Inspectors General
Actions Needed to Improve Audit Coverage of NASA Gao ID: GAO-09-88 December 18, 2008GAO was asked to review the National Aeronautics and Space Administration (NASA) Office of Inspector General (OIG) and provide information on (1) the audit and investigative coverage of NASA; (2) the NASA OIG's audit and investigative accomplishments; (3) the NASA OIG's budget and staffing levels, including staff attrition rates; and (4) the results of external reviews of the NASA OIG. GAO obtained information from NASA OIG reports, interviews, and documentation.
The fundamental mission of the statutory federal IG offices, including the NASA OIG, includes identifying areas for improved economy, efficiency, and effectiveness through independent and objective oversight and preventing and detecting fraud, waste, and abuse. Of the 71 reports issued by the OIG's Office of Audits in fiscal years 2006 and 2007, only 1 report had recommendations to address the economy and efficiency of NASA's programs and operations with measurable monetary accomplishments. Over the 5-year period of fiscal years 2003 through 2007, audit reports contributed to only 1 percent of the OIG's total monetary accomplishments. The remaining 99 percent came from the OIG's investigative cases. Of about $9 million in total reported monetary accomplishments from audits over the 5-year period, almost $7 million was from one audit completed in fiscal year 2007. When the monetary accomplishments of both audits and investigations in fiscal year 2007 are combined and compared to the OIG's budget of $34 million, the return for each budget dollar is $0.36. This calculation for all 30 OIGs with IGs appointed by the President and confirmed by the Senate averages $9.49, or 26 times that of the NASA OIG. The OIG's relative lack of monetary accomplishments from audits is due, at least in part, to the OIG's strategic and annual audit plans, which do not provide assurance that NASA's economy and efficiency will be addressed or that measurable monetary accomplishments will be achieved. We believe that during the planning process, the OIG should consult with an objective third party with experience in providing economy and efficiency audits with potential monetary savings. The OIG's budgets and staffing kept pace or did slightly better than all of NASA for these same resources during fiscal years 2003 through 2007. When comparing the fiscal year 2007 budgets of all 30 IGs appointed by the President and confirmed by the Senate with their respective agencies' budgets, the NASA OIG ranked 11th. Nevertheless, GAO noted that the OIG's ability to retain experienced audit personnel was adversely affected by a staff attrition rate that has increased from 12 percent to almost 20 percent over fiscal years 2003 through 2007. Due to the relatively high attrition rates, GAO believes that the OIG should use the assistance of an objective expert to identify the causes of staff turnover. The NASA OIG's most recent peer reviews for both audits and investigations have resulted in unqualified opinions. A recent investigation by the Integrity Committee of the President's Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency reported that the NASA IG had an appearance of a lack of independence. The investigation was closed, but corrective actions did not address this finding and the Integrity Committee considers the issue unresolved. This issue has been raised by members of the Congress as a limitation in obtaining independent oversight of NASA.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-88, Inspectors General: Actions Needed to Improve Audit Coverage of NASA
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
December 2008:
Inspectors General:
Actions Needed to Improve Audit Coverage of NASA:
GAO-09-88:
GAO Highlights:
Highlights of GAO-09-88, a report to congressional requesters.
Why GAO Did This Study:
GAO was asked to review the National Aeronautics and Space
Administration (NASA) Office of Inspector General (OIG) and provide
information on (1) the audit and investigative coverage of NASA; (2)
the NASA OIG‘s audit and investigative accomplishments; (3) the NASA
OIG‘s budget and staffing levels, including staff attrition rates; and
(4) the results of external reviews of the NASA OIG. GAO obtained
information from NASA OIG reports, interviews, and documentation.
What GAO Found:
The fundamental mission of the statutory federal IG offices, including
the NASA OIG, includes identifying areas for improved economy,
efficiency, and effectiveness through independent and objective
oversight and preventing and detecting fraud, waste, and abuse. Of the
71 reports issued by the OIG‘s Office of Audits in fiscal years 2006
and 2007, only 1 report had recommendations to address the economy and
efficiency of NASA‘s programs and operations with measurable monetary
accomplishments.
Over the 5-year period of fiscal years 2003 through 2007, audit reports
contributed to only 1 percent of the OIG‘s total monetary
accomplishments. The remaining 99 percent came from the OIG‘s
investigative cases. Of about $9 million in total reported monetary
accomplishments from audits over the 5-year period, almost $7 million
was from one audit completed in fiscal year 2007. When the monetary
accomplishments of both audits and investigations in fiscal year 2007
are combined and compared to the OIG‘s budget of $34 million, the
return for each budget dollar is $0.36. This calculation for all 30
OIGs with IGs appointed by the President and confirmed by the Senate
averages $9.49, or 26 times that of the NASA OIG.
The OIG‘s relative lack of monetary accomplishments from audits is due,
at least in part, to the OIG‘s strategic and annual audit plans, which
do not provide assurance that NASA‘s economy and efficiency will be
addressed or that measurable monetary accomplishments will be achieved.
We believe that during the planning process, the OIG should consult
with an objective third party with experience in providing economy and
efficiency audits with potential monetary savings.
The OIG‘s budgets and staffing kept pace or did slightly better than
all of NASA for these same resources during fiscal years 2003 through
2007. When comparing the fiscal year 2007 budgets of all 30 IGs
appointed by the President and confirmed by the Senate with their
respective agencies‘ budgets, the NASA OIG ranked 11th. Nevertheless,
GAO noted that the OIG‘s ability to retain experienced audit personnel
was adversely affected by a staff attrition rate that has increased
from 12 percent to almost 20 percent over fiscal years 2003 through
2007. Due to the relatively high attrition rates, GAO believes that the
OIG should use the assistance of an objective expert to identify the
causes of staff turnover.
The NASA OIG‘s most recent peer reviews for both audits and
investigations have resulted in unqualified opinions. A recent
investigation by the Integrity Committee of the President‘s Council on
Integrity and Efficiency and the Executive Council on Integrity and
Efficiency reported that the NASA IG had an appearance of a lack of
independence. The investigation was closed, but corrective actions did
not address this finding and the Integrity Committee considers the
issue unresolved. This issue has been raised by members of the Congress
as a limitation in obtaining independent oversight of NASA.
What GAO Recommends:
GAO is making two recommendations for the NASA IG to (1) revise
strategic and annual planning to include audits of NASA‘s program
economy and efficiency with potential monetary savings by working with
an objective third party to obtain external review and consultation
during the planning process and (2) take actions to identify the causes
of high staff turnover with the assistance of an objective expert.
In addition, GAO is recommending that the Integrity Committee follow up
on its investigative finding that the NASA IG had an appearance of a
lack of independence.
In comments on a draft of the report, the Integrity Committee and the
NASA IG disagreed with the recommendations. GAO believes the
recommendations are valid and provides a detailed response to these
comments in the body of the report.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-88]. For more
information, contact Jeanette Franzel at (202) 512-9471 or
franzelj@gao.gov.
Contents:
Letter:
Scope and Methodology:
Results in Brief:
Background:
NASA OIG Provides Limited Monetary Accomplishments from Audits:
NASA OIG's Budgets and Staffing:
External Reviews of NASA OIG and the Integrity Committee's
Investigation:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Monetary Accomplishments Reported in OIGs' Semiannual
Reports to the Congress for Fiscal Year 2007:
Appendix II: Comparison of OIGs' Budgetary Resources with Total
Budgetary Resources of Their Agencies for Fiscal Year 2007:
Appendix III: Comments from the Integrity Committee:
GAO Comment:
Appendix IV: Comments from the Inspector General, National Aeronautics
and Space Administration:
GAO Comments:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: NASA Mission Directorates and Their Primary Missions:
Table 2: NASA OIG Offices and Responsibilities:
Table 3: NASA OIG Audit Coverage of High-Risk Areas and Management
Challenges in Fiscal Years 2006 and 2007:
Table 4: NASA OIG's Reported Monetary Accomplishments and Return per
Budget Dollar for Fiscal Years 2003 through 2007:
Table 5: NASA OIG and NASA Budgets and FTEs, Fiscal Years 2003 through
2007:
Table 6: NASA OIG Attrition Rates for Fiscal Years 2003 through 2007:
Figures:
Figure 1: NASA OIG Investigations Closed During Fiscal Years 2006 and
2007:
Figure 2: Distribution of NASA OIG Staff for Fiscal Year 2007:
Abbreviations:
CAIB: Columbia Accident Investigation Board:
DCAA: Defense Contract Audit Agency:
ECIE: Executive Council on Integrity and Efficiency:
FTE: Full-time equivalent:
GAO: Government Accountability Office:
IG: Inspector General:
IG Act: Inspector General Act of 1978, as amended:
JPL: Jet Propulsion Laboratory:
NASA: National Aeronautics and Space Administration:
OIG: Office of Inspector General:
OMB: Office of Management and Budget:
PCIE: President's Council on Integrity and Efficiency:
SSRRC: Senior Staff Referral Review Committee:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
December 18, 2008:
The Honorable Charles E. Grassley:
Ranking Member:
Committee on Finance:
United States Senate:
The Honorable Bart Gordon:
Chairman:
Committee on Science and Technology:
House of Representatives:
The Honorable Brad Miller:
Chairman:
Subcommittee on Investigations and Oversight:
Committee on Science and Technology:
House of Representatives:
This report responds to your request that we review the operations and
activities of the National Aeronautics and Space Administration's
(NASA) Office of Inspector General (OIG). The NASA OIG was established
by the Inspector General (IG) Act of 1978[Footnote 1] to provide
independent audits and investigations of NASA's programs and
operations, promote economy and efficiency, detect and prevent fraud
and abuse, and recommend actions for improvement.
In the three decades since passage of the IG Act, the IGs have played
an important role in enhancing government accountability and protecting
the government from fraud, waste, abuse, and mismanagement. In the
current environment of an escalating federal budget deficit and
increasingly limited resources, effective IG functions are needed to
help transform what government does and how it does business and to
hold it accountable for achieving real, positive, and sustainable
results.
As discussed with your offices, we are providing information regarding
(1) the NASA OIG's audit and investigative coverage of NASA, including
oversight of high-risk areas and NASA's management challenges; (2) the
NASA OIG's audit and investigative accomplishments; (3) the NASA OIG's
budget and staffing levels, including staff attrition rates; and (4)
the results of external reviews of the NASA OIG, including peer reviews
of its quality assurance program and operations and an investigative
report by the Integrity Committee of the President's Council on
Integrity and Efficiency (PCIE) and the Executive Council on Integrity
and Efficiency (ECIE).[Footnote 2]
Scope and Methodology:
To review the OIG's audit oversight coverage of NASA, we obtained the
71 final reports from the Office of Audits as reported in the OIG's
semiannual reports to the Congress for fiscal years 2006 and 2007,
which included 46 audits with statements of compliance with Government
Auditing Standards and 25 reports without reference to compliance with
auditing standards. For purposes of our review, we considered only
those reports that stated compliance with Government Auditing Standards
as audit reports and refer to the reports without such statements as
nonaudit reports.[Footnote 3] We compared the contents of the 46 audit
reports with the high-risk areas designated by us and with the
management challenges identified by the NASA OIG to determine the audit
coverage of these areas. We also analyzed the nature and scope of all
71 final reports and the resulting recommendations to determine the
extent to which they addressed compliance with laws, regulations, and
NASA policies and procedures; economy and efficiency; or the
effectiveness of NASA's programs and operations. To review the
investigative coverage, we used the identification of closed cases
reported by the OIG in semiannual reports for fiscal years 2006 and
2007. We also obtained the OIG's strategic and annual audit plans
covering the same 2-year period to determine if they contained goals
and objectives to provide audit coverage of NASA's program compliance
with laws and regulations and program economy, efficiency, and
effectiveness.
We identified monetary and other audit and investigative
accomplishments reported by the NASA OIG in semiannual reports to the
Congress for fiscal years 2003 through 2007 in order to observe any
long-term trends. We limited our review of the NASA OIG's
accomplishments to the results of audits and investigations reported to
the Congress for this period and did not audit or otherwise verify the
dollar amounts of the monetary accomplishments or potential savings to
the government reported by the NASA OIG. We also obtained the
semiannual reports issued by all 30 IGs appointed by the President and
confirmed by the Senate to obtain the monetary accomplishments reported
by those IGs during fiscal year 2007. We obtained the total budgetary
resources of each OIG for fiscal year 2007 from the Office of
Management and Budget (OMB) and compared the reported monetary
accomplishments with budgetary resources to obtain a return on
investment for each IG office.[Footnote 4]
We obtained the total budgetary resources at the NASA OIG and the
agency for fiscal years 2003 through 2007 from OMB in order to observe
any long-range budgetary trends. We obtained additional information on
staffing levels, resource distribution, and attrition rates from the
OIG to identify staffing trends over this period. The attrition rates
for NASA overall were verified by NASA management officials. We
compared the total budgetary resources for fiscal year 2007 of the 30
IGs appointed by the President and confirmed by the Senate with the
total budgetary resources of their respective agencies for the same
year. We calculated a ratio for each OIG's budget information as a
percentage of its respective agency's budget for comparative purposes.
We obtained reports from the external reviews of the NASA OIG completed
during fiscal years 2003 through 2007 to observe any long-term trends
in OIG quality for both audits and investigations. Specifically, we
obtained the audit peer review report of audit quality dated January 8,
2004, completed by the Department of Justice OIG, and the March 13,
2007, peer review report completed by the General Services
Administration OIG. We also obtained the July 8, 2005, peer review
report of the NASA OIG's investigative quality completed by the
Department of Transportation OIG. In addition, we obtained the report
of investigation completed by the Integrity Committee of PCIE and ECIE,
which addressed allegations of the NASA IG's misconduct and appearance
of a lack of independence. This investigative report was released in
late March 2007 to the House Committee on Science and Technology, which
has oversight responsibilities for scientific research and development
at NASA and other nondefense agencies. We discussed the disposition of
the investigation with the Integrity Committee. We met with the NASA IG
and senior OIG staff at the beginning of our review regarding our scope
and methodology. We conducted a series of interviews coordinated
through the IG's Executive Officer which included the Deputy Inspector
General, the Counsel to the IG, the Assistant IG for Audits, the
Assistant IG for Investigations, and the Assistant IG for Management
and Planning. At the completion of our work we met with the NASA IG and
senior OIG staff to discuss our report findings, conclusions, and
recommendations.
We conducted this performance audit from November 2007 through December
2008 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Results in Brief:
The fundamental mission of the statutory federal OIGs includes
identifying areas for improved economy, efficiency, and effectiveness
through independent and objective oversight; preventing and detecting
fraud, waste, and abuse; and recommending corrective actions. Over
fiscal years 2006 and 2007 the OIG completed 71 audits and other
reports which included oversight of NASA's high-risk areas and
management challenges, and reported closing 153 investigations in
response to allegations of fraud, waste, and abuse. However, only one
audit report for the 2-year period included recommendations for
improving NASA's economy and efficiency with potential cost savings.
For fiscal years 2003 through 2007 the NASA OIG reported over $824
million in total monetary accomplishments from audits and
investigations. The results of the OIG's investigations accounted for
over $815 million or 99 percent of this amount while audits contributed
about $9 million, or 1 percent. In addition, two OIG investigations
were responsible for $726 million, or 88 percent of the investigative
total, and two audits were responsible for about $8.4 million, or about
94 percent of all audit monetary accomplishments reported during the 5-
year period. Contributing to the lack of reported monetary
accomplishments from audits for this period, the OIG reported no
monetary accomplishments from its audit activity from April 1, 2004,
through September 30, 2005.
We believe that the lack of OIG recommendations regarding the economy
and efficiency of NASA's programs and activities has resulted in the
relatively low amount of reported monetary accomplishments when
compared to other OIGs during fiscal year 2007. By comparing the OIG's
budgetary resources of about $34 million for the same year with the
combined monetary accomplishments for audits and investigations, there
is a $0.36 return for each budget dollar. When this calculation is made
for all 30 OIGs with IGs appointed by the President and confirmed by
the Senate, the cumulative return for each budget dollar is
approximately $9.49, or about 26 times that of the NASA OIG. Also, when
compared to these other OIGs, the year that the NASA OIG had its
largest reported monetary accomplishment from audits, it ranked 27 in
return for each budget dollar out of the 28 OIG offices reporting
monetary accomplishments for fiscal year 2007.
These results can be attributed, at least in part, to strategic and
annual audit plans that lack goals and objectives to provide assurance
that the economy and efficiency of NASA's programs will be addressed.
Instead, NASA OIG management officials often act as a clearinghouse for
allegations received by the OIG and provide auditors with assignments
to address limited scope procurement issues and areas that involve
violations of NASA regulations. This reactive approach to assigning
audits can encroach on the ability of the OIG to assign staff needed
for other audits to address the overall economy and efficiency of
NASA's programs and activities. We believe that the OIG can improve its
audit plans by providing more specific attention to performance audits
that address potential cost savings through recommendations that affect
the economy and efficiency of NASA's programs and operations and that
the OIG should consult with an objective outside party with experience
in this type of audit work when developing strategic and annual audit
plans.
The lack of OIG audits focused on NASA's economy and efficiency and the
relative lack of reported monetary accomplishments from audits are not
explained by a concurrent lack of budgetary resources. The NASA OIG's
total budgetary resources increased about 17 percent from $29 million
to $34 million in constant dollars over fiscal years 2003 through 2007.
The OIG's full-time equivalents (FTE) over the same period increased
from 191 to 199 at year-end (a 4 percent increase). A comparison of the
NASA OIG budget with the overall NASA budget indicates that the OIG
budget has increased slightly more than the NASA budget. In addition,
when this comparison is made for all 30 OIGs where the IGs are
appointed by the President and confirmed by the Senate, the NASA OIG's
budget ranks 11th as a percentage of the agency's budget.
The NASA OIG's staff attrition rate for fiscal year 2007 was almost 20
percent, while the attrition rate for all other NASA offices was 5
percent. The loss of experienced staff in the Office of Audits is a
result of 9 of the 10 highest-level audit managers' leaving the OIG in
the past 5-year period. These losses affect the ability of the OIG to
maintain experienced audit personnel.
Over the 5-year period of fiscal years 2003 through 2007 the NASA OIG
had three routine external peer reviews to determine whether the OIG
provides reasonable assurance of conforming to applicable professional
standards and one nonroutine external review completed in fiscal year
2007, conducted by the Integrity Committee of PCIE and ECIE. Two of the
routine peer reviews concluded that the NASA OIG's system of quality
control for the audit function provided reasonable assurance of
material compliance with professional auditing standards. The other
routine peer review concluded that the OIG's Office of Investigation's
system of internal safeguards and management procedures was in full
compliance with the quality standards established by PCIE and ECIE and
the Attorney General's investigation guidelines.
