Audit Report - Oig 24 041 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of Air Carrier
Summary
Treasury Office of Inspector General Audit Report OIG-24-041, Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter Services, LLC, dated September 26, 2024, with a memorandum to Jessica Milano, Chief Program Officer, from Deborah L. Harker. The memo states that Saggar & Rosenberg, P.C. performed the audit under a contract monitored by OIG, covering the period from April 1, 2019 through September 30, 2019. It states that S&R found Wing Aviation Charter Services incorrectly compiled data used for the Awardable Amounts section of the PSP1 Application, resulting in a $320,605 overstatement, and that the company received a $250,713 overpayment from Treasury. S&R recommends that Treasury seek reimbursement of the $250,713 overpayment and review the requested amount under PSP2 and PSP3.
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- Oig 24 041 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of Air Carrier
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Audit Report
OIG-24-041
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF
PROGRAMS
Audit of Air Carrier Worker Support
Certifications - Wing Aviation Charter
Services, LLC
September 26, 2024
Office of Inspector General
Department of the Treasury
This Page Intentionally Left Blank
September 26, 2024
MEMORANDUM FOR JESSICA MILANO
CHIEF PROGRAM OFFICER
FROM: Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT: Audit of Air Carrier Worker Support Certifications – Wing
Aviation Charter Services, LLC
Attached is our audit report for the Audit of Air Carrier Worker Support Certifications –
Wing Aviation Charter Services, LLC (Wing Aviation Charter Services) (OIG-24-041;
dated September 26, 2024). 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 Wing Aviation Charter Services’ 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). 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 The scope of this audit covered the period from April 1, 2019
through September 30, 2019 and included the certified PSP1 Application, sworn
financial statement, tax returns, and other documentation submitted to Treasury.
In its audit report, S&R found Wing Aviation Charter Services incorrectly compiled data
used for the Awardable Amounts section of the PSP1 Application, resulting in
a $320,605 overstatement. Specifically, the:
• Inclusion of unallowable corporate officer compensation, resulted in a
overstatement; and
• Differences between the benefit estimates used to prepare the PSP1 Application
and the actual paid benefit amounts, resulted in a understatement.
1
P.L. 116–136 (March 27, 2020).
Treasury’s awards to passenger air carriers under PSP1 included a 78.2-percent
pro-rata distribution of application amounts. Applying this formula, Wing Aviation
Charter Services received a $250,713 overpayment from Treasury.
Accordingly, S&R recommends that Treasury’s Chief Program Officer:
• Seek reimbursement of the $250,713 overpayment for PSP1 financial
assistance; and
• Review Wing Aviation Charter Services’ requested amount for unallowable
expenses, under the Payroll Support Program Extension (PSP2) 2 authorized by
the Consolidated Appropriations Act, 2021 and the Payroll Support Program 3
(PSP3) 3 authorized by the American Rescue Plan Act of 2021, and seek
reimbursement for the overpayment, if applicable.
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 Wing Aviation Charter Services’ 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.
2
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).
3
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).
Attachment
cc: Gregory Till, Chief Operating Officer, Office of Capital Access, Department of
the Treasury
Danielle Christensen, Deputy Chief Program Officer, Office of Capital Access,
Department of the Treasury
Jason Morrow, Senior Counsel, 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
Wing Aviation Charter Services, LLC ................................................7
Audit Results......................................................................................................8
Finding 1 Inaccurate Compilation of the PSP1 Application Awardable Amount .....9
Corporate Officer Compensation ......................................................9
Benefit Estimates .........................................................................10
Recommendations ........................................................................12
Appendices
Appendix 1: Objective, Scope, and Methodology ..................................................13
Appendix 2: Schedule of Monetary Benefits .........................................................17
Appendix 3: Wing Aviation Charter Services Management Response.......................18
Appendix 4: Treasury Management Response ......................................................19
Appendix 5: Report Distribution ..........................................................................22
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
i
PSP3 Payroll Support Program 3, American Rescue Plan Act of 2021
S&R Saggar & Rosenberg, P.C.
SOC 1 System and Organizational Controls
Treasury Department of the Treasury
ii
This Page Intentionally Left Blank
September 26, 2024
Jessica Milano
Chief Program Officer
Department of the Treasury
This report presents the results of our audit of Wing Aviation
Charter Services, LLC’s (Wing Aviation Charter Services)
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 OIG, Saggar & Rosenberg, P.C. (S&R)
conducted this audit. Our audit objective was to assess the
accuracy, completeness, and sufficiency of Wing Aviation Charter
Services’ 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”.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 1
sworn financial statement, tax returns, and other documentation
submitted to Treasury on April 1, 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 Wing Aviation Charter Services,
Treasury, and contracted consultants engaged by Treasury to
evaluate certified company applications. We conducted our
fieldwork from July 2023 through November 2023. Appendix 1
contains a more detailed description of our objective, scope, and
methodology.
