Airport Alert: FAA Releases Updated FAQ on CARES Act Airport Grants
December 3, 2020
This afternoon the Federal Aviation Administration (FAA) released an updated frequently asked questions (FAQ) document that provides additional information for airport sponsors on questions and issues that have arisen since FAA began awarding grants and distributing $10 billion that Congress approved as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The updated FAQ, which is the fifth iteration of the document and first update since May 29, addresses additional questions relating to the reimbursement of debt service payments; when a development addendum is required; how to comply with the CARES Act workforce retention requirements; and closing out a CARES Act grant. The document also outlines the new process for airports to submit payment requests and obtain reimbursement.
FAA's updated FAQ document on CARES Act Airport Grants, dated December 3, can be viewed here. FAA is expected to make the document available on its website this evening. Highlights from the updated FAQ are included below.
Debt Service Payment Reimbursements. AAAE has urged FAA to provide clarification on whether airports can obtain reimbursement for PFC-backed bond payments and the process for doing so. In the updated FAQ (Q-U20 through Q-U22), FAA clarified that such reimbursements are appropriate and outlined the process for submitting such a request and simultaneously amending an airport's PFC approval.
Q-U20: Can CARES Act Airport Grants funds be used to reimburse debt service payments that are backed by an approved PFC and paid with PFC funds?
A: No. If PFC funds are available, the PFC funds must be used on any approved PFC project. CARES Act Airport Grants funds are not available to be deposited into PFC accounts. In accordance with 14 CFR § 158.39, public agencies cannot hold excess PFC funds in reserve for a future use. In addition, the requirements of 14 CFR part 158 apply for any new projects or changes in scope to existing projects.
Q-U21: Can CARES Act Airport Grants funds be used to reimburse debt service payments that are backed by an approved PFC?
A: Yes. The sponsor may supplement with other airport revenue and submit a request for payment under its CARES Act Airport Grant. The invoice summary should show the amount of debt service paid with PFC collections and the amount paid with non-PFC funds. The sponsor can submit a request for payment under its CARES Act Airport Grant at the same time it submits an amendment to an approved PFC, which decreases the total collection or deletes an approved project, to its local Airports District Office or Airports Regional Office.
Q-U22: Can CARES Act Airport Grants funds be used to reimburse the defeasement of debt backed by an approved PFC?
A: Yes. The airport sponsor can defease the debt with non-PFC funds and submit a request for payment under its CARES Act Airport Grant. However, the airport sponsor must amend its PFC approval, in accordance with the requirements of 14 CFR § 158.37, to reflect the change. A PFC amendment that decreases the total PFC revenue or deletes an approved project does not require airline consultation nor a public comment period. An airport sponsor can submit a request for payment under its CARES Act Airport Grant at the same time it submits an amendment to an approved PFC to its local Airports District Office or Airports Regional Office.
New Payment Request/Reimbursement Process. AAAE has urged FAA to simplify the process for submitting payment requests to obtain reimbursements under an airport's CARES Act grant. In the updated FAQ (Q-I1), FAA indicated that the agency is no longer requiring the submission of underlying payment request documentation, but it will now allow a detailed invoice summary instead. Airports will still have to retain invoices and documentation for a 3-year period and make them available to FAA upon request.
Q-I1: How will an airport sponsor submit payment requests for CARES Act Airport Grants?
A: The FAA will use the existing U.S. Department of Transportation Delphi eInvoicing system for payment requests. The FAA will continue to review CARES Act Airport Grant payment requests manually. The FAA initially required submission of underlying payment request documentation. However, an airport sponsor may submit only a detailed invoice summary with its payment request. The invoice summary should include the:
The invoice summary should include enough detail to permit the FAA to verify compliance with the FAA's Revenue Use Policy. While airport sponsors no longer submit copies of all invoices, sponsors must be prepared to submit any invoices, upon request, during the review process as well as retain those invoices and other supporting documentation for three years after the grant is closed as required by 2 CFR § 200.334.
