Full text
Audit Report
OIG-23-023
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF
PROGRAMS
Audit of Air Carrier Worker Support
Certifications - Wings Air Helicopters, LLC
March 31, 2023
Office of Inspector General
Department of the Treasury
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OFFICE OF
INSPECTOR GENERAL
DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C. 20220
March 31, 2023
MEMORANDUM FOR JACOB LEIBENLUFT
CHIEF RECOVERY OFFICER
FROM:
Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT:
Audit of Air Carrier Worker Support Certifications – Wings
Air Helicopters, LLC
Attached is our audit report for the Audit of Air Carrier Worker Support
Certifications – Wings Air Helicopters, LLC (Wings Air Helicopters) (OIG-23-023;
dated March 31, 2023). Under a contract monitored by our office, Saggar &
Rosenberg, P.C. (S&R), a certified independent public accounting firm, performed
the audit. The objective of this audit was to assess the accuracy, completeness,
and sufficiency of Wings Air Helicopters’ sworn financial statement or other data
used to certify the wages, salaries, benefits, and other compensation amounts
submitted and approved by the Department of the Treasury (Treasury) for the Air
Carrier Payroll Support Program (PSP1). The scope of this audit covered the time
period from April 1, 2019 through September 30, 2019 and included the certified
PSP1 Application, sworn financial statements, tax returns, and other
documentation submitted to Treasury.
In its audit report, S&R found Wings Air Helicopters incorrectly included corporate
officer compensation in the Awardable Amounts section of the PSP1 Application,
resulting in a $
overstatement. Treasury’s awards to passenger air carriers
under PSP1 included a 78.2 percent pro rata distribution of application amounts.
Applying this formula, Wings Air Helicopters received a $
overpayment from
Treasury.
Our contract required that the audit be performed in accordance with generally
accepted government auditing standards. In connection with the contract, we
reviewed S&R’s report and related documentation and inquired of its
representatives. Our review, as differentiated from an audit performed in
accordance with generally accepted government auditing standards, was not
intended to enable us to express an opinion on Wings Air Helicopters’ compliance
with Treasury’s PSP1 policies and procedures. S&R is responsible for the attached
auditor’s report and the conclusions expressed therein. Our review found no
instances in which S&R did not comply, in all material respects, with generally
accepted government auditing standards.
We appreciate the courtesies and cooperation provided to S&R and our staff during
the audit. If you have any questions or require further information, please contact
me at (202) 486-1420, or a member of your staff may contact Lisa DeAngelis,
Deputy Assistant Inspector General for Audit, at (202) 487-8371.
Attachment
cc:
Jason Morrow, Attorney Advisor, Department of the Treasury
Victoria Collin, Chief Compliance and Finance Officer, Office of Recovery
Programs, Department of the Treasury
Jeff Davis, Partner, Saggar & Rosenberg, P.C.
Contents
Audit Report
Results in Brief ................................................................................................... 2
Background ........................................................................................................ 4
Treasury Disbursement Processes .................................................... 6
PSP1 Interim Audit Report ............................................................... 7
Wings Air Helicopters, LLC .............................................................. 8
Audit Results ...................................................................................................... 8
Finding 1 Corporate Officer Compensation Was Included in the Awardable
Amount ......................................................................................... 9
Recommendations ........................................................................ 11
Appendix 1: Objective, Scope, and Methodology .................................................. 12
Appendix 2: Schedule of Monetary Benefits ......................................................... 16
Appendix 3: Wings Air Helicopters Management Response .................................... 17
Appendix 4: Treasury Management Response ...................................................... 18
Appendix 5: Report Distribution .......................................................................... 21
Abbreviations
CARES Act
Coronavirus Aid, Relief, and Economic Security Act
COVID-19
Coronavirus Disease 2019
DOT
Department of Transportation
GAO
Government Accountability Office
Guidelines
Guidelines and Application Procedures for Payroll Support to
Air Carriers and Contractors
IRS
Internal Revenue Service
OIG
Treasury Office of Inspector General
PSP1
Payroll Support Program, CARES Act
PSP2
Payroll Support Program Extension, Consolidated
Appropriations Act, 2021
PSP3
Payroll Support Program 3, American Rescue Plan Act of
2021
S&R
Saggar & Rosenberg P.C.
