DALLAS — DFW International Airport received almost $300 million in federal aid at the height of the pandemic to help deal with a major revenue decline while the airline industry was almost completely shut down.
Now, a federal government watchdog has called into question more than 90% of that funding.
A July 18 report by the U.S. Department of Transportation Office of the Inspector General released Wednesday assessed the Federal Aviation Administration's distribution and oversight of $10 billion in CARES Act funding awarded to airports across the country. The report identified DFW Airport as one of two airport authorities that received funding for "questioned or unsupported costs."
Overall, the OIG said the FAA awarded grants quickly but changes in the agency’s oversight process regarding supporting documentation requirements affected its ability to monitor program performance. The OIG identified more than $350 million in questioned or unsupported costs, as well as $3 million in improper payments.
The report attributed about $272 million in "questioned and unsupported costs" to DFW Airport. The vast majority of the remainder was attributable to the Metropolitan Washington Airports Authority, which oversees Ronald Reagan Washington National Airport and Dulles International Airport.
The FAA made changes to its centralized process for reviewing grant applications in order to get funding out the door as quickly as possible, according to the report. But those changes led to transactions" that were reimbursed based on insufficient supporting documentation and/or costs incurred before the CARES Act allowable period."
"Our review of the 58 grants in our sample found that FAA had approved more than $271 million in reimbursements based on little more than recipient-developed spreadsheets or memos — documentation that would normally be deemed insufficient for [Airport Improvement Program] grants of an elevated risk level," according to the OIG report.
DFW, which received the third-largest chunk of funding of any airport in the U.S., planned to use the money to pay debt service and operating expenses. In a statement, airport officials said its grants were not improper.
"The FAA has confirmed DFW followed the FAA’s CARES Act guidelines and provided proper supporting documents for the allocation of funds," the statement read. "We remain grateful to Congress and the FAA for providing this aid."
The FAA defended itself and criticized the OIG's methodology in a memo responding to a draft of the report.
"The agency believes the OIG’s draft report on how the FAA administered airport emergency funding at the height of the Covid-19 pandemic is inaccurate, contains flawed methodology and should be corrected before the final report is issued," according to the memo. "FAA strongly objects to the findings in the draft report."
At issue is the definition of an "incurred cost." The OIG claims the FAA should have defined an incurred cost based on the date a service was rendered. The FAA disagreed and defined an incurred expense as being on the day it was paid.
The OIG raised concerns about airports that have not drawn down funds, which the FAA said implies it should have taken specific actions. However, the FAA said the CARES Act grants have a four-year period of performance.
The FAA further defended itself in a statement to the Dallas Business Journal and said the grants to DFW were not improper.
"Counting an expense the day it was paid as an incurred cost matches the urgent intent of the CARES Act," the agency said in a statement provided to the Business Journal. "The FAA presented hundreds of detailed records to the Inspector General accounting for the funds and showed they were spent according to the law."
