The Transportation Department's inspector general criticized the Transportation Security Administration's spending practices but not its budget shortfall. The headline on a Feb. 6 article incorrectly characterized the criticism. (Published 2/7/03)

The Transportation Department's inspector general yesterday accused the federal agency in charge of airport security of wasteful spending as it built up a $3.3 billion shortfall in its first year of operation.

Kenneth M. Mead harshly criticized the Transportation Security Administration for poor spending controls and loose monitoring of multimillion-dollar contracts with private companies. In one instance, Mead said, the TSA estimated that it would cost $107 million to hire tens of thousands of federal airport screeners. The contract ended up costing more than $700 million.

"The overriding goal of the TSA must be to provide high security in a way that avoids waste and cost-effective use of taxpayer dollars," Mead told the Senate Commerce, Science and Transportation Committee's aviation subcommittee.

The agency requested $5.3 billion for the current fiscal year. It has collected only $1.7 million from a $2.50 security tax added to the cost of airline tickets and $300 million in security payments from airlines.

TSA chief James M. Loy said he would press airlines to contribute more money but did not offer a specific plan to make up the budget shortfall.

At the hearing, senators praised the agency for improvements it made in airport security since it was created after the hijackings of Sept. 11, 2001, and said they intend to help TSA get more money. But they also urged the agency to better control its costs.

Sen. John McCain (R-Ariz.) criticized the TSA for not helping its own case. "Nothing hurts you more, Admiral Loy, than wasteful and abusive practices," he said. "Please take into account cost controls."

Loy said the agency has proposed to force the airlines to pay $750 million a year instead of $300 million. The carriers said they were already paying too much. Loy also suggested that the agency could save money by reducing its workforce of airport security screeners to 48,000 by the end of 2004 from 51,000 this year.

Loy reminded the senators that the TSA still must develop a program to arm commercial airline pilots, for which Congress has not appropriated any money. The TSA is also working to improve security at ports, bus terminals, railways and pipelines.

James May, president of the airline industry's largest lobbying organization, said airlines would resist having to pay higher fees. The industry lost an estimated $10 billion last year and is expected to lose $5 billion to $6 billion this year. "Our message is made all the more urgent by the prospect of war," May said.