Treasury
Department of the Treasury
Wings Air Helicopters Wings Air Helicopters, LLC
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Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
1
March 31, 2023
Jacob Leibenluft
Chief Recovery Officer
Department of the Treasury
This report presents the results of our audit of Wings Air
Helicopters, LLC’s (Wings Air Helicopters) certifications made to
the Department of the Treasury (Treasury) as part of its
participation in the Air Carrier Payroll Support Program (PSP1). This
audit was mandated by Title IV, Subtitle B, Air Carrier Worker
Support, of the Coronavirus Aid, Relief, and Economic Security
Act (CARES Act).1 Under the CARES Act, Treasury was to provide
$32 billion in financial assistance to passenger air carriers, cargo air
carriers, and certain contractors to be exclusively used for the
continuation of payment of employee wages, salaries, and benefits,
in response to the economic impact of the Coronavirus Disease
2019 (COVID-19).2 Furthermore, the Treasury Office of Inspector
General (OIG) is required to audit certifications made by passenger
and cargo air carriers that do not report salaries and benefits to the
Department of Transportation (DOT) (hereinafter referred to as non-
241 air carriers)3 and contractors.
Under a contract with Treasury OIG, Saggar & Rosenberg
P.C. (S&R) conducted this audit. Our audit objective was to assess
the accuracy, completeness, and sufficiency of Wings Air
Helicopters’ sworn financial statement or other data used to certify
the wages, salaries, benefits, and other compensation amounts
submitted and approved by Treasury for PSP1. The scope of our
audit covered the time period from April 1, 2019 through
September 30, 2019 and included the certified PSP1 Application,
1 P.L. 116-136 (March 27, 2020).
2 The financial assistance provided under the CARES Act was split between Passenger Air Carriers
($25 billion), Cargo Air Carriers ($4 billion), and Contractors ($3 billion).
3 Passenger and cargo air carriers that are not required to report salaries and wages to DOT under 14
CFR, Part 241, “Uniform System of Accounts and Reports for Large Certificated Air Carriers”.
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sworn financial statements, tax returns, and other documentation
submitted to Treasury on March 31, 2020.4
To accomplish the objective, we reviewed applicable laws and
regulations; and Treasury’s policies and procedures, including but
not limited to, the Title IV, Subtitle B, Air Carrier Worker Support of
the CARES Act, Guidelines and Application Procedures for Payroll
Support to Air Carriers and Contractors (Guidelines), PSP1
Agreement, and Frequently Asked Questions: Application
Procedures for Payroll Support to Air Carriers and Contractors. We
interviewed key personnel from Wings Air Helicopters, Treasury,
and contracted consultants engaged by Treasury to evaluate
certified company applications. We conducted our fieldwork from
September 2021 through March 2022. Appendix 1 contains a
more detailed description of our objective, scope, and
methodology.
Results in Brief
In brief, S&R found that Wings Air Helicopters, a passenger air
carrier, reported correct information for three of the four sections
reviewed on their PSP1 Application.5 These sections are:
(1) Applicant Information, (2) Applicant Type, and (3) Certification.
However, we found that Wings Air Helicopters incorrectly reported
information in the Awardable Amounts section, resulting in a
$
overstatement in its requested amount. Specifically, we
found that Wings Air Helicopters included unallowable corporate
officer compensation in the awardable amount. Treasury’s awards
to passenger air carriers under PSP1 included a 78.2 percent pro
rata distribution of application amounts. Applying this formula, we
found that Wings Air Helicopters received a $
overpayment
from Treasury. As a result, we question the costs totaling $
and recommend that the Chief Recovery Officer seek
reimbursement of the $
overpayment to Wings Air
4 Wings Air Helicopters submitted the PSP1 Application and related support documentation on
March 31, 2020.
