U.S. Department of Transportation Federal Aviation Administration Advisory Circular Subject: Internal Evaluation Programs Date: 10/30/18 AC No: 120-59B Initiated by: AFS-200 Change:
1 PURPOSE OF THIS ADVISORY CIRCULAR (AC). This AC provides information and guidance to persons operating under Title 14 of the Code of Federal Regulations (14 CFR) who are designing, developing, and implementing an Internal Evaluation Program (IEP). The procedures and practices outlined in this AC can be applied to all operations.
1.1 Regulatory Requirement. There is no regulatory requirement for an IEP. However, the Federal Aviation Administration (FAA) encourages the development and use of such programs to increase management and employee awareness of their responsibility to promote continual compliance with all regulatory requirements and best safety practices.
Establishing the type of program described in this document is completely voluntary.
If used by an air carrier, an IEP may satisfy the internal evaluation requirement of 14 CFR part 5, § 5.71. However, an IEP may be required under other programs such as the Department of Defense’s (DOD) Commercial Air Carrier Quality and Safety Requirements and the International Air Transport Association (IATA) Operational Safety Audit (IOSA). A robust IEP can facilitate data gathering for a Safety Management System (SMS) (if implemented) and quality assurance (QA) activities. Implementation of an IEP as outlined in this guidance material will assist in meeting such requirements.
2 AUDIENCE. This AC is directed to persons operating under 14 CFR who are designing, developing, and implementing an IEP. For ease of use, the term “aviation organization” is used throughout this AC and includes, but is not limited to, 14 CFR part 119 certificate holders, 14 CFR part 91 subpart K (part 91K) program managers, air agencies, and other persons operating under 14 CFR.
3 WHERE YOU CAN FIND THIS AC. You can find this AC on the FAA’s website at http://www.faa.gov/regulations_policies/advisory_circulars.
4 WHAT THIS AC CANCELS. AC 120-59A, Air Carrier Internal Evaluation Programs, dated April 17, 2006, is canceled.
5 DEFINITIONS. For more information on terms related to IEPs, see Appendix A, Definitions.
6 RELATED READING MATERIAL. For additional guidance on internal evaluation techniques and procedures, an Air Carrier Internal Evaluation Model Program Guide is available through the National Technical Information Service (NTIS) located at 5301 Shawnee Road, Alexandria, VA 22312. For more information, visit
http://www.ntis.gov or contact the NTIS at 703-605-6585 or email info@ntis.gov.
8.10 Information on other programs that are related to an IEP may be obtained at the following websites (see paragraph , which explains how these programs relate to an IEP):
6.1 IATA IOSA. IATA Operational Safety Audits website:
http://www.iata.org/whatwedo/safety/audit/Pages/index.aspx.
6.2 DOD. U.S. Air Force Air Mobility Command Commercial Services website:
http://www.amc.af.mil/Home/AMC-Commercial-Services/.
7 BACKGROUND. Aviation organizations are responsible for operational safety and are expected to have processes, policies, procedures, and documentation in place to ensure regulatory compliance. Additionally, it is to the advantage of every aviation organization to have an effective management system in place to ensure positive control of all operational activities. An IEP is a fundamental element to ensure compliance with external regulatory requirements, identify nonconformance to internal company policies and procedures, and identify opportunities to improve organizational policies, procedures, and processes.
7.1 Internal Evaluation and QA Programs. Within the international aviation community, the IEP is also synonymous with the QA function. QA programs are being expanded beyond aircraft Maintenance and Engineering (M&E) to include assessment of all operational functions in terms of regulatory compliance, and conformance to internal policies and procedures, to include evaluation of existing processes, procedures, and documentation. On a broader scale, several nations have published SMS guidelines in which the QA (or IEP) function is a fundamental element of the overall management system that includes organizational management, documentation, safety programs, QA, and emergency response planning. The thrust of such initiatives is to effectively integrate these functions into the management system.
7.2 Regulatory Noncompliance. As a matter of policy, the FAA encourages aviation organizations to identify, correct, and disclose instances of regulatory noncompliance.
Therefore, the development and implementation of an IEP will benefit both aviation organizations and the flying public. For more information, refer to the current editions of AC 00-58, Voluntary Disclosure Reporting Program; and AC 121-37, Voluntary Disclosure Reporting Program – Hazardous Materials.