The nonroutine peer review was an investigation of allegations about
the management practices of the NASA IG performed by the Department of
Housing and Urban Development's OIG under the direction of the
Integrity Committee. The Integrity Committee concluded that the NASA IG
had created an abusive work environment and that other actions created
an appearance of a lack of independence. The Chair of both PCIE and
ECIE referred the results of the investigation to the current NASA
Administrator who provided a course of action to address the
investigation's conclusions. The Chair of PCIE and ECIE confirmed that
the actions taken by the NASA Administrator constitute the final
disposition of the investigation, and the case was closed by the
Integrity Committee. Nevertheless, the Integrity Committee considers
the actions taken by the NASA Administrator to be insufficient and the
matter of the NASA IG's appearance of a lack of independence to be
unresolved.
We are making recommendations to the IG to help strengthen the
oversight of NASA. Specifically, we recommend that the OIG's strategic
and annual audit plans address NASA's economy and efficiency by working
with an objective third party to obtain external review and
consultation during the strategic and annual planning processes. In
addition, we are recommending that the IG take actions to identify the
causes of high staff turnover with the assistance of an objective
expert. We are also making a recommendation to the Integrity Committee
to follow up on its investigative report and make any recommendations
needed to fully resolve its finding regarding the IG's appearance of a
lack of independence.
We obtained separate comments on a draft of this report from the
Integrity Committee and the NASA IG. These comments are reprinted in
their entirety in appendixes III and IV. Both the Integrity Committee
and the NASA IG disagreed with our recommendations. The Integrity
Committee stated that it did not have the power to compel any
particular action regarding its investigative finding that the NASA IG
lacked an appearance of independence and that we should make our
recommendation to the Chair of PCIE and ECIE. However, our
recommendation does not call for the Integrity Committee to take the
corrective action to resolve its investigative finding but rather to
exercise its authority and make appropriate recommendations for the
Chair of PCIE and ECIE to take corrective action. The NASA IG objected
to our report's scope, methodology, findings, conclusions, and
recommendations but provided little additional information to show that
NASA's economy and efficiency had been addressed through OIG audit
recommendations for potential cost savings, or that actions had been
taken to fully resolve the Integrity Committee's investigative finding
that the NASA IG had an appearance of a lack of independence. We rebut
disagreements and concerns raised by the Integrity Committee and the
NASA IG in the Agency Comments and Our Evaluation section of this
report. We also provide additional information in the GAO Comments
section of this report. We reaffirm the need for the Integrity
Committee and the NASA IG to take actions to address these findings.
Background:
NASA was established by the National Aeronautics and Space Act of 1958
to provide research into problems of flight within and outside Earth's
atmosphere and to ensure that the United States conducts activities in
space devoted to peaceful purposes for the benefit of mankind. On
January 14, 2004, the President announced a new vision for space
exploration endorsed by the Congress in the NASA Authorization Act of
2005 [Footnote 5] which includes a journey of exploring the solar
system, returning astronauts to the moon in the next decade, and
venturing to Mars and beyond.
NASA comprises the Headquarters in Washington, D.C., nine field centers
located throughout the country, and the Jet Propulsion Laboratory (JPL)
operated for NASA by the California Institute of Technology.[Footnote
6] The NASA centers and JPL conduct NASA's programs in exploration,
discovery, and research and are led by four mission directorates at
NASA Headquarters. (See table 1.)
Table 1: NASA Mission Directorates and Their Primary Missions:
NASA mission directorates:
Aeronautics Research Mission Directorate: Conducts research to enable
changes to the airspace system and the aircraft that fly within it
while supporting NASA's space exploration missions.
Exploration Systems Mission Directorate: Supports the development of
human and robotic space exploration.
Science Mission Directorate: Conducts the scientific exploration of the
Earth, sun, and the rest of the solar system and the universe.
Space Operations Mission Directorate: Directs space flight operations,
space launches, and space communications and manages operations of the
International Space Station.
Source: NASA.
[End of table]
The NASA OIG was established by the IG Act to provide an independent
office within NASA to conduct and supervise audits and investigations;
provide leadership and coordination and recommend policies to promote
economy, efficiency, and effectiveness; and prevent and detect waste,
fraud, abuse, and mismanagement. The IG Act provides protections to
IGs' organizational independence through key provisions that require
specified IGs, including the NASA IG, to be appointed by the President
with the advice and consent of the Senate. This appointment is required
to be without regard to political affiliation and is to be based solely
on an assessment of the candidate's integrity and demonstrated ability.
Such presidentially appointed IGs can only be removed from office by
the President who must communicate the reasons for removal to both
houses of the Congress. The current NASA IG was appointed by the
President on April 16, 2002, after Senate confirmation. In addition to
the IG, the Deputy IG, and the Executive Officer, the OIG is organized
into four offices to provide oversight of NASA, as shown in table 2.
Table 2: NASA OIG Offices and Responsibilities:
Offices: Office of Audits;
Responsibilities: Responsible for financial and performance audits and
other reviews to examine NASA activities, programs, operations, and
organizations, and to focus on whether programs are organized, managed,
and implemented economically, effectively, and efficiently; funds are
expended in a manner consistent with laws, regulations, and policies;
desired program results are achieved; and management controls are in
place to prevent crimes, fraud, waste, abuse, and mismanagement.
Offices: Office of Investigations;
Responsibilities: Responsible for an investigations program to detect
and deter crimes, fraud, waste, abuse, and mismanagement. This includes
investigations of allegations of crime, cybercrime, fraud, abuse, or
misconduct having an impact on NASA programs, operations, and
resources.
Offices: Office of Management and Planning;
Responsibilities: Responsible for assembling the NASA OIG's strategic
plans; handling personnel matters, including recruiting and performance
management; and preparing budget estimates and resource needs.
Offices: Counsel to the Inspector General;
Responsibilities: Prepares legal reviews of statutes and regulations
that apply to the work of the OIG's auditors and investigators, and
addresses personnel matters and other legal matters affecting the
office.
Source: NASA OIG.
[End of table]
As a presidentially appointed IG, the NASA IG is a member of the PCIE,
which together with the ECIE, operates a joint Integrity Committee that
is empowered to investigate allegations of wrongdoing against IGs and
certain members of their staff. The Inspector General Reform At of
2008,[Footnote 7] enacted on October 14, 2008, authorizes a new
statutory Council of the Inspector General on Integrity and Efficiency
which is to have its own Integrity Committee with powers similar to the
PCIE and ECIE Integrity Committee and disestablishes the PCIE and ECIE
effective on the earlier of the creation of the new Council, or 180
days after the passage of the Act. As of the date of this report the
new Council has not yet been established, and the PCIE, ECIE, and their
Integrity Committee continue operation.
Since 1990, we have periodically reported on government operations that
we have designated as high risk because of their greater
vulnerabilities to fraud, waste, abuse, and mismanagement as well as
challenges to economy, efficiency, or effectiveness.[Footnote 8] In
January 2007, we identified 27 high-risk areas across the federal
government. These included high-risk areas applicable to NASA that had
been reported in prior high-risk reports. We specifically identified
NASA's contract management as a high-risk area because of weaknesses in
NASA's integrated financial management system. For example, we have
reported that NASA's contractor cost reporting process does not provide
cost information that program managers and cost estimators need to
develop credible estimates and compare budgeted and actual cost with
the work performed. Also, NASA has lacked a modern financial management
system to provide accurate and reliable information on contract
spending and placed little emphasis on product performance, cost
controls, and program outcomes. On a governmentwide basis, we also
identified protecting the federal government's information systems and
strategic human capital management across the executive branch as high-
risk areas.
Beginning in 1997, the IGs were asked by congressional leaders to
identify the 10 most serious management problems in their respective
agencies. The request began a yearly process that continues in response
to requirements established in the Reports Consolidation Act of
2000.[Footnote 9] This act calls for executive agencies, including
NASA, to report their IGs' lists of significant management challenges
in their annual performance and accountability reports to the
President, OMB, and the Congress. In fiscal years 2006 and 2007, the
NASA OIG identified management challenges that included areas also
identified in our high-risk reports and in the additional areas of
financial management, space operations and exploration, and safety and
security.
The OIG has identified NASA's Integrated Enterprise Management Program
as key to improving NASA's ability to provide reliable information to
management, support compliance with federal requirements, and
strengthen the internal control program to address continuing problems,
such as NASA's internal control weaknesses over property, plant, and
equipment and materials. Regarding space operations and exploration,
the OIG has identified the transition from the space shuttle to the
next generation of space vehicles as a management challenge as NASA
balances schedule and resource constraints while maintaining the
capabilities required to fly the space shuttle and simultaneously
developing the next generation of space vehicles. In the area of safety
and security the OIG has identified NASA's need to manage risk, safety,
and mission assurance controls to ensure reliable operations in the
context of aggressive launch and mission schedules, funding
limitations, and future uncertainties as management challenges.
NASA OIG Provides Limited Monetary Accomplishments from Audits:
The IG Act requires independent IG offices to provide leadership on
issues of economy and efficiency and to report on the effectiveness of
programs, offices, and activities within their respective agencies. The
NASA OIG's Office of Audits provides financial and performance audits
and other reviews to examine NASA's operations.[Footnote 10] The NASA
OIG has conducted audit activity in most high-risk areas identified by
us and the management challenges identified by the OIG for fiscal years
2006 and 2007. In addition to audits, the NASA OIG reported closing 153
investigative cases during fiscal years 2006 and 2007 in response to
allegations of fraud, waste, and abuse. In providing audit coverage,
the NASA OIG has generally not focused on audits with recommendations
for improving the economy and efficiency of NASA's programs and
operations with potential monetary savings. For example, during fiscal
years 2006 and 2007 the OIG had one audit with recommendations with
potential monetary savings.
During the 5-year period of fiscal years 2003 through 2007, 99 percent
of NASA OIG's dollar accomplishments came from investigations with 88
percent coming from two joint investigations with other OIGs. The
remaining 1 percent of the monetary accomplishments reported by the
NASA OIG during this 5-year period was from audits. We believe that
improvements to the OIG's strategic and annual audit planning could
help to ensure that audits with an emphasis on NASA's economy and
efficiency through potential cost savings are included in its annual
audit activities.
Audit Coverage of High Risk Areas and Management Challenges:
Over fiscal years 2006 and 2007 the NASA OIG's Office of Audits
reported having completed 71 reports. Of these, the NASA OIG issued 13
audit reports in fiscal year 2006 and 20 audit reports in fiscal year
2007 on high-risk areas identified by us, and on NASA's management
challenges identified by the OIG. As shown in table 3, multiple NASA
OIG audit reports were completed in most of the areas designated as
high risk and as management challenges with the exception of asset
management and human capital. Most of the OIG's reports were in the
areas of information technology security, contract management, and
financial management. In contrast, the area of asset management had one
report, and there were no audits of human capital issues even though
these areas are both among GAO high-risk areas and NASA's management
challenges. (The OIG is currently auditing an issue of asset management
and has plans to address an issue of NASA's human capital.)
In addition, the NASA OIG's audit reports also addressed areas not
identified as high-risk areas or management challenges. These included
quality control reviews of the audits of federal award recipients by
nonfederal auditors to ensure that these audits are performed in
compliance with government auditing standards.[Footnote 11] In
addition, while the OIG's audit policy is to complete audits using
Government Auditing Standards and the IG Act requires that all NASA OIG
audits be completed using these standards, 25, or approximately 35
percent, of the OIG's 71 reports completed by the NASA OIG Office of
Audits were completed without using these standards. Those reports
included transmittal letters and information without a statement of
compliance with auditing standards. Consequently, we did not consider
these reports as part of the OIG's audit coverage for high-risk areas
and management challenges.
Table 5: NASA OIG Audit Coverage of High-Risk Areas and Management
Challenges in Fiscal Years 2006 and 2007:
GAO high-risk areas for 2005[A] and 2007[B]: Protecting the federal
government's information systems;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Information Technology & Security;
NASA OIG reports: FY 2006: 5;
NASA OIG reports: FY 2007: 3;
NASA OIG reports: Total reports: 8.
GAO high-risk areas for 2005[A] and 2007[B]: NASA contract management
issues caused by weaknesses in the integrated financial management
system;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Contractor performance oversight, acquisition and
contracting processes;
NASA OIG reports: FY 2006: 4;
NASA OIG reports: FY 2007: 4;
NASA OIG reports: Total reports: 8.
GAO high-risk areas for 2005[A] and 2007[B]: Managing federal real
property;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Asset management;
NASA OIG reports: FY 2006: 0;
NASA OIG reports: FY 2007: 1;
NASA OIG reports: Total reports: 1.
GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital
management;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Human capital issues related to NASA's transition to next
generation of space vehicles;
NASA OIG reports: FY 2006: 0;
NASA OIG reports: FY 2007: 0;
NASA OIG reports: Total reports: 0.
GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital
management;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Financial management, systems, analyses, and oversight;
NASA OIG reports: FY 2006: 1;
NASA OIG reports: FY 2007: 9;
NASA OIG reports: Total reports: 10.
GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital
management;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Space Operations & Exploration;
NASA OIG reports: FY 2006: 1;
NASA OIG reports: FY 2007: 2;
NASA OIG reports: Total reports: 3.
GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital
management;
Management challenges and issues identified by NASA OIG in 2006 and
2007[C,D]: Safety and Security--space shuttle safety, operational and
safety risks;
NASA OIG reports: FY 2006: 2;
NASA OIG reports: FY 2007: 1;
NASA OIG reports: Total reports: 3.
Total audits of high-risk areas and management challenges:
NASA OIG reports: FY 2006: 13;
NASA OIG reports: FY 2007: 20;
NASA OIG reports: Total reports: 33.
Quality control reviews[E]:
NASA OIG reports: FY 2006: 5;
NASA OIG reports: FY 2007: 4;
NASA OIG reports: Total reports: 9.
Other areas covered by audits:
NASA OIG reports: FY 2006: 2;
NASA OIG reports: FY 2007: 2;
NASA OIG reports: Total reports: 4.
Audit products not using Government Auditing Standards:
NASA OIG reports: FY 2006: 15;
NASA OIG reports: FY 2007: 10;
NASA OIG reports: Total reports: 25.
Total audit products:
NASA OIG reports: FY 2006: 35;
NASA OIG reports: FY 2007: 36;
NASA OIG reports: Total reports: 71.
Sources: GAO's 2007 and 2005 High-Risk Series and NASA OIG's fiscal
year 2006 and 2007 audit reports.
[A] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, DC.:
January 2005).
[B] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, DC.:
January 2007).
[C] NASA's Performance and Accountability Report, fiscal years 2006 and
2007.
[D] NASA's Most Serious Management and Performance Challenges, fiscal
years 2006 and 2007.
[E] Reviews required by OMB Circular No. A-133, Audits of States, Local
Governments, and Non-profit Organizations.
[End of table]
Investigative Coverage from Closed Cases:
In addition to audits, the NASA OIG reported closing 153 investigative
cases during fiscal years 2006 and 2007 in response to allegations of
fraud, waste, and abuse. The OIG's Office of Investigations
investigates allegations of crime, cybercrime, fraud, waste, abuse, and
misconduct that could affect NASA's programs, projects, operations, and
resources. The Office of Investigations refers its findings either to
the Department of Justice for criminal prosecution and civil litigation
or to NASA management for administrative action. In addition, the
Office of Investigations identifies crime indicators and recommends
measures for NASA management that are designed to reduce NASA's
vulnerability to criminal activity.
The OIG's closed cases focused on NASA procurements or procurement
activities and investigations of computer crimes. (See figure 1.) In
addition, there were investigations of conflicts of interest, large-
scale thefts of government property, and false statements. Other
investigations included safety, state and local crimes, travel card
fraud, and drug abuse.
Figure 1: NASA OIG Investigations Closed During Fiscal Years 2006 and
2007:
[Refer to PDF for image]
This figure is a horizontal bar graph depicting the following data:
NASA OIG Investigations Closed During Fiscal Years 2006 and 2007:
Type of investigation: Procurement/procurement related:
Closed FY 2007: 29;
Closed FY 2006: 27.
Type of investigation: Computer crime:
Closed FY 2007: 13;
Closed FY 2006: 21;
Type of investigation: Conflict of interest:
Closed FY 2007: 0;
Closed FY 2006: 8.
Type of investigation: Theft/conversion of government property:
Closed FY 2007: 8;
Closed FY 2006: 8.
Type of investigation: Other:
Closed FY 2007: 11;
Closed FY 2006: 12.
Type of investigation: False statements:
Closed FY 2007: 5;
Closed FY 2006: 11.
Note: The types of investigations may include multiple categories.
Also, other closed cases include investigations of safety, state and
local crimes, travel card fraud, and drug investigations.
[End of figure]
NASA OIG's Monetary Accomplishments Are Largely from Investigations:
Statutory OIGs subject to the IG Act, including the NASA OIG, are
required to report the monetary value of certain findings and
recommendations in their semiannual reports provided by the OIGs
through their agency heads to the Congress. As required, the NASA OIG's
semiannual reports for fiscal years 2003 through 2007 included the
number of audit reports issued and the questioned costs, unsupported
costs, and funds to be put to better use identified by the OIG's
audits. As defined by the IG Act, questioned costs include either
alleged violations of laws, regulations, contracts, grants, or
agreements; costs not supported by adequate documentation; or the
expenditure of funds for an intended purpose that was unnecessary or
unreasonable. In addition, unsupported costs are defined as costs that
do not have adequate documentation, and funds to be put to better use
are inefficiencies identified by the OIG in the use of agency funds.
These are often potential savings to the government.
The monetary accomplishments of the NASA OIG's Office of Investigations
are largely from closed investigations that result in recoveries of
federal dollars which include fines and court ordered restitutions
regarding individuals and contractors who have defrauded the
government. As shown in table 4, almost all of the NASA OIG's monetary
accomplishments have come from investigations during fiscal years 2003
through 2007.
Table 4: NASA OIG's Reported Monetary Accomplishments and Return per
Budget Dollar for Fiscal Years 2003 through 2007:
Fiscal year: 2007;
Monetary accomplishments: $12,103,809;
Dollar return on NASA's OIG budget: $0.36; Dollar return on NASA's OIG
budget: (43 percent from investigations; 57 percent from one audit).
Fiscal year: 2006;
Monetary accomplishments: $657,116,285;
Dollar return on NASA's OIG budget: $19.91; Dollar return on NASA's OIG
budget: (Over 99 percent from investigations; 94 percent from one
investigation).
Fiscal year: 2005;
Monetary accomplishments: $12,866,383;
Dollar return on NASA's OIG budget: $0.39; Dollar return on NASA's OIG
budget: (100 percent from investigations; $0.00 audit accomplishments).