5 The PSP1 Application is comprised of eight sections. Four sections - Financial Institution Information,
Employment Levels, Taxpayer Protection, and Additional Information, were not subject to audit
procedures. Details regarding the sections not reviewed can be found in appendix 1.
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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Helicopters for PSP1. Additionally, we recommend that Treasury
review Wings Air Helicopters’ requested amount for unallowable
expenses, under the Payroll Support Program Extension (PSP2)6
authorized by the Consolidated Appropriations Act, 2021 and the
Payroll Support Program 3 (PSP3)7 authorized by the American
Rescue Plan Act of 2021 and seek reimbursement for
overpayment, if applicable.
Appendix 2 contains more details on questioned costs.
As part of our reporting process, we provided Wings Air
Helicopters management an opportunity to comment on a draft of
this report. Wings Air Helicopters management stated that at the
time of its PSP1 application, their understanding was that
compensation for everyone with an active role in the company
would be included in the PSP1 Application. They believed this
would include the company owner, who also acts as Chief Pilot
and Director of Operations. Wings Air Helicopters management also
stated that it was surprised to learn that the legislation governing
the PSP1 program excludes corporate officers from receiving any
payroll support. While this makes sense for large corporations
where corporate officers collect large salaries and bonuses,
management believes the situation is quite different for small
businesses. On a small business level, there is no difference
between a supervisor employee and a business owner who is
actively involved in day-to-day operations. Wings Air Helicopters
management requested Treasury to reconsider seeking repayment
of PSP1 amounts awarded to small businesses.
Neither the PSP1 Application instructions (referred to as
“Guidelines” in this report) nor the PSP1 Agreement between
Treasury and Wings Air Helicopters, effective April 27, 2020,
instructed applicants to exclude corporate officer compensation
based on the size of the applicant. In addition, despite Wings Air
Helicopters’ owner simultaneously occupying multiple roles within
6 The Consolidated Appropriations Act, 2021 (P.L. 116-260), enacted on December 27, 2020, created
the Airline Worker Support Extension for passenger air carriers and certain contractors. Treasury
referred to this as Payroll Support Program Extension (PSP2).
7 The American Rescue Plan of 2021 (P.L. 117-2), enacted on March 11, 2021, created the Air
Transportation Payroll Support Program Extension authorizing Treasury to provide additional
assistance to passenger air carriers and contractors that received financial assistance under PSP2.
Treasury referred to this as Payroll Support Program 3 (PSP3).
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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the small company, the owner’s official title is “President” which
met the definition of a corporate officer per the PSP1 Agreement.
The PSP1 Agreement defines a corporate officer as, with respect
to the Recipient, “its president; any vice president in charge of a
principal business unit, division, or function (such as sales,
administration or finance); any other officer who performs a policy-
making function; or any other person who performs similar policy
making functions for the Recipient. Executive officers of
subsidiaries or parents of the Recipient may be deemed Corporate
Officers of the Recipient if they perform such policy-making
functions for the Recipient.” Wings Air Helicopters management’s
response, in its entirety, is included as appendix 3 of this report.
In a written response, Treasury management concurred with our
recommendations and agreed that any overpayments of PSP funds
should be recouped. Treasury stated it will conduct a review of the
findings, consider any response from the recipient, and seek
recoupment of any amounts that Treasury determines have been
overpaid. Also, Treasury will review awardable amounts requested
under PSP2 and PSP3 and seek recoupment where appropriate.
Treasury management will need to record an estimated completion
date for these actions in the Joint Audit Management Enterprise
System (JAMES). Management’s planned corrective actions meet
the intent of our recommendations. Treasury management’s
response, in its entirety, is included as appendix 4 of this report.
Background
Title IV, Subtitle B, of the CARES Act, Air Carrier Worker Support,
requires Treasury to provide financial assistance to air carriers and
contractors that must exclusively be used for the continuation of
payments of employees’ wages, salaries, and benefits. Financial
assistance is to be provided to:
(1) passenger air carriers, in an aggregate amount up to
$25 billion;
(2) cargo air carriers, in an aggregate amount up to
$4 billion; and
(3) contractors, in an aggregate amount up to $3 billion.
