As airports move through the summer reporting and planning cycle, several developments warrant focused attention from finance and leadership teams. This month’s hot topics include preparing for the impact on financial statement presentation related to adoption of GASB Statement No. 103, Financial Reporting Model Improvements; reviewing the Federal Aviation Administration’s (FAA) draft Airport Improvement Program (AIP) Handbook for potential changes to grant administration expectations; and evaluating internal controls over financial information reported through the FAA’s Certification Activity Tracking System (CATS). Together, these items reinforce the importance of timely planning, clear documentation, and reliable reporting as airport officials respond to evolving accounting, regulatory, and stakeholder expectations.
Airport Considerations for Adoption of GASB 103
The adoption of GASB 103 is effective for fiscal years beginning after June 15, 2025, meaning airports with a June 30, 2026 fiscal year or after. GASB 103 is meant to improve certain aspects of the financial reporting model established by GASB 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments. There are six main components to this standard that include Management’s Discussion & Analysis (MD&A); Unusual or Infrequent Items; Proprietary Fund Statement of Revenues, Expenses, & Changes in Fund Net Position; Information on Major Component Units; Budgetary Comparison Information; and Statistical Financial Trend Information.
While reviewing each aspect of GASB 103 will be important to determine applicability to your airport, here are a few key items from the standard and implementation guide that will be important for airport officials to remember as they adopt GASB 103.
1. MD&A
One of the primary changes in the MD&A relates to placing a greater emphasis on explaining why financial changes occurred rather than simply stating what changed. Preparers are expected to connect their analysis with significant transactions, events, and fiscal policies. Airport officials should review their MD&A to make sure they are placing proper emphasis on explaining “the why” behind significant changes.
2. Proprietary Fund Statements
GASB 103 introduces a new financial statement group, noncapital subsidies, within the Statement of Revenues, Expenses, and Changes in Fund Net Position. As noted in the Implementation Guide Question 4.6, passenger facility charges (PFCs) meet the definition of a subsidy because they are fees imposed on passengers and collected from parties that do not directly receive goods or services from the airport in exchange for the fee. In addition, PFC revenues enable the airport to directly or indirectly maintain airline and concessionaire fees and charges at lower levels than would otherwise be required. Reclassification of the PFC revenues will be a change from the previous presentation in which PFC revenues were likely considered nonoperating revenues. The image below from GASB 103 highlights the new statement format. While customer facility charges (CFCs) are not specifically mentioned in the standard or implementation guide, airport officials should consider the definition of subsidy and the PFC implementation guide response in determination of their conclusion for where CFC revenues should be presented.
- Operating revenues (detailed)
- Total operating revenues
- Operating expenses (detailed)
- Total operating expenses
- Operating income (loss)
- Total operating expenses
- Noncapital subsidies (detailed)
- Total noncapital subsidies
- Operating income (loss) and noncapital subsidies
- Total noncapital subsidies
- Other nonoperating revenues and expenses (detailed)
- Total other nonoperating revenues and expenses
- Income (loss) before unusual or infrequent items
- Total other nonoperating revenues and expenses
- Unusual or infrequent items (detailed)
- Increase (decrease) in fund net position
- Fund net position—beginning of period
- Fund net position—end of period
3. Budgetary Comparison Information
These schedules are presented as Required Supplementary Information (RSI) only for General Fund or major Special Revenue Funds of a government. A standalone business-type activity, like an airport, is not required to include any budgetary comparison schedules in RSI. If these schedules are included, they should be included as supplementary or other information.
Airport Improvement Handbook
In May 2026, the FAA issued a draft of FAA Order 5100.38E, Airport Improvement Program Handbook (Order). The draft is meant to supersede the existing Order 5100.38D, Change 1, which was released in February 2019. Per the FAA, the new draft “incorporates important changes arising from the FAA Reauthorization Acts of 2018 and 2024, reflecting significant legal and policy updates.”
The FAA will evaluate all submissions from the public comment period as part of finalizing the Order. It will be important for airport officials to monitor the FAA site for the final issuance to make sure any changes are properly incorporated into their operation of the AIP.
Airport Financial Reporting to the FAA (CATS)
The U.S. Government Accountability Office (GAO), in its April 2026 report, Airport Financial Reporting: FAA Should Implement Controls to Improve Data Quality (GAO-26-107938), identified deficiencies in the completeness, timeliness, and accuracy of airport financial data reported to the FAA through CATS. Although most commercial service airports submit the required information, the GAO noted that the FAA has limited ability to verify timely submission, identify reporting errors, or ensure consistent reporting across airports. CATS data are publicly available and regularly used by federal agencies, industry stakeholders, researchers, and bond rating agencies to analyze airport financial performance.
While the FAA administers the CATS system, airport sponsors are responsible for certifying the accuracy and completeness of the financial information submitted. The GAO reported that CATS submissions may contain anomalies or errors due to manual data entry, differences between audited financial statements and CATS reporting formats, and the ability for airports to overwrite prior submissions without retaining a submission history. As a result, users of CATS data may rely on information that is incomplete or not fully aligned with audited financial information.
While the FAA has not responded to these recommendations yet, airport management should consider reviewing its existing internal controls in relation to the CATS system and its required reporting. Such controls to consider include, but are not limited to:
- Formalizing the review and approval process prior to submission;
- Reconciling reported data to audited financial statements; and
- Retaining documentation of management’s review and certification.
Making sure controls are adequate will help reduce the risk of inaccurate public reporting, support compliance with FAA requirements, and improve the reliability of financial information relied upon by external stakeholders.
How Forvis Mazars Can Help
Forvis Mazars can help airports prepare for GASB 103, monitor AIP guidance changes, and strengthen controls over CATS reporting. Proactive planning now can support smoother implementation, clearer documentation, and more reliable reporting.
If you have any questions or need assistance, please reach out to a professional at Forvis Mazars. For additional resources, please explore our Government Outsourced Accounting Services and refer to the following FORsights™:
- GASB 103 Implementation & Financial Reporting Insights
- Streamlining GASB 103 With The Reporting Solution
- GASB 103 Implementation Checklist
- 1GASB Statement No. 103, Financial Reporting Model Improvements