Fiscal year: 2004;
Monetary accomplishments: $10,361,564;
Dollar return on NASA's OIG budget: $0.35; Dollar return on NASA's OIG
budget: (86 percent from investigations; 14 percent from one audit).
Fiscal year: 2003;
Monetary accomplishments: $131,985,231;
Dollar return on NASA's OIG budget: $4.55; Dollar return on NASA's OIG
budget: (Over 99 percent from investigations; 84 percent from one
investigation).
Source: NASA OIG.
[End of table]
In fiscal year 2006 the OIG reported the results of a joint
investigation with the Department of Defense and Department of Justice
OIGs that had total recoveries of $615 million from a settlement with
the Boeing Company regarding criminal and civil allegations. Also, in
fiscal year 2003 the OIG reported another joint investigation with
recoveries of about $111 million. The results of these two
investigations alone account for 88 percent of the NASA OIG's reported
total monetary accomplishments of over $824 million from both audits
and investigations over fiscal years 2003 through 2007. The total
monetary accomplishments from OIG investigations for this period were
$815 million, or 99 percent of all reported OIG monetary
accomplishments. In contrast, over the same 5-year period the OIG's
potential audit savings contributed about $9 million or about 1 percent
of the OIG's total reported 5-year monetary accomplishments, with one
audit in fiscal year 2007 responsible for $7 million of this amount and
another audit in fiscal year 2004 responsible for about $1.5 million.
Therefore, approximately 94 percent of all NASA OIG audit monetary
accomplishments reported over the 5-year period came from the results
of two audits. In addition, during the 1-1/2-year period from April 1,
2004, through September 30, 2005, the OIG reported no monetary
accomplishments from its audit activity.
A comparison of the OIG's fiscal year 2007 total budgetary resources of
$34 million to its reported combined monetary accomplishments for that
year results in a return of $0.36 for each budget dollar. When this
same calculation is made based on the monetary accomplishments reported
by all 30 OIGs with IGs appointed by the President and confirmed by the
Senate, the overall average return on their total budgetary resources
in fiscal year 2007 was $9.49 for every dollar spent by the government
for their offices, or almost 26 times that of the NASA OIG for fiscal
year 2007. In addition, when compared to these other OIGs, the year
that the NASA OIG had its largest monetary accomplishment from audits
it ranked 27 out of the 28 OIG offices reporting monetary
accomplishments for fiscal year 2007. (See appendix I.)
OIG Planning Lacks Economy and Efficiency Objectives:
Of the 71 reports completed by the NASA OIG's Office of Audits over
fiscal years 2006 and 2007, 70 did not include recommendations that
address the economy and efficiency of NASA's programs and operations
with potential cost savings. The one exception to this was an OIG audit
that addressed an area of NASA's economy and efficiency and resulted in
about $7 million in reported potential monetary savings. The remaining
70 reports included recommendations for improving compliance with laws,
regulations, and NASA policies and procedures; internal controls; and
addressed specific areas of NASA's operations. Nevertheless, these
recommendations did not provide measurable improvements to the costs
and resources used to achieve program results.
To illustrate, in fiscal year 2006 the NASA OIG audited the awards of
subcontracts worth $4.6 billion for NASA's space flight operations. The
OIG found that the primary government contractor's actions had complied
with requirements for competition, quality assurance, and other
procurement regulations, but also found examples of inadequate pricing
determinations. The report recommended that the NASA contracting
officer ensure compliance with contract agreements and procurement
regulations but did not include recommendations to help ensure that
this area will be effective or efficient in the future and did not
identify any measurable cost savings to the government resulting from
inadequate pricing. In addition, over the 2-year period we reviewed
there were no OIG audits with recommendations to increase the economy
and efficiency of NASA's space flight operations with identified cost
savings even though the IG had identified this program as one of NASA's
management challenges.
The OIG's annual audit plan addresses NASA's programs in high-risk
areas and management challenges but does not have a strategy to deal
with economy and efficiency associated with these NASA programs. The
OIG's strategic plan and annual audit plans do not identify goals and
audit objectives related to evaluating NASA's programs and operations
through economy and efficiency audits. The OIG's annual audit plans for
fiscal years 2006 and 2007 provided details on the objectives of each
individual audit; however, similar to the results that we found for the
OIG's audits, the objectives of the audits in these plans were not
directed at audits that might result in measurable cost savings. A
subsequent revision of the fiscal year 2007 audit plan also had no
specific objectives for addressing NASA's economy and efficiency.
In addition, through limited scope audits of compliance as well as
investigations, the OIG addresses allegations received. To illustrate,
OIG auditors and investigators are often assigned reviews of
allegations or other assignments received from the OIG's Senior Staff
Referral Review Committee (SSRRC). The SSRRC was established by the
NASA IG in the fall of 2005 to act as a clearinghouse for allegations
and to review all work planned for OIG staff. The SSRRC is composed of
the Assistant IG for Investigations, the Deputy Assistant IG for
Audits, the OIG Counsel, and the IG's Executive Officer. The SSRRC
meets once a week to coordinate audit and investigative assignments,
review fraud hotline information, review letters with allegations, and
decide on where to assign the work. Generally, if the issues involve
wrongdoing by NASA employees or contract fraud the OIG investigators
will handle the cases. The OIG auditors are generally assigned limited
scope procurement issues and issues that involve violations of NASA
regulations. Issues involving standards of conduct or personnel matters
will generally be referred to NASA management.
The NASA OIG's limited monetary accomplishments from its audit activity
can be attributed to (1) the lack of emphasis in its annual audit plan
on goals and objectives for areas to improve economy and efficiency of
NASA's programs and operations and (2) the OIG's focus on reviews of
allegations and limited scope issues in a reactive approach to audit
planning through assignments from the SSRRC, which can encroach on the
ability to assign staff needed for other performance audits that can
address potential dollar savings. We believe that the OIG can improve
its audit plans by providing more specific attention to performance
audits that address the economy and efficiency of NASA's programs and
operations, and that the OIG should consult with an objective,
knowledgeable outside party with experience in these types of audits
when completing these plans.
NASA OIG's Budgets and Staffing:
From fiscal year 2003 through fiscal year 2007, the NASA OIG's total
budgetary resources increased by approximately 17 percent, from
approximately $29 million to $34 million in constant dollars, while the
FTEs increased 4 percent, from 191 to 199. Of the 199 FTEs at the end
of fiscal year 2007, 47 percent were in the Office of Audits, 37
percent in the Office of Investigations, 10 percent in the Office of
Management and Planning, and 4 percent and 2 percent, respectively, for
the Counsel to the IG and the IG's immediate office. (See figure 2.)
Figure 2: Distribution of NASA OIG Staff for Fiscal Year 2007:
[Refer to PDF for image]
This figure is a pie-chart depicting the following data:
Distribution of NASA OIG Staff for Fiscal Year 2007:
Office of Audits: 47%;
Office of Investigations: 37%;
Office of Management and Planning: 10%;
Counsel to the IG: 4%;
IG, Deputy IG, Executive Director: 2%.
Source: NASA OIG.
[End of figure]
A comparison of NASA OIG's total budgetary resources with NASA's total
budgetary resources shows that the OIG's budget as a percentage of
NASA's budget has increased. In addition, NASA OIG's staffing levels
have increased while NASA's staffing level has decreased. During fiscal
years 2003 through 2007, NASA's overall total budgetary resources
increased by about 4 percent, compared with the OIG's budgetary
resources, which increased by about 17 percent. Therefore, the NASA
OIG's total budgetary resources as a percentage of NASA's total
budgetary resources increased from 0.15 percent to 0.17 percent. (See
table 5.) During that same period, NASA's FTEs decreased by
approximately 2.7 percent, compared with the OIG's FTE increase of
about 4 percent.
Table 5: NASA OIG and NASA Budgets and FTEs, Fiscal Years 2003 through
2007:
Fiscal year: 2007;
NASA's total budgetary resources (dollars in millions): $20,011;
NASA OIG's total budgetary resources (dollars in millions): $34;
NASA OIG's total budgetary resources as a percentage of NASA's total
budgetary resources: 0.17;
NASA's FTEs (on board staff): 18,212;
NASA OIG's FTEs (on board staff): 199;
NASA OIG's authorized FTEs: 213.
Fiscal year: 2006;
NASA's total budgetary resources (dollars in millions): $20,315;
NASA OIG's total budgetary resources (dollars in millions): $33;
NASA OIG's total budgetary resources as a percentage of NASA's total
budgetary resources: 0.16;
NASA's FTEs (on board staff): 18,280;
NASA OIG's FTEs (on board staff): 199;
NASA OIG's authorized FTEs: 213.
Fiscal year: 2005;
NASA's total budgetary resources (dollars in millions): $20,121;
NASA OIG's total budgetary resources (dollars in millions): $33;
NASA OIG's total budgetary resources as a percentage of NASA's total
budgetary resources: 0.16;
NASA's FTEs (on board staff): 18,807;
NASA OIG's FTEs (on board staff): 183;
NASA OIG's authorized FTEs: 213.
Fiscal year: 2004;
NASA's total budgetary resources (dollars in millions): $20,743;
NASA OIG's total budgetary resources (dollars in millions): $30;
NASA OIG's total budgetary resources as a percentage of NASA's total
budgetary resources: 0.15;
NASA's FTEs (on board staff): 18,821;
NASA OIG's FTEs (on board staff): 189;
NASA OIG's authorized FTEs: 213.
Fiscal year: 2003;
NASA's total budgetary resources (dollars in millions): $19,254;
NASA OIG's total budgetary resources (dollars in millions): $29;
NASA OIG's total budgetary resources as a percentage of NASA's total
budgetary resources: 0.15;
NASA's FTEs (on board staff): 18,709;
NASA OIG's FTEs (on board staff): 191;
NASA OIG's authorized FTEs: 213.
Source: GAO analysis of OMB and NASA OIG data.
Note: Budgetary resources are in constant 2007 dollars.
[End of table]
When NASA OIG's budget-to-agency-budget ratio is compared to this same
ratio for other OIGs in which the IG is appointed by the President with
Senate confirmation, the percentages vary depending on the size of the
federal agencies, their missions, and the oversight issues emphasized
by each OIG. Such a comparison for fiscal year 2007 budgets indicates
that the ratio of the NASA OIG's total budgetary resources to the total
budgetary resources for NASA was within the range of these percentages
for other OIGs and their agencies. Specifically, the comparison of
these other OIGs' budgets with those of their agencies ranged from
0.005 percent to 1.10 percent, and the NASA OIG's percentage of NASA
resources was at 0.17 percent, which ranks 11th of these 30 agencies.
(See appendix II.)
Regarding staffing levels, we obtained the attrition rates for the NASA
OIG for fiscal years 2003 through 2007. Attrition is the percentage of
personnel losses for all reasons during the fiscal year, and is
measured by comparing personnel losses during the year to the total
personnel strength on board at the beginning of the year. The staff
attrition rate for NASA OIG has increased over the 5-year period from
12.4 percent in 2003 to 19.9 percent in 2007. Specifically, the NASA
OIG had losses of 24 personnel in fiscal year 2003 compared to a loss
of 40 personnel in fiscal year 2007, an increase of approximately 67
percent. (See table 6.) As a comparison, the overall attrition rate for
NASA was about 5 percent in both fiscal years 2006 and 2007.
From fiscal years 2003 through 2007, the NASA OIG lost 157 staff. These
losses affect the ability of the OIG to maintain experienced audit
personnel. To illustrate this effect on the Office of Audits, we
compared the audit staff on board in January 2003, shortly after the
current IG took office, to the audit staff on board in March 2008. Of
the 78 auditors on board in January 2003, 42 auditors have left the OIG
audit directorate, including 9 of the 10 management-level auditors.
Those leaving included all but one of the audit directors, the
Assistant IG for Audits, and 2 deputy assistant IGs for audits. We did
not review the reasons for the OIG's employee turnover but believe that
the OIG would benefit from a review by an objective third-party expert
to address the reasons for the relatively high attrition rate as
compared to the overall rate for NASA.
Table 6: NASA OIG Attrition Rates for Fiscal Years 2003 through 2007:
Fiscal year: 2003;
Beginning of year personnel strength[A]: 194;
Gains: 21;
Losses: 24;
End of year personnel strength[A]: 191;
Attrition rate: 12.4.
Fiscal year: 2004;
Beginning of year personnel strength[A]: 191;
Gains: 21;
Losses: 26;
End of year personnel strength[A]: 186;
Attrition rate: 13.6.
Fiscal year: 2005;
Beginning of year personnel strength[A]: 186;
Gains: 37;
Losses: 35;
End of year personnel strength[A]: 188;
Attrition rate: 18.8.
Fiscal year: 2006;
Beginning of year personnel strength[A]: 188;
Gains: 45;
Losses: 32;
End of year personnel strength[A]: 201;
Attrition rate: 17.0.
Fiscal year: 2007;
Beginning of year personnel strength[A]: 201;
Gains: 40;
Losses: 40;
End of year personnel strength[A]: 201;
Attrition rate: 19.9.
Sources: NASA OIG.
[A] Actual personnel on board.
[End of table]
External Reviews of NASA OIG and the Integrity Committee's
Investigation:
Over the 5-year period of fiscal years 2003 through 2007, NASA OIG had
three routine external peer reviews--two reviews of its auditing
practice and one review of its investigative practice. The NASA OIG
also had a nonroutine external review performed by the Integrity
Committee of PCIE and ECIE completed in fiscal year 2007 as a result of
concerns about the management practices and conduct of NASA's IG.
Routine Peer Reviews:
Government Auditing Standards requires audit organizations that perform
audits in accordance with the standards to have external peer reviews
on a routine basis, at least once every 3 years. Those reviews are to
be performed by reviewers independent of the audit organization. In the
federal IG community, other federal IGs perform these peer reviews. The
purpose of the peer review is to conclude whether the audit
organization has a system of quality control that is suitably designed
and implemented in order to provide reasonable assurance of conforming
to applicable professional standards. In addition, for investigations,
the Homeland Security Act of 2002[Footnote 12] amended the IG Act to
require that each OIG with investigative or law enforcement authority
under the act have its investigative function reviewed periodically by
another IG office.
For peer reviews of the audit practices,[Footnote 13] the external
reviewers concluded that NASA OIG's system of quality control for the
audit function provided reasonable assurance of material compliance
with professional auditing standards. The peer review of the NASA OIG's
investigative function[Footnote 14] concluded that the system of
internal safeguards and management procedures for the Office of
Investigations was in full compliance with the quality standards
established by PCIE and ECIE and the Attorney General's investigation
guidelines.
Integrity Committee's Investigation:
The NASA OIG also had a nonroutine external review completed in fiscal
year 2007 as a result of serious concerns that had been raised about
the management practices and conduct of the IG. At the request of the
Integrity Committee of PCIE and ECIE, the Department of Housing and
Urban Development's (HUD) OIG conducted an investigation into the
allegations of possible misconduct by the NASA IG. The Integrity
Committee initiated the investigation through a request letter to the
HUD OIG dated January 6, 2006, and forwarded 18 complaints with 79
separate allegations regarding actions of the NASA IG to the HUD OIG
investigators.
The HUD OIG submitted the results of its investigation for the
Integrity Committee's consideration on August 30, 2006. In a January
22, 2007, letter to the OMB Deputy Director for Management who serves
as the Chair of both PCIE and ECIE, the Integrity Committee concluded
that (1) the NASA IG had engaged in abuse of authority by creating an
abusive work environment and (2) the NASA IG's actions in two instances
created an appearance of a lack of independence. In addition, the
Integrity Committee stated that the IG had sought to develop and
maintain a close relationship with the former NASA Administrator and
that this effort contributed to an appearance that his independence was
being compromised. However, the Integrity Committee offered no
recommendations for corrective actions in their letter.
Executive Order 12993 entitled Administrative Allegations Against
Inspectors General provides guidance to address investigations of
alleged IG wrongdoing. Under this guidance the Integrity Committee is
responsible for deciding whether the investigative report prepared at
its request establishes any administrative misconduct within its
oversight jurisdiction. If in the Integrity Committee's opinion the
report establishes such issues or otherwise requires action, the report
is referred to the Chair of PCIE and ECIE with recommendations for
appropriate action. The Integrity Committee advised us that they had
not believed it necessary to include specific recommendations in this
case due to the extent of the findings and the presumption that the
Chair of PCIE and ECIE would take disciplinary action commensurate with
these findings.
In accordance with the Executive Order, the Chair of PCIE and ECIE
advised the NASA Administrator to determine the appropriate actions to
address the investigation's conclusions. The NASA Administrator
proposed to the Chair that the NASA IG attend the Federal Executive
Institute to develop a leadership and management training plan, attend
at least one management/leadership program annually, obtain the
services of an executive coach, and meet with the Deputy NASA
Administrator on a bimonthly basis to discuss implementation of the
leadership and management plan as well as the NASA IG's professional
growth. The NASA Administrator also stated that the proposed actions
would resolve any concerns he had after reviewing the Integrity
Committee's report of investigation.
Reacting to the NASA Administrator's response, the Integrity Committee
expressed its view in a March 20, 2007 letter to the Chair of PCIE and
ECIE that the proposed actions were inadequate to address the
investigation's conclusions. Specifically, the Integrity Committee
stated that "all members of the committee believed the proposed course
of action recommended by the Administrator of NASA was inadequate to
address the conduct of [the IG]. All members of the committee further
believed that disciplinary action up to and including removal could be
appropriate."
In a follow-up letter dated March 29, 2007, the NASA Administrator
reaffirmed his belief that his proposed actions were adequate. With
respect to the appearance of a lack of impartiality he stated that he
and the IG had a professional arms-length relationship and that he did
not believe that additional corrective measures were necessary. In a
letter also dated March 29, 2007, the Chair of PCIE and ECIE asked the
Integrity Committee for confirmation on several matters including that
its members (1) had not concluded that the IG had broken any laws or
acted illegally; (2) had no uniform view on what actions would be
appropriate to address its concerns regarding the IG; (3) that it was
not now recommending removal of the IG as a disciplinary action; and
(4) that the January 22, 2007, letter to the PCIE and ECIE Chair had
not contained recommendations on this matter. That same day, the Chair
of the Integrity Committee confirmed that the PCIE and ECIE Chair's
understanding accurately reflected the intent of the Integrity
Committee. In accordance with the discretion afforded in the Executive
Order and the related implementing guidance, on April 18, 2007, the
Chair of PCIE and ECIE advised the Chair of the Integrity Committee to
consider the actions in the NASA Administrator's March 29, 2007, letter
as constituting the final disposition of the investigation. In line
with the Executive Order, the Integrity Committee informed the NASA IG
that their review was complete and that the case is considered closed.