8 IEP ELEMENTS. An IEP is a high-level program that provides a means to maintain and refine the management system by continually monitoring the effectiveness and efficiency of processes and systems. An IEP applies various assessment and evaluation tools to derive information reporting how the management systems and key processes are meeting both internal quality and external regulatory standards. An IEP is based on the premise that the aviation organization will design and maintain an IEP that contains fundamental elements of quality and safety. An effective IEP should include the following fundamental elements:
8.1 Systems-Oriented Process. Internal evaluation should be a continual process that incorporates the techniques of inspections, audits, and evaluations to assess the adequacy of managerial controls and processes in critical systems and to continuously improve those systems based upon the results of regular evaluations. It should also include continuous monitoring and feedback of information on critical processes, and regular trend analysis of resulting data.
8.2 Beyond Regulatory Compliance. Internal evaluations should extend beyond regulatory compliance to determine the causes of deficiencies and detect and implement needed enhancements to company operating practices before deficiencies occur.
8.3 Independent. An IEP is an independent process that organizationally has straight-line reporting responsibility to senior management.
8.4 Defined Responsibility and Authority. The IEP should identify a person or group within the company who has the responsibility and authority to:
1. Establish and modify the IEP.
2. Perform evaluations, audits, inspections, and analysis of data as a part of an ongoing IEP.
3. Initiate, recommend, or provide corrective actions, including preventative action through designated reporting channels to address IEP audit findings.
4. Track and verify the implementation of corrective actions within specified timeframes.
5. Communicate and coordinate activities with FAA personnel on a regular basis.
Note 1: With regard to the principals’ independence and authority, reporting lines are important. In some cases, internal evaluation activities may be centrally controlled under the leadership of a corporate QA manager. In other cases, QA managers may be embedded within the operational functions reporting to a respective senior manager.
Note 2: The IEP description (plan/manual) should include an organizational diagram that depicts the independence of personnel who supervise and perform internal evaluation functions. This diagram should delineate the organizational chain of authority through which IEP audit results are communicated to senior management.
8.5 Senior Management Review. Senior management involvement in an IEP is crucial to program success. An effective program should include periodic senior management review of IEP audit results.
8.5.1 For the purposes of this program, senior management includes the chief executive officer (CEO), president, chief operating officer (COO), or an equivalent position that has the authority for action to resolve issues.
8.5.2 The management review should be accomplished on a regular basis appropriate to the scope of the IEP, but no less frequently than annually. The purpose is to review current performance and opportunities for improvement in an open discussion format to foster idea generation. An agenda should be prepared and distributed to participants at least 1 week prior to the meeting. At a minimum, the agenda should include:
1. Followup actions from previous management reviews, to include progress reports on the status of previously established improvement objectives.
2. A report on significant or systemic deficiencies, with associated status reports detailing corrective actions and planned followup activities.
3. Strategic or operational changes that could affect the IEP.
4. Establishment of new or revised objectives.
5. Recommendations for improvement and required resources.
8.5.3 Management reviews should be documented to include not only the content, but the resulting management-directed action items, if any. A fundamental concept of the IEP is that senior management is accountable for acting on the information it receives from the program. The IEP should include assessment of the effectiveness of the management review process and identify opportunities for improvement.
8.6 Feedback Loop. Quality control takes place by use of a feedback loop. Feedback is a dynamic process whereby output of a system is passed (fed back) to the input to continually achieve the desired results. Often, this is done intentionally to control the behavior of the system. The use of feedback to continually monitor the divergence between objectives and outcomes while implementing changes to reduce the variance is also known as a closed loop. An IEP should be designed to achieve quality control through closed-loop feedback.
8.6.1 An effective IEP provides quality-related information to the affected employee group and associated management team members. In addition, information derived from an IEP should be fed back into the operating departments from which the data was obtained.
Effective corrective actions that were driven by a Root Cause Analysis (RCA) of findings may have applicability in other areas of the aviation organization. Therefore, opportunities for improvement across the various departments within the aviation organization may exist.
8.6.2 Quality-related information is similar to safety-related information typically provided to employee groups via a variety of channels. Feedback may include the sharing of best practices, typical system/process weaknesses, common management errors, etc.