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According to the CARES Act, Treasury is required to provide
financial assistance to air carriers that report salaries and benefits
to the DOT (referred to as 241 carriers),8 in an amount equal to the
salaries and benefits reported to DOT for the period April 1, 2019
through September 30, 2019. For air carriers that do not report
such data to DOT (referred to as non-241 carriers), and
contractors, financial assistance is required to be in an amount that
the air carrier or contractor certifies using sworn financial
statements or other appropriate data as the amount of wages,
salaries, benefits, and other compensation paid to employees
during the period of April 1, 2019 through September 30, 2019.
The amounts submitted on the application to Treasury were
considered sworn financial statements. To be eligible for payments,
air carriers and contractors had to enter into agreements with
Treasury certifying that they meet certain required assurances,
terms, and conditions.
On March 30, 2020, Treasury posted on its website the
Guidelines, which included the PSP1 Application. The PSP1
Application is comprised of eight sections:
1. Applicant Information ─ (1) applicant name; (2) taxpayer
identification number and address; and (3) contact person’s
name, title, phone number, and email address.
2. Applicant Type ─ selection of applicant type whether it is
passenger air carrier, cargo air carrier, or contractor.
Additionally, if the applicant is a contractor, this section would
identify the contractor’s service functions and the name of the
air carrier or airport to which services are provided. Finally, this
section includes affiliate and parent company information.
3. Financial Institution Information ─ (1) the applicant’s banking
account number and routing number; and (2) the financial
institution’s name, address, and telephone number.
8 14 CFR, Part 241 “Uniform System of Accounts and Reports for Large Certificated Air Carriers”
defines “Air carrier, large certificated” as an air carrier holding a certificate issued under 49 U.S.C
41102, as amended, that: (1) operates aircraft designed to have a maximum passenger capacity of
more than 18,000 pounds; or (2) conducts operations where one or both terminals of a flight stage
are outside the 50 states of the United States, the District of Columbia, the Commonwealth of
Puerto Rico and the U.S. Virgin Islands. These air carriers are required to report financial information
to DOT. Wings Air Helicopters is not a Large Certificated Air Carrier.
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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4. Employment Levels ─ applicant’s average number of employees
for 2019 and involuntary reductions after March 1, 2020.
5. Awardable Amounts ─ applicant’s sworn financial statement
consisting of salaries, wages, benefits, and other compensation
for the period April 1, 2019 through September 30, 2019.
6. Taxpayer Protection ─ a table that outlines in detail the
proposed financial instrument to be issued to Treasury.
7. Additional Information ─ applicant’s verification of submitting its
Internal Revenue Service (IRS) Form 941– Employer’s Quarterly
Federal Tax Return9 covering the period April 1, 2019 through
September 30, 2019 along with the PSP1 Application submitted
to Treasury.
8. Certification ─ names, titles, and signatures of two certifying
officials10 and the applicant name and application submission
date.
On April 18, 2020, Treasury published a sample PSP1 Agreement
on its website, which provided definitions, terms, and conditions
for participation in PSP1, and required applicants to submit
completed applications by April 27, 2020. After Treasury reviewed
and approved an application, both parties were required to sign the
PSP1 Agreement.
Treasury Disbursement Processes
In an effort to disburse PSP1 payments to passenger air carrier
applicants as quickly as possible and prior to the application
deadline of April 27, 2020, Treasury applied an initial estimated
pro-rata rate of 76 percent to the awardable amount because not
all applications had been submitted at the time. After the
application deadline, Treasury determined the total amount
requested by all passenger air carrier applicants was approximately
9 IRS Form 941 is a tax form that businesses file quarterly to report income taxes, Social Security
taxes, and Medicare taxes they withheld from employee paychecks.
