"NASA Inspector General Paul K. Martin today released a report that examined how well the Agency manages the $3 billion in grants its has awarded over the past 5 years to fund scientific research, scholarships, fellowships, and educational activities. The Office of Inspector General (OIG) review found that NASA does not have an adequate system of controls in place to ensure proper administration and management of its grant program."
Recently in Financial Management Category
"It marked the first time since the 2002 fiscal year that independent auditors issued a qualified opinion, with no material weaknesses, rather than a disclaimer of opinion on NASA's financial statements."
"Going forward, I am confident that we will remain vigilant in maintaining the public trust through safeguarding our assets, promoting integrity in financial stewardship, and pursuing teamwork in accounting and budgeting. Thank you for your hard work on behalf of the American people."
Keith's note: Alas, despite this audit, the agency still missed a huge budgetary and accounting issue with Webb's cost overruns. I wonder how the auditors missed this ...
This week at Cape Canaveral saw the red, white and blue honored by one of the most historic of American traditions. It also saw local leaders both working to improve the economic future of the Space Coast region and acknowledging the benefits of the shuttle era extending into another year.
"It only took about half as long to get to the moon as it has taken to clean up NASA's financial performance, but three tries, hundreds of millions of dollars and the hard work of many NASA employees later they have shown definite improvement," said Subcommittee Chairman Brad Miller (D-NC). "I feel the responsibility of ensuring that NASA is a good steward of the resources they are given--resources which ultimately come from the American taxpayers," said Subcommittee Chairwoman Gabrielle Giffords (D-AZ)."
"Through various Agency initiatives and by implementing recommendations made by the Office of Inspector General (OIG) and other evaluative bodies, such as the Government Accountability Office, NASA is working to improve Agency programs and operations. However, challenges remain in the following areas:
* Transitioning from the Space Shuttle to the Next Generation of Space Vehicles
* Managing Risk to People, Equipment, and Mission
* Financial Management
* Acquisition and Contracting Processes
* Information Technology Security"
"In the "Report of Independent Auditors" (Enclosure 1), E&Y disclaimed an opinion on NASA's financial statements for the fiscal years ended September 30, 2009 and 2008. While the Agency made significant progress in improving its financial processes and systems, the disclaimer resulted from continued weaknesses in internal controls over accounting for legacy property, plant, and equipment (PP&E)."
"In the "Report of Independent Auditors", E&Y disclaimed an opinion on NASA's financial statements for the fiscal years ended September 30, 2008 and 2007. The disclaimer resulted from continued significant weaknesses in NASA's financial management processes and systems, including issues related to internal controls for property accounting.
The E&Y "Report on Internal Control" includes two significant deficiencies, which are considered to be material weaknesses. Material weaknesses were found in NASA's controls for (1) financial systems, analyses, and oversight used to prepare the financial statements, and (2) assuring that property, plant, and equipment and materials are presented fairly in the financial statements. These material weaknesses have been reported for several years.
The E&Y "Report on Compliance with Laws and Regulations" identifies certain instances in which NASA's financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA)."
Commentary: NASA's new tenets for doing business, Federal Times
"As the new assistant administrator for procurement, I have tried to take a fresh look at NASA's procurement practice based on data from our current contracts. As a result of this assessment, I developed some principles for procurement that, if implemented, could improve our return on investment. These principles have become NASA's procurement tenets, nine guidelines that describe a new way of doing business:"
Governmentwide Purchase Cards: Actions Needed to Strengthen Internal Controls to Reduce Fraudulent, Improper, and Abusive Purchases. GAO-08-333, March 14.
Page 8: "At the National Aeronautics and Space Administration (NASA), a cardholder used the government purchase card to acquire two 60GB iPods. Although NASA officials maintained that the iPods were essential for official data storage, we found that the cardholder personalized the iPods with the requester's and agency's names and used the iPods to store songs and music videos. Although the iPods had some business files on them, we concluded that the purchase was abusive because other data storage devices without video and audio capabilities were available at lower costs."
