Department of the Interior: Bureau of Reclamation Aircraft Should Be Centrally Managed Like Other Interior Aircraft

Published by the Government Accountability Office on 1990-01-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

GAO              Report to the Chairman, Subcommittee
                 on Environment, Energy, and Natural
                 Resources, Committee on Government
                 Operations, House of Representatives

January   1990
                 Bureau of Reclamation
                 Aircraft Should Be
                 Centrally Managed
                 Like Other Interior

GAO/M;D-90-N                                       .    .
United States
General Accounting Office
Washington, D.C. 20548

General   Government      Division


January 18, 1990

The Honorable Mike Synar
Chairman, Subcommittee on Environment,
  Energy, and Natural Resources
Committee on Government Operations
House of Representatives

Dear Mr. Chairman:

This report responds to your request that we examine the Bureau of
Reclamation’s management and administrative use of government air-
craft. As agreed, we focused on aircraft that are configured and used
primarily for transportation services similar to those provided by com-
mercial airlines and by rental, lease, and charter businesses. You asked
whether Reclamation, an agency of the Department of the Interior. was
complying with the aircraft ownership, management, and administra-
tive use policies of Office of Management and Budget (OMB) Circulars A-
76 and A-126. You also asked whether there are any reasons why Recla-
mation’s aircraft should not be owned and centrally managed by the
Department of the Interior’s Office of Aircraft Services (0~s) like most
other Interior aircraft.

Because Reclamation’s aircraft management practices were similar to
those we found at other civilian agencies and reported to you in a recent
overall report’ , and as agreed with the Subcommittee, this report
focuses primarily on the issue of whether Reclamation aircraft should
be centrally owned and managed by 0~s.

OMB   Circular A-76, “Performance of Commercial Activities,” states that
the government’s general policy is to rely on commercial sources to sup-
ply the products and services it needs, including aircraft and aircraft
 services, when it is more economical to do so. It requires agencies to
justify government performance of such commercial activities through
 cost studies demonstrating that government performance is less costly
 than commercially available services. The supplement to circular A-76
 provides a methodology for agencies to use in doing these cost studies.

OMB Circular A-126, “Improving the Management and Use of Govern-
ment Aircraft,” prescribes policies executive agencies are to follow in

‘Government Civilian Aircraft: Central Management Reforms Are Encouraging But Requre Extawve
Oversight (GAO/GGD89-86,      Sept. 29, 1989).

Page 1                                                   GAO/GGD+W20      Reclamation   A&aft

                        Our objectives were to (1) evaluate Reclamation’s aircraft ownership,
Objectives, Scope,and   management, and administrative use practices, particularly its compli-
Methodology             ance with OMB Circulars A-76 and A-126 and (2) determine whether
                        there are any reasons why Reclamation aircraft should not be owned
                        and centrally managed by OM like most other Interior aircraft.

                        As of September 1, 1988, Reclamation operated a total of 11 aircraft-
                        10 government-owned and 1 leased. As agreed with the Subcommittee,
                        our evaluation focused on five aircraft-two      Gulfstream Commanders.
                        two Rockwell Commanders, and a Cessna-that Reclamation used for
                        administrative travel such as transporting employees and other official
                        and non-official passengers to remote work sites, meetings, and other
                        functions. The five aircraft were operated by four Reclamation regional
                        offices-the Upper Colorado Region in Salt Lake City, Utah; the Lower
                        Colorado Region in Boulder City, Nevada; the Missouri Basin Region in
                        Billings, Montana; and the Pacific Northwest Region in Boise, Idaho. In
                        carrying out our work, we (1) examined Reclamation cost records, air-
                        craft flight logs, passenger lists. and other data relating to the owner-
                        ship and management of the five aircraft for fiscal year 1988 and (2)
                        discussed these data and Reclamation’s management practices with Inte-
                        rior and Reclamation headquarters and regional officials.