Notwithstanding the formal process outlined by the Executive Order, the
Integrity Committee confirmed in a written response to our questions,
its continued concern that the actions taken regarding the appearance
of a lack of independence were insufficient. In the same response, the
Integrity Committee stated that the views expressed in its March 20,
2007, letter remain unchanged and that the NASA IG's lack of an
appearance of independence was not resolved by the actions proposed by
the NASA Administrator.
In late March 2007, both the Chairman of the Subcommittee on Space,
Aeronautics, and Related Matters, Senate Committee on Commerce, Science
and Transportation, and the Chairman of the Subcommittee on
Investigations and Oversight, House Committee on Science and
Technology, received a copy of the Integrity Committee's report of
investigation. In their letter of April 2, 2007, to the President of
the United States, the Chairmen requested that the President remove the
NASA IG from office based on the results of the investigation. The
letter states that the committees and the public are not receiving
useful assistance from the NASA IG, one of their primary tools for
oversight, and that the NASA IG can no longer be effective in his
office and should be replaced immediately.
In prepared testimony on June 7, 2007, before a joint hearing between
the Subcommittee on Space, Aeronautics, and Related Sciences, Senate
Committee on Commerce, Science and Transportation, and the Subcommittee
on Investigations and Oversight, House Committee on Science and
Technology, the NASA IG disputed the findings of the Integrity
Committee investigation by calling the allegations unjustified and the
investigation flawed. The IG pointed out his views regarding possible
mistakes by the investigators, and provided arguments to explain his
actions regarding many of the allegations investigated. In this joint
hearing members of both the House and the Senate called for the IG to
resign.
Independence is the cornerstone of professional auditing. The IG Act
requires that IGs comply with Government Auditing Standards, which
specifies that auditors and audit organizations be free from personal,
external, and organizational impairments and avoid the appearance of
such impairments to independence. Auditors and audit organizations must
maintain independence so that their opinions, findings, conclusions,
judgments, and recommendations will be impartial and, just as
important, viewed as impartial by objective third parties with
knowledge of the relevant information.
Quality Standards for Federal Offices of Inspector General issued by
PCIE and ECIE include requirements for IGs to be objective with an
obligation to be impartial, intellectually honest, and free of
conflicts of interest. Independence is considered by these standards to
be a critical element of objectivity, and without independence both in
fact and in appearance, objectivity is impaired.
As noted above, the absence of actions to address the perceived lack of
independence can perpetuate concerns regarding the IG's objectivity in
dealing with IG responsibilities related to audits and investigations.
Given the importance of IG independence both in fact and appearance and
the lack of any corrective actions to fully resolve this matter, we
believe that additional follow up and recommendations by the Integrity
Committee are warranted related to its investigative finding dealing
with the NASA IG's appearance of a lack of independence.
Conclusions:
The fundamental mission of the NASA OIG includes providing independent
and objective oversight of NASA to identify areas for improved economy,
efficiency, and effectiveness, and to detect and prevent fraud, waste,
and abuse. While the OIG has conducted audits in areas of high risk and
management challenges and provided the results of investigations, the
OIG's monetary accomplishments from its audit activities have been
limited by a lack of audits to evaluate the economy and efficiency of
NASA's programs and operations that result in recommendations for
measurable cost savings.
The NASA OIG's monetary accomplishments and recommendations in the
areas of economy and efficiency significantly lag behind the
accomplishments and return on investment of the federal OIG community
as a whole. A reevaluation of audit planning and methods within NASA's
OIG is needed to include audits that hold NASA accountable for its
stewardship of public funds through independent audits and
investigations that include recommendations for economy and efficiency.
Due to the importance of this issue, we believe that a reexamination of
the audit strategy and planning approach within the OIG can best be
accomplished with the assistance of an objective outside party with
experience in these types of audits.
The OIG's budgets and staffing levels have not been adversely affected
when compared to both the NASA budgets and staffing and to the budgets
of other OIGs. However, the effectiveness of the OIG can be negatively
affected by an environment of high staff turnover, which has especially
affected audit management staff. The reasons for the relatively high
rate and recent increases in employee turnover should be examined by an
objective expert so that any underlying issues can be addressed and the
NASA OIG can effectively meet its mission of providing objective and
reliable information.
The independence of the IG is central to the effectiveness of the IG's
office. The Integrity Committee, which has the authority to make
recommendations regarding the outcomes of its investigations, considers
the actions taken by the NASA Administrator to be insufficient, that
the NASA IG's lack of an appearance of independence is not resolved,
and that the views expressed in its letter of March 20, 2007, are
unchanged. Because independence is fundamental to effective oversight
and professional auditing, we believe that additional follow up actions
are warranted related to the Integrity Committee's findings dealing
with the appearance of a lack of independence on the part of NASA's IG.
Recommendations for Executive Action:
In order to strengthen audit oversight and management of the NASA OIG,
we recommend that the NASA IG:
* include in strategic and annual planning, performance audits that
address NASA's economy and efficiency with potential monetary savings
and that the OIG work closely with an objective outside party to obtain
external review and consultation in the strategic and annual planning
processes, and:
* identify the causes of high employee turnover with the assistance of
an objective expert, and determine actions needed as appropriate.
In order to resolve the matter regarding the appearance of independence
of the NASA IG, we recommend that the Integrity Committee:
* follow up regarding its investigative finding regarding the NASA IG's
appearance of a lack of independence and make any recommendations
needed.
Agency Comments and Our Evaluation:
In written comments on a draft of our report, the NASA IG expressed
widespread disagreement with our conclusions and recommendations and
questioned the depth and scope of our evaluation. We disagree with the
IG and in the following paragraphs reaffirm our conclusions and
recommendations. We augmented our discussions of the scope and
methodology of our work and expanded the evidentiary matter in the body
of this report for issues related to the Integrity Committee's
investigation and the monetary accomplishments reported by the NASA OIG
over fiscal years 2003 through 2007. We rebut what we consider the most
important aspects of his disagreement in this section of the report. In
addition, please refer to the appendix section of this report following
our reprint of the IG's comments (see app. IV) in which we rebut or
clarify other less material matters.
The Integrity Committee limited its comments to matters in our draft
report concerning the committee's investigation of allegations against
the NASA IG. The Integrity Committee restates its determination that
actions taken by NASA regarding the appearance of a lack of
independence findings were insufficient, states that the Integrity
Committee has no power to compel any particular action, and suggests
that we should present our recommendation to the Chair of PCIE and
ECIE. However, we see nothing in the guidance in Executive Order 12993
to prohibit the Integrity Committee from making recommendations to the
Chair of PCIE and ECIE regarding its investigative finding which has
not been fully resolved. Therefore, we reaffirm our recommendation to
the Integrity Committee. (See appendix III.)
Integrity Committee Investigation:
In the written comments, the NASA IG stated that the Integrity
Committee investigation of allegations against him was a closed matter.
He emphasized that the Integrity Committee's views regarding the
independence matter were from a historical perspective and that there
was nothing to suggest that the appearance of a lack of independence
was an ongoing issue. Further, he stated that the Integrity Committee
had not included any recommendations in its report and that therefore,
nothing is unresolved.
The IG commented that we had ignored the documented final disposition
of this matter in the PCIE and ECIE Chair's April 18, 2007 letter, and
that we had selectively included or excluded information to suggest
that a closed matter is still open. We fully understand that the formal
investigation has run its course, and we have added discussion to the
body of the report to reflect the documented interactions among the
Chairman of PCIE and ECIE, the Integrity Committee, the NASA
Administrator, and the NASA IG. Our report acknowledges that the
Integrity Committee did not make any specific recommendations to
address either the investigative findings of an abusive work
environment or the perception of a lack of independence. However,
despite the PCIE and ECIE Chair's acceptance of the actions proposed by
the NASA Administrator and closure of the case, the Integrity Committee
stated in response to our questions, that the actions were not adequate
to resolve the investigative conclusion that the IG lacked an
appearance of independence.
As discussed in our report, the Integrity Committee told us that it did
not include recommendations for corrective actions in its January 22,
2007, letter to the Chair of PCIE and ECIE regarding the results of its
investigation because of the extent of the findings and a presumption
that the Chair of PCIE and ECIE would take disciplinary action
commensurate with these findings. These concerns are captured in the
Integrity Committee's March 20, 2007, letter to the Chair of PCIE and
ECIE, which stated that "all members of the committee further believed
that disciplinary action up to and including removal, could be
appropriate."
Given the Integrity Committee's documented dissatisfaction with the
corrective actions and that no actions we are aware of address the
independence issue, we disagree that this matter has been fully
resolved. Objective third parties with knowledge of the relevant
information including that of the Integrity Committee's investigation;
the lack of actions to attempt to change perceptions; and the Integrity
Committee's continuing concern, expressed in a written response to our
questions, that the actions taken were inadequate; could conclude that
the appearance of independence issues have not been resolved. As a
result, the decisions and actions of the IG may not be fully accepted
as a basis for policy or other changes. This perspective is illustrated
by the stances taken by the leadership of NASA's oversight committees.
As noted in the body of the report, in their joint letter dated April
2, 2007, the Chairman of the Subcommittee on Space, Aeronautics, and
Related Matters, Senate Committee on Commerce, Science and
Transportation, and the Chairman of the Subcommittee on Investigations
and Oversight, House Committee on Science and Technology, requested
that the President of the United States remove the NASA IG from office
based on the results of the Integrity Committee's investigation. The
letter states that the oversight committees and the public are not
receiving useful information from the NASA IG, one of their primary
tools for oversight, and that the IG can no longer be effective in his
office and should be replaced.
The Integrity Committee commented that it could not concur with our
recommendation because it lacked the authority to compel any particular
corrective action. However, our recommendation to the Integrity
Committee does not call for it to compel the corrective action, but
rather to exercise its authority as allowed in Executive Order 12993
and acknowledge the concerns of its own members and make appropriate
recommendations to the Chair of PCIE and ECIE for corrective action
regarding its unresolved investigative finding that the NASA IG lacked
an appearance of independence. The Integrity Committee confirmed its
opinion that the actions taken were not sufficient and restated its
opinion in the March 20, 2007 letter to the Chair of PCIE and ECIE that
it supported a range of actions to be considered, up to and including
removal of the NASA IG from office. Because the Integrity Committee has
the authority to make recommendations within the guidance of the
Executive Order, we reaffirm our report recommendation.
Interviews with OIG Management:
Contrary to the NASA IG's statement that we failed to consult with NASA
OIG's senior leadership on the important issues in this report, we met
with the NASA IG and the senior OIG staff at the beginning of our
review regarding our scope and methodology. We also coordinated a
series of interviews through the IG's Executive Officer with the OIG
senior management officials responsible for all areas addressed in our
report. In all instances, we identified the purpose of our planned
contacts, and the IG's Executive Officer scheduled meetings with those
NASA OIG management staff who were best suited to address each matter.
These included the Deputy Inspector General, the Counsel to the IG, the
Assistant IG for Audits, the Assistant IG for Investigations, and the
Assistant IG for Management and Planning. At the completion of our work
we met with the NASA IG and the senior OIG staff to discuss our report
findings, conclusions, and recommendations. All meetings were
coordinated through the IG's office, and we were available for any
input the IG may have wished to provide.
Audit Coverage:
The NASA IG disagreed with our recommendation to revise approaches
taken in audits to include in strategic and annual planning,
performance audits that address NASA's program results, effectiveness,
and outcomes as well as audits of economy and efficiency by working
closely with an objective outside party. Specifically, the NASA IG did
not agree with our conclusion that the OIG's effectiveness has been
hindered by reliance on audits that do not include evaluating NASA's
program economy, efficiency, and effectiveness, and result in limited
monetary accomplishments. The IG Act requires that IGs address issues
of economy and efficiency and provide independent audits and
investigations. We have removed our concern regarding effectiveness
because of the subjective nature of evaluating the OIG's efforts in
this regard. However, as stated in our report, the NASA OIG had
reported only one audit with recommendations for economy and efficiency
and potential cost savings to the agency over fiscal years 2006 and
2007. Therefore, we have narrowed the focus of our report and our
recommendation in order to address our major concern that the OIG has
an insufficient number of economy and efficiency audits that result in
reported monetary savings.
In addition, the IG does not believe that our conclusions regarding
audit coverage are sufficiently balanced to recognize audits that are
focused on areas other than economy and efficiency. Contrary to this
statement, our report provides information stating that the OIG's
audits have addressed areas designated as high-risk and management
challenges. We also state that while the OIG's audits do not adequately
address the economy and efficiency of NASA's programs and operations,
they do include recommendations for improving compliance with laws,
regulations, and NASA policies and procedures; internal controls; and
other specific areas of NASA's operations.
The IG provided a listing of issued audit products that he said have
addressed economy, efficiency, and effectiveness issues and
specifically highlighted nine examples. While the report
recommendations may affect the economy and efficiency of NASA's
operations, none of these reports highlighted by the IG have specific
recommendations to improve NASA's economy and efficiency with potential
cost savings. In addition, the reports' recommendations address
compliance with laws, regulations, policies and procedures, internal
controls, and other areas. In addition, two of the highlighted reports
were not audits and made no reference to professional auditing
standards. To illustrate our concerns regarding the lack of OIG audit
reports with recommendations for improving NASA's economy and
efficiency, our report provides an example of an OIG audit regarding a
NASA contractor's inadequate pricing determinations. The audit
recommends that the contracting officer ensure compliance with contract
agreements. However, even though the OIG had the opportunity, the
report did not identify any measurable cost saving to the government
resulting from the inadequate pricing and made no recommendations to
help ensure that pricing determinations will be accurate in the future.
Monetary Accomplishments:
The NASA IG states the difference between actual monetary recoveries
from investigations and potential monetary accomplishments from audits.
The IG comments that the results of audits are more speculative and
must rely on the implementation of management to be realized. This
statement acknowledges the different purposes of audits and
investigations: audits can recommend improvements to future operations,
and investigations tend to focus on the identification of fraudulent
and illegal activities that have occurred.
Audit Planning:
Our review found that the OIG's strategic and annual audit plans did
not have goals and objectives that specifically address the economy and
efficiency of NASA's programs and operations. We had recommended that
the NASA IG include in strategic and annual planning, performance
audits that address NASA's economy and efficiency with potential
monetary savings and that the OIG work closely with an objective
outside party, such as the PCIE, to obtain external review and
consultation in the strategic and annual planning processes. The NASA
IG stated his intent to benchmark with the PCIE community to provide
assurance that audits address these areas. While this is a positive
statement we continue to make our recommendation that the IG work
closely with an objective outside party during the strategic and annual
planning processes. However we no longer specify that the IG work with
the PCIE Audit Committee on this issue.
Staff Attrition:
The NASA IG also disagrees with our recommendation to identify the
causes of high employee turnover with the assistance of an objective
expert and determine actions needed as appropriate. The IG states that
we did not discuss employee turnover with OIG leadership. To the
contrary, our discussions with OIG management, both past and present,
provided the information on turnover in our report and alerted us to
the problem of the OIG's relatively high staff attrition rate. The IG
also provides attrition rates of other agency OIGs that are all lower
than that of the NASA OIG and supports our conclusion that the NASA OIG
has a comparably high staff attrition rate even when compared to other
OIGs. The IG also states that a number of steps have been taken to
address the continuing significant turnover rates. We are encouraged
that the IG is already taking steps in this area, however, because of
the OIG's relatively high rate of staff attrition we are recommending
that the NASA IG use the assistance of an objective expert to identify
the causes of employee turnover.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we will not distribute it until 30 days from
its date. At that time we will send copies of the report to the NASA
Administrator; the NASA IG; the Chairman of the Integrity Committee;
the OMB Deputy Director for Management; the Chairman and Ranking Member
of the Senate Committee on Commerce, Science and Transportation;
interested congressional committees; and other parties. This report
will also be available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you have any questions or would like to discuss this report, please
contact me at (202) 512-9471 or franzelj@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Major contributors to this report are
listed in appendix V.
Signed by:
Jeanette M. Franzel:
Director:
Financial Management and Assurance:
[End of section]
Appendix I: Monetary Accomplishments Reported in OIGs' Semiannual
Reports to the Congress for Fiscal Year 2007:
Table:
Federal agency: Social Security Administration;
IG total budgetary resources: $92,000,000;
Monetary accomplishments: $4,802,207,264;
Dollar return on IG's budget[A]: $52.20.
Federal agency: General Services Administration;
IG total budgetary resources: $58,000,000;
Monetary accomplishments: $1,121,385,515;
Dollar return on IG's budget[A]: $19.33.
Federal agency: Department of Transportation;
IG total budgetary resources: $71,000,000;
Monetary accomplishments: $1,086,688,396;
Dollar return on IG's budget[A]: $15.31.
Federal agency: Department of Education;
IG total budgetary resources: $50,000,000;
Monetary accomplishments: $639,389,462;
Dollar return on IG's budget[A]: $12.79.
Federal agency: Department of Health and Human Services;
IG total budgetary resources: $285,000,000[B];
Monetary accomplishments: $3,537,923,000;
Dollar return on IG's budget[A]: $12.41.
Federal agency: Department of Housing and Urban Development;
IG total budgetary resources: $121,000,000;
Monetary accomplishments: $1,347,799,879;
Dollar return on IG's budget[A]: $11.14.
Federal agency: Office of Personnel Management;
IG total budgetary resources: $19,000,000;
Monetary accomplishments: $188,856,301;
Dollar return on IG's budget[A]: $9.94.
Federal agency: Department of Defense;
IG total budgetary resources: $221,000,000;
Monetary accomplishments: $2,083,836,000;
Dollar return on IG's budget[A]: $9.43.
Federal agency: Department of Veterans Affairs;
IG total budgetary resources: $74,000,000;
Monetary accomplishments: $670,200,000;
Dollar return on IG's budget[A]: $9.06.
Federal agency: Department of Justice;
IG total budgetary resources: $89,000,000;
Monetary accomplishments: $754,357,601;
Dollar return on IG's budget[A]: $8.48.
Federal agency: Department of Labor;
IG total budgetary resources: $73,000,000;
Monetary accomplishments: $561,849,158;
Dollar return on IG's budget[A]: $7.70.
Federal agency: Small Business Administration;
IG total budgetary resources: $21,000,000;
Monetary accomplishments: $130,177,723;
Dollar return on IG's budget[A]: $6.20.
Federal agency: Federal Deposit Insurance Corporation;
IG total budgetary resources: $26,000,000;
Monetary accomplishments: $116,280,993;
Dollar return on IG's budget[A]: $4.47.