"While both USAID and NASA took steps to assess their payment activities for risk, including conducting a review of select payment streams for improper payments, we identified numerous deficiencies in their procedures. USAID and NASA lacked a systematic method to review and analyze program operations to determine if risks exist, what those risks are, and the potential or actual impact of those risks on program operations. For example, neither USAID nor NASA had developed a process to (1) identify risks that exist in their payment activities or (2) evaluate the results of their payment stream reviews, such as weighting and scoring the effectiveness of existing internal control over payments made and results from external audits."
"Previously, Brown was executive director of finance operations for ConAgra Food Ingredients of Omaha, Neb., a $1 billion specialty food ingredients business. He was responsible for managing finance, information technology and supply chain initiatives for 34 ConAgra plants nationwide."
Editor's note: On one hand he has zero experience with NASA. Yet on the other hand, he has zero experience with NASA. Perhaps he won't know any better than to do things the right way!
"Last week and this week, I have been going into a fair amount of detail on subjects that will be fairly dry to many. These issues, though - financial management and IEMP - are some of the very important foundations for NASA."
"Internal controls designed to detect and prevent unauthorized and potentially fraudulent transactions were not always followed. We reviewed 1,749 transactions identified through data mining techniques and judgmental sampling that totaled approximately $2.1 million. We identified 875 transactions (50 percent), totaling $831,953.82, that did not comply with regulatory and program guidance."
"We found that Goddard personnel involved in the MOBIS schedule 874 procurement process improperly directed a prime contractor to subcontract with a particular subcontractor, did not chose the most appropriate and cost-effective procurement method to execute the contract action, and wasted funds by paying $169,546.70 in unnecessary subcontract costs."
"The Integrated Enterprise Management Program (IEMP) has two major projects, which will become operational on Nov. 13, 2006. The SAP Version Upgrade (SVU) project is implementing a version update to NASA's financial system. ... The Contract Management Module (CMM) project is implementing a new commercial application, which streamlines and provides efficiencies to the procurement process, including contract writing, management and reporting."
"A major upgrade to the core financial systems of the National Aeronautics and Space Administration has encountered turbulence from end users and the agency's inspector general before getting far off the ground. The $116 million financials upgrade is the cornerstone of a larger project, dubbed the Integrated Enterprise Management Program, which is expected to cost $1.1 billion. The IEMP uses R/3 financial applications from SAP AG, and when completed, it's expected to improve financial, contractual, asset management and other procedures throughout NASA."
NASA Has Made Very Little Progress in Managing its Finances Inspector General and GAO Testify, House Science Committee
"NASA's Chief Financial Officer, Gwendolyn Sykes, also told Congress that she would not certify the agency's financial statements if she were bound by Sarbanes-Oxley, the federal law that provides severe penalties to private sector officials for financial misstatements."
CFO Sykes helps NASA manage change, Government Computer News
"At the National Aeronautics and Space Administration (NASA), auditors reported numerous weaknesses in the core financial system, the integrated financial management system first implemented by NASA in fiscal year 2003. We have previously reported on problems NASA faced when implementing this system."
"PriceWaterhouseCoopers, LLP (PWC) has agreed to pay $41.9 million to settle allegations that it made false claims to the United States in connection with claims it made to federal agencies for travel reimbursement. ... The settlement resulted from an investigation by the Justice Department's Civil Division ... and the National Aeronautics and Space Administration ..."
"In a scathing report on NASA's Sept. 30, 2003, financial statement which got scant attention at its release but was detailed in a cover story in the May issue of CFO Magazine [PriceWaterhouseCoopers] accused the space agency of one of the cardinal sins of the accounting world: failing to record its own costs properly."
"NASA's fiscal year 2004 management representation letter did not provide all the information necessary to support Treasury and OMB's preparation of the CFS management representation letter. This in turn impacted our ability to rely on the representations in the CFS management representation letter in combination with individual federal agency representation letters."
"To demonstrate the effect of payments to contractors using the purchase card, we obtained the National Aeronautics and Space Administration's (NASA) fiscal year 2004 purchase card transactions and compared the contractors from which NASA purchased goods and services to the IRS unpaid taxes database."