10 The certifying officials attested under penalty of perjury that the information and certifications provided
in the application and its attachments are true and correct.
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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$31.8 billion, which exceeded the $25 billion available financial
assistance. Because its initial estimated pro-rata rate was low,
Treasury calculated an additional 2.2 percent, the top-off amount,
for passenger air carriers making the final pro-rate rate 78.2
percent. Generally, treasury disbursed an initial lump sum payment
of one third of the awardable amount, followed by four equal
subsequent payments to ensure it provided sufficient and timely
financial assistance corresponding to the applicants’ payroll
schedule. In instances where Treasury needed to perform additional
follow-up with passenger air carriers or needed additional time to
approve applications, Treasury compressed the payment schedule
on a case by case basis. Generally, Treasury disbursed the top-off
amounts to passenger air carriers in September 2020. Treasury
officials told us that if recoupment was necessary for an
applicant’s inclusion of unallowable expenses such as corporate
officer compensation and employer-side payroll taxes in the
application, the recoupment method was dependent on timing. If
the need for recoupment was known prior to the top-off
distribution then the recoupment was offset from the top-off
payment. For recoupment amounts not known until after the top-
off payment, Treasury has not made a decision how those funds
will be collected and whether those funds will be reallocated at a
later date.
PSP1 Interim Audit Report
In a prior audit report,11 OIG identified two recurring issues
affecting the payment amounts administered to all PSP1 recipients
for non-241 carriers and contractors. Specifically, employer-side
payroll taxes and corporate officer compensation were included in
the awardable amounts for some recipients. Treasury management
acknowledged that the recipients audited included unallowable
employer-side payroll taxes or corporate officer compensation in
their calculation of the “awardable amount” on their PSP1
Applications and agreed to (1) review payments issued under PSP1
to ensure awarded amounts are allowable per the CARES Act and
Treasury guidance; and (2) remedy the incorrect amounts awarded
under PSP1.
11 OIG-21-025, Interim Audit Update – Air Carrier and Contractor Certifications for Payroll Support
Program (Interim Audit), March 31, 2021.
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Wings Air Helicopters, LLC
Headquartered in Harrison, New York, Wings Air Helicopters
provides a variety of transportation services, including ground
transportation, luggage transfers, and helicopter charters.
Wings Air Helicopters, a passenger air carrier, submitted its PSP1
Application totaling $
on March 31, 2020. Treasury
awarded $205,672 to the company as a result of the 78.2 percent
pro rata distribution to passenger air carriers. Treasury’s
disbursements to Wings Air Helicopters were as follows:
• April 30, 2020 – $66,628.69
• June 4, 2020 – $33,314.35
• July 7, 2020 – $33,314.35
• August 6, 2020 – $33,314.35
• September 4, 2020 – $33,314.34
• Top-off: September 30, 2020 – $5,786.18
In addition to PSP1, Treasury awarded Wings Air Helicopters
$139,131 under PSP2 and $129,768 under PSP3. PSP2 and PSP3
were not the subject of this audit.
Audit Results
We found that Wings Air Helicopters reported correct information
for three of the four sections reviewed on its PSP1 Application.
These sections are: (1) Applicant Information, (2) Applicant Type,
and (3) Certification. We compared information provided in each
section of the PSP1 Application to supporting documentation
including air carrier certifications, company sworn financial
statements, tax forms, executive-level business charts, payroll
registers, and third-party benefit invoices, among other items.
We also found that Wings Air Helicopters reported incorrect
information in the Awardable Amounts section, which included
compensation of $
paid to one corporate officer for
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
9
“Salaries and Wages”. Since Treasury disbursed PSP1 funds pro
rata for passenger air carriers at 78.2 percent of the requested
amount, Wings Air Helicopters received an overpayment
of $
.