Results in Brief
In brief, S&R found that Wing Aviation Charter Services, a
passenger air carrier, reported correct information for three of the
four sections reviewed on its PSP1 Application. 5 These sections
are: (1) Applicant Information, (2) Applicant Type, and
(3) Certification. However, Wing Aviation Charter Services
incorrectly reported information in the Awardable Amounts section
of the PSP1 Application.
Wing Aviation Charter Services overstated its awardable amount by
$320,605. Specifically, we found (1) the inclusion of unallowable
corporate officer compensation, resulting in a
overstatement, and (2) differences between benefit estimates used
to prepare the PSP1 Application and the actual benefit
compensation paid, resulting in a understatement.
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 Wing Aviation Charter Services
received a $250,713 overpayment from Treasury. As a result, we
4
Wing Aviation Charter Services submitted the PSP1 Application and related supporting
documentation on April 1, 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 - Wing Aviation Charter
Services, LLC (OIG-24-041) 2
question the costs totaling $250,713 and recommend that the
Chief Program Officer seek reimbursement of the $250,713
overpayment to Wing Aviation Charter Services for PSP1.
Additionally, we recommend that Treasury review Wing Aviation
Charter Services’ 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 Wing Aviation
Charter Services management with an opportunity to comment on
a draft of this report. In a written response, Wing Aviation Charter
Services management acknowledged that the overstatement of the
awardable amount was made up of two portions; the inclusion of
unallowable corporate officer compensation and the incorrect initial
statement of actual benefit compensation paid. However, Wing
Aviation Charter Services management also stated that they
partially disagree with the finding related to inclusion of
unallowable corporate officer compensation in regard to the Vice
President of Sales. Management stated that they believed the Vice
President of Sales was eligible for PSP1 due to his minimal
oversight of other business units and having no ability to perform
policy making, despite the Vice President title.
Neither the PSP1 Application instructions (referred to as
“Guidelines” in this report) nor the PSP1 Agreement required
corporate officers to perform policy making duties or provide a
specific amount of oversight of other company business units. In
addition, the signed PSP1 Agreement between Wing Aviation
Charter Services and Treasury, effective April 20, 2020, explicitly
referenced a recipient’s Vice President of Sales as a corporate
officer. Wing Aviation Charter Services management’s response, in
its entirety, is included as appendix 3 of this report.
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 - Wing Aviation Charter
Services, LLC (OIG-24-041) 3
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. In addition, 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.
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 air 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 air carriers),
and contractors, financial assistance is required to be in an amount
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. Wing Aviation Charter Services is not a Large Certificated Air Carrier.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 4
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 account
number and routing number; and (2) the financial institution’s
name, address, and telephone number.
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 ─ 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
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 5
Federal Tax Return, 9 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
officials 10 and the applicant’s 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
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 $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 awarded pro-rata rate 78.2 percent.
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
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 employees’ 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 - Wing Aviation Charter
Services, LLC (OIG-24-041) 6
case-by-case basis. Generally, Treasury disbursed the top-off
amounts for passenger air carriers in September 2020.
PSP1 Interim Audit Report
In a prior audit report, 11 OIG identified two systemic issues
affecting the payment amounts administered to all PSP1 recipients
for non-241 air carriers and contractors. Specifically, some of the
recipients audited included unallowable employer-side payroll taxes
and/or corporate officer compensation in their calculation of the
awardable amounts on their PSP1 applications. Treasury
management acknowledged these issues 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. Based on
our recommendations, in March 2022 Treasury implemented a
PSP1 recertification process whereby recipients had to certify
whether they excluded employer-side payroll taxes and corporate
officer compensation in their calculation of the awardable amounts
on their PSP1 applications. Treasury’s goal was to determine if
overpayments were made to recipients based on inaccurate
information included in PSP1 applications.
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. Any
overpayment was first offset against the approved top-off
payment. If an overpayment remained, or the overpayment was
identified after all PSP1 disbursements were made, and the
recipient was entitled to PSP2 or PSP3 funding, the overpayment
was offset against the PSP2 and/or PSP3 awards prior to issuance.
All remaining PSP1 overpayments not previously collected where
the recipient did not qualify for, or apply for, PSP2 and PSP3
funding, were required to be repaid to Treasury.