Federal agency: Agency for International Development;
IG total budgetary resources: $51,000,000;
Monetary accomplishments: $193,342,475;
Dollar return on IG's budget[A]: $3.79.
Federal agency: Department of the Interior;
IG total budgetary resources: $43,000,000;
Monetary accomplishments: $142,527,564;
Dollar return on IG's budget[A]: $3.31.
Federal agency: Department of Energy;
IG total budgetary resources: $42,000,000;
Monetary accomplishments: $99,409,187;
Dollar return on IG's budget[A]: $2.37.
Federal agency: Department of Commerce;
IG total budgetary resources: $23,000,000;
Monetary accomplishments: $51,736,992;
Dollar return on IG's budget[A]: $2.25.
Federal agency: Department of the Treasury;
IG total budgetary resources: $19,000,000;
Monetary accomplishments: $40,257,085;
Dollar return on IG's budget[A]: $2.12.
Federal agency: Environmental Protection Agency;
IG total budgetary resources: $54,000,000;
Monetary accomplishments: $92,792,457;
Dollar return on IG's budget[A]: $1.72.
Federal agency: Corporation for National and Community Service;
IG total budgetary resources: $7,000,000;
Monetary accomplishments: $11,974,636;
Dollar return on IG's budget[A]: $1.71.
Federal agency: Department of State;
IG total budgetary resources: $34,000,000;
Monetary accomplishments: $52,500,036;
Dollar return on IG's budget[A]: $1.54.
Federal agency: Tennessee Valley Authority (TVA);
IG total budgetary resources: $16,000,000[C];
Monetary accomplishments: $15,854,105;
Dollar return on IG's budget[A]: $0.99.
Federal agency: Department of Agriculture;
IG total budgetary resources: $91,000,000;
Monetary accomplishments: $81,412,378;
Dollar return on IG's budget[A]: $0.89.
Federal agency: Department of Homeland Security;
IG total budgetary resources: $128,000,000;
Monetary accomplishments: $100,916,585;
Dollar return on IG's budget[A]: $0.79.
Federal agency: Railroad Retirement Board;
IG total budgetary resources: $7,000,000;
Monetary accomplishments: $5,179,515;
Dollar return on IG's budget[A]: $0.74.
Federal agency: Treasury Inspector General for Tax Administration;
IG total budgetary resources: $135,000,000;
Monetary accomplishments: $54,902,108;
Dollar return on IG's budget[A]: $0.41.
Federal agency: National Aeronautics and Space Administration;
IG total budgetary resources: $34,000,000;
Monetary accomplishments: $12,103,809;
Dollar return on IG's budget[A]: $0.36.
Federal agency: Nuclear Regulatory Commission;
IG total budgetary resources: $10,000,000;
Monetary accomplishments: $495,065;
Dollar return on IG's budget[A]: $0.05.
Federal agency: Export-Import Bank of the United States;
IG total budgetary resources: $2,000,000;
Monetary accomplishments: na[D];
Dollar return on IG's budget[A]: na[D].
Federal agency: Central Intelligence Agency;
IG total budgetary resources: na[D];
Monetary accomplishments: na[D];
Dollar return on IG's budget[A]: na[D].
Federal agency: Total;
IG total budgetary resources: $1,896,000,000;
Monetary accomplishments: $17,996,355,289;
Dollar return on IG's budget[A]: $9.49.
Source: GAO analysis of OMB and IG semiannual reports to the Congress
for fiscal year 2007.
Note: The agencies presented are those with presidentially appointed
IGs confirmed by the Senate.
[A] Dollar return on each IG's budget is calculated by dividing the
total monetary accomplishments by the IG's total budgetary resources.
[B] Includes budget authority to combat Medicare and Medicaid fraud.
[C] Amounts for TVA's OIG are from PCIE's fiscal year 2007 profile
data.
[D] Information not available.
[End of table]
[End of section]
Appendix II: Comparison of OIGs' Budgetary Resources with Total
Budgetary Resources of Their Agencies for Fiscal Year 2007:
Table:
Federal agency: Nuclear Regulatory Commission;
IG total budgetary resources: $10 million;
Agency total budgetary resources: $910 million;
IG budget resources as a percentage of agency budgetary resources:
1.10.
Federal agency: Small Business Administration;
IG total budgetary resources: $21 million;
Agency total budgetary resources: $2,869 million;
IG budget resources as a percentage of agency budgetary resources:
0.73.
Federal agency: Corporation for National and Community Service;
IG total budgetary resources: $7 million;
Agency total budgetary resources: $1,154 million;
IG budget resources as a percentage of agency budgetary resources:
0.62.
Federal agency: Environmental Protection Agency;
IG total budgetary resources: $54 million;
Agency total budgetary resources: $12,795 million;
IG budget resources as a percentage of agency budgetary resources:
0.42.
Federal agency: Agency for International Development;
IG total budgetary resources: $51 million;
Agency total budgetary resources: $15,156[A] million;
IG budget resources as a percentage of agency budgetary resources:
0.34.
Federal agency: Export-Import Bank of the United States;
IG total budgetary resources: $2 million;
Agency total budgetary resources: $730 million;
IG budget resources as a percentage of agency budgetary resources:
0.27.
Federal agency: Department of Justice;
IG total budgetary resources: $89 million;
Agency total budgetary resources: $35,661 million;
IG budget resources as a percentage of agency budgetary resources:
0.25.
Federal agency: General Services Administration;
IG total budgetary resources: $58 million;
Agency total budgetary resources: $24,756 million;
IG budget resources as a percentage of agency budgetary resources:
0.23.
Federal agency: Treasury Inspector General for Tax Administration;
IG total budgetary resources: $135 million;
Agency total budgetary resources: $69,016 million;
IG budget resources as a percentage of agency budgetary resources:
0.20.
Federal agency: Department of Commerce;
IG total budgetary resources: $23 million;
Agency total budgetary resources: $11,926 million;
IG budget resources as a percentage of agency budgetary resources:
0.19.
Federal agency: National Aeronautics and Space Administration;
IG total budgetary resources: $34 million;
Agency total budgetary resources: $20,011 million;
IG budget resources as a percentage of agency budgetary resources:
0.17.
Federal agency: Department of Homeland Security;
IG total budgetary resources: $128 million;
Agency total budgetary resources: $75,903 million;
IG budget resources as a percentage of agency budgetary resources:
0.17.
Federal agency: Tennessee Valley Authority;
IG total budgetary resources: $16[B] million;
Agency total budgetary resources: $9,666 million;
IG budget resources as a percentage of agency budgetary resources:
0.17.
Federal agency: Department of the Interior;
IG total budgetary resources: $43 million;
Agency total budgetary resources: $26,681 million;
IG budget resources as a percentage of agency budgetary resources:
0.16.
Federal agency: Department of Housing and Urban Development;
IG total budgetary resources: $121 million;
Agency total budgetary resources: $86,641 million;
IG budget resources as a percentage of agency budgetary resources:
0.14.
Federal agency: Department of Energy;
IG total budgetary resources: $42 million;
Agency total budgetary resources: $34,647 million;
IG budget resources as a percentage of agency budgetary resources:
0.12.
Federal agency: Department of State;
IG total budgetary resources: $34 million;
Agency total budgetary resources: $30,954[C] million;
IG budget resources as a percentage of agency budgetary resources:
0.11.
Federal agency: Department of Labor;
IG total budgetary resources: $73 million;
Agency total budgetary resources: $76,789 million;
IG budget resources as a percentage of agency budgetary resources:
0.10.
Federal agency: Department of Veterans Affairs;
IG total budgetary resources: $74 million;
Agency total budgetary resources: $96,168 million;
IG budget resources as a percentage of agency budgetary resources:
0.08.
Federal agency: Department of Agriculture;
IG total budgetary resources: $91 million;
Agency total budgetary resources: $131,486 million;
IG budget resources as a percentage of agency budgetary resources:
0.07.
Federal agency: Department of Transportation;
IG total budgetary resources: $71 million;
Agency total budgetary resources: $121,093 million;
IG budget resources as a percentage of agency budgetary resources:
0.06.
Federal agency: Railroad Retirement Board;
IG total budgetary resources: $7 million;
Agency total budgetary resources: $12,131 million;
IG budget resources as a percentage of agency budgetary resources:
0.06.
Federal agency: Department of Education;
IG total budgetary resources: $50 million;
Agency total budgetary resources: $88,037 million;
IG budget resources as a percentage of agency budgetary resources:
0.06.
Federal agency: Federal Deposit Insurance Corporation;
IG total budgetary resources: $26 million;
Agency total budgetary resources: $53,083 million;
IG budget resources as a percentage of agency budgetary resources:
0.05.
Department of Health and Human Services;
IG total budgetary resources: $285[D] million;
Agency total budgetary resources: $976,749 million;
IG budget resources as a percentage of agency budgetary resources:
0.03.
Federal agency: Department of Defense;
IG total budgetary resources: $221 million;
Agency total budgetary resources: $843,179 million;
IG budget resources as a percentage of agency budgetary resources:
0.03.
Federal agency: Social Security Administration;
IG total budgetary resources: $92 million;
Agency total budgetary resources: $664,305 million;
IG budget resources as a percentage of agency budgetary resources:
0.014.
Federal agency: Office of Personnel Management;
IG total budgetary resources: $19 million;
Agency total budgetary resources: $201,742 million;
IG budget resources as a percentage of agency budgetary resources:
0.009.
Federal agency: Department of the Treasury;
IG total budgetary resources: $19 million;
Agency total budgetary resources: $413,634[E million;
IG budget resources as a percentage of agency budgetary resources:
0.005.
Federal agency: Central Intelligence Agency;
IG total budgetary resources: na[F];
Agency total budgetary resources: na[F];
IG budget resources as a percentage of agency budgetary resources:
na[F].
Source: GAO analysis of OMB data.
Note: The agencies presented are those with IGs appointed by the
President with Senate confirmation.
[A] Total budgetary resources are from the Agency for International
Development's fiscal year 2007 financial report.
[B] Amounts for TVA's IG are from PCIE's fiscal year 2007 profile data.
[C] Total budgetary resources are from the State Department's fiscal
year 2007 financial report.
[D] Includes budget authority to combat Medicare and Medicaid fraud.
[E] The Department Of The Treasury's total budgetary resources excludes
the Internal Revenue Service.
[F] Information not available.
[End of table]
[End of section]
Appendix III: Comments from the Integrity Committee:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
Integrity Committee:
President's Council on Integrity and Efficiency:
Executive Council on Integrity and Efficiency:
935 Pennsylvania Ave., NW, Room 3973:
Washington, D.C. 20535-0001:
October 10, 2008:
Ms. Jeanette M. Franzel:
Director, Financial Management and Assurance:
United States Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Re: GAO-08-1035:
Dear Ms. Franzel:
Thank you for the opportunity to review and comment on the Government
Accountability Office (GAO) Draft Report entitled, "Actions Needed to
Improve Audit Coverage of NASA." Although not the primary focus of this
GAO audit, the Draft Report also contains a brief discussion of another
investigation pertaining to the NASA Inspector General (IG) which was
initiated by the Integrity Committee (IC) of the President's Council on
Integrity and Efficiency (PCIE) and the Executive Council on Integrity
and Efficiency (ECIE). IC members have reviewed and discussed the
portion of the GAO Draft Report that concerns this other investigation.
Herein, I respond on behalf of the IC as its Chair.
First, the IC notes that the contents of the report regarding the NASA
IG were developed as part of another, separate GAO audit. Although the
IC working group staff fully cooperated in the separate audit, the IC
was not involved in the GAO review that is the subject of the Draft
Report. Therefore, all information provided was not in direct relation
to the subject report. [See comment 1]
Based upon our review of the report, the IC does not concur with the
GAO's recommendation which states:
In order to strengthen the appearance of independence on the NASA IG we
recommend that the Integrity Committee ... follow up on the conclusions
in its report and make appropriate recommendations on actions needed to
resolve its investigative finding that the NASA IG has an appearance of
a lack of independence.
Charged by Executive Order (EO) 12933, the IC may receive, review, and
refer for investigation allegations of wrongdoing against IGs and
certain members of their staff, to the extent permitted by law and in
accordance with the EO. The IC has adopted internal operating
procedures to accomplish these responsibilities. The decisions
regarding actions that may be taken in response to an IC investigative
finding or recommendation lie with the Chair of the PCIE. Henceforth,
the IC cannot concur with the aforementioned recommendation as it is
goes beyond the authority vested in the IC's operating procedures. The
IC has no power to compel any particular action. The GAO would be
better served to present this recommendation to the PCIE Chairperson.
In addition, it should be noted in the investigation of the NASA IG,
the IC determined the actions taken by NASA regarding the appearance of
a lack of independence findings were insufficient. The IC recommended
to the PCIE Chairperson a range of further actions to consider, up to
and including removal from office. Subsequently, the PCIE Chairperson
found the actions taken by NASA to be sufficient. Therefore, the matter
was closed by the IC as they have no authority to implement further
action.
Thank you for the opportunity to comment on the report.
Sincerely,
Signed by:
Kenneth W. Kaiser
Chair, Integrity Committee:
1 - Honorable Clay Johnson, III, Chairman:
President's & Executive Councils on Integrity and Efficiency:
c/o United States Office of Management and Budget:
17th Street & Pennsylvania Avenue, N.W. Room 113:
Washington, D.C. 20503
The following is GAO's comment on the Integrity Committee's letter
dated October 10, 2008.
GAO Comment:
Comment 1.
As the Integrity Committee stated, the information related to its
activities in this report was obtained in connection with our separate
ongoing audit of the activities and operations of the Integrity
Committee.
[End of section]
Appendix IV: Comments from the Inspector General, National Aeronautics
and Space Administration:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
National Aeronautics and Space Administration:
Office of Inspector General:
Washington, DC 20546-0001
October 14, 2008:
Jeanette M. Franzel:
Director:
Financial Management and Assurance:
U.S. Government Accountability Office:
Washington, DC 20548:
Re: NASA Office of Inspector General's Response to the Government
Accountability Office Draft Report "Actions Needed to Improve Audit
Coverage of NASA": The Report Is Not Balanced or Objective.
Dear Ms. Franzel:
The NASA Office of Inspector General (OIG) disagrees with the
conclusions and recommendations of the Government Accountability
Office's (GAO) draft report titled "Actions Needed to Improve Audit
Coverage of NASA" because they are based on selective and incomplete
data and flawed characterizations of the work, processes, and
accomplishments of NASA 0IG.[Footnote 16]
To reach its conclusion that an issue concerning the Inspector
General's independence is unresolved and still pending, the draft
report mischaracterizes the findings of the President's Council on
Integrity and Efficiency (PCIE) Integrity Committee (the IC) and
ignores the documented final disposition of the matter on April 18,
2007. The germane decisional documents, not referenced in the draft
report, clearly reflect that the matter was fully investigated,
reviewed, resolved, and closed. In sum, the draft report misleads the
reader through selective inclusion and exclusion of evidence to suggest
that a closed matter is still open, a conclusion that is demonstrably
wrong.
With regard to observations about the NASA OIG products and staff,
especially in relation to the Office of Audits, the draft report
mischaracterizes the content of OIG audits; it alters its methodology
to exclude evidence inconsistent with the negative conclusions it
presents; and it simply ignores the excellent work of the NASA OIG
staff, which has been repeatedly recognized by the PCIE, Congress,
United States Attorneys, and, in fact, the GAO. Rather than meet the
audit's objective to identify "audit and investigative accomplishments
reported by the NASA OIG," GAO chose to focus its efforts on
marginalizing the importance of OIG work and ignoring the SIG's
contributions to improving NASA programs and operations.
The GAO staff responsible for the draft failed to consult NASA OIG's
senior leadership on the important issues on which the draft report
opines. The Inspector General, the official accountable and responsible
for the strategic direction of the Office, was not interviewed by the
GAO staff. None of the issue area directors or audit staff were
interviewed. In fact, the totality of interviews conducted with OIG
staff lasted less than 5 hours and, for the most part, covered topics
that, ultimately, were not addressed in the draft report at all. The
GAO staff also did not consult with NASA management-those with the
direct responsibility for the effective execution of the NASA mission.
Had they done so, GAO would have developed a genuine understanding of
the OIG's many contributions, especially as to those areas at the root
of efficient, economical, and effective management of NASA programs and
operations: safety, acquisition management, financial management,
information technology management, and management of internal controls
over identified Agency weaknesses.
We are particularly surprised at the draft report's conclusion of
weakness in the NASA OIG's audit coverage, given the OIG's strict
compliance with the requirement in the Inspector General Act to "give
particular regard to the activities of the Comptroller General of the
United States with a view toward avoiding duplication and insuring
coordination and cooperation." Each year for the past 6 years, the NASA
OIG's audit plans have been discussed with, commented on, and otherwise
coordinated with the GAO staff responsible for conducting NASA
oversight. The notion of this draft report that the OIG's audit
coverage needs material improvement is not in accord with any view
expressed to the NASA OIG by GAO's NASA experts in the past 6 years.
[See comment 1]
As a consequence of the GAO's flawed methodology, the draft report
contains conclusions and recommendations that do not reflect an
accurate, independent, or objective review of NASA OIG's operations and
activities.
The draft report is erroneous in asserting that concerns about
appearance of lack of independence are unresolved[Footnote 17]:
The draft report's conclusion-that the IC finding on appearance of lack
of independence was unresolved and warrants further attention-is based
on a mischaracterization of the IC's finding and an omission of the
decision documents which demonstrate, without any ambiguity, that the
matter was fully resolved and closed with a determination to take no
action. While the draft report completely disregards what clearly
occurred as a factual matter in this case, it also ignores the legal
requirements in Executive Order (EO) 12993 for determinations relating
to Inspectors General.
The draft report refers to the "investigative finding that the NASA IG
has [emphasis added] an appearance of lack of independence." Here,
creating a fiction that there is an unresolved issue, the draft report
misstates the finding of the IC, which was substantially more limited.
The IC did not find that the NASA Inspector General "has" an appearance
of lack of independence. The IC's finding as regards appearances were
historical and concerned the creation of an appearance of a lack of
independence in connection with one matter arising in 2002 and another
in 2004.[Footnote 18] There was nothing the IC concluded to suggest an
ongoing appearance issue.
Furthermore, to support its incorrect assertion of lack of resolution,
the draft report incorrectly suggests that the IC made a recommendation
to the PCIE Chair and that the recommendation was not addressed. In
reality, however, there was no IC recommendation. Nonetheless, the
question of whether any action should be taken as to appearance
concerns raised in the IC's report was fully considered by the Chair of
the PCIE. After consideration, the PCIE Chair deemed "no action" was
appropriate, and that determination was fully documented. However, that
documentation is neither acknowledged nor referenced anywhere in the
draft report.
