April 6, 2010 - DOT’s Inspector General’s Office testified before congress, Subcommittee on Transportation, in their report they indicated the FAA’s oversight of the Air Transportation Oversight System (ATOS) inspections continues to be ineffective at the national level in large part because the FAA does not collect data on all overdue inspections or fully utilize the data it already collects.

In response to DOT 2008 recommendation, the FAA established a process to compile inspection data at the national level and distribute quarterly reports to alert regional managers to overdue inspections. However, FAA’s data tracking efforts still lack accountability in two key areas. First, FAA does not monitor completion of a key group of inspections, those identified as scheduled, but not yet assigned.

From June 2008 through June 2009, 237 scheduled inspections were left unassigned and uncompleted—and none were being tracked by FAA to completion. While local oversight offices rescheduled some of the inspections, they were not projected for completion for as much as 4 years beyond the original inspection date.

Over the past 7 years, DOT has reported on a number of weaknesses within ATOS. In 2002, DOT recommended that FAA establish strong national oversight and accountability to ensure consistent ATOS field implementation. Today, all Part 121 passenger air carriers in the United States are being inspected using ATOS.

In 2005, DOT again recommended that FAA strengthen its national oversight of field offices by establishing policies and procedures to ensure air carrier inspections are conducted in a timely and consistent manner. More recently, in 2008, DOT recommended that FAA implement a process to track field office inspections and alert the local, regional, and Headquarters offices to overdue inspections.

To conduct this review, DOT obtained and analyzed ATOS inspection data and interviewed FAA Flight Standards Division (Headquarters) and regional managers to evaluate their role and effectiveness in analyzing data and ensuring timely completion of inspections.

ATOS is FAA’s approach to air carrier safety oversight. FAA inspectors assigned to local oversight offices use ATOS to conduct surveillance of air carrier operations and maintenance programs at more than 100 Part 121 air carriers in the United States.

ATOS is designed to allow FAA inspectors to use data to focus their inspections on areas posing the greatest safety risks and adapt their inspection plans in response to changing conditions within air carriers’ operations. ATOS helps inspectors assess air carriers across three primary areas:

• System Design: Inspectors evaluate air carriers’ policies and procedures to determine if their operating systems comply with safety regulations and standards. System design evaluations are required every 5 years.

• Performance: Inspectors determine whether an air carrier is following its FAA-approved procedures and that those procedures and operating systems are working as intended. Performance evaluations are conducted at prescribed intervals depending on the likelihood of failure in air carrier programs.

• Risk Management: Inspectors examine air carrier processes dealing with hazards and associated risks that are subject to regulatory control (e.g., enforcement actions and rulemaking). FAA uses these analyses as a basis to target resources towards the most at-risk programs.

The frequency of performance evaluations is based on the significance of the program to an air carrier’s operations. Inspections of high-criticality maintenance programs, such as Airworthiness Directive Management, are performed every 6 months; lower-criticality programs, such as Carry-On Baggage or Service Difficulty Reports, are inspected every 12 or 36 months, respectively.

Since ATOS is an automated oversight system, results of inspections and decisions made by managers to mitigate risk levels are collected and organized in a centrally located repository within ATOS. This allows Headquarters and regional officials to monitor the current status of all ATOS inspections.

FAA headquarters does not use inspection status data to hold local oversight offices accountable for completing ATOS inspections. Inspections are automatically scheduled in ATOS based on intervals established within the system, and it is the responsibility of local oversight office managers to assign inspectors to complete these inspections.

However, DOT review of inspection data indicates that not all scheduled inspections are being assigned, including those with increased levels of risk. For example, four local oversight offices that transitioned to ATOS since 2006 have yet to complete any scheduled system design or performance inspections for 10 air carrier operations programs. At the time of DOT review, these inspections were unassigned.

In DOT June 2008 report, DOT recommended that FAA implement a process to monitor field office inspections and alert local, regional, and Headquarters management to overdue inspections. In response, the FAA developed a process to track the status of ATOS inspections. In July 2008, the FAA Headquarters ATOS Division Manager began sending quarterly inspection status reports—commonly referred to as the Quarterly ADI Completion Report—to regional managers.

However, DOT analysis of FAA’s quarterly inspection status reports showed that FAA Headquarters only tracks the status of assigned inspections for timely completion. Unassigned inspections pose a greater problem for FAA because managers have not committed inspector resources to complete these inspections.

Once these inspections become past due, there is no sense of urgency to complete them. FAA Headquarters officials also use the quarterly reports during FAA’s “Dashboard” meetings. DOT found 237 instances where ATOS inspections were unassigned and not completed at the required interval. For example, DOT review of ATOS data disclosed 11 inspections that were at least 90 days past due but not yet rescheduled. In other instances, FAA did reschedule unassigned inspections.

FAA officials acknowledged that not all scheduled ATOS inspections will be completed at the required interval. They informed DOT that in a risk-based oversight system such as ATOS, it is not practical or desirable to complete all inspections just for the sake of completing inspections.

Therefore, Headquarters officials do not hold local oversight offices accountable for completing unassigned inspections because doing so would impede the time inspectors need to perform quality inspections for those areas that pose greater risk.

While DOT agreed that higher-risk air carrier programs warrant being inspected ahead of lower-risk programs, some of the unassigned inspections were identified by inspectors as “high risk” programs but not inspected. Additionally, ensuring that all areas, regardless of risk, are inspected is a critical step toward identifying and monitoring risk levels before system failure occurs.

Quarterly inspection status reports consistently pointed to a lack of inspector resources as the main reason scheduled inspections have gone unassigned and uncompleted. Headquarters officials acknowledged that they are aware of the resource issues cited by the regions, but they have not addressed this problem.

DOT analysis showed that a lack of inspector staffing was cited in 70 percent of the 237 unassigned inspections over a 1-year period.  FAA’s efforts to effectively oversee all inspections at a national level will require a process that tracks unassigned inspections to ensure that they are rescheduled and completed in a timely manner. FAA could maximize the results of this process by monitoring reasons cited by local oversight offices for failing to assign inspections.