Such information may be disseminated via less formal channels, such as employee “Read and Sign” files, bulletins, newsletters, or websites, or it may be incorporated in structural changes, such as program/policy changes, enhancements to training, manual revisions, procedural changes, or personnel reorganization.
8.6.3 The method of feedback should be in accordance with the size and sophistication of the aviation organization. The process for this feedback loop should be defined in the IEP documentation.
8.7 Continual Process. To effectively anticipate problem areas and correct them before actual findings occur, an IEP should be a continual, ongoing process. An internal evaluation should be more than spot-check inspections of operating practices. Standalone, spot-check inspections do little more than identify symptoms of potential problems.
8.7.1 A continual process is needed to verify whether findings are isolated instances or actual symptoms of systemic policy, process, or procedural problems. An IEP should involve more than planned evaluations, tracking corrective actions, followup evaluations, and special evaluations based on identification of trends. It should also include ongoing data collection and analysis to identify opportunities for preventative action to preclude adverse events before they occur. A well-structured program ensures that all areas of operations are assessed at appropriate intervals. It also institutionalizes the process so that a change in personnel does not adversely affect the program.
8.7.2 A continuous process is equally important to identify problems that may otherwise be missed by periodic audits. Where appropriate, a continuing process of data collection and analysis can enhance the efficiency of the IEP by reducing the need for periodic audits, enabling a data-driven determination of when audits are needed, or providing the information needed to validate the effectiveness of corrective action previously initiated.
8.8 FAA Interface.
8.8.1 Program Assistance. The FAA does not approve or accept an IEP. However, the FAA is available to provide advice, assistance, or direction to aviation organizations interested in developing an IEP. Preparing program documentation (as discussed in paragraph 9) will provide the FAA with an opportunity to review the proposed duties, responsibilities, procedures, and organization of the IEP.
8.8.2 Sharing Reports. The FAA encourages aviation organizations to openly share the results of their IEP with the assigned Flight Standards office. Proprietary information contained in IEP reports/records should be maintained and secured on the aviation organization’s premises. If given to the FAA, proprietary information will be protected by the FAA in accordance with applicable laws and regulations. Sharing IEP information can enhance the working relationship between the FAA and the aviation organization. Information not required by regulation that remains on the aviation organization’s property would not normally be subject to public disclosure.
8.8.3 Disclosure of Findings to the FAA. For aviation organizations electing to voluntarily disclose apparent violations discovered by an IEP, further information is provided in AC 00-58 and AC 121-37. Under this policy, when an aviation organization finds a potential violation of the regulations, reports it to the FAA, and meets other specific conditions, the FAA will close this event with either corrective action or administrative action (i.e., a Letter of Correction (LOC)). Disclosures such as these require corrective 5
action plans (CAP) designed to eliminate the underlying cause of the problem. Even though the internal evaluation process supports voluntary disclosures, it is not necessary to have an IEP to participate in the voluntary disclosure program, nor is it mandatory to disclose findings discovered during an internal evaluation. However, if the FAA discovers regulatory violations that were not disclosed, the aviation organization may receive enforcement action, or alternatively, Compliance Action if willing and able to cooperate with the FAA.
8.9 External Review. It is recommended that an external and independent review be done on the IEP to assess the effectiveness of the program.
8.10 IEP Relationship to Other Programs.
8.10.1 IATA IOSA Program. Since 2001, IATA has led the effort among the world’s leading airlines, regulatory authorities, and other industry participants to develop a standardized audit program based on internationally recognized standards called the IATA Operational Safety Audit (IOSA). The IOSA is an internationally recognized and accepted system designed to assess the operational management and control systems of an airline.
The system employs internationally recognized quality audit principles conducted in a standardized manner. Audit standards are identified in the IOSA Standards Manual (ISM) and specific audit processes are described in the IOSA Program Manual (IPM). The IOSA and IEP have no direct interface. However, the IOSA standards are internationally recognized and may be used in the development and implementation of an effective IEP.