Workforce Retention. Under the CARES Act and existing FAA guidance, airports are required to certify compliance with the workforce retention requirement at the time of the grant execution and report employment totals quarterly. In the updated FAQ (Q-WF1 through Q-WF7), FAA elaborated extensively on the process for submitting workforce retention reports and how to request waivers from the requirement. As a reminder, the CARES Act required small, medium, and large hubs to maintain until December 31, 2020, at least 90 percent of the number of individuals employed (after adjusting for retirements or voluntary employee separations) as of March 27, 2020.
A
Q-WF2: Where should CARES Act Airport Grants workforce retention reports be submitted?
A: CARES Act Airport Grants workforce retention reports should be submitted to CARESAirports@faa.gov. Please include 'Workforce Retention Report' and your airport's city, state, and airport location identifier in the email subject line.
Q-WF4: What format is required for CARES Act Airport Grants workforce retention reports?
A: There is no particular format for reporting baseline and quarterly workforce retention counts. Airport sponsor personnel with appropriate knowledge or authority, such as the human resources director, chief financial officer, or payroll officer should validate the information.
Q-WF5: Are payroll records or any other documentation required for workforce retention reports?
A: Airport sponsors do not need to submit payroll records. However, airport sponsors must retain all supporting documentation for three years after the grant is closed as required by 2 CFR § 200.334.
Q-WF6: Are waivers from the CARES Act workforce retention requirement available?
A: The Secretary of Transportation may waive the workforce retention requirement if the Secretary determines that the sponsor is experiencing economic hardship as a direct result of the requirement, or that the requirement reduces aviation safety or security. To request a waiver of the CARES Act workforce retention requirement, an airport sponsor should send a waiver request to CARESAirports@faa.gov no less than 30 days before the quarterly report due date. The waiver request should come from a person authorized to sign AIP grants and include how the workforce retention requirement causes a direct economic hardship on the airport or reduces aviation safety or security. The airport sponsor should include any additional documentation that supports its request. The FAA will respond expeditiously.
Q-WF7: What are the consequences for failing to meet workforce retention reporting requirements?
A: If a sponsor of a small, medium, or large airport does not meet the workforce retention reporting requirements within 10 business days of the end of the reporting period, reimbursements on CARES Act Airport grants may be suspended. The FAA will continue to work with the sponsor to meet these reporting requirements, but continued non-compliance may result in termination of the grant and recovery of reimbursements.
Development Addendum Requirements. As airports are aware, FAA has required a Development Addendum to be executed if an airport wants to use grant funds for an airport development project. In the updated FAQ (Q-GA10 through Q-GA13), FAA provides additional clarity on what types of projects and costs would require or not require the issuance of a Development Addendum. More specifically, FAA indicated that a Development Addendum is not required for pavement maintenance projects (e.g., crack sealing, seal coating, replacing concrete panels), or replacing components of a facility in-kind, in the same footprint (as opposed to expansion or improvements). In contrast, FAA indicated that it would issue a Development Addendum to fund ineligible costs of an AIP or supplemental discretionary project, or cost overruns within the scope of such a grant.
Buy American Requirements. In the updated FAQ (Q-GA15), FAA indicated that CARES Act grants are subject to Buy American requirements. However, the Buy American provision does not apply to operational expenses and debt service.
Financial Reporting Requirements. FAA added an existing paragraph indicating that airport sponsors must submit annual financial reports for each open CARES Act grant:
Q-GA16: Are there annual financial reporting requirements associated with CARES Act Airport Grants?
A: Yes. In accordance with 2 CFR § 200.328, an airport sponsor must submit annually an SF-425, Federal Financial Report, for each open CARES Act Airport Grant or Development Addendum. This report is due by December 31 of each year. Airport sponsors with a Development Addendum must also submit annually an SF-271, Outlay Report and Request for Reimbursement for Construction Program by December 31 of each year.
Grant Closeouts. FAA indicated in today's update (Q-C1 through Q-C2) that a sample CARES Act grant closeout report is available and that airport sponsors will receive a grant closeout letter from FAA stating the grant has been closed.
This afternoon the Federal Aviation Administration (FAA) released an updated frequently asked questions (FAQ) document that provides additional information for airport sponsors on questions and issues that have arisen since FAA began awarding grants and distributing $10 billion that Congress approved as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The updated FAQ, which is the fifth iteration of the document and first update since May 29, addresses additional questions relating to the reimbursement of debt service payments; when a development addendum is required; how to comply with the CARES Act workforce retention requirements; and closing out a CARES Act grant. The document also outlines the new process for airports to submit payment requests and obtain reimbursement.