                        To determine why Reclamation chose to exclude its aircraft from the OAS
                        fleet and whether those reasons are compelling, we examined documen-
                        tation on Reclamation’s decision and discussed that decision with
                        responsible officials of the Department of the Interior in Washington,
                        D.C.; OAS in Boise, Idaho; Reclamation headquarters in Denver, Colorado;
                        and the four Reclamation regions. We met with OAS and Reclamation
                        officials to determine what services OAS presently provides to Reclama-
                        tion, what services Reclamation pays for, and the cost and benefit impli-
                        cations of making Reclamation aircraft part of the OASfleet. Finally, we
                        coordinated our findings with the House and Senate appropriations sub-
                        committees that have jurisdiction over these agencies.

                        We did our work between March 1988 and November 1989 using gener-
                        ally accepted government auditing standards. Views of responsible
                        agency officials are included where appropriate. However, in accord-
                        ance with the Subcommittee’s wishes, we did not obtain written com-
                        ments on a draft of this report.

                        Page 3                                       GAO/GGD9020   Reclamation   Airaft

                           by-flight cost comparisons because they were unaware of the Circular A-
                           126 requirements. According to these officials, neither Interior, OAS, nor
                           Reclamation headquarters notified them of the Circular or issued any
                           implementing guidance or regulations for them to use in managing their

                           Although the regions did not fully comply with the aircraft justification
                           policies of Circular A-l 26, they had done aircraft studies. Two regions
                           did A-76 cost analyses in 1982 and 1983 when they acquired new air-
                           craft. Another region that wanted to convert from a leased aircraft to a
                           government-owned aircraft had OM do a cost analysis in 1984. Because
                           of the time that had elapsed since the studies were made, we did not
                           attempt to validate the study results.

                           Interior’s Office of the Assistant Secretary for Policy, Budget, and
                           Administration has overall responsibility for departmental leadership
                           and coordination of aviation management policies, procedures, and prac-
                           tices. Interior assigned to OASthe responsibility for establishing policies
                           to guide all Interior aviation operations. However, OASdid not notify
                           Interior offices and bureaus about OMB Circular A-126 following its issu-
                           ance in October 1983 or issue any regulations or other guidance to
                           implement the circular. An OASofficial said that he drafted implement-
                           ing policy guidance but could not recall why it was never issued. Also.
                           Interior officials we contacted could not explain why Interior did not
                           follow up on the lack of guidance or ensure that Reclamation’s aircraft
                           management practices were consistent with OMB policies. However, OAS,
                           on October 3, 1989, issued guidance to implement OMB'S January 1989
                           revision to Circular A-126.

Regions Lacked Complete    Resides prescribing policies for justifying government aircraft and their
Aircraft Management Data   use for administrative travel, OMB Circular A-126 requires that agencies
                           maintain accounting systems that accurately and completely account for
to Do the Required         all aircraft costs. Without complete cost data, agencies cannot do the
Analyses                   cost-effectiveness determinations required by OMB Circulars A-76 and A-

                           None of the regions accounted for all aircraft costs. Generally, the
                           regions accounted for aircraft fuel, maintenance, hangar, and deprecia-
                           tion costs, and labor costs such as pilots’ salaries and benefits. However,
                           only one region allocated administrative overhead costs to its aircraft
                           operations. None of the regions recorded, as annual costs, reserves for
                           accident damage (insurance) or for major maintenance costs. The

                           Page6                                         GAOGGD9E20    Reclamation   Abaft

                          report, we recommended, among other things, that (1) OMB require each
                          civilian agency with substantial aircraft needs to establish a central
                          office responsible for aircraft management and oversight and (2) the
                          General Services Administration (GSA) establish and operate a govern-
                          mentwide aircraft management information system similar to the one
                          operated by OAS.