Finding 1
Corporate Officer Compensation Was Included in the
Awardable Amount
Both the CARES Act and Treasury’s Guidelines define “employee”
as “an individual, other than a corporate officer, who is employed
by an air carrier or contractor in the United States (including its
territories and possessions).” In addition, the signed
PSP1 Agreement, effective April 27, 2020, subsequently defines a
corporate officer as, with respect to the Recipient, “its president;
any vice president in charge of a principal business unit, division, or
function (such as sales, administration or finance); any other officer
who performs a policy-making function; or any other person who
performs similar policy making functions for the Recipient.
Executive officers of subsidiaries or parents of the Recipient may
be deemed Corporate Officers of the Recipient if they perform such
policy-making functions for the Recipient.”
We identified one Wings Air Helicopters executive, the company
President, through discussions with the company’s management
and review of its 2019 organizational chart. We determined that
this executive met the definition of a corporate officer per the PSP1
Agreement and that compensation related to this individual should
have been excluded from the awardable amount on the PSP1
Application. Wings Air Helicopters included the corporate officer
compensation, totaling $
, in the requested amount. Table 1
illustrates a monthly breakdown of Wings Air Helicopters’
overstated awardable amount for the corporate officer
compensation.
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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Table 1. Corporate Officer Inclusion
Month
Non-allowable Corporate Officer
Compensation in the PSP1 Application
April 2019
$
May 2019
$
June 2019
$
July 2019
$
August 2019
$
September 2019
$
TOTAL
$
Source: S&R Calculation of Awardable Amount
When we inquired about the reason that the corporate officer
compensation was included in the PSP1 Application, Wings Air
Helicopters management stated that the definition of corporate
officer was unclear and it did not believe small companies, such as
Wings Air Helicopters, employed corporate officers.
Since Treasury disbursed PSP1 funds pro rata for passenger air
carriers at 78.2 percent of the requested awardable amount, Wings
Air Helicopters received an overpayment of $
.
To remedy the findings listed in the prior OIG audit report,12
Treasury required PSP2 applicants to re-certify their PSP1
awardable amounts. Wings Air Helicopters certified to Treasury
under PSP2, that its PSP1 Application did not include corporate
officer compensation. Treasury stated it relies on applicants’
certifications that they did not include unallowable expenses (i.e.
corporate officer compensation and employer-side payroll taxes)
and no further validation checks were performed; as a result, the
company likely included corporate officer compensation in its PSP2
and PSP3 financial assistance request.
12 OIG-21-025, Interim Audit Update – Air Carrier and Contractor Certifications for Payroll Support
Program (Interim Audit), March 31, 2021.
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Recommendations
S&R recommends that the Treasury’s Chief Recovery Officer:
1. Seek reimbursement of the $
overpayment of PSP1
financial assistance.
Management Response
Treasury will conduct a review of the findings, consider any
response from the recipient, and seek recoupment of any
amounts that Treasury determines have been overpaid.
S&R Comment
Management’s planned corrective actions meet the intent of our
recommendation. Treasury management will need to record an
estimated completion date for these actions in JAMES.
2. Review Wings Air Helicopters’ requested amount for
unallowable expenses, under PSP2 and PSP3, and seek
reimbursement for the overpayment, if applicable.
Management Response
Treasury will review awardable amounts requested under PSP2
and PSP3 and seek recoupment where appropriate.
S&R Comment
Management’s planned corrective actions meet the intent of our
recommendation. Treasury management will need to record an
estimated completion date for these actions in JAMES.
* * * * * *
We appreciate the courtesies and cooperation provided to our staff
during the audit. A distribution list for this report is provided as
appendix 5.
Saggar & Rosenberg, P.C. /s/
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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Appendix 1: Objective, Scope, and Methodology
Our objective was to assess the accuracy, completeness, and
sufficiency of Wings Air Helicopters, LLC (Wings Air Helicopters)
sworn financial statement or other data used to certify the wages,
salaries, benefits, and other compensation amounts submitted and
approved by the Department of the Treasury (Treasury).