As background, EO 12993 requires the IC to assess an investigation and,
if deemed appropriate, send forward a report "with Integrity Committee
recommendations, to the Chairperson of the PCIE/ECIE for resolution."
As regards the investigation of the NASA Inspector General, the IC
forwarded its January 22, 2007, report to the Chair, but without making
any recommendations. As there was no IC recommendation, there is
nothing unresolved.
To support its incorrect assertion that somehow the matter was left
"unresolved," the draft report selectively references a March 20, 2007,
letter from the IC Chair to the PCIE Chair expressing dissatisfaction
with a proposal by the NASA Administrator.[Footnote 19] Based on this,
the draft report implies that the IC made a recommendation and that it
was unresolved. The March 20 letter cited in the draft report is taken
out of context, as it is only the beginning of the relevant
correspondence, the rest of which the draft report ignores, but is
described below in Table 1.
Table 1. Documents GAO Ignored in Its Draft Report:
Date: March 29, 2007
Document: Letter from the PCIE Chair to IC Chair clearly establishing
that the IC had made no recommendation.
Date: March 29, 2007
Document: Letter from the IC Chair to PCIE Chair confirming that the IC
had made no recommendation.
Date: March 29, 2007;
Document: Letter from the NASA Administrator to PCIE Chair stating that
he did not believe that additional corrective measures were necessary
with regard to the appearance of a lack of independence.
Date: April 18, 2007;
Document: Letter from the PCIE Chair to IC Chair reflecting his
decision to take no action on the appearance issue.
Date: April 26, 2007;
Document: Letter from the IC Chair to the NASA IG reflecting the
decision to take no action on the appearance issue and closing the
matter.
[End of table]
The March 20 letter prompted a telephone call from the PCIE Chair to
the IC Chair, the substance of which was confirmed by a March 29 letter
from the PCIE Chair to the IC Chair and acknowledged by the IC Chair by
letter on that same date. This correspondence confirmed that the IC had
made no recommendation (see Figure 1).
Figure 1. Letter from the IC Chair to PCIE Chair:
Deputy Director For Management:
Executive Office Of The President:
Office Of Management And Budget:
Washington, DC 20503:
March 29, 2007:
James H. Burnes, Jr.
Chairman, Integrity Committee:
President's Council on Integrity and Efficiency:
935 Pennsylvania Ave NW, Room 3973:
Washington, DC 20535-0001:
Dear Mr. Humus:
On March 20, 2007, you sent me a letter on behalf of the Integrity
Committee with regard to the NASA Inspector General, Robert E. Cobb.
After receiving the letter, I called you for some clarifications, which
I now want to confirm.
First, I asked for clarification of whether the Integrity Committee
concluded that Mr. Cobb had broken any laws or acted illegally. You
reported that he had not. Instead, the conclusions of the Integrity
Committee related to management and appearance concerns.
Second, I asked for clarification as to whether all of the members of
the Integrity Committee shared a common view about what would be the
appropriate way to address the concerns raised about Mr. Cobb, and you
indicated that there had been a range of views.
Third, I asked for clarification as to whether the Integrity Committee
was now itself recommending removal as a disciplinary action against
Mr. Cobb, and you told me that no such recommendation was being made by
the Integrity Committee.
I also noted that the original report does not appear to make an actual
recommendation about steps to be taken in light of the Integrity
Committee report's findings about Mr. Cobb's actions, and you confirmed
that I had read that correctly.
Please confirm that I have accurately summarized our conversation on
these points.
Sincerely,
Signed by:
Clay Johnson:
Chairman
President's Council on Integrity and Efficiency:
[End of figure]
This letter was followed by yet more correspondence, with the PCIE
Chair ultimately sending a letter reflecting the Chair's determination
that no action was warranted, or would be taken, against the NASA
Inspector General as regards the appearance matter. In reflection upon
the IC's March 20 letter, the NASA Administrator in a letter dated
March 29 reiterated his recommendation to the PCIE Chair on the
appearance issue by stating:
With respect to the `appearance of a lack of impartiality concern,' IG
Cobb and I have a professional, arm's length relationship and I do not
believe that additional corrective measures are necessary in that
regard [emphasis added]. In the two years that I have observed IG Cobb,
I have seen a high quality work product from the OIG reflective of a
staff and its leadership dedicated to carrying out the mission
entrusted by law to the IG. IG Cobb is technically sound, highly
conscientious, fully engaged in his work, and he brings rigorous
analysis to the OIG work product.
On April 18, 2007, the PCIE Chair wrote to the IC on the final
disposition of the matter, and on April 26, 2007, the IC Chair wrote to
the NASA Inspector General:
On April 18, 2007, the IC received a response letter from the PCIE
Chair indicating that he had accepted the recommendations from NASA
Administrator Griffin as the appropriate and final disposition of the
matter. Accordingly, the IC review is complete and the case is
considered closed[Footnote 20] [emphasis added].
Accordingly, the record clearly reflects that the matter was fully
investigated, reviewed, resolved, and closed. The draft report ignores
all of this to reach a result that is clearly incorrect.
The draft report's review of NASA OIG audit coverage and other matters
is not thorough or balanced:
The draft report's conclusion that the NASA OIG's "audit coverage of
NASA is limited in scope" is not based on a thorough and objective
assessment of the OIG's work, its products, and accomplishments. Rather
than provide a balanced assessment of the OIG's strengths and
weaknesses, GAO chose to focus its efforts on marginalizing the
importance of the OIG's work and ignoring the OIG's contributions to
improving Agency programs and operations.[Footnote 21] For example,
there is neither mention of the OIG's extensive contributions in
identifying systemic problems in information technology (IT) security,
financial management, or safety nor any mention of helping the Agency
identify and implement needed corrective actions.[Footnote 22] Instead,
the GAO mischaracterizes the OIG's audit work; its analysis of return
on investment is distorted and misguided; its conclusions on strategic
planning are unsupported (and not based on thorough work); and the
examination of OIG budgets and staffing is not only superficial but
fails to reflect the real budgetary challenge facing the 0IG. Had the
GAO staff consulted with the Inspector General or the Deputy Inspector
General on overall strategy and policy direction in the OIG or
interviewed the issue area directors or audit staff, it may have
avoided such fundamental errors in its assessment.
The GAO draft report supports its notions of the limited scope of NASA
audits with essentially three points:
* the NASA OIG's audit coverage has not included audits with
recommendations to improve the economy, efficiency, and effectiveness
of NASA programs;
* NASA OIG audits do not make recommendations for systemic improvements
in NASA program management; and;
* the OIG's compliance audits were limited in scope because they did
not examine possible systemic issues causing noncompliance and needing
correction.
These assertions are unsupported and unsupportable. Even a cursory
review of the attached listing of OIG audit products for the past 3
years (Enclosure), all of which are readily available on the NASA OIG
Web site, shows that the office has addressed economy, efficiency, and
effectiveness issues. In addition, these audits, which were the result
of a systematic planning process, identify the systemic issues causing
noncompliance and make recommendations identifying needed systemic
improvements in program management that will lead to greater economy,
efficiency, and effectiveness in NASA's execution of its mission. [See
comment 2]
The GAO draft report states, "NASA OIG audits have been done to the
exclusion of audits with recommendations that address the economy,
efficiency, and effectiveness of NASA's programs and operations." [See
comment 3] This statement is false. So, for example, the draft report
does not consider the NASA OIG's award-winning audit addressing NASA's
plan for Space Shuttle transition as a product that considers economy,
efficiency, and effectiveness. The OIG found, in conducting this audit,
that NASA managers will be challenged to provide "efficient and
effective" transition without a plan that addresses a series of
elements, including work breakdown structures, cost estimating, metrics
for measuring progress, milestone reviews, communication plans, asset-
end state requirements and security provisions for Shuttle property, a
centralized data management system, and clearly defined
responsibilities in a governance structure. Management agreed to revise
its transition plan to address the OIG's concerns and did, in fact,
revise its plan to address the concerns. The draft report classifies
our resulting audit report, and many similar reports, as a "compliance
audit." The notion that this audit, addressing in great detail the
planning for evolution between two of the most expensive programs in
NASA history, does not address economy, efficiency, and effectiveness
is incomprehensible.
Examples of NASA OIG audits that address economy, efficiency, and
effectiveness, as well as systemic improvements in program management
abound. The following examples are from the year 2007 alone and do not
include the extensive auditing associated with NASA's financial
statements and information technology (IT) security: [See comment 2]
* Our audit of the system upgrade of NASA's billion dollar Integrated
Enterprise Management System's Core Financial Module concluded that
requirements were unsettled, the test plan of the upgrade was
inadequate, and the implementation of the plan undisciplined;
recommendations addressed the upgrade project and improved approaches
to future IEMP projects.
* Our audit of the Management of NASA's aircraft operations focused on
"whether the size and structure or NASA's aircraft operations ... were
adequate to support the Agency's requirements [and] to ... ensure the
effectiveness of aircraft operations and safety programs" and whether
"NASA provided adequate oversight."
* Our audit of Space Shuttle Program accounting systems to track costs,
undertaken in light of GAO's identification of the Agency's inability
to provide its managers with timely data, found specific limitations in
the program's tracking of costs and made recommendations to fix them.
* The Hurricane Katrina audit focused on "determining whether NASA
established the necessary internal controls to manage Hurricane Katrina
recovery and reconstruction efforts, and evaluating NASA's estimation
and execution of Hurricane Katrina funds and processes used to ensure
that those funds were used for their intended purposes."
* Our report entitled "Effective Inspection Program Key to Improving
Laboratory Safety at Glenn Research Center" closely examined
"effectiveness," especially as regards safety. Acting on our
recommendations, Glenn enhanced the effectiveness, economy, and
efficiency of the Laboratory Safety Inspection program by reducing the
risk of injury to personnel and damage to assets and facilities.
* The audit of NASA's A-76 Studies for Mission Management and Program
Support Aircraft addressed economy and efficiency issues. As a direct
result of our work, the Agency determined that it could reduce
operations and maintenance costs for aircraft services by $1.25 million
over 5 years by using a private sector provider in lieu of NASA-owned
aircraft for mission-required flights at two Centers.
* Our review of the Glenn's Research Center's Altitude Combustion Stand
Facility, concluded that the decision to construct the facility was not
an effective use of resources and recommended that NASA consider
halting construction pending an assessment of whether the facility
supports a valid mission need.
* Our audit of NASA's management of its internal control process found
that process to be inadequate and made several recommendations to
improve the process; working closely with us, NASA revamped its
processes to assure robust consideration and corrective measures to
address internal control weaknesses and to provide greater support for
the Administrator's annual statement of assurance.
GAO's assertion that OIG audits do not make recommendations for
systemic improvements in program management ignores documented evidence
of the OIG's influence on change within the Agency. Our Strategic Plan
Results Reports, which are on the NASA OIG Web site, track the number
of implemented audit recommendations resulting in programmatic, policy,
regulatory, and other changes in Agency programs and operations. For
fiscal year (FY) 2006 and FY 2007, we reported 152 and 150 implemented
recommendations that resulted in change (see Figure 2). Of these
recommendations, 126 (82 percent) and 81 (54 percent) resulted in
programmatic or policy changes in FY 2006 and FY 2007 respectively. We
note that action in response to recommendations is an important element
in GAO's consideration of the effectiveness of its own audit work in
respect to the audited agency or functionality. NASA is implementing
OIG recommendations because Agency leaders view them as helpful in
making systemic improvements to NASA programs and operations. [See
comment 4]
GAO's view that NASA OIG recommendations addressing compliance do not
contribute to program economy, efficiency, or effectiveness is
troublesome in the context of the important safety and operational
issues facing an agency where compliance with requirements and
protocols can make the difference between mission success and failure.
In these and other areas, compliance directly impacts program economy,
efficiency, and effectiveness-to include safety.
Figure 2: Implemented Recommendations:
Office of Audits - Tangible Results: Recommendations Resulting in
Change, FY 2006:
Programmatic:
Number of Recommendations: 107.
Policy:
Number of Recommendations: 19.
Regulatory:
Number of Recommendations: 1.
Other:
Number of Recommendations: 25.
Office of Audits - Results: Recommendations Resulting in Change, FY
2007:
Programmatic:
Number of Recommendations: 50.
Policy:
Number of Recommendations: 31.
Regulatory:
Number of Recommendations: 4.
Other:
Number of Recommendations: 65.
[End of figure]
GAO's view that NASA OIG recommendations addressing compliance do not
contribute to program economy, efficiency, or effectiveness is
troublesome in the context of the important safety and operational
issues facing an agency where compliance with requirements and
protocols can make the difference between mission success and failure.
In these and other areas, compliance directly impacts program economy,
efficiency, and effectiveness-to include safety.
While safety had long been a priority in the NASA OIG Office of Audits
prior to 2003, the tragic loss of the Space Shuttle Columbia and her
crew on February 1, 2003, resulted in a substantial commitment of audit
resources toward assuring NASA's compliance with its own requirements.
The physical and organizational causes of the accident were found by
the Columbia Accident Investigation Board (CAIB) to have been founded
in NASA's failure to follow its own requirements. [See comment 5] The
accident was caused by a breach on the leading edge of the left wing
after a piece of foam separated from the external tank and struck that
leading edge during ascent of the Shuttle. The CAIB found that "NASA
has not followed its own rules and requirements on foam-shedding....
the debris impact requirements have not been met on any mission" (CAIB
Final Report, Vol. 1, Finding 6.1-1, page 130). In its Organizational
Cause Statement, the CAIB found "cultural traits and organizational
practices detrimental to safety and reliability were allowed to
develop, including: reliance on past success as a substitute for sound
engineering practices (such as testing to understand why systems were
not performing in accordance with requirement/specifications)..., and
the evolution of an informal chain of command and decision-making
processes that operated outside the organization's rules" (CAIB Final
Report, Vol. 1, page 177). In the report, the Board recommends that
NASA make both organizational and cultural changes. As the report
states:
Within NASA, the cultural impediments to safe and effective Shuttle
operations are real and substantial, as documented extensively in this
report. The Board's view is that cultural problems are unlikely to be
corrected without top-level leadership. Such leadership will have to
rid the system of practices and patterns that have been validated
simply because they have been around so long.
The Agency and the NASA OIG put a renewed focus on ensuring compliance
based on the findings and recommendations of the CAIB and the Return to
Flight Task Group.
In Conference Report 108-199, the conferees expressed support and
provided an extra $1 million for NASA OIG efforts to monitor Agency
compliance with recommendations of the CAIB and to work closely with
the Return to Flight Task Group. In response, the OIG, to include both
the Office of Audits and the Office of Investigations, devoted
considerable resources to assessing the Agency's progress toward the
organizational and cultural changes recommended by the Board, and our
products have contributed to improving the economy, efficiency, and
effectiveness of the Shuttle Program, other Agency programs and
projects, and to the overall operation of the Agency. Of course, none
of this is viewed by the draft report as advancing the economy,
efficiency, or effectiveness of Agency operations.[Footnote 23]
GAO ignores the substantial external recognition of the OIG's
accomplishments. Ironically, other GAO products and congressional
committees have cited the OIG's accomplishments as noteworthy. In
addition, over the last few years the PCIE recognized numerous OIG work
products as meriting community-wide awards.
* In March 2007, a GAO Director for Acquisition and Sourcing Management
testified before the Subcommittee on Space, Aeronautics, and Related
Sciences, Committee on Commerce, Science and Transportation, U.S.
Senate, on issues surrounding the Space Shuttle transition program. In
that testimony, he cited the findings and recommendations in our audit
report on Space Shuttle transition as good examples of the improvements
needed to enhance NASA's transition plan.
* In March 2007 and again in November 2007, a GAO Director for
Financial Management Assurance testified before the Subcommittee on
Federal Financial Management, Government Information, Federal Services,
and International Security, Committee on Homeland Security and
Government Affairs, U.S. Senate, stating that the "NASA OIG found
various weaknesses in NASA's acquisition and contracting management
processes such as a lack of a reliable financial management system to
track contract spending, inadequate control over government property
held by contractors, and procurement abuses by NASA employees and
contractors."
* In House Report 108-792, accompanying HR 4818 (P.L. 108-447), the
conferees directed the NASA Inspector General to issue a list of
contracting trouble areas with recommendations to address these areas;
after the OIG did so, in Senate Report 109-88, the Committee on
Appropriations commended the NASA Inspector General's diligence in
addressing issues of fraud and abuse and directed the OIG to continue
its efforts to review NASA's contract procedures and conventions to
determine if there are ways to reform the process and reduce the costs
of NASA programs and activities.
* In October 2006, OIG audit and investigative personnel received a
PCIE award for excellence for interdisciplinary and intra-agency
teamwork for their efforts in uncovering a complex fraud scheme at NASA
and the Social Security Administration.
* In October 2007, the Office of Audits received a PCIE award for
excellence in recognition of the report, "NASA's Plan for Space Shuttle
Transition Could Be Improved by Following Project Guidelines."
* In October 2008, the Office of Audits will receive three PCIE awards
for excellence for:
- evaluation of NASA's management and execution of the National
Aviation Operations Monitoring Service Project;
- outstanding teamwork and exceptional performance in efforts to
evaluate and make recommendations to improve the integrity of the
Standing Review Board established to conduct independent assessments of
the Orion Crew Exploration Vehicle Project and,
- exceptional analysis and recommendations made to improve NASA's
identification, management, and retention of official electronic mail.
The above mentioned awards and recognition exclude the very substantial
number of awards to the NASA OIG for the work of its special agents and
staff of the Office of Investigations from the PCIE, United States
Attorneys, and others for investigative excellence. Most of this
recognition relates to results from criminal investigations advancing
NASA's interests, but some recognition relates to administrative
investigations. An example of an administrative investigation that has
received recognition, including being quoted in congressional report
language, is the "Investigative Summary Regarding Allegations that NASA
Suppressed Climate Change and Denied Media Access to Dr. James E.
Hansen, a NASA Scientist," issued June 2, 2008, which we issued in
response to a congressional inquiry to the NASA OIG. The summary report
reflects a comprehensive study, characteristic of NASA OIG work
products, addressing important issues. This report is available at
[hyperlink, http://oig.nasa.gov/investigations/OI_STI_Summary.pdf]. GAO
apparently thought all of this irrelevant to its audit objective to
identify "audit and investigative accomplishments reported by the NASA
0IG." [See comment 5]
Return on Investment:
The draft report's erroneous conclusion that "NASA OIG monetary
accomplishments are limited" distorts the OIG's work and its products
and accomplishments. Further, the level of monetary accomplishments do
not in any way establish whether NASA OIG's audits address economy,
effectiveness, and efficiency. And, finally, the draft report fails to
consider the strategic approach taken by the NASA OIG in audit
planning, which, as it relates to return on investment, incorporates
the audit work of the DCAA, the results of which are reported in the
NASA OIG Semiannual Report and which work is ignored and not referenced
in the draft report. [See comment 6]
But the NASA OIG does not shy away from legitimate comparison; for
example, when it comes to actual money returned to an Agency and
applied to Agency contracts and operations, the NASA OIG stands out.