FAA's updated FAQ document on CARES Act Airport Grants, dated December 3, can be viewed here. FAA is expected to make the document available on its website this evening. Highlights from the updated FAQ are included below.
Debt Service Payment Reimbursements. AAAE has urged FAA to provide clarification on whether airports can obtain reimbursement for PFC-backed bond payments and the process for doing so. In the updated FAQ (Q-U20 through Q-U22), FAA clarified that such reimbursements are appropriate and outlined the process for submitting such a request and simultaneously amending an airport's PFC approval.
Q-U20: Can CARES Act Airport Grants funds be used to reimburse debt service payments that are backed by an approved PFC and paid with PFC funds?
A: No. If PFC funds are available, the PFC funds must be used on any approved PFC project. CARES Act Airport Grants funds are not available to be deposited into PFC accounts. In accordance with 14 CFR § 158.39, public agencies cannot hold excess PFC funds in reserve for a future use. In addition, the requirements of 14 CFR part 158 apply for any new projects or changes in scope to existing projects.
Q-U21: Can CARES Act Airport Grants funds be used to reimburse debt service payments that are backed by an approved PFC?
A: Yes. The sponsor may supplement with other airport revenue and submit a request for payment under its CARES Act Airport Grant. The invoice summary should show the amount of debt service paid with PFC collections and the amount paid with non-PFC funds. The sponsor can submit a request for payment under its CARES Act Airport Grant at the same time it submits an amendment to an approved PFC, which decreases the total collection or deletes an approved project, to its local Airports District Office or Airports Regional Office.
Q-U22: Can CARES Act Airport Grants funds be used to reimburse the defeasement of debt backed by an approved PFC?
A: Yes. The airport sponsor can defease the debt with non-PFC funds and submit a request for payment under its CARES Act Airport Grant. However, the airport sponsor must amend its PFC approval, in accordance with the requirements of 14 CFR § 158.37, to reflect the change. A PFC amendment that decreases the total PFC revenue or deletes an approved project does not require airline consultation nor a public comment period. An airport sponsor can submit a request for payment under its CARES Act Airport Grant at the same time it submits an amendment to an approved PFC to its local Airports District Office or Airports Regional Office.
New Payment Request/Reimbursement Process. AAAE has urged FAA to simplify the process for submitting payment requests to obtain reimbursements under an airport's CARES Act grant. In the updated FAQ (Q-I1), FAA indicated that the agency is no longer requiring the submission of underlying payment request documentation, but it will now allow a detailed invoice summary instead. Airports will still have to retain invoices and documentation for a 3-year period and make them available to FAA upon request.
Q-I1: How will an airport sponsor submit payment requests for CARES Act Airport Grants?
A: The FAA will use the existing U.S. Department of Transportation Delphi eInvoicing system for payment requests. The FAA will continue to review CARES Act Airport Grant payment requests manually. The FAA initially required submission of underlying payment request documentation. However, an airport sponsor may submit only a detailed invoice summary with its payment request. The invoice summary should include the:
- CARES Act Airport Grant Number
- Airport Name
- Airport City
- Airport Location Identifier
- Services Rendered Dates
- Invoice Paid Date
- Vendor Name
- Billed Amount
- Payment Request Amount
- Short summary of expenses billed, including, for example:
- Payroll
- Utilities (electric, water, phone)
- Service contracts (include type of work)
- AIP or Supplemental Discretionary Grant Local Match (include the AIP grant number)
- Goods Purchase (include a list of all items purchased)
- Debt Service Payment (identify whether this is a semi-annual bond payment or monthly payment into a debt service reserve fund)
- Other (explanation of costs and how they are related to the airport)
The invoice summary should include enough detail to permit the FAA to verify compliance with the FAA's Revenue Use Policy. While airport sponsors no longer submit copies of all invoices, sponsors must be prepared to submit any invoices, upon request, during the review process as well as retain those invoices and other supporting documentation for three years after the grant is closed as required by 2 CFR § 200.334.