                          In response to our recommendations, OMB issued Circular A-126,
                          “Improving the Management and Use of Government Aircraft,” in Octo-
                          ber 1983. It contained some of the policy guidance and procedures we
                          recommended, including a policy that agencies establish clear accounta-
                          bility for aircraft management at a senior management level and assign
                          responsibility for implementing the Circular to a senior official. Also in
                          response to our recommendations, GSA implemented a governmentwide
                          aircraft management information system in February 1985.

                          In an April 1984 report-’ we pointed out that OASwas established to man-
                          age all Interior aviation resources, but Interior had only given OAS these
                          responsibilities in Alaska. We recommended that the Secretary of the
                          Interior direct OASto assume ownership and overall management of all
                          departmental aircraft, aircraft facilities and equipment, and aviation-
                          related personnel managed by other Interior offices and bureaus.

OAS Now Owns and          As of October 27, 1989, the Department of the Interior owned or leased
Centrally Manages Most    a total of 86 aircraft. Of these, 73 were centrally managed by OAS (OAS
                          fleet aircraft); 2 were managed by the National Capitol Park Police in
Other Interior Aircraft   Washington, D.C.; and 11 were managed by the Bureau of Reclamation.
                          While 0~s owns or leases the 73 fleet aircraft, individual Interior offices
                          and bureaus maintain day-to-day operational control of 71 of the 73 air-
                          craft; OAScontrols and uses the other 2 aircraft.

                          Besides owning most of Interior’s aircraft, OAS provides certain central-
                          ized aviation support services to all Interior offices and bureaus, includ-
                          ing Reclamation. These services include (1) developing, implementing,
                          and maintaining departmental aviation policies and standards governing
                          aircraft operations, maintenance and aircrew qualifications, and profi-
                          ciency; (2) procuring aircraft and charter and rental services and pro-
                          viding technical assistance to offices and bureaus upon request; (3)
                          evaluating departmentwide aviation safety and providing aviation

                          ‘Actions Taken to Improve Management and Reduce Costs of Interior’s   Arcraft   Operations and Fur-
                          ther Improvements Need&. (GAO/FS’kD-84   - 45 1Apr. 2, 1984).

                          Page?                                                       GAO/GGD9@20         Reclamation   Airaft

Table 1: Sources of OAS’ Funding for
Fiscal Year 1969                       Sources                                                                            Amount
                                       Approprlattons                                                                   $1,813,000
                                       User fee-s                                                                        .-__
                                         Commercial alrcraft charters and rentals                                         1 011 000
                                         Commercial matntenance contracts              --__                               2,826,OOO
                                         Other reimbursable serwces
                                                                                                                       -__ 241,000
                                         . admlnlstratwe fees for the fleet atrcraft                                        426,000
                                       Total                                                                            66.317.000

                                       According to the Chief of 0~s’ Management Services Div’sion, the
                                       existing OAS system, including personnel as well as administrative sup-
                                       port equipment, could accommodate additional fleet aircraft. He said
                                       that adding Reclamation’s 11 aircraft to the OAS fleet would likely result
                                       in only minimal increases in OAS’ operating costs. If Reclamation aircraft
                                       were part of the OAS fleet, Reclamation, like other Interior offices and
                                       bureaus, would pay a prorata share of OAS’ operating costs that are not
                                       otherwise covered by appropriations and user fees.

Reclamation’s Rationale                Reclamation joined OAS’centralized fleet system in October 1985 but was
for Owning and Managing                allowed out after only 9 months. Reclamation’s reasons for wanting out
                                       were that (1) its funding for operations, including aircraft, falls within
Its Own Aircraft                       the jurisdiction of a different appropriations subcommittee than other
                                       Interior offices and bureaus and (2) it believed that its aircraft operat-
                                       ing costs were higher under OAS ownership. We do not believe these are
                                       compelling reasons for excluding Reclamation aircraft from the OAS

                                       Recfamation’s funding comes under the jurisdiction of the House and
                                       Senate Appropriations Subcommittees on Energy and Water Develop-
                                       ment. Appropriations for all other Interior offices and bureaus are
                                       under the jurisdiction of the House and Senate Appropriations Subcom-
                                       mittees on Interior and Related Agencies. Interior, Reclamation, and OAS
                                       officials could not identify why or how the appropriation jurisdictional
                                       differences were or would be an impediment to Reclamation aircraft
                                       being part of the OAS fleet.