The NASA OIG Office of Investigations alone was responsible for the
actual recovery to NASA programs of $168,000,000 between FY 2002 and FY
2007, reflecting an almost dollar-for-dollar actual return on
investment to NASA from OIG work. These are real dollars rather than
speculative "questioned costs" and "funds to be put to better use" that
the draft report incorrectly cites as "return on investment." The draft
report's reported "returns" are more speculative than real as they
depend heavily on prospective Agency action to accept and implement
recommendations and on having the consequences of implementation match
auditors' projections.[Footnote 24]
The draft report limits its comparison of NASA OIG's monetary
accomplishments against those of other PCIE OIGs to 1 fiscal year. This
resulted in a distortion of the NASA OIG's accomplishments and is
particularly troublesome given that GAO deviated from the overall scope
of its audit work for this analysis. For all of the other analyses
throughout its draft report, GAO uses a scope of 2 years or 5 years to
assess the activities of the NASA OIG. Had GAO used the same 2-year
period (FY 2006 and FY 2007) that it did to assess audit coverage, it
would have reached a different conclusion about the relative ranking of
the NASA OIG in comparison to other offices.
Specifically, the draft report's choice to use monetary recoveries for
only FY 2007 as a comparative example of return on investment is a
gross distortion of the overall monies recovered by NASA OIG over a
sustained period. At the exit conference in September 2008, GAO staff
described as "anomalous" the NASA OIG's 3-year, award-winning
investigation of Boeing (which included Office of Audits support). This
investigation resulted in the largest recovery in history involving a
defense contractor. We were particularly troubled by GAO's efforts to
discount and minimize that statistical accomplishment for FY 2006 ($615
million recovered, of which $ 106.7 million was directly returned to
NASA). Had GAO stayed with their original 2-year scope period of FY
2006 and FY 2007, the average recovery for those 2 years would have
been $330,885,133 for just the Office of Investigations. Had GAO stayed
with their 5-year period of study (FY 2003 - FY 2007), the average per-
year recoveries just for the Office of Investigations would have been
$163,193,550. [See comment 7]
Finally, we note that investigative and audit activity, by its nature,
is often cyclical when it comes to monetary recoveries. So GAO's choice
to select 1 particular year as representative of the accomplishments of
the organization is misleading and an inappropriate methodology that
leads to an inaccurate conclusion. GAO's affirmative departure from
their 2- and 5-year assessment periods and its selection of FY 2007 as
the representative year, seriously calls into question the methodology
used by GAO and the conclusions reached in the study.[Footnote 25]
Since the draft report links monetary results to audit coverage, its
analysis is woefully incomplete as its fails to take into account the
monetary accomplishments obtained as a result of audit and
investigative activities related to NASA's contractors and grantees by
the Defense Contract Audit Agency (DCAA), whose work is coordinated,
planned, and conducted pursuant to a memorandum of understanding dated
January 14, 1988, with the NASA OIG. DCAA conducts incurred costs, cost
accounting standards, defective pricing claims, forward pricing
proposals, and operations audits for NASA on a reimbursable basis.
These audits result in significant monetary accomplishments involving
hundreds of millions of dollars annually in questioned costs and funds
to be put to better use. For example, for the semiannual reporting
period that ended on March 30, 2008, DCAA issued 459 audit reports on
contractors doing business with NASA that included $14,967,000 in
questioned costs and $229,259,000 in recommendations for putting funds
to better use. The extent of the work by DCAA is a factor that the OIG
incorporated into audit planning since its inception and is a root
cause of why contract audits have not been a focus of OIG audit
planning and execution.
Although we report the DCAA monetary benefits separately in our
Semiannual Reports to Congress, other OIGs against whom the NASA OIG
was compared in the draft report's monetary recovery chart, such as the
Department of Agriculture and the Department of Homeland Security,
include DCAA audit reports issued with questioned costs and
recommendations that funds be put to better use in their overall
monetary benefit statistics. Therefore, the DCAA reports increase the
returns of agencies against whom the NASA OIG is compared but are not
used to increase the returns of the NASA OIG. Table 2 shows the
monetary accomplishments of the DCAA over the last 5 fiscal years that
GAO did not take into account when concluding that "NASA OIG monetary
accomplishments are limited."
Table 2. DCAA Audit Results for FY 2003 through FY 2007:
FY: 2003;
Questioned Costs: $86,504,000;
Recommendations that Funds Be Put to Better Use: $154,406,000.
FY: 2004;
Questioned Costs: $116,890,000;
Recommendations that Funds Be Put to Better Use: $100,648,000.
FY: 2005;
Questioned Costs: $54,943,000;
Recommendations that Funds Be Put to Better Use: $65,248,000.
FY: 2006;
Questioned Costs: $36,309,000;
Recommendations that Funds Be Put to Better Use: $616,671,000.
FY: 2007;
Questioned Costs: $140,388,000;
Recommendations that Funds Be Put to Better Use: $1,153,272,000.
The GAO's use of "return on investment" as the sole comparative ranking
category for an OIG in the context of its draft report is especially
troubling. OIGs-especially ones that must be attuned to their Agencies'
or Departments' safety and compliance programs due to the inherently
dangerous missions undertaken-must be judged by their effectiveness in
accomplishing all of the missions articulated in the Inspector General
Act of 1978, to include its ability to promote effectiveness in the
administration of NASA programs. To judge the NASA OIG on monetary
recoveries (as is the case with this draft report), invites
reprioritization away from whistleblower complaints and safety issues-
where the monetary return is potentially great but too speculative to
report.[Footnote 26] The NASA OIG remains committed to all the missions
articulated in the Inspector General Act.
Audit Approaches and Strategic and Annual Planning:
The draft report attributes its findings on audit scope to "audit plans
without goals and objectives" and to NASA OIG management officials
"often acting as a clearinghouse for allegations received by the OIG
and provide auditors with assignments to address limited scope
procurement issues and areas that involve violation of NASA
regulations." The first concern is not supported by the facts, and the
second reflects an obsolete view of the audit function, rejected by GAO
itself, which is that audit staff should not be utilized to react to
whistleblower or other complaints on critical issues of immediate
concern such as safety issues or abuses of acquisition process during
the pendency of a procurement because these "encroach on the ability of
the OIG to assign staff needed for other audits." Interestingly, the
draft report itself is not a product of strategic audit planning, but
is in direct response to a congressional request. [See comment 8]
In the context of the Space Shuttle Columbia accident, the notion at
NASA of a "silent safety culture" where those with complaints were not
able to have their concerns listened to, and the focus by Congress and
others on whistleblower issues, with specific emphasis on NASA, the
NASA OIG undertook a number of initiatives that are not recognized in
the draft report. One of these was to consider every complaint to the
NASA OIG at an executive level and to prioritize resources to address
complaints that merited further action. The suggestion of the draft
report that the NASA OIG is, in effect, too responsive to
whistleblowers in serving as a "clearing house for allegations" because
this "encroaches" on audit work is imprudent.
The draft report's conclusion that "a reevaluation of audit planning
and methods within NASA's OIG is needed ...," does not reflect an
understanding of the OIG's comprehensive strategic and annual planning
processes. This is not surprising given that the GAO audit team did not
interview the OIG leadership about our strategic planning processes and
efforts to improve audit planning.
NASA OIG leadership devoted considerable effort to developing a
strategic plan to provide a framework and guiding principles for
carrying out the work of the office. We also developed a comprehensive
set of data points that allow us to assess trends in the effectiveness
of our work and the utilization of resources on an annual basis.
[Footnote 27] The Inspector General and Deputy Inspector General
discuss these results with the senior executive leaders of each OIG
office at least once per year to identify areas for greater emphasis
within their areas of responsibility.
We are particularly surprised at the draft report's conclusion of
weakness in the NASA OIG's audit coverage given the OIG's strict
compliance with the requirement in the Inspector General Act to "give
particular regard the activities of the Comptroller General of the
United States with a view toward avoiding duplication and insuring
coordination and cooperation." Each year for the past 6 years, the NASA
OIG's audit plans were discussed with, commented on, and otherwise
coordinated with GAO's Director for Acquisition and Sourcing Management
and staff responsible for conducting NASA oversight. The notion of this
draft report that the OIG's audit coverage needs material improvement
is not in accord with any expressed view of GAO's NASA experts in the
past 6 years.
For example, consistent with our past practice, we met with GAO
representatives on January 25, 2008, to discuss our 2008 Audit Plan in
an effort to avoid duplication of effort, improve coordination, and
increase oversight of NASA's major programs and operations. As recently
as September 3, 2008, senior audit management met with GAO
representatives to discuss ongoing 2008 assignments and planned GAO and
OIG assignments for FY 2009. Our meetings with GAO resulted in
suggestions, which we incorporated into our planned audit assignments
and objectives as appropriate. Moreover, during our audit planning
efforts, we also work with Office of Management and Budget staff, staff
from relevant congressional committees, outside experts, and NASA
senior management to identify areas of NASA's programs and operations
that warrant audit oversight.
Our 5-year Strategic Audit Plan, dated May 10, 2007, provides a basis
for ensuring comprehensive coverage for Agency programs and projects in
NASA's major missions including Science and Aeronautics and the
transition from the Space Shuttle to the next generation space
vehicles. The plan includes strategic questions, sub-questions, and
specific audit objectives that provide comprehensive audit coverage for
each topic area over a 5-year period. Some examples of the topics
addressed by the plan follow:
* Determine whether NASA's Mars Scout Missions are meeting robotics
objectives for future human exploration.
* Assessment of the cost and benefits of the Venture Innovation program
recommended by 2007 decadal survey.
* Assess how NASA is ensuring that the new space vehicles and support
systems provide maximum utility.
* Determine whether NASA's aeronautics research aligns with Government
wide research objectives.
* Determine whether the Agency can effectively link cost resources to
performance for reimbursable projects to include collecting amounts
owed by other agencies.
* Determine the effect of enhanced use leasing on NASA's management of
its facilities and assess its impact on base operations costs.
* Assess the impact of NASA's education and technology development on
its ability to hire and retain qualified personnel.
Our FY 2007 Audit Plan included the following assignments:
* Determine the effectiveness of NASA processes for evaluating programs
or projects for cancellation, termination, or delays of Science
Projects.
* Review NASA's acquisition of the Orion Crew Capsule.
* Determine whether NASA's aeronautics research budgets will create
gaps in research or technology development for the overall Next
Generation Air Transportation System.
* Evaluate the effectiveness of NASA's process for reviewing mishaps
and close calls as a means for improving safety and preventing future
occurrences of similar events.
* Determine whether NASA has developed and implemented training to
ensure that all e-mail users are aware of and understand the process by
which to identify, designate, and store official e-mails.
* Determine whether NASA's internal control processes used to identify
assessable units, conduct risk assessments and report deficiencies are
adequate and supportable.
* Determine whether award fee amounts for Jet Propulsion Laboratory
were appropriate.
Despite our disagreements with GAO on the state of our planning
processes, we recognize that there is always room for improvement.
However, we do not agree with GAO that the PCIE Audit Committee is the
appropriate source to help us improve our audit planning processes.
That Committee focuses on advancing auditing standards, financial
audits, peer reviews, training, and high-risk areas, none of which are
cited as issues by the draft report. Therefore, to address the intent
of that GAO recommendation, we will continue to assure ourselves of a
robust strategic planning process that stresses communication with
stakeholders such as relevant congressional committees, Office of
Management and Budget NASA advisory boards, and NASA officials. And, of
course, we will continue to coordinate, as we have in the past, our
audit planning with the GAO. We will also benchmark with other OIGs to
assure ourselves that our audits addressing program effectiveness,
economy, and efficiency continue to fulfill the OIG mission.
NASA OIG Budgets and Staffing:
The GAO draft report's conclusion that "the OIG's budgets and staffing
levels have not been adversely affected, when compared to both the NASA
budgets and staffing and to the budgets of other OIGs," ignores the
real budget issues facing NASA OIG and fails to take into account that
a major part of the increases in NASA OIG budgets is attributed to the
reallocation from NASA's budget to the OIG's of funds to pay for the
financial audit of the Agency.[Footnote 28] [See comment 9]
The impact of reductions to proposed increases to NASA OIG's FY 2007
and FY 2008 budgets has left us operating with an essentially flat
budget for 3 fiscal years. Given that about 93 percent of our budget
goes to salaries and the contract for auditing the Agency's financial
statements, we have limited discretionary spending to absorb these
reductions.[Footnote 29] As a result, at the end of FY 2008, we reduced
our on-board staffing by 15, from 201 to 186, to pay cost-of-living
allowances and maintain travel, training, and other expenditures
necessary to accomplishing our mission. We anticipate further staff
reductions as a result of a continuing resolution, in lieu of a FY 2009
approved budget, and to be prepared for any budget eventuality when a
FY 2009 budget is approved. The draft report would be correct if it had
said that the staff losses resulting from the underfunding of the OIG
is impacting the NASA OIG's productivity.
The draft report superficially addresses the rate of attrition at the
NASA OIG and suggests this attrition has negatively impacted the
ability of the OIG to maintain "experienced audit personnel." It then
notes "9 of the 10 highest level audit managers leaving the OIG in the
past five year period." Omitted by the draft report is the fact that
after a major reorganization in 2003, the senior audit staff who
subsequently departed were no longer "highest level managers" and that
many (4) of these individuals retired accepting "buy-outs," which OIG
used to rebalance the skill mix in the Office of Audits. These managers
were largely responsible for an audit organization in 2002 that had
more than 500 outstanding, unimplemented recommendations to NASA,
reflecting a dysfunction in accomplishing the OIG mission of promoting
the economy and efficiency of NASA.
Most important, NASA OIG has ensured that it is staffed with leaders
and managers who have considerable experience within the accountability
community. The Assistant Inspector General for Auditing has 29 years of
Government auditing experience, and the six Program Directors and the
Deputy Assistant Inspector General for Auditing have an average of 13
years (median of 12 years) experience in the audit community. Their
experience is broad and includes time with GAO, various PCIE OIGs, and
public accounting firms. Two of the newest Directors are recently
retired officers of the Navy and Marine Corps with extensive Inspector
General experience, bringing more than 50 years of collective
leadership and accountability experience to the DIG. The 13 Project
Managers currently employed have been with NASA OIG an average of 12
years (median of 17 years); 7 Managers have tenure of 16 years or more.
Throughout the period covered, the leadership and experience base has
continuously provided the guidance necessary to integrate new employees
while enhancing the quality of the work. Recurrent recognition by the
Agency and external peer groups attest to the exceptional value and
quality of Office of Audits' reports.
Also notable is the experience and stability of the NASA OIG career
senior executive service (SES) staff. Since the current Inspector
General was confirmed in April of 2002, two career SES staff have left
NASA OIG, the last in June 2005. The current 5 members of the career
SES have a total of more than 56 years of experience with the NASA OIG
(and a total of more than 150 years of Government service). In addition
to the experience of the Assistant Inspector General for Audits, the
Deputy Inspector General has, aside from his experience in his current
position, 28 years experience as a Government auditor, 24 of which were
spent at the GAO, allowing him to provide invaluable leadership to NASA
OIG in audit as well its other activities.
The GAO draft report concludes that "the reasons for the relatively
high rate and recent increases in employee turnover should be examined
...," apparently assuming that attrition has not been closely examined
by NASA OIG. Again, had the GAO staff interviewed senior OIG officials
on steps taken to address this issue, the draft report could have
presented a more accurate assessment of the issue and been able to
reflect that attrition was 20 percent lower in FY 2008 than in FY 2007.
The draft report compares the attrition rate between NASA OIG and the
rest of NASA. However, there are significant differences between the
largely scientific and engineering workforce of the Agency and the
primarily auditor and investigator workforce of OIG that do not lend
themselves to comparison. In fact, one area of high attrition at NASA
OIG is technical staff hired and brought in to focus on critical
technical issues of the Agency. While these professionals enjoy the
opportunity to bring value through OIG work, they also often seek to
practice the professions they were trained for with "hands on"
employment not offered by OIG.
A more appropriate comparison for the OIG workforce is the PCIE
community. The range of attrition percentages for the Departments of
Interior, Energy, Veterans Affairs, and Education OIGs was 10.0 to 12.3
percent for FY 2007 and 10.0 to 14.5 percent for FY 2006. While still
lower than the NASA OIG rates, these ranges are far different from
NASA's 4 to 5 percent rates for the same periods.
The draft report states that it did not review the reasons for OIG's
employee turnover, suggesting a lack of depth to GAO's analysis and the
accompanying observation and recommendation. Again, we note that GAO
also did not discuss employee turnover with OIG leadership or seek any
information on management actions to address the issue. OIG leadership
is acutely aware of the extent of employee turnover as well as the
causes and has undertaken a number of steps to address the issue. OIG
leadership obtains feedback from employees in a variety of ways
including two formal methods. The draft report did not examine this.
OIG leadership has undertaken a number of initiatives to improve
employee development, morale, and retention. The draft report does not
consider these either.
Conclusion:
The recommendations made in GAO's draft report are not based on an
objective or independent examination of the NASA OIG and, as a result,
we do not concur in them. However, to the extent that the intent of the
recommendations is to ensure audit resources are deployed in a manner
that is most effective in carrying out the OIG mission and employee
morale and development are accounted for so as to promote retention, we
agree to continue our deliberate efforts to address these omnipresent
issues.
Specifically, we strategically deploy our audit resources to address
the issues of greatest import to NASA and where we believe audit
resources are likely to bring the greatest additional value to NASA
programs and operations. The NASA OIG will continue to develop its
strategic use of audit resources and, this year, will endeavor to
benchmark its audit planning approach with others in the PCIE
community.
As regards employee retention issues, while the steps we have already
taken are having an ameliorative impact, the Office will continue to
provide positive support to the OIG's excellent staff by promoting a
culture where employees personally develop in an atmosphere that values
professionalism, integrity, and accountability. We particularly support
our employees by recognizing the tremendous service they provide and
the value of the excellent work they do.
Although the recommendation concerning appearance of independence is
not made to this Office, we reiterate that is it made without factual
support. Moreover, it is made to the wrong authority. The
recommendation is not addressed to the appropriate and legal authority
with staff cognizance on taking action on matters involving Inspectors
General, the Chair of the PCIE.