8.10.2 DOD Program. DOD Instruction 4500.53, Department of Defense Commercial Air Transportation Quality and Safety Review Program, charges the Commander of the United States Transportation Command (CDRUSTRANSCOM) with managing and executing the program. It also charges the CDRUSTRANSCOM with ensuring the establishment of a Commercial Airlift Review Board (CARB) and providing policy guidance and direction for its operation. Title 32 of the Code of Federal Regulations (32 CFR) Part 861, Department of Defense Commercial Air Transportation Quality and Safety Review Program, establishes DOD quality and safety criteria for air carriers providing or seeking to provide air transportation and, at the discretion of the CARB or higher authority, operational support services to the DOD. Part 861 also includes the operating procedures of the CARB. The CARB has the authority to suspend air carriers from DOD use or take other actions when issues of air carrier quality and air safety arise.
Under the DOD program, civil air carriers and operators providing air transportation and operational support services must have an IEP acceptable to the DOD.
8.10.3 Continuing Analysis and Surveillance System (CASS). CASS is a quality management system that monitors and analyzes the performance and effectiveness of airworthiness inspection and maintenance programs. A CASS is required by 14 CFR part 121, § 121.373, and part 135, § 135.431 (for certificate holders subject to § 135.411(a)(2)), and part 91, § 91.1431.
8.10.3.1 As required by regulation, a CASS monitors a certificate holder/program manager’s inspection and maintenance programs for compliance with applicable requirements, including FAA regulations and manufacturer instructions. Each certificate holder/program manager subject to these regulations is required to establish and maintain a system for the continuing analysis and surveillance of the performance and effectiveness of its inspection program and the program covering other maintenance, preventive maintenance, and alterations and for the correction of any deficiency in those programs, regardless of whether those programs are carried out by the certificate holder/program manager or by another person.
8.10.3.2 FAA guidance on CASS is available in the current edition of AC 120-79, Developing and Implementing an Air Carrier Continuing Analysis and Surveillance System. An IEP is an independent program intended to provide information to senior management as to how well critical programs
(e.g., CASS) are working. An IEP is not a substitute for CASS. An IEP poses questions necessary to determine if the certificate holder/program manager’s systems (e.g., CASS) are effective and efficient and if there are opportunities for improvement in those systems.
8.10.4 Safety Program. A safety program and an IEP are complementary functions within the management system. Both provide top management feedback regarding the health and effectiveness of the organization as a whole.
8.10.4.1 Safety programs include the capture and analysis of employee safety/hazard reports, the investigation of operational incidents and accidents, the oversight of risk assessment activities, and flight operations data assessment programs.
As commonly practiced, safety programs are often reactive in nature in that they involve analysis of events that have already occurred (e.g., investigative efforts are oriented to identify root cause and establish corrective actions to prevent reoccurrence or limit frequency to acceptable risk levels). Focus of employee-reported safety/hazard reports should reveal information that, when utilized correctly, will concentrate on objective facts to identify system deficiencies, help prevent future recurrences, and improve system reliability.
It is not as important to identify “who did it” as it is to learn why it happened.
Within this process, it is important to distinguish between error and intentional/willful noncompliant actions.
8.10.4.2 In contrast, quality programs (or an IEP) are designed to systematically and proactively search for weaknesses and gaps in the management system, operational processes/procedures, or documentation. An effective IEP seeks to assure that key processes and controls are in place across the full spectrum of operational safety. The IEP is focused on verifying organizational compliance with all external regulatory requirements and internal organizational policies and procedures. These comprehensive system audits identify opportunities for improvement, which ultimately enhance safety through establishment of predictable and reliable business processes.
9 IEP DESCRIPTION. Aviation organizations that are interested in developing an IEP are encouraged to define and document the following essential elements in the program:
9.1 Program Documentation. IEP procedures and responsibilities should be documented.
The following are suggestions for preparing and structuring program documentation.
As an example, a sample program manual using the program elements discussed in this AC is provided in Appendix B, Sample Internal Evaluation Program Manual (14 CFR Part 121 Air Carrier).
9.1.1 Program documentation should describe the duties, responsibilities, procedures, and organization of the IEP.
9.1.2 Aviation organizations should review the size and complexity of their operation to determine the appropriate level of documentation.
9.1.3 Copies of the program documentation should be distributed to the appropriate company personnel so they are aware of and are familiar with the IEP procedures.
9.1.4 Revisions should be made as necessary to ensure that the program documentation continues to reflect the current internal evaluation procedures and organization.