                                       Presently, Reclamation receives or has access to, most of OAS’ aviation
                                       support services. However, Reclamation helps finance OASoperating
                                       costs only when it rents or charters commercial aircraft through OAS,
                                       contracts for maintenance through OAS, or obtains other special services

                                       page9                                                  GAO/GGD9020ReclamationAircaft

                       government-owned and leased aircraft and in-house provision of air-
                       craft operations by .July 3 1, 1989. Although no federal agency met the
                       July 31, 1989 deadline, the requirement to make the analyses is still in

                       Effective January 18. 1989, OMB revised its Circular A-126 to (1) clarify
                       certain ambiguities in its aircraft management policies and to strengthen
                       the interrelationship of Circulars A-76 and A-126; (2) incorporate cost-
                       accounting guidance and standard aircraft program cost elements for
                       agencies to use in complying with the justification and cost-effectiveness
                       requirements of Circulars A-76 and A-l 26; (3) establish a govern-
                       mentwide leadership, technical assistance, and supporting oversight role
                       for GSA in the aircraft area; and (4) provide for more OMB oversight of
                       agencies’ aircraft management practices.

                       In view of the shortcomings in Reclamation’s accounting system for air-
Conclusions            craft costs and its noncompliance with the earlier version of OMB Circu-
                       lar A- 126, we believe that Reclamation’s capability to comply with OMB'S
                       revised aircraft management policies would be enhanced if its aircraft
                       were part of the OASfleet. OAS recently issued guidance to implement
                       OMB'S revised aircraft management policies within Interior. Its cost
                       accounting system for the fleet aircraft provides the data needed to
                       comply with OMB‘S aircraft ownership, management, and administrative
                       use policies. Iiotwithstanding the fleet aircraft issue, sustained depart-
                       mental oversight would be helpful in holding Reclamation accountable
                       for complying with OMDpolicies.

                       To better ensure that Reclamation aircraft and aircraft operations are
Recommendations to     cost effective, we recommend that the Secretary of the Interior require
the Secretary of the   (1) Reclamation to place its aircraft into the OAS fleet and seek oti’ assis-
Interior               tance in managing them and (2) Interior’s Assistant Secretary for Policy,
                       Budget, and Administration to oversee Reclamation’s compliance with
                       OMB'S aircraft management policies.

                       As arranged with the Subcommittee, unless you publicly announce its
                       contents earlier, we plan no further distribution of this report until 30
                       days from the date of this letter. At that time, we will provide copies to
                       the Secretary of the Interior, Director of OMB, Administrator of GSA,

                       Page 11                                        GAO/GGD-9020   Reclamation   A&aft
Page 13   GAO/GGDOO-20   Reclamation   Alrcaft
Major Contributors to This Report

                        .John M. Lovelady. Assistant Director
General Government         Government Business Operations Issues
Division, Washington,   Robert B. Mangum. Assignment Manager
                        Diane Dawes. Typist

                        Jeffrey Forman, Attorney
Office of General
Counsel, Washington,
                        Billie J. North, Regional Management Representative
Denver Regional         Paul S. Begnaud, Evaluator-In-Charge
Office                  Alan J. Wernz. Evaluator

(014025)                Page 14                                     GAO/GGDSO-20   Reclamation   Aircaft

Commissioner of the Bureau of Reclamation, Director of OAS,other con-
gressional committees and subcommittees that have an interest in this
matter, and to other interested parties upon request.
If you have questions about this report, please call me on 275-8676.GAO
staff members who made major contributions are listed in the appendix.