The scope of our audit covered the time period from April 1, 2019
through September 30, 2019 and included the certified Payroll
Support Program (PSP1) Application, sworn financial statements,
tax returns, and other documentation submitted to Treasury on
March 31, 2020.13
To accomplish this objective, Saggar & Rosenberg P.C. (S&R)
performed the following activities during audit fieldwork conducted
remotely, due to the Coronavirus Disease 2019 (COVID-19)
pandemic from September 2021 through March 2022:
•
Reviewed applicable Federal laws, regulations, and guidance,
including:
o Title IV, Subtitle B, Air Carrier Worker Support, of the
Coronavirus Aid, Relief, and Economic Security Act
(CARES Act);14 and
o 14 CFR, Part 241,15 Uniform System of Accounts and
Reports for Large Certificated Air Carriers, amended
August 12, 2022.
•
Reviewed Treasury’s policies, procedures, and guidance related
13 Wings Air Helicopters submitted the PSP1 Application and related support documentation on
March 31, 2020.
14 P.L. 116-136 (March 27, 2020).
15 14 CFR, Part 241 “Uniform System of Accounts and Reports for Large Certificated Air Carriers”
defines “Air carrier, large certificated” as an air carrier holding a certificate issued under 49 U.S.C
41102, as amended, that: (1) operates aircraft designed to have a maximum passenger capacity of
more than 18,000 pounds; or (2) conducts operations where one or both terminals of a flight stage
are outside the 50 states of the United States, the District of Columbia, the Commonwealth of
Puerto Rico and the U.S. Virgin Islands. These air carriers are required to report financial information
to the Department of Transportation. Wings Air Helicopters is not a Large Certificated Air Carrier.
Appendix 1: Objective, Scope, and Methodology
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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to PSP1:
o Guidelines and Application Procedures for Payroll Support
to Air Carriers and Contractors, which included the
PSP1 Application, March 30, 2020;
o PSP1 Agreement;
o Question and Answer: Payroll Support to Air Carriers and
Contractors, (April 2, 2020, April 3, 2020, and April 20,
2020 versions); and
o Frequently Asked Questions: Application Procedures for
Payroll Support to Air Carriers and Contractors,
April 3, 2020.
•
Performed 100 percent testing for four of the eight sections of
the PSP1 Application, specifically, the Applicant Information,
Applicant Type, Awardable Amounts, and Certification sections.
The other four sections were not reviewed because the
Taxpayer Protection section generally applied to 241 air
carriers, with exceptions; and the Employment Levels, Financial
Institution Information, and Additional Information sections had
no impact on Treasury’s determination of recipients’ award
amounts.
•
Interviewed key Treasury personnel and contracted consultants
engaged by Treasury to aid in its evaluation of the air carriers’
and the contractors’ certified applications and other data.
•
Interviewed Wings Air Helicopters representatives responsible
for the sworn financial statement. The amounts submitted in
the Awardable Amounts section of the PSP1 Application were
considered the sworn financial statement.
•
Reviewed sworn financial statements and documents to support
the requested payroll support amount. The documentation
included, general ledger data, company pay registers, benefit
invoices, Internal Revenue Service (IRS) Form 941 – Employer’s
Quarterly Federal Tax Return16 filings, and organizational
hierarchy information.
•
Reviewed Government Accountability Office’s (GAO) Standards
for Internal Control in the Federal Government17 to identify the
16 IRS Form 941 is a tax form that businesses file quarterly to report income taxes, Social Security
taxes, and Medicare taxes they withheld from employee paychecks.
17 GAO-14-704G (September 2014).
Appendix 1: Objective, Scope, and Methodology
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
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components of internal control that are significant to the audit
objective. Understanding internal control within the context of
an entity’s internal control framework can help auditors
determine whether internal control deficiencies exist. We
concluded that one of the five internal control components,
Control Activities, as related to Wings Air Helicopters payroll
system, was significant to the audit objective.18 This
component states that control activities are the actions
management establishes through policies and procedures to
achieve objectives and respond to risks in the internal control
system, which includes the entity’s information system. To
assess the controls over Wings Air Helicopters’ payroll system,
we examined Wings Air Helicopters’ response to a Data Supplier
Questionnaire19 and interviewed Wings Air Helicopters
management responsible for generating and using the data.
