OIG found that the FAA's risk-based approach to AIP grant oversight is inadequate and does not effectively prevent or detect improper payments. AIP payments totaling over $13 million (more than 5 percent) made to 17 of the 26 grantees we reviewed were improper. 

OIG has made seven recommendations to improve the FAA's oversight of its AIP payments. The FAA has fully concurred with four recommendations and provided acceptable actions and timeframes for these four. OIG has requested the FAA re-evaluate its positions on the remaining three recommendations, and provide a written response within 30 days of the issuance of this report. 

In addition to the fiscal year 2009 $3.5 billion appropriation, AIP received an additional $1.1 billion under the American Recovery and Reinvestment Act of 2009 (ARRA). The Department of Transportation (DOT) has determined that AIP is susceptible to improper payments, such as payments for ineligible services or to ineligible recipients, duplicate and incorrect payment amounts, and payments based upon insufficient supporting documentation. The infusion of Federal dollars under ARRA increases the amount of AIP dollars subject to risk.  

Over $13 million (more than 5 percent) of AIP payments made to 17 of the 26 AIP grantees we reviewed were improper. Approximately $7 million of the $13 million was paid for work performed that grantees did not sufficiently document. Almost $4 million was paid to grantees for ineligible or unallowable services.