FAA Managers Fall Flat

THE DAILY FED

FAA Managers Fall Flat

The Federal Aviation Administration must substantially reduce its personnel costs and improve its cost-accounting system, an independent audit of the agency found.

Coopers & Lybrand L.L.P., an accounting firm called on by Congress to analyze the FAA's financial management, found that the FAA has no financial management.

"The lack of detailed cost-accounting information . . . makes it all but impossible to analyze detailed information regarding which projects, which operations or which investments make the most sense," The Washington Post quoted from the Coopers & Lybrand study today. "The FAA's core program managers have not demonstrated an understanding of financial management."

The study emphasized the need to reduce the FAA's personnel costs, which are on the rise, calling pay and benefits "the FAA's most significant cost element."

The study also criticized the FAA's five year budget plan, which the accounting firm said projected no improvements to the agency's financial status. The firm recommended giving the agency greater flexibility to pursue reform, which has been stunted by the yearly budget battle with Congress, the study said.

The FAA applauded the study's recommendation of managerial flexibility, saying it would use the findings to "operate in more businesslike and efficient way."

While Coopers & Lybrand credited FAA managers with attempting reform, their audit found no evidence that personnel, financial management, procurement and travel reforms produced any results.