Sincerely yours,

L. Nye Stevens
Director, Government Business
  Operations Issues

Page 12                                     GAO/GGD6W26   IlecLnution   Ahaft
                            El-23 1246.6

                            from QAS.Since Reclamation aircraft are not part of the OAS fleet, Recla-
                            mation does not help pay OAS’ operating costs that are not covered by
                            direct appropriations and user fees. Also, we noted that Reclamation
                            sometimes chartered or leased aircraft directly from OAS’commercial
                            vendors, at the prices OM negotiated with those vendors, and, thus,
                            avoided the OAS user fees.

                            Reclamation officials expressed a desire to keep aircraft costs as low as
                            possible because such costs are allocated among various water projects
                            and reimbursed by local water districts. Reclamation officials said that
                            they were concerned that the water districts would question any higher
                            costs associated with 0~s ownership of Reclamation aircraft. Because of
                            these concerns, Reclamation compared the costs of owning and operat-
                            ing its own aircraft with the costs it would incur if its aircraft were part
                            of the 0~s fleet. Reclamation’s analysis, made in 1985, indicated that its
                            costs would be higher under the OAS system. However, Reclamation
                            understated the actual costs of owning and operating its own aircraft
                            because its cost analysis did not include administrative overhead, acci-
                            dent reserves, or major maintenance reserves. OAS recognizes and
                            charges these costs to the fleet aircraft, but Reclamation does not.

                            ’ Because of these unrecognized costs and the administrative fees associ-
                              ated with 0~s’ operations, Reclamation’s costs charged to aircraft opera-
                              tions would probably be higher in the short-term if its aircraft were
                              made part of the OASfleet. However, we believe that these costs would
                              more accurately reflect the actual costs of Reclamation’s aircraft opera-
                              tions. Over the long-term, we believe that making Reclamation aircraft
                              part of the OAS fleet would result in cost savings through improved air-
                              craft management. By providing more complete cost data on Reclama-
                              tion aircr:sft and better utilizing oti’ aircraft management expertise,
                              such an arrangement should better ensure that Reclamation aircraft are
                              operated and used cost-effectively.

Recent OMB Actions Make      During the course of our work at Reclamation, OMB made certain changes
Cost-Effective               in the governmentwide aircraft ownership, management, and use poli-
                             ties. The OMB policy changes, made in response to GAO and Inspectors
Management of                General findings at several other federal agencies, place more emphasis
Reclamation Aircraft More    on aircraft cost analyses and flight-by-flight cost comparisons.
                             In a November 15, 1988, memorandum, OMB directed agencies to com-
                             plete special A-76 cost analyses to justify the cost-effectiveness of all

                             Page 10                                       GAO/GGD+W20   Reclamation   Aircaft

safety training; and (4) contracting for commercial aircraft services and
aircraft maintenance.

Additionally, OAS provides certain centralized aviation support services
to other Interior offices and bureaus but not to Reclamation. These ser-
vices include (1) coordinating use of the fleet aircraft under the opera-
tional control of other Interior offices and bureaus to maximize their
utilization and (2) prescribing the procedures for justifying, budgeting,
and managing the financial aspects of the fleet aircraft, including air-
craft acquisition, aircraft billings and payments, aircraft cost account-
ing, and the aircraft management information system. Through its cost-
accounting system, OAScollects, and makes available to other Interior
offices and bureaus, data on the costs of operating the fleet aircraft
such as fuel, regular and unscheduled maintenance, and reserves for
major overhaul and accidental damage. Interior offices and bureaus
need such cost data to make the A-76 cost analyses and the A-l 26 flight-
by-flight justification cost comparisons.

