer programs and manufacturer-recommended programs.
8 Oklahoma City had five Sabreliners. However, one was in the process of being transferred; therefore, it was not monitored by the vendors.
9 A discrepancy is any deviation from normal; e.g., the public address system not working properly and the landing gear light not operating.
10 One Boeing 727 was in maintenance off-site at the time of our review. Therefore, the Federal Aviation Administration inspectors only reviewed the maintenance records.
11 This list identifies the instruments and equipment that must be functional, at a minimum, when operating an aircraft.
12 Thirteen were pilots-in-command for the larger jet aircraft; one was designated pilot-in-command for a smaller jet aircraft.
13 There are several types of pilot certificates; e.g., student pilot, recreational pilot, private pilot, commercial pilot, and airline transport pilot.
14 An instrument rating allows the pilot to operate the aircraft under instrument flight rules-rather than visual flight rules-when visibility is poor.
15 There are three classes of medical certificates: first, second, and third. The class required depends on the level of pilot privileges to be exercised. According to the Federal Aviation Regulations, a first-class medical certificate is needed to operate under airline transport pilot privileges; a second-class is needed for commercial pilot privileges; and a third-class is needed for private, recreational, or student privileges.
16 We have discussed the cost element inconsistencies among the two regulations with GSA. As the lead agency for this audit, GSA will pursue appropriate resolution to facilitate uniformity among Federal agencies in reporting aircraft costs.
17 The difference between the number of aircraft reported in the FY 1993 report and the aircraft on hand during our site work is due to one aircraft being transferred in early FY 1994.
18 One Sabreliner aircraft had zero flight hours because it was scheduled to be transferred to another agency. The transfer occurred during our site work.
19 The Boeing 727 with the greatest number of hours flown was in the last year of a lease-purchase
agreement (a lease agreement with the option to purchase) and, therefore, was not comparable with the other aircraft tested. Thus, we selected the Boeing 727 with the second greatest number of flight hours instead.
20 As submitted to the Property Management Services Office, Justice Management Division, DOJ.
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