9.2 IEP Scope. Consideration needs to be given to defining the scope of the program.
For example, the carrier may include organizational management, flight operations and dispatch, station operations, In-Flight Services (IFS), aircraft maintenance, security, hazardous materials (hazmat), and ground handling. It is recommended that any business area that affects the integrity of the aviation organization should be considered.
9.3 Evaluation Standards. Aviation organizations should identify and communicate a specific standard(s) against which each functional area will be evaluated. Each documented standard should be developed with the assistance of the applicable management personnel. Once established, these standards should be clearly communicated and understood by the management team. A specific internal standard may be developed as a composite of multiple sources including, but not limited to:
1. External regulations (e.g., 14 CFR, Occupational Safety and Health Association (OSHA) regulations in Title 29 of the Code of Federal Regulations (29 CFR), and hazmat regulations in Title 49 of the Code of Federal Regulations (49 CFR)).
2. Internal company operating policies and procedures.
3. IOSA Standards and Recommended Practices (ISARP).
4. DOD Quality and Safety Requirements.
5. International Civil Aviation Organization (ICAO) requirements.
6. International Organization for Standardization (ISO) 9001: management elements (as amended).
9.4 Types of Evaluations.
9.4.1 Planned Evaluations. An effective program will establish a Schedule of Events (SOE) that will be performed during a set calendar period under the IEP. It is helpful to divide the complete schedule into segments that are practical from a workload standpoint.
However, it is important to schedule evaluations to allow enough flexibility for resources to be committed to special evaluations or followup evaluations, if needed.
9.4.2 Special Evaluations. Conduct special evaluations based on concerns or priorities set by senior management. The need for special evaluations can be driven by such factors as a review of industry trends, FAA concerns, or adverse trends identified by the IEP or other internal programs.
9.4.3 Followup Evaluations. Schedule and conduct followup evaluations to ensure that corrective action commitments were met and to verify that corrective actions were effective.
9.5 Evaluation Schedule. It is essential for an IEP to include a defined schedule of planned activities. This schedule serves to verify that the IEP is comprehensive, well controlled, and timely. A published schedule also provides a vehicle for keeping management informed. An internal evaluation schedule should include a planned cycle for periodically reviewing areas to be covered by the IEP. The evaluation cycle can be flexible, but should not exceed 3 years. The scheduling process should also be dynamic and allow for special evaluations when trends are identified. In addition, followup evaluations should be scheduled as necessary to verify that corrective action commitments were met and that they were effective in eliminating any reported findings.
9.6 Corrective Action and Followup. An IEP should include procedures that ensure CAPs are developed in response to findings and that they verify timely and effective implementation of corrective action. Internal evaluation personnel may participate in the development of a CAP and should review the plan prior to implementation. However, organizational responsibility and accountability for the development and implementation of CAPs should reside with the operational departments cited in the finding.
9.6.1 A CAP should include:
1. A detailed description of the finding and how it was discovered. This should include the discussion of the scope and the extent of the problem so that solutions can be analyzed properly.
2. An analysis of the evidence to determine the root cause(s) of the finding.
RCA treats errors as defects in the system rather than in a person. RCA looks beyond the symptom to find the organizational defect that permitted an error to occur. Its goal is to correct the fundamental problem and to prevent recurrence. The more thorough the analysis, the greater the likelihood the aviation organization will uncover why the system deficiency occurred and how the organization can respond effectively.
3. An identification of planned corrective actions to be taken in response to the finding to include specification of how, when, and where these actions will be taken.
4. An implementation schedule, including a timeframe for putting corrective actions in place.
5. An identification of the individual(s) who are assigned the responsibility for implementing each of the corrective steps.
9.6.2 The individuals responsible for managing an IEP should facilitate the corrective action process by:
1. Ensuring that CAPs are developed in a timely manner.
2. Verifying that CAPs include the items outlined above.
3. Monitoring and documenting implementation of corrective actions through resolution of the issue(s).
4. Providing senior management with an independent assessment of CAP development and implementation.
5. Initiating scheduled and/or unannounced followup evaluations to ensure the effectiveness of corrective actions specified in CAPs.