Workforce Retention. Under the CARES Act and existing FAA guidance, airports are required to certify compliance with the workforce retention requirement at the time of the grant execution and report employment totals quarterly. In the updated FAQ (Q-WF1 through Q-WF7), FAA elaborated extensively on the process for submitting workforce retention reports and how to request waivers from the requirement. As a reminder, the CARES Act required small, medium, and large hubs to maintain until December 31, 2020, at least 90 percent of the number of individuals employed (after adjusting for retirements or voluntary employee separations) as of March 27, 2020.
A
Q-WF2: Where should CARES Act Airport Grants workforce retention reports be submitted?
A: CARES Act Airport Grants workforce retention reports should be submitted to CARESAirports@faa.gov. Please include 'Workforce Retention Report' and your airport's city, state, and airport location identifier in the email subject line.
Q-WF4: What format is required for CARES Act Airport Grants workforce retention reports?
A: There is no particular format for reporting baseline and quarterly workforce retention counts. Airport sponsor personnel with appropriate knowledge or authority, such as the human resources director, chief financial officer, or payroll officer should validate the information.
Q-WF5: Are payroll records or any other documentation required for workforce retention reports?
A: Airport sponsors do not need to submit payroll records. However, airport sponsors must retain all supporting documentation for three years after the grant is closed as required by 2 CFR § 200.334.
Q-WF6: Are waivers from the CARES Act workforce retention requirement available?
A: The Secretary of Transportation may waive the workforce retention requirement if the Secretary determines that the sponsor is experiencing economic hardship as a direct result of the requirement, or that the requirement reduces aviation safety or security. To request a waiver of the CARES Act workforce retention requirement, an airport sponsor should send a waiver request to CARESAirports@faa.gov no less than 30 days before the quarterly report due date. The waiver request should come from a person authorized to sign AIP grants and include how the workforce retention requirement causes a direct economic hardship on the airport or reduces aviation safety or security. The airport sponsor should include any additional documentation that supports its request. The FAA will respond expeditiously.
Q-WF7: What are the consequences for failing to meet workforce retention reporting requirements?
A: If a sponsor of a small, medium, or large airport does not meet the workforce retention reporting requirements within 10 business days of the end of the reporting period, reimbursements on CARES Act Airport grants may be suspended. The FAA will continue to work with the sponsor to meet these reporting requirements, but continued non-compliance may result in termination of the grant and recovery of reimbursements.
Development Addendum Requirements. As airports are aware, FAA has required a Development Addendum to be executed if an airport wants to use grant funds for an airport development project. In the updated FAQ (Q-GA10 through Q-GA13), FAA provides additional clarity on what types of projects and costs would require or not require the issuance of a Development Addendum. More specifically, FAA indicated that a Development Addendum is not required for pavement maintenance projects (e.g., crack sealing, seal coating, replacing concrete panels), or replacing components of a facility in-kind, in the same footprint (as opposed to expansion or improvements). In contrast, FAA indicated that it would issue a Development Addendum to fund ineligible costs of an AIP or supplemental discretionary project, or cost overruns within the scope of such a grant.
Buy American Requirements. In the updated FAQ (Q-GA15), FAA indicated that CARES Act grants are subject to Buy American requirements. However, the Buy American provision does not apply to operational expenses and debt service.
Financial Reporting Requirements. FAA added an existing paragraph indicating that airport sponsors must submit annual financial reports for each open CARES Act grant:
Q-GA16: Are there annual financial reporting requirements associated with CARES Act Airport Grants?
A: Yes. In accordance with 2 CFR § 200.328, an airport sponsor must submit annually an SF-425, Federal Financial Report, for each open CARES Act Airport Grant or Development Addendum. This report is due by December 31 of each year. Airport sponsors with a Development Addendum must also submit annually an SF-271, Outlay Report and Request for Reimbursement for Construction Program by December 31 of each year.
Grant Closeouts. FAA indicated in today's update (Q-C1 through Q-C2) that a sample CARES Act grant closeout report is available and that airport sponsors will receive a grant closeout letter from FAA stating the grant has been closed.
