Airport Finance:

Using Airport Grant Funds for Security Projects Has Affected Some Development Projects

GAO-03-27: Published: Oct 15, 2002. Publicly Released: Oct 25, 2002.

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Gerald Dillingham, Ph.D.
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The events of September 11, 2001 created several new challenges for the aviation industry in ensuring the safety and security of the national airport system. Chief among them is deciding to what extent Airport Improvement Program (AIP) grant funds should be used to finance the new security requirements at the nation's airports. Although many in the aviation industry believe that funding security projects has become even more important in the aftermath of September 11, they also recognize the need to continue funding other airport development projects, such as those designed to enhance capacity in the national airport system. During fiscal year 2002, the Federal Aviation Association (FAA) awarded a total of $561 million, 17 percent of the $3.3 billion available for grants, in AIP grant funds to airports for security projects related to the events of September 11, 2001. This amount is the largest amount awarded to airports for security projects in a single year since the program began in 1982. Based on data provided by FAA, all of the security projects funded with AIP grants since the events of September 11, 2001, met the legislative and program eligibility requirements. The projects, which range from access control systems to terminal modifications, qualified for AIP funding either under eligibility requirements in effect before September 11, 2001, or under subsequent statutory and administrative changes. Although FAA Airport Planning and Programming officials stated that they were able to comply with statutory requirements, set-asides, and other program priorities, the $504 million increase in AIP grand funds for new security projects in fiscal year 2002 has affected the amount of funds available for some airport development projects in comparison with the distribution of AIP grand funds awarded in fiscal year 2001. FAA was able to fully fund these projects, in part, because of a record level of carryover apportionments, which totaled $355 million, and the $84 million in grant funds that were recovered from prior-year projects. However, there were reductions in AIP funding awarded to nonsecurity projects in fiscal year 2002, as compared with fiscal year 2001.

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