State Auditor Crit Luallen calls for more efficient management of state-owned aircraft.
See the audit report for Full Details
(Frankfort - September 10, 2008)
State Auditor Crit Luallen’s Office today released an audit of the Capital City Airport Division – calling for stronger policies and a more efficient organizational structure relating to Kentucky’s aircraft.
The audit, which makes recommendations on 10 findings, found no formal process for setting usage rates, a failure to request or check passenger identification, a broad definition of who can fly on a state aircraft, the inability to control the use of air charter flights by state agencies and a decentralized air fleet.
In one finding, auditors couldn’t determine the purpose of 15 of 39 flights sampled in fiscal year 2007 due to a lack of supporting documentation.
The division concurs with the numerous findings and recommendations and is currently taking measures to increase its oversight, according to the agency response in the report.
The performance audit was conducted with the objective to evaluate the division’s administration of state-owned aircraft used for general aviation purposes during FY07, while focusing on the aircraft operated and maintained by the division.
The division, under the Department of Aviation within the Transportation Cabinet, owns six of the state’s 16 aircraft, including one helicopter and five fixed-wing aircraft. The Justice Cabinet, the Department for Natural Resources and the Department of Agriculture own the other 10 aircraft.
The division is statutorily authorized to operate and maintain state aircraft and to provide general air charter services to state agencies. The other three agencies own and operate aircraft for agency-specific missions such as drug enforcement, aerial photography, and surveys or applying agricultural chemicals.
The audit notes the decentralized ownership and control of Kentucky’s aircraft results in overlapping services among agencies and recommends the Governor’s Office determine the optimal administrative organization for aviation services.
“The Kentucky air fleet is an essential tool for many government agencies’ day-to-day business,” Luallen said. “But there is a need for greater oversight and proper structure to ensure it operates more efficiently to better serve state government,” Luallen said.
When reviewing the division’s records, auditors couldn’t determine the purpose of 15 of 39 flights sampled during FY07, despite Kentucky law (KRS 36.420) requiring agencies to submit an official agency approval signature, the purpose and destination of the trip, all passengers’ names, and any personal usage by the governor or lieutenant governor.
Five agencies failed to submit statutorily required forms for the 15 flights, according to the audit.
They include: the Environmental and Public Protection Cabinet on six flights, the Governor’s Office on four flights, the Department of Aviation on three flights, and the Transportation and Finance and Administration cabinets on one flight each.
The audit notes that the division prefers verbal requests, which might contribute to the missing written request forms. Kentucky law does allow verbal requests, but it also requires the agencies to follow-up with a written request within five days of the flight.
Auditors were able to locate the final destinations of the 15 flights on the flight cards filed by the pilots; however, the actual purposes of the flights are not included on these forms.
Auditors note that without proper information, it is difficult to determine whether a trip is for personal or official business and recommends the division revise its forms to capture crucial information and to ensure that all agencies, including the Governor’s Office, comply with its policies.
According to the audit, in February 2008, the Governor’s Office issued new guidelines that require the cost of travel for personal or political purposes to be documented on the forms. The Director of Operations for the Governor’s Office handles the request for aircraft and allocation of costs.
The flights reviewed during this audit were taken during FY07, prior to this new policy; however, the Auditor’s Office plans to sample flights in the current fiscal year as a follow up to this report.
In its official response to the audit, the division said it is currently revising its forms to better track aircraft business and will retain these forms to document flight purposes.
The audit also recommends that a formal policy be developed to establish fees for usage of state aircraft and that the broad allowances for state aircraft travel be amended to better protect state resources and provide stronger management controls.
Currently, Kentucky law (KRS 36.415) makes it possible for nearly anyone to travel on state aircraft at the expense of state agencies, according to the audit.
Additionally, the audit recommends the division develop an official process to verify the identification of passengers boarding state aircraft.
The division should develop better billing procedures to each state agency. During the audit, five of the 39 flights sampled in FY07 showed five flights totaling $13,368 had not been billed to the agencies.
Another protective measure recommended in the audit includes the need for the division to work with the Finance Cabinet to ensure other agencies are not able to purchase charter flight services without first contacting the division. Auditors found no restrictions existing in the state’s procurement system that would stop an agency from paying for air charter services rather than initially contacting the division about flight needs.
The audit recommends the Transportation Cabinet conduct a review of the overall aviation needs of state agencies to determine whether the Commonwealth should replace the current aircraft fleet.
When comparing Kentucky’s general aviation aircraft fleet (as opposed to mission-specific fleets, like that of KSP) to those of the seven contiguous states, Kentucky has the oldest fleet.
The average age of Kentucky’s general aviation aircraft, which includes the six aircraft owned by the division and the Natural Resources aircraft frequently employed for general aviation purposes, is 34.5 years. Two Kentucky aircraft are more than 40 years old and most of the other aircraft are 1970s models. The age of the air fleets in surrounding states varies from 28.1 years to 7.6 years.
In addition to operating state aircraft, the division operates the Capital City Airport, which is a state-owned public use airport located in Frankfort. The airport offers 41 hangars, 17 tie-down spots, and sells aviation fuel. The airport is completely self-sustaining based on the fees charged to airport users and requires no state general funds.
Funds generated from the Capital City Airport operations are used to support the costs of operating the general use aircraft to lower the rates for state agencies using this service. The division received and spent $865,700 in general funds during fiscal year 07 while generating an additional $1.7 million in agency revenue.
It currently employs at least 19 staff that includes: an acting director, four pilots, five mechanics, five flight linemen, an airport manager and other supporting positions.
To review a copy of the audit and the agency’s response, visit www.auditor.ky.gov/.