Major Management Challenges and Program Risks

This publication is part of GAO's performance and accountability series which provides a comprehensive assessment of government management, particularly the management challenges and program risks confronting federal agencies. Using a "performance-based management" approach, this landmark set of reports focuses on the results of government programs--how they affect the American taxpayer--rather than on the processes of government. This approach integrates thinking about organization, product and service delivery, use of technology, and human capital practices into every decision about the results that the government hopes to achieve. The series includes an overview volume discussing governmentwide management issues and 20 individual reports on the challenges facing specific cabinet departments and independent agencies. The reports take advantage of the wealth of new information made possible by management reform legislation, including audited financial statements for major federal agencies, mandated by the Chief Financial Officers Act, and strategic and performance plans required by the Government Performance and Results Act. In a companion volume to this series, GAO also updates its high-risk list of government operations and programs that are particularly vulnerable to waste, fraud, abuse, and mismanagement.

GAO noted that: (1) NASA's contract management function encompasses several processes, including financial management and oversight; (2) both of these processes require accurate and reliable information; (3) however, NASA lacks adequate systems and processes to oversee procurement activities and to produce accurate and reliable management information in a timely manner; (4) characterized as one of the most challenging engineering feats ever attempted, the International Space Station Program is expected to culminate in 2004 in a football field-sized laboratory manned by up to seven crew members; (5) however, until the space station is completed, NASA will continue to face challenges in controlling the cost and schedule of the program; (6) in May 1998, GAO reported that since 1995, the life cycle cost for the station had increased almost $2 billion, to $95.6 billion; (7) at the time of GAO's report, the final assembly date of the station had slipped from June 2002 to December 2003; (8) NASA and the Department of Defense (DOD) agreed in 1996 to form joint working groups for aerospace test facilities to coordinate investments to avoid unnecessary duplication, coordinate test schedules to spread workload across the facilities, and develop standardized business processes; (9) however, the agencies' promise of closer cooperation and the development of a national perspective on aerospace test facilities remains largely unfulfilled because NASA and DOD: (a) have not convened most joint test facility working groups on a regular basis; (b) have competed with each other to test engines for new rockets; and (c) have not prepared a congressionally required joint plan on rocket propulsion test facilities; (10) NASA has made progress in meeting these challenges; (11) in the contract management area, although it has made some progress in developing systems to correct contract management weaknesses, NASA still has not implemented its integrated financial management system; (12) regarding space station challenges, the final assembly date has slipped to July 2004; (13) the prime contractor's performance and Russia's problems with funding its portion contributed to the cost increase and schedule delay in the space station program; (14) NASA and DOD have agreed to go beyond cooperative working groups in aeronautics and jointly manage their aeronautical test facilities; (15) however, they have not reached agreement on key aspects of a management organization; and (16) GAO's review of NASA's 1999 annual performance plan found that the agency did not recognize major management challenges.