9.7 Reporting. The content of the detailed evaluation report should be defined in the program. An evaluation report should be sent to the responsible managers and the senior management for review. Briefings should be given to senior management and other responsible parties, as appropriate. Reports of the status of corrective actions should be provided, as appropriate. The aviation organization should decide upon the frequency, format, and structure for informing senior management of internal evaluation schedules, results, and followup actions to validate that corrective actions have been implemented and that they are effective. It is recommended that the reporting structure also be documented by the aviation organization and become a part of its program.
9.8 Records. The results of an internal evaluation should be documented in reports and other appropriate records consistent with the process of internal reporting at the aviation organization. Aviation organizations may find it useful to manage the results of IEP evaluations (as well as the other elements of the IEP) through a database or a quantitative application. IEP records should include:
1. Planned evaluation reports.
2. Special evaluation reports (including the trends or other reasons for scheduling a special evaluation).
3. CAPs.
4. Results of followup evaluations.
5. Records of auditor training and qualifications.
9.9 Auditor Training and Qualifications. If feasible, the aviation organization should specify that IEP auditors have training and/or experience in recognized quality management auditing, systems analysis, RCA, and risk assessment, as well as evaluation principles and techniques. Any one or combination of the following could accomplish training:
1. In-house prepared courses.
2. College courses.
3. Home study course materials.
4. Industry seminars and workshops.
5. Selected FAA courses.
9.10 Determination of Resources. To determine the resources needed by an IEP, senior management should make the scope of oversight and the extent of involvement for the IEP explicit. In most cases, the size of the organization and budgetary considerations will be the principal defining factors.
10 EXAMPLE IEP MANUAL. An example of an IEP manual that incorporates elements discussed within this AC is provided in Appendix B. An aviation organization’s IEP plan should be documented and may be a standalone manual or a portion of some larger department’s manual (e.g., the safety department’s manual). The example included in Appendix B may be more appropriate for a large part 121 air carrier. However, it can be scaled down and modified to fit other aviation organization’s needs.
11 AC FEEDBACK FORM. For your convenience, the AC Feedback Form is the last page of this AC. Note any deficiencies found, clarifications needed, or suggested improvements regarding the contents of this AC on the Feedback Form.
ORIGINAL SIGNED by /s/ Rick Domingo Executive Director, Flight Standards Service 11
Appendix A APPENDIX A. DEFINITIONS A.1 Audit. A methodical, planned review which builds on the principles of inspection.
An audit is used to determine how business is being conducted and compares results with how business should have been conducted in accordance with established procedures.
The most frequently used audit categories are (quality) system audits, service/product audits, and process audits.
A.2 Audit Scope. The operational disciplines and/or operational areas that are assessed during the conduct of an audit.
A.3 Auditor. An individual who has satisfied defined experience prerequisites and is successfully qualified under a defined training program to conduct audits.
A.4 Authority. As a safety attribute, a clearly identifiable, qualified, and knowledgeable person who has the authority to set up and change a process.
A.5 Concern. A conclusion by an auditor, supported by objective evidence, that is seen as a potential problem, trend, or inefficiency that may become a finding.
A.6 Continual. A close, prolonged succession or recurrence, infinite in time, without interruption.
A.7 Control. Key procedure, responsibility, or decision-making position within an organization, department, division, or functional area. Checks and restraints are designed into a process to ensure a desired result. Comprehensive evaluations (system audits) will focus on verifying and testing the controls within the organization.
A.8 Corrective Action. The action(s) taken to correct a deficiency with the intent to preclude recurrence of the finding or noncompliance of an approved standard.
A.9 Corrective Action Plan (CAP). The total plan of an aviation organization to close all findings through implementation of comprehensive corrective action. This plan should include the changes in policy and/or procedures that will ensure continued compliance.
A.10 Evaluation. A functionally independent review of company policies, procedures, and systems. If accomplished by the company itself, the evaluation should be done by an element of the company other than the one performing the function being evaluated.
The evaluation process builds on the concepts of audit and inspection. An evaluation is an anticipatory process, and is designed to identify and correct potential findings before they occur. An evaluation is synonymous with the term “systems audit.”
A.11 Evaluation Standard. Specific criteria on which basis a functional area will be evaluated in terms of compliance or conformance.
A.12 Evidence. A documented statement of fact, prepared by an aviation organization, which may be quantitative or qualitative, and is based on observations, inspections, measurements, or tests that can be verified. For the purpose of internal evaluation, A-1