Aviation Finance: Observations on Potential FAA Funding Options Page: 43 of 50
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those agencies that would, in all likelihood, be able to repay their
borrowing through revenue collections be granted authority to borrow.
Agency Comments We provided a draft of this report to DOT and Treasury for review and
comment. We received comments from DOT through an e-mail from FAA's
Director of the Office of Aviation Policy and Plans on September 11, 2006,
and from Treasury through an e-mail from the Deputy Assistant Secretary
of Government Financial Policy on September 8, 2006. Neither DOT nor
Treasury explicitly agreed or disagreed with our observations, and both
raised a number of concerns.
DOT stated that, in its opinion, although a change in FAA's governance
may not be statutorily required, it may be important as a matter of policy.
DOT stated that because air navigation service providers are by nature
monopoly providers, users need assurance that their concerns are taken
into account in cost control and investment decisions, particularly under a
system that more closely ties users' contributions to the costs of the
system. DOT stated that an alternative governance mechanism, along with
user fees, could give system users a structured advisory role in how
moneys are spent, costs are allocated, and charges are set to recover those
costs, while still retaining the inherently governmental decision-making
authority within FAA and DOT. In addition, DOT maintained that a
governance mechanism specifically designed to give users input into
investment decisions and cost recovery would add a valuable layer of
discipline in optimizing the system to accommodate users' needs most
efficiently.
In contrast, according to DOT, a system in which FAA/DOT could charge
fees to cover costs with no meaningful stakeholder involvement would be
much less attractive to the stakeholders. Finally, DOT stated, such an
arrangement is fully consistent with the position of the International Civil
Aviation Organization, which calls for user charges to be set in
consultation between the service provider and the user community.
DOT may want to encourage Congress to consider the issue of governance
structure. However, we did not include an analysis of governance issues in
the scope of our review; therefore, we did not provide a more detailed
discussion of the issue in this report.
DOT stated that our discussion of the need to analyze FAA's costs implied
FAA has not developed any cost accounting or cost allocation systems.
Although we agree that FAA has made progress in implementing a costGAO-06-973 Aviation Finance
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United States. Government Accountability Office. Aviation Finance: Observations on Potential FAA Funding Options, report, September 29, 2006; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc299352/m1/43/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.