"In my view, the attached synopsis reflects the most significant problems in financial management at NASA: financial management is decentralized, with Center Chief Financial Officers more responsive to Center operational needs than to enterprise solutions for the Agency, and Agency-wide business processes suitable for an integrated approach have not been established. Proceeding with enterprise solutions under these circumstances is untenable."
"A week or so ago, we briefed the usual line-up of Bill Atkins, Ken Munro, and Kristi Karls on the state of the IFM Program. Though there was another staffer chap (whose name I did not catch, unfortunately) that though he was more like their Andie MacDowell to our Bill Murray - he's on the minority side, so his point of view did not count. Ah well ... and as they say in Punxsutawney, "Tomorrow's another day!"
"In the future, when someone goes to the Hill on a request from Congress, make sure that Code A, the Office of Legislative Affairs, and the Office of Public Affairs know so there is coordination of one NASA message."
Editor's note: Gee, I wonder what NASA Legislative Affairs thinks of this arrogant and dismissive attitude on the part of HQ IFM employees when it comes to their Congressional interactions - that is, of course, assuming that there is anyone left in Code L who knows enough to pay attention to such things. Curiously, one of Mike Griffin's inner circle, Liam Sarsfield, is supposedly working closely with the IFM crowd.
"We recognize that, while Headquarters continues to assess the budget and scope of IAM, some of you have been compelled to react independently of an Agency budget decision. I can assure you that an Agency position is forthcoming; unfortunately, I cannot predict when that position will be announced. Given the sizable costs and the significant strategic impact of IAM, the decision will likely not get made until after the new Administrator is on board. Meanwhile, to protect the prerogatives of the new Administrator, we should not assume or act as if a decision has been made one way or the other."
"We're still keeping the IAM project warm and humming, despite the recent sweeping of the grim reaper's scythe through the Program's budget, the detailing away of the IAM project manager, and no real decision made yet on our future. Leaves us in the somewhat odd position of having the GAO as our bedfellow for wanting to see the IFM Program through as originally designed."
NASA HQ IFM Newsletter 4 April 2005, NASA HQ
"Would you like to complain about IFMP? Well here's your chance to let it rip. Or even, heaven forbid, pay a compliment....maybe we should have one of those "American Idol" type dial-ins every now and again...until then, here's what we'll be doing. Very soon you will hear much more regarding the Customer Satisfaction Survey that will be conducted by the Competency Center in mid-April."
"Inspector General announces audit of the Integrated Asset Management (IAM) Project: ... The IG maintains its record-breaking run on the investigation of the IFM Program by announcing yet another audit, this time they are going to assess the adequacy of NASAs early planning for requirements and life-cycle operations for the IAM Project; specifically focusing on (amongst other things) ensuring we have effective procedures for planning and monitoring the development of the module, identifying all users, and making sure we have the right set of user requirements obtained following the right set of processes."
Editor's note: I certainly can't imagine why the NASA OIG would want to check up on NASA's financial management system! After all, NASA's IFM Program has been so amazingly timely, accurate, and ahead of schedule these past few years ... Now if only they could pay travel vouchers on time.
"One of NASA's most formidable barriers to sound contract management is the lack of an integrated financial management system. In 2003, GAO reported that, in implementing its most recent system, NASA did not reengineer its core business processes or establish adequate requirements for the system to address many of its most significant management challenges, including producing credible cost estimates."
"... because of the reporting and integration limitations, it was impossible to determine whether, in accordance with Federal Travel Regulations, NASA travelers were reimbursed within 30 days or whether interest was paid when reimbursements were late. In other words, no mechanized insight existed for determining if the system was working properly."
"NASA has limited ability to collect the program cost and schedule data needed to meet basic cost-estimating criteria. For example, as GAO has previously reported, NASA does not have a system to capture reliable financial and performance data key to using effectively the cost-estimating tools that NASA officials state that programs employ. Further, without adequate financial and nonfinancial data, programs cannot easily track an acquisition's progress and assess whether the program can meet its cost and schedule goals before it incurs significant cost and schedule overruns."