As table 1 shows, OAS’ operations are financed through a combination of
appropriated funds, user fees, and other administrative fees. Interior
receives direct appropriations for some of the aircraft services OAS pro-
vides to all Interior offices and bureaus. As a part of its centralized
departmental program, OAS procures commercial aircraft services-air-
craft charters, rentals, and maintenance contracts-through       a working
capital fund arrangement and charges user fees to Interior offices and
bureaus as well as other federal agencies who use those commercial ser-
vices. Like other Interior offices and bureaus, Reclamation finances a
portion of OAS’ operating costs through these user fees when it rents or
charters aircraft or contracts for aircraft maintenance services through
OAS. During fiscal year 1989, for example, Reclamation spent $920,000
for such commercial aircraft services it obtained through OAS.OAS’ oper-
ating costs that are not funded by appropriations or user fees are cov-
ered by other administrative fees charged to the Interior offices and
bureaus that have operational control over the fleet aircraft.

Page 8                                        GAO/GGD-9020   Reclamation   Aircaft

                           regions recorded costs for major maintenance as one-time charges in the
                           year paid rather than amortize them over the remaining estimated flight
                           hours of the aircraft. Regions were also inconsistent in their treatment
                           of aircraft useful life and residual or salvage value for depreciation pur-
                           poses. Unlike Reclamation, OAS' cost accounting system for the fleet air-
                           craft, consistent with OMR Circular A- 126 as revised in .January 1989,
                           accounts for all these costs (see p. 10 of this report).

                           We found no compelling reasons for Reclamation to own and manage its
OASOwnership of            aircraft independently of OAS. To the contrary, we believe that making
Reclamation Aircraft       Reclamation aircraft part of the OAS fleet would better ensure that Rec-
                           lamation aircraft are operated and used cost-effectively.
Offers Opportunity for
Improved Management

Our Past Reports Have      In three earlier reports, we concluded that Interior’s limited efforts to
                           centralize control over departmental aircraft through OAS had been
Endorsed the OAS Concept   effective. For example, in an October 1981 report’ we concluded that
                           Interior was achieving important benefits from OAS’ centralized aircraft
                           management in the areas of contracting effectiveness, safety, manage-
                           ment information, flight coordination, and cost savings. We also con-
                           cluded that individual Interior offices and bureaus could not provide
                           these services as cost-effectively as OAS.

                           In a June 1983 report’ we concluded that OAS had very effectively man-
                           aged a number of Interior’s aircraft operations by establishing uniform
                           aircraft policies and procedures, an aircraft management information
                           system that included a cost accounting system, and a safety program.
                           We reported that a further indication of OAS’ effectiveness and potential
                           broader application of its services was that some non-Interior agencies
                           had benefitted from using OASservices. On the basis of our work at OAS,
                           we concluded that civilian agencies, in which multiple organizations
                           required substantial aircraft services, needed an aircraft office, such as
                           OAS, to serve as a focal point for overall aircraft management. We also
                           concluded that the OAS aircraft management information system could
                           serve as a model for a much needed governmentwide system. In that

                            ‘The Department of the Interior’s   Office of Aircraft   Services Should Xot Re abolIshed   (GAO/
                            PLRD82-5, Oct. 7,1981)

                            ‘Federal Civilian   A encies Can Better Manage Their Arcraft      and Helated Services (GAO/
                            ~83-64,.hne~4.           1983).

                            Page 6                                                            GAO/GGB9020RdamationAircaft

                          Reclamation was not complying with OMB Circulars A-76 and A-126,
Reclamation Not           which are designed to ensure that agencies’ aircraft operations are justi-
Complying With OMB        fied and cost effective.
Aircraft Policies         The four regions we reviewed owned, operated, and used their aircraft
                          for administrative travel without adequately considering whether com-
                          mercial alternatives might be more economical. The regions were not
                          doing (1) annual cost analyses required by OMB Circular A-126 to justify
                          the continuing need for, and cost-effectiveness of, their aircraft and in-
                          house aircraft operations or (2) valid flight-by-flight cost comparisons to
                          determine whether use of their aircraft for administrative travel w’as
                          cost-effective. Also, the regions lacked complete cost data to determine
                          whether their use of aircraft was cost effective.