Wing Aviation Charter Services, LLC
Headquartered in Houston, Texas, Wing Aviation Charter Services
is a passenger air carrier that provides clients with a
11
OIG-21-025, Interim Audit Update – Air Carrier and Contractor Certifications for Payroll Support
Program (Interim Audit), March 31, 2021.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 7
comprehensive array of aviation services encompassing aircraft
charter, management, and brokerage.
Wing Aviation Charter Services submitted its PSP1 Application
totaling on April 1, 2020. Wing Aviation Charter
Services received the passenger air carrier top-off for a total award
of $4,877,533, or 78.2 percent of the company’s requested
amount. Treasury’s disbursements to Wing Aviation Charter
Services were as follows:
• April 21, 2020: $1,580,105
• June 2, 2020: $790,052
• July 1, 2020: $790,052
• August 3, 2020: $790,052
• September 1, 2020: $790,052
• October 1, 2020: $137,220
In addition to PSP1, Treasury awarded Wing Aviation Charter
Services $3,299,507 under PSP2 and $3,077,451 under PSP3.
PSP2 and PSP3 were not the subject of this audit.
Audit Results
We found that Wing Aviation Charter Services 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 general ledger data, company sworn
financial statement, air carrier certificate, IRS Form 941,
executive-level business charts, payroll registers, and third-party
benefit invoices.
We also found that Wing Aviation Charter Services reported
incorrect information in the Awardable Amounts section. The
company included unallowable corporate officer compensation,
resulting in an overstatement of . However, benefit
estimates used to prepare the PSP1 Application were less than the
actual benefits paid by , resulting in a net overstatement
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 8
of $320,605. Table 1 illustrates a monthly breakdown of Wing
Aviation Charter Services’ overstated amounts.
Table 1: Aggregate Overstatement by Month
PSP1 Awardable Amount
Month Application Re-Calculated by S&R Variance
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
TOTAL $(320,605)
Source: S&R Calculation of Awardable Amount
Since Treasury disbursed PSP1 funds pro-rata for passenger air
carriers at 78.2 percent of the requested awardable amount, Wing
Aviation Charter Services received an overpayment of $250,713.
Finding 1 Inaccurate Compilation of the PSP1 Application
Awardable Amount
Corporate Officer Compensation
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 date
April 20, 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
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 9
may be deemed Corporate Officers of the Recipient if they
perform such policy-making functions for the Recipient.
We identified eight Wing Aviation Charter Services executives
through discussion with management and review of the
company’s 2019 organizational chart. Three of those executives
met the definition of a corporate officer per the PSP1 Agreement.
Wing Aviation Charter Services included unallowable
compensation paid to all three of its corporate officers, resulting in
an overstatement of . The three executives were the
Chief Executive Officer, Chief Operating Officer, and Vice
President of Charter Sales. Wing Aviation Charter Services
management stated that there was a lack of guidance regarding
the requirement to exclude corporate officer compensation from
the awardable amount calculation on the PSP1 Application. In
addition, management stated that they did not necessarily
consider an individual with the official title of “Vice President” as
a corporate officer.
Benefit Estimates
Treasury’s Guidelines define wages, salaries, benefits, and other
compensation as:
remuneration paid by the applicant to its employees for personal
services and includes salaries, wages, overtime pay, cost-of-
living differentials, and other similar compensation, as
distinguished from per diem allowances or reimbursement for
expenses incurred by personnel for the benefit of the applicant.
In addition, the Guidelines define Awardable Amounts as:
an amount that such carrier certifies, using sworn financial
statements or other appropriate data, as the amount of wages,
salaries, benefits, and other compensation paid by such carrier
during the time period.
Wing Aviation Charter Services used monthly benefits estimated
payments, totaling rather than the actual paid amounts
of to prepare the PSP1 Application. Although using
estimates was not a prohibited compilation method under
Treasury’s PSP1 Application guidelines, it did not result in an
overstatement as the actual costs exceeded the requested amount
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 10
by . Wing Aviation Charter Services management stated
that the company utilized estimates for benefits because it was an
easier approach than calculating actual claims.
The inclusion of corporate officers in the PSP1 Application resulted
in an overstatement of . However, this overstatement
was offset by the benefits understatement of . As a result,
the residual net overstatement is $320,605, as illustrated in
Table 2 below.
Table 2: Aggregate Overstatement
Description Salaries/Wages Benefits Total
Actual Supported
Compensation
Less: Corporate Officers
Allowable Compensation
PSP1 Application
Net Overstatement $(320,605)
Source: S&R Calculation of Awardable Amount
Since Treasury disbursed PSP1 funds pro-rata for passenger air
carriers at 78.2 percent of the requested awardable amount, Wing
Aviation Charter Services received an overpayment of $250,713.