Additional details regarding our assessment of the reliability of
the data is reported in the section below.
•
Reviewed GAO’s Assessing Data Reliability20 guidance, which
states that a data reliability determination does not involve
attesting to the overall reliability of the data or database. For
this audit, the audit team has only determined the reliability of
the specific data sources needed to support the findings,
conclusions, or recommendations in the context of the audit
objective. Wings Air Helicopters prepared the PSP1 Application
using information from the payroll system of record. We
compared payroll details generated from the payroll registers at
the individual employee level as well as third-party vendor
benefit invoices to the amounts presented in the Awardable
Amounts section of the PSP1 Application.
To assess data reliability of these sources, we examined Wings
Air Helicopters’ response to a Data Supplier Questionnaire for
the payroll system and interviewed Wings Air Helicopters
management responsible for generating and using the data.
Based on our assessment, we determined that the data was
18 The five components of internal control are Control Environment, Risk Assessment, Control
Activities, Information and Communication, and Monitoring.
19 A Data Reliability Assessment is completed to assess the reliability of data originating from a system
to determine if it is reliable for the purposes of the audit. The Data Supplier Questionnaire would be
one of the tools used during the Data Reliability Assessment.
20 GAO-20-283G (December 2019).
Appendix 1: Objective, Scope, and Methodology
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
15
sufficiently reliable to support the findings and conclusions to
answer the objective of this audit.
We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and
conclusions based on our audit objective. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objective.
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
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Appendix 2: Schedule of Monetary Benefits
According to the Code of Federal Regulations,21 a questioned cost
is a cost that is questioned by the auditor because of an audit
finding:
(a) which resulted from a violation or possible violation of a
statute, regulation, or the terms and conditions of a Federal
award, including for funds used to match Federal funds;
(b) where the costs, at the time of the audit, are not supported
by adequate documentation; or
(c) where the costs incurred appear unreasonable and do not
reflect the actions a prudent person would take in the
circumstances.
Questioned costs are to be recorded in the Department of the
Treasury’s (Treasury) Joint Audit Management Enterprise System.
The amount will also be included in the Office of Inspector General
(OIG) Semiannual Report to Congress. It is Treasury management's
responsibility to report to Congress on the status of the agreed to
recommendations with monetary benefits in accordance with
Section 5(b) of the Inspector General Act of 1978, as amended.
Recommendation
Questioned Costs
Recommendation No. 1
$
The questioned cost represents amounts provided by Treasury
under the Payroll Support Program (PSP1). As discussed in
Finding 1, Wings Air Helicopters, LLC overstated its PSP1
Application awardable amount to Treasury by $
due to the
inclusion of corporate officer compensation. However, since
Treasury disbursed PSP1 funds pro rata for passenger air carriers at
78.2 percent of the requested awardable amount, the questioned
cost related to the overstated PSP1 Application is $
.
21 2 CFR § 200.84 – Questioned Cost.
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
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Appendix 3: Wings Air Helicopters Management Response
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
18
Appendix 4: Treasury Management Response
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
19
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
20
Audit of Air Carrier Worker Support Certifications - Wings Air Helicopters,
LLC (OIG-23-023)
21
Appendix 5: Report Distribution
Department of the Treasury
Treasury Secretary
Deputy Secretary
Treasury Audit Liaison
Office of Strategic Planning and Performance Improvement
Office of the Deputy Chief Financial Officer, Risk and Control
Group
Wings Air Helicopters, LLC
President
General Manager
Office of Management and Budget
OIG Budget Examiner
United States Senate
Committee on Homeland Security and Governmental Affairs
Committee on Finance
Committee on Banking, Housing, and Urban Affairs
Committee on Commerce, Science, and Transportation
Committee on Appropriations
Committee on the Budget
United States House of Representatives
Committee on Oversight and Reform
Committee on Financial Services
Committee on the Budget
Committee on Transportation and Infrastructure
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