Need for Written Procedures to Guide FAA Staff in Preparing Certain Cost-Benefit Analyses

GAO was asked to conduct a review of the Federal Aviation Administration (FAA) plan to close two regional offices and consolidate them into offices located in two other cities.

GAO found that, while the cost-benefit analysis contained in the FAA consolidation plan was accurate, cost estimates for early retirements, unemployment compensation, and lump-sum annual leave payments were not included. Although some of these items are not direct costs to FAA, they are costs to the Federal Government and are directly related to the regional office consolidation. GAO believes these costs are proper offsets to projected FAA savings and estimated them at about $4.6 million. In preparing any future cost-benefit analyses, all costs associated with consolidating offices and/or eliminating positions should be recognized. This will insure that management has the most complete information on which to base decisions. Some cost estimates may be highly uncertain because actual data are not available and assumptions must be made or averages used. Nevertheless, FAA should acknowledge these costs and make estimates using the best information available. GAO is not aware of any written procedures to guide the FAA staff in preparing cost-benefit analyses associated with reorganizations or elimination of positions.