"Spurred in part by a new recommendation to the president that NASA allow more private sector involvement in space operations, U.S. Sen. Bill Nelson today called for an expedited investigation into NASA contractors who get work despite owing unpaid taxes. Nelson's request also comes in response to an earlier study by the General Accounting Office that revealed 27,000 contractors for the Defense Department owe the government over $3 billion in unpaid federal taxes. Forty-seven of those contractors received closer scrutiny; and, a top GAO official has confirmed for Nelson that several work for NASA."
20 May 2004: NASA's bookkeeping system still won't fly, Orlando Sentinel
"Nearly 2 1/2 years after NASA chief Sean O'Keefe vowed to straighten up the agency's bookkeeping, the effort continues to struggle. "It may be years before NASA can get a clean audit," said Robert Cobb, the agency's inspector general, during a hearing Wednesday of a subcommittee of the House Government Reform Committee."
19 May 2004: NASA systems: Houston, we have a problem, GCN News
"NASA's has bungled its $982.7 million enterprise resource planning system project in a way that caused the agency to lose track of $2 billion in its Treasury Department account and forced it to adjust its books, witnesses told a House committee this afternoon."
19 May 2004: Mission Impossible? Fixing NASA's Financial Management, House Government Reform Committee
"The Government Reform Subcommittee on Efficiency and Financial Management will hold an oversight hearing to look at problems with financial management at NASA, where recent audits have revealed serious problems."
18 May 2004: Updated NSSC Site Seletion Process and Q&A 01
18 May 2004: NASA Shared Services Center Industry Day, NASA
"NASA will hold a two-day industry day to provide an overview and current status of the NSSC acquisition and to provide a forum for potential offerors to get information and meet with representatives from the six possible sites for the NSSC. Industry day will be held June 2-3, 2004."
14 May 2004: NASA's finances in disarray; auditor quits, Reuters
"PriceWaterhouseCoopers and NASA parted ways earlier this year, according to the space agency's inspector general, Robert Cobb. PriceWaterhouseCoopers declined to comment, but a source familiar with the situation said the audit firm opted out of the contract because it was unhappy with the relationship."
"Two weeks later, troubling new doubts were raised about NASA's financial management. PricewaterhouseCoopers, the agency's auditor, issued a disclaimed opinion on NASA's 2003 financial statements. PwC complained that NASA couldn't adequately document more than $565 billion - billion - in year-end adjustments to the financial-statement accounts, which NASA delivered to the auditors two months late. Because of "the lack of a sufficient audit trail to support that its financial statements are presented fairly," concluded the auditors, "it was not possible to complete further audit procedures on NASA's September 30, 2003, financial statements within the reporting deadline established by [the Office of Management and Budget]."
13 March 2003: Important Notice to all NASA LaRC Contractors
"The Center's Deputy Chief Financial Officer for Finance has determined that it is prudent to make early payments prior to closing the legacy financial system. Invoices received between April 16 and May 7, 2003, will not be subject to the Prompt Payment Act waiting period and will be paid early."
11 March 2003: NASA OIG: NASA'S Reduction of Undefinitized Contract Actions, NASA OIG (link to full report)
"We found that NASA had significantly reduced both the number and dollar amount of UCAs since the General Accounting Office highlighted them as one reason for identifying contract management as a major management challenge for NASA. By November 30, 2002, NASA had reduced the number of UCAs to 19 with a total estimated value of $61 million, representing reductions of about 90 percent in the number of UCAs and 97 percent in estimated dollar value. We also found that three Centers reviewed had inconsistent policies, which could cause inaccurate UCA reporting on certain relatively low-value contracts."
"In its 2001 performance and accountability report on NASA, GAO identified important management, oversight, and workforce issues facing the agency. The information GAO presents in this report is intended to help sustain congressional attention and an agency focus on continuing to make progress in addressing these challenges - and others that have arisen since 2001 - and ultimately overcoming them."
17 January 2003: "Acquisition Workforce: Status of Agency Efforts to Address Future Needs", GAO (Acrobat)
20 January 2003: GAO reports on acquisition workforce, Federal Computer Week
"The departments of Energy and Veterans Affairs and the General Services Administration are developing plans to strengthen their acquisition workforce specifically, while NASA and the departments of Treasury and Health and Human Services are drafting overall plans to strengthen their workforces."