                          The regions were not familiar with OMB’S aircraft management policies.
                          Neither Interior nor Reclamation had (1) notified the regions of the OMB
                          Circular A-126 requirements, (2) issued implementing policies or guide-
                          lines for the regions to use in managing their aircraft, or (3) followed up
                          to determine if the regions were complying with the governmentwide

Regions Lacked Policies   OMB  Circular A-126 required agencies to annually review and rejustify
and Oversight to Ensure   the continuing need for, and cost-effectiveness of, their government air-
                          craft and in-house aircraft operations. It also required agencies to jus-
Cost-Effectiveness        tify any administrative use of government aircraft by showing that the
                          variable costs of using the aircraft are not more than the costs of com-
                          mercial alternatives.

                          At Reclamation, we found that three of the four regions had not done
                          the required annual reviews of their aircraft or aircraft operations.
                          Also, we found that the regions had not done valid flight-by-flight cost
                          comparisons to justify administrative usage of their aircraft. Some
                          regions did not do the required flight-by-flight comparisons while other
                          regions said that they did cost comparisons but did not document them.
                          The cost comparisons available for our review did not consider all rele-
                          vant aircraft costs. We noted instances in which the regions used the
                          government aircraft for administrative travel even though their cost
                          comparisons, which did not include all relevant costs, indicated that
                          usage was not cost effective compared to commercial alternatives.

                          Regional officials said that they did not do annual reviews of their air-
                          craft and aircraft operations and did not do or properly document flight-

                           Page 4                                       GAO/GGD9020   Reclamation   Aircaft

                   acquiring, managing, using, and accounting for the costs of government
                   aircraft. Basically, it requires agencies to do cost analyses to justify (1)
                   the continuing need for government aircraft and the cost-effectiveness
                   of in-house aircraft operations and (2) flight-by-flight use of government
                   aircraft for administrative travel, i.e., passenger transportation or other
                   administrative support purposes.

                   Within the Department of the Interior, OASwas established in 1973 to
                   centrally manage all departmental aviation resources. OAS presently pro-
                   vides certain management support services to all Interior offices and
                   bureaus. Individual offices and bureaus have day-to-day operational
                   control of their aircraft, however, OAS owns or leases and centrally man-
                   ages all Interior aircraft except those operated by Reclamation and the
                   National Park Police. Reclamation participated in OM’ centralized sys-
                   tem from October 1985 until June 1986. Reclamation was allowed out of
                   the OASsystem after only 9 months because (1) funding for its opera-
                   tions, including aircraft, comes under the jurisdiction of a different con-
                   gressional appropriations subcommittee than other Interior offices and
                   bureaus and (2) it believed its operating costs were higher under OAS
                   ownership. Reclamation now owns and manages its aircraft indepen-
                   dently of OAS.

                   Reclamation does not know whether its aircraft operations are cost-
Results in Brief   effective because it has not complied with OMB policies designed to
                   ensure that the ownership, operation, and administrative use of govern-
                   ment aircraft are more economical than commercial alternatives. The
                    four regions we reviewed had not done the required cost analyses to
                   justify the continuing need for, and cost-effectiveness of, their aircraft
                    and in-house aircraft operations. Also, the regions had not done valid
                    flight-by-flight cost comparisons to justify the use of their aircraft for
                    administrative travel. The regions’ noncompliance with OMB aircraft
                    management policies stemmed from inadequate guidance and oversight
                    by Interior and Reclamation headquarters and from inadequate and
                    incomplete cost data on their aircraft.

                   We found no compelling reasons why Reclamation should own and oper-
                   ate its aircraft independently of OAS. To the contrary, making Reclama-
                   tion aircraft part of the OAS fleet should better ensure that aircraft
                   operation and use are cost-effective and that Reclamation has complete
                   and accurate cost data to comply with OMB'S aircraft management direc-
                   tives and policies. Such an arrangement would also better utilize 0.~’
                   aircraft-management expertise.

                    Page2                                         GAO/GGD9@20   Reclamation   A&aft