To remedy the findings listed in the prior OIG audit report, 12
Treasury required PSP2 applicants to recertify their PSP1
awardable amounts. Wing Aviation Charter Services erroneously
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 erroneously 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.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 11
Recommendations
S&R recommends that Treasury’s Chief Program Officer:
1. Seek reimbursement of the $250,713 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.
OIG 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 Wing Aviation Charter Services’ 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.
OIG 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 - Wing Aviation Charter
Services, LLC (OIG-24-041) 12
Appendix 1: Objective, Scope, and Methodology
Our objective was to assess the accuracy, completeness, and
sufficiency of Wing Aviation Charter Services, LLC’s (Wing
Aviation Charter Services) 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 period from April 1, 2019
through September 30, 2019, and included the certified Payroll
Support Program (PSP1) Application, sworn financial statement,
tax returns, and other documentation submitted to Treasury on
April 1, 2020.13
To accomplish this objective, Saggar & Rosenberg, P.C. (S&R)
performed the following activities during audit fieldwork remotely
from July 2023 through November 2023:
• Reviewed applicable Federal laws and regulations, 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
December 28, 2023.
• Reviewed Treasury’s policies, procedures, and guidance related
13
Wing Aviation Charter Services submitted the PSP1 Application and related support documentation
on April 1, 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. Wing Aviation Charter Services is not a Large Certificated Air
Carrier.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 13
Appendix 1: Objective, Scope, and Methodology
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; 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 consultant
personnel engaged by Treasury to aid in its evaluation of the air
carriers’ and the contractors’ certified applications and other
data.
• Interviewed Wing Aviation Charter Services representatives
responsible for the completion and submission of the sworn
financial statement in the Awardable Amounts section of the
PSP1 Application.
• Reviewed sworn financial statement 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 Return; 16 and organizational hierarchy
information.
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.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
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Appendix 1: Objective, Scope, and Methodology
• Reviewed Government Accountability Office’s (GAO) Standards
for Internal Control in the Federal Government 17 to identify the
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 Wing Aviation Charter Services’
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 Wing Aviation Charter Services’ payroll
system, we reviewed a System and Organizational Controls 1
(SOC 1) report, 19 Data Supplier Questionnaire, 20 and interviewed
Wing Aviation Charter Services 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 Reliability 21 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. Wing Aviation Charter Services prepared the PSP1
Application using gross pay, which included information
developed from Wing Aviation Charter Services’ payroll system,
and estimated benefit payments. We compared details
generated from payroll registers at the individual employee level,
as well as third-party vendor benefit invoices from April 2019
17
GAO-14-704G (September 2014).
18
The five components of internal control are Control Environment, Risk Assessment, Control
Activities, Information and Communication, and Monitoring.
19
SOC 1 report addresses a company’s internal control over financial reporting, which pertains to the
application of checks-and-limits. Essentially, it is the audit of a third-party vendor’s accounting and
financial controls.
20
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.
21
GAO-20-283G (December 2019).
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
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Appendix 1: Objective, Scope, and Methodology
through September 2019 to the amounts presented in the
Awardable Amounts section of the PSP1 Application.
To assess data reliability of these sources, we reviewed the
SOC 1 report and Data Supplier Questionnaire for the payroll
system, and interviewed Wing Aviation Charter Services
management responsible for generating and using the data.
Based on our assessment, we determined that the data was
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 - Wing Aviation Charter
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Appendix 2: Schedule of Monetary Benefits
According to the Code of Federal Regulations, 22 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
5 USC 405.
Recommendation Questioned Costs
Recommendation No. 1 $250,713
The questioned cost represents amounts provided by Treasury
under the Payroll Support Program (PSP1). As discussed in
Finding 1, Wing Aviation Charter Services, LLC overstated its PSP1
Application awardable amount to Treasury by $320,605 due to
(1) the inclusion of corporate officer compensation; and
(2) differences between the estimated benefits used for the PSP1
Application and the actual amount of benefit compensation paid.
However, since Treasury disbursed PSP1 funds pro-rata for
passenger air carriers at 78.2 percent of the requested amount, the
questioned cost related to the overstated PSP1 Application is
$250,713.
22
2 CFR § 200.84 – Questioned Cost.
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
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Appendix 4: Treasury Management Response
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 19
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 20
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
Services, LLC (OIG-24-041) 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
Wing Aviation Charter Services, LLC
Chief Executive Officer
Chief Operating Officer
National Director of Sales (formerly Chief Executive Officer)
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 Accountability
Committee on Financial Services
Committee on the Budget
Committee on Transportation and Infrastructure
Audit of Air Carrier Worker Support Certifications - Wing Aviation Charter
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