19 January 2003: Report lauds acquisition workforce training efforts, Government Executive
"GAO praised NASA and the VA for developing new information management systems so they can track current acquisition employees' skills sets and identify gaps they need to fill in the future. This is important because many agencies lack good data on their procurement workforces, such as information on workers' knowledge and skills sets, attrition rates and retirement rates, the report said."
15 January 2003: NASA Passes Audit With Flying Colors
Editor's note: word has it that NASA got a verbal confirmation today that it had passed an audit conducted by PriceWaterhouseCoopers and that it would receive an "unqualified" rating. In other words - acceptable. The formal auditor's report is due in a few weeks. Quite a turn around from the last audit conducted during Dan Goldin's tenure - one that NASA flunked.
20 March 2002: NASA chief seeks to remedy accounting woes, Government Executive
1 March 2002: Audit of NASA Financial Statements, NASA OIG
28 February 2002: Results of federal agencies' fiscal 2001 audits, Government Executive
15 January 2003: ISSP Flight Readiness and Program Progress
15 January 2003: ISS Assembly Sequence Critical Path Assessment
15 January 2003: ISS Top Program Risks
15 January 2003: ISS Agreements/Barters/Offsets Status
Editor's note: Charts Source: ISS Monthly Program Review, Vol. 127, 6 December 2002
"NASA Headquarters will implement the Core Financial module of the Integrated Financial Management Program (IFMP) in February 2003. Implementation will result in a suspension of travel Voucher payments for vouchers submitted after January 17, 2003. The anticipated date for resuming voucher payments is March 10, 2003. The oldest and highest dollar value vouchers will be prioritized for payment beginning on March 10."
"NASA began using SEER-H at Marshall Space Flight Center in Alabama in the early 1990's. Over the years, many of the other centers began using the tools and it became more economical to buy a corporate license, stated Hamaker, who worked as a cost engineer and analyst at Marshall before being promoted to headquarters. "In general, SEER is just a very good set of modeling tools," said Hamaker. "We are able to calibrate SEER to our historical track record and we've come to understand which parameters are applicable to NASA so our estimating can be continuously refined and more accurate."
Editor's note: I am a little confused. I thought NASA was overhauling its IFMP given that the old way of doing things was broken - or was it that NASA had the right tools but didn't use them?
10 January 2003: GRC Reimbursement System Back on Track?
A notice being circulated at GRC from a NASA Watch: "I just spoke with the bank - we can resume using our purchase cards."
From another reader at MSFC: "Thanks to the new NASA IFMP (Integrated Financial Management Program [Problem]) many people at MSFC did not get timely reimbursements for government travel. As a result, some travelers had their Bank of America (BoA) government cards cancelled when they were late with payments. I personally didn't receive a reimbursement (just under $1,000) until 1/3/03 for a trip I took at the end of 9/02. According to the 12/19/02 edition of the "Marshall Star", 300 NASA team members were honored with awards for their work on the IFMP and O'Keefe and Mulville attended the ceremony."
31 December 2002: Notice to Ames Research Center Vendors
"The following letter was distributed on December 12, 2002 Dear NASA Vendor: Ames Research Center will be shutting down its financial systems in early January to cut over to a new integrated financial management system. The shut down may result in some payment delays."
NASA Watch reader comment from GRC: "GRC is one of the "pilot" centers initiating the IFMS. The system is so fouled up that our purchase account at Bank of America has been suspended (No credit card purchases are being allowed by BofA) since the new system has so many bugs in it that payment can't be made (so far GRC is more than 90 days in arrears)."
Another NASA Watch reader comment from GRC: "The travel manager package was not issuing reimbursement checks for a couple of months, especially to those people who made changes from their
original plans. There was a problem with getting the P-card software to authorize the
SAP software to make a payment to the Bank of America for our Mastercards that we use to make purchases. Bank of America recently "cancelled" our bankcards. We can't buy anything since shortly before Christmas. They were trying to correct the problem, but as of Tuesday morning, no word was given on success. Management meetings have not been occurring since no one can download the financial data."