Finally, we at the NASA OIG are particularly proud of the integrity of
the work of the Office and the overall commitment of the staff to
produce thorough work that is fair, objective, and independent. We
understand the effort associated with producing such work, and we
understand that meeting this standard is the hallmark of independent
audits and investigations.
Thank you for the opportunity to review and comment on this draft
report. If you have any questions, please contact Renee Juhans at (202)
358-1220.
Sincerely,
Signed by:
Robert W. Cobb:
Inspector General:
Enclosure:
Issued NASA OIG Reports:
FY 2008:
Report Number: IG-08-032;
Title: NASA's Development of the Integrated Asset Management - PP&E
Module to Provide Identified Benefits;
Date: 09/25/08.
Report Number: IG-08-031;
Title: Federal Information Security Management Act: Fiscal Year 2008
Report from the Office of Inspector General;
Date: 09/18/08.
Report Number: IG-08-030;
Title: Cost Estimates Used to Support the FY 2008 Budget Request for
NASA's Constellation Program Could Have Been Better Documented;
Date: 09/18/08.
Report Number: IG-08-029;
Title: Final Memorandum on the Review of Rocket Segment Handling;
Date: 09/05/08.
Report Number: IG-08-028;
Title: Final Memorandum Regarding Potential Overpayment to Contractor;
Date: 08/28/08.
Report Number: IG-08-027;
Title: Glenn Research Center Needs to Better Define Roles and
Responsibilities for Emergency Response;
Date: 09/03/08.
Report Number: IG-08-026;
Title: OCR of PricewaterhouseCoopers, LLP, Office of Management and
Budget Circular A-133 Audit of The University of Alabama in Huntsville
for the FY Ended September 30, 2006;
Date: 09/02/08.
Report Number: IG-08-025;
Title: Centers Security Program Needed Improvement;
Date: 09/19/08.
Report Number: ML-08-011;
Title: Initial Review of Ciuni and Panichi, Inc., Audit Report on the
Lorain County Joint Vocational School District for the Fiscal Year
Ended June 30, 2007;
Date: 08/07/08.
Report Number: ML-08-010;
Title: Initial Review of McGladrey & Pullen, LLP, Audit Report on the
Friends of the North Carolina State Museum of Natural Sciences for the
FY Ended June 30, 2007;
Date: 08/05/08.
Report Number: IG-08-024;
Title: Audit of International Space Station Contracts Government Cost
and Price Analyses;
Date: 07/31/08.
Report Number: N/A;
Title: Audit of NASA's Pre-Acquisition Planning for the Constellation
Space Suit System;
Date: 07/29/08.
Report Number: IG-08-023;
Title: QCR of Harris & Associates Audit of KSC Exchange Financial
Statements for FY Ended September 30, 2007;
Date: 07/28/08.
Report Number: IG-08-022;
Title: NASA's Compliance with Federal Export Control Laws and Risks
Associated with the Illegal Transfer or Theft of Sensitive
Technologies;
Date: 07/22/08.
Report Number: IG-08-021;
Title: Final Memorandum on the Review of NASA's Plan to Build the A-3
Facility for Rocket Propulsion Testing;
Date: 07/08/08.
Report Number: IG-08-020;
Title: Quality Control Review of the House & Albright P.C. Audit of the
Marshall Space Flight Center Exchange Financial Statements for Fiscal
Year Ended September 30, 2007;
Date: 06/13/08.
Report Number: ML-08-009;
Title: Initial Review of McGregor & Company, LLP Audit Report on
Orangeburg Consolidated School District Four for the Fiscal Year Ended
June 30, 2007;
Date: 6/11/08.
Report Number: ML-08-008;
Title: Initial Review of CDPA, PC Audit Report on North Alabama Science
Center, Inc. for the Fiscal Year Ended December 31, 2006;
Date: 06/11/08.
Report Number: IG-08-019;
Title: Final Memorandum on the Audit of NASA's Management of the Test
Operations Contract;
Date: 05/09/08.
Report Number: IG-08-018;
Title: Final Memorandum on the Standing Review Board for the Orion Crew
Exploration Vehicle Project;
Date: 04/28/08.
Report Number: IG-08-017;
Title: Actions Needed to Ensure Scientific and Technical Information Is
Adequately Reviewed at GSFC, JSC, LaRC, and MSFC Addendum: Memorandum
with Management Comments in Response to the Final Report;
Date: 06/02/08; Addendum: 07/16/08.
Report Number: ML-08-007;
Title: Initial Review of West & Company CPAs Audit Report on Clinton-
Essex-Warren-Washington Counties Board of Cooperative Education
Services for the Fiscal Year Ended June 30, 2007;
Date: 04/23/08.
Report Number: ML-08-006;
Title: Initial Review of Peter Schilz & Co, Audit Report on Earth and
Space Research for the Fiscal Year Ended June 30, 2006;
Date: 04/23/08.
Report Number: ML-08-005;
Title: Initial Review of Rogers & Company PLLC Audit Report on the KISS
Institute for Practical Robotics Fiscal Year Ended August 31, 2006;
Date: 04/18/08.
Report Number: IG-08-016-R;
Title: Final Memorandum on Audit of NASA's Global Precipitation
Measurement Project;
Date: 03/31/08.
Report Number: IG-08-015;
Title: OCR of Mayer, Hoffman, McCann, P.C., Office of Management and
Budget Circular A-133 Audit of the Florida Atlantic University Research
Corporation for FY Ended June 30, 2005;
Date: 03/31/08.
Report Number: IG-08-014;
Title: Final Memorandum on the Review of the National Aviation
Operations Monitoring Service; Addendum: Memorandum with Management
Comments in Response to the Final Report;
Date: 03/31/08; Addendum: 05/09/08.
Report Number: IG-08-013;
Title: Final Memorandum on Audit of NASA's Documentation of Readiness
for Award Form Usage for Site-Specific Earmarks;
Date: 03/24/08.
Report Number: IG-08-012;
Title: Final Memorandum on Glenn Research Center's Land-based Mobile
Communication System;
Date: 03/10/08.
Report Number: ML-08-004;
Title: Final Memorandum on Initial Review of Keegan, Linscott and
Kenon, P.C. Audit Report on the Planetary Science Institute for Fiscal
Year Ended January 31, 2006;
Date: 03/04/08.
Report Number: IG-08-011;
Title: Status of FY 2006 Management Letter Findings and
Recommendations, in connection with the audit of NASA's FY 2007
Financial Statements;
Date: 02/29/08.
Report Number: IG-08-010;
Title: Final Memorandum on Audit of Retention of NASA's Official
Electronic Mail;
Date: 02/28/08.
Report Number: ML-08-003;
Title: Final Memorandum on Initial Review of Derrick, Stubbs & Stith,
LLP Audit Report on the South Carolina Association of School
Administrators for Fiscal Year Ended June 30, 2006;
Date: 02/27/08
Report Number: IG-08-009;
Title: Review of a Shuttle Training Aircraft Mishap on October 19,
2007;
Date: 02/15/08.
Report Number: ML-08-002;
Title: Initial Review of Putnam, Blackwell and Company, P.C. Audit
Report on the Alabama Space Science Exhibit Commission for FY Ended
September 24, 2006;
Date: 02/15/08.
Report Number: IG-08-008;
Title: Final Memorandum on Management of the Wallops Exchange and
Morale Association;
Date: 02/21/08.
Report Number: IG-08-007;
Title: QCR of Faw Casson Company LLP's Audit of Wallop Exchange and
Moral Association Financial Statements for FY Ended 09-30-2006;
Date: 02/15/08.
Report Number: IG-08-006;
Title: Final Memorandum on NASA's Management of the Flight Project for
the Geostationary Operational Environmental Satellite Series-R Program;
12/19/07.
Report Number: IG-08-005;
Title: Final Memorandum on NASA's Accounting for Capitalized Real
Property Designated as Inactive;
Date: 12/11/07.
Report Number: IG-08-004;
Title: Final Memorandum on NASA's Accounting for Real Property Leased
to Other Entities;
Date: 12/11/07.
Report Number: IG-08-003;
Title: Review of NASA's Budget Year 2008 Capital Asset Plan and
Business Case;
Date: 1/30/08.
Report Number: IG-08-002;
Title: Information Technology Findings and Recommendations;
Date: 11/26/07.
Report Number: IG-08-001;
Title: Audit of the National Aeronautics and Space Administration's
Fiscal Year 2007 Financial Statements;
Date: 11/15/07.
Report Number: ML-08-001;
Title: Initial Review of Gelman, Rosenberg, & Freedman Audit Report on
the Foundation for Earth Science Information Partners for FY Ended 09-
30-2005;
Date: 10/10/07.
FY 2007:
Report Number: IG-07-035;
Title: Final Audit Report on Assessment of NASA's Certification and
Accreditation process;
Date: 09/26/07.
Report Number: IG-07-034;
Title: Federal Information Security Management Act Fiscal Year 2007
Report from the Office of Inspector General;
Date: 09/28/07.
Report Number: IG-07-033;
Title: Final Memorandum on the Audit of Requirements for Testing
Facilities at Plum Brook Station;
Date: 09/28/07.
Report Number: IG-07-032;
Title: Effective Inspection Program Key to Improving Laboratory Safety
at Glenn Research Center;
Date: 09/24/07.
Report Number: IG-07-031;
Title: Final Report System Integration Testing of the Systems
Applications and Products Version Update Project Needed Improvement;
Addendum: Memorandum with Management Comments in Response to the Final
Report;
Date: 09/28/07; Addendum: 01/14/08.
Report Number: IG-07-030;
Title: Final Report of Audit of Marshall Space Flight Center's
Administration of Government Property Held Off-Site by Contractors;
Addendum: Memorandum with Management Comments in Response to the Final
Report;
Date: 09/28/07; Addendum: 12/06/07.
Report Number: IG-07-029-R;
Title: Final Memorandum on Audit of NASA Education and Training Grants
(Redacted);
Date: 09/18/07.
Report Number: IG-07-28;
Title: Audit of NASA's Management and Funding of Fiscal Year 2006
Congressional Earmarks;
Date: 08/09/07.
Report Number: IG-07-027;
Title: Final Memorandum on Observations on the Review and Approval of
Glenn 109/28/07 Research Center's Relocation of the Cryogenic
Components Laboratory Facility; Addendum: Memorandum with Management
Comments in Response to the Final Report;
Date: 09/28/07; Addendum: 11/30/07.
Report Number: IG-07-026;
Title: Final Memorandum on the Audit of Space Shuttle Program Costs;
Date: 09/19/07.
Report Number: IG-07-025;
Title: Final Memorandum on Audit of NASA's Compliance with Federal
Internal Control Reporting_Requirements;
Date: 08/14/07.
Report Number: IG-07-024;
Title: Final Memorandum on NASA's Implementation of the Privacy
Provisions of the Electronic Government Act;
Date: 08/28/07.
Report Number: IG-07-023;
Title: NASA's Reporting of Performance Measure Data for the Federal
Information Security Management Act (FISMA) Needed Improvement at Four
Centers and NASA Headquarters;
Date: 09/06/07.
Report Number: IG-07-022;
Title: Internal Controls over NASA's Transit Subsidy Program at
Headquarters and Goddard Space Flight Center Needed Improvement;
Date: 07/20/07.
Report Number: IG-07-021;
Title: Quality Control Review of [a Company's] Audit of Goddard
Employees' Welfare Association Financial Statements for Fiscal Year
Ended September 30, 2006;
Date: 08/28/07.
Report Number: ML-07-010;
Title: Letter to Congress on NASA's Export Controls;
Date: 07/20/07.
Report Number: IG-07-020;
Title: Quality Control Review of Macias Gini & O'Connell LLP Audits of
Ames Exchange Financial Statements for FYs Ended September 30, 2005,
and September 30, 2006;
Date: 07/06/07.
Report Number: IG-07-019;
Title: NASA Could Improve Controls and Lower the Costs of the
Intergovernmental Personnel Act Mobility Program;
Date: 07/18/07.
Report Number: IG-07-018;
Title: Final Memorandum on the Audit of Federal Emergency Management;
Agency Mission Assignments for Hurricane Katrina Disaster Relief;
Date: 07/05/07.
Report Number: IG-07-017;
Title: Final Memorandum on Audit of NASA's Workers' Compensation
Program for the Office of Inspector General;
Date: 06/19/07.
Report Number: Q-06-005-00;
Title: Final Memorandum on Post-Closure Follow-Up Review for Audit
Recommendations Closed During FYs 2001-2005;
Date: 05/29/07.
Report Number: IG-07-016;
Title: Final Memorandum on the Audit of the Management of Aircraft
Operations;
Date: 05/17/07.
Report Number: IG-07-015;
Title: NASA Mission Management and Program Support Aircraft A-76
Studies;
Date: 05/17/07.
Report Number: IG-07-014;
Title: Controls over the Detection, Response, and Reporting of Network
Security Incidents Needed Improvement at the Four NASA Centers
Reviewed;
Date: 06/19/07.
Report Number: IG-07-013;
Title: Final Memorandum on Marshall Space Flight Center's Approach to
Establishing Product Data Management and Mechanical Computer-Aided
Design Software Tools as Standard Center-Wide; Addendum: Memorandum
with Management Comments in Response to the Final Report;
Date: 07/24/07; Addendum: 02/19/08.
Report Number: ML-07-006:
Title: Final Memorandum Addressing Unnecessary Subcontract Costs and
Other Deficiencies in GSFC's Multiple Award Schedule Procurement
Process; Addendum: Memorandum with Management Comments in Response to
the Final;
Date: 03/30/07; Addendum: 09/05/07.
Report Number: IG-07-012;
Title: Internal Controls to Detect and Prevent Unauthorized and
Potentially; Fraudulent Purchase Card Transactions at Four NASA Centers
Needed Improvement;
Date: 03/29/07.
Report Number: IG-07-010;
Title: QCR of Argy, Wiltse & Robinson, P.C., OMB A-133 Audits of the
National Institute of Aerospace Associates for Fiscal Year Ended
September 30, 2004;
Date: 12/06/06.
Report Number: ML-07-005;
Title: Final Memorandum on Follow-Up Review of the Management of the
Headquarters Exchange; Addendum: Memorandum with Management Comments;
Date: 03/13/07; Addendum: 06/22/07.
Report Number: IG-07-005;
Title: NASA's Plan for Space Shuttle Transition Could Be Improved by
Following Project Management Guidelines; Addendum: Memorandum with
Management Comments in Response to the Final Report;
Date: 1/29/07; Addendum: 5/10/07.
Report Number: IG-07-004;
Title: Audit of the National Aeronautics and Space Administration's
Fiscal Year 2006 Financial Statements;
Date: 11/09/06.
Report Number: ML-07-004;
Title: Final Memorandum on the Review of T-0 Access Stair Trucks
Located at (Dresden Flight Research Center;
Date: 01/09/07.
Report Number: IG-07-003;
Title: Governance of the SAP Version Update Project Needs Improvement;
Date: 11/21/06.
Report Number: ML-07-003; Final Report of Desk Review of Langan &
Title: Associates OMB Circular No. A-1133 Audits of the Dwight D.
Eisenhower World Affairs Institute;
Date: 12/18/06.
Report Number: IG-07-002;
Title: NASA Implemented the Project Management Information Improvement
(PMI2) Initiative but Crosswalk and Training Need to be Completed;
Date: 11/20/06.
Report Number: IG-07-001;
Title: OCR of KPMG LLP and the DCAA OMB Circular A-133 Audits of the
Smithsonian Institution for Fiscal Year Ended September 30, 2004;
Date: 01/17/07.
Report Number: ML-07-001;
Title: Final Memorandum on Observations on the Review and Approval of
Glenn Research Center's Relocation of the Altitude Combustion Stand
Facility; Addendum: Memorandum with Management Comments;
Date: 11/02/06; Addendum: 02/20/07.
FY 2006:
Report Number: ML-06-013;
Title: NASA's Compliance with Office of Management and Budget
Memorandum M-06-16, "Protection of Sensitive Agency Information";
Date: 09/22/06.
Report Number: IG-06-021;
Title: Federal Information Security Management Act: Fiscal Year 2006
Report from the Office of Inspector General Report;
Date: 09/28/06.
Report Number: ML-06-011;
Title: Audit of NASA's Use of Defense Contract Audit Agency (DCAA)
Services in Managing NASA Contracts;
Date: 09/25/06.
Report Number: IG-06-020;
Title: NASA Can Improve Its Mitigation of Risks Associated with
International Agreements with Japan for Science Projects;
Date: 09/12/06.
Report Number: ML-06-009;
Title: Final Memorandum on the Audit of the Management of Hurricane
Katrina Disaster Relief Efforts;
Date: 08/29/06.
Report Number: IG-06-019;
Title: Quality Control Review of Goodman & Company's Audit of Langley
Exchange Financial Statements for Fiscal Year Ended September 30, 2005;
Date: 08/29/06.
Report Number: IG-06-018;
Title: Final Memorandum on the Audit of the OIG Office of
Investigations Confidential Fund for Fiscal Year 2005;
Date: 09/05/06.
Report Number: IG-06-017;
Title: NASA's Information Technology Capital Planning and Investment
Control;
Date: 09/14/06.
Report Number: IG-06-016;
Title: NASA's Implementation of the National Incident Management
System;
Date: 08/29/06.
Report Number: IG-06-015;
Title: Quality Control Review Report on Headquarters Exchange Financial
Statements for Fiscal Years Ended in September 30, 2003, and September
30, 2004;
Date: 09/22/06.
Report Number: IG-06-014;
Title: Space Shuttle Program Problem Reporting and Corrective Action
Process at Kennedy Space Center Needs Improvement; Addendum: Memorandum
with Management Comments in Response to the Final;
Date: 08/30/06; Addendum: 11/21/06.
Report Number: IG-06-013;
Title: Subcontract Management by United Space Alliance under the Space
Flight Operations Contract; Addendum: Memorandum with Management
Comments in Response to the Final;
Date: 08/28/06; Addendum: 10/11/06.
Report Number: N/A;
Title: Final Memorandum on NASA's Acquisition Approach Regarding
Requirements for Certain Engineering Software Tools to Support NASA
Programs; Addendum: Memorandum with Management Comments in Response to
the Final;
Date: 08/23/06; Addendum: 09/21/06.
Report Number: N/A;
Title: Final Memorandum NASA Educational and Training Grants;
Date: 08/10/06.
Report Number: N/A;
Title: Final Memorandum on Improvements Needed in NASA's Evaluation and
Selection Processes under NASA Research Announcements;
Date: 07/11/06.
Report Number: N/A;
Review of NASA's Wind Tunnel User Fees;
06/01/06.
Report Number: N/A;
Final Memorandum on the Review of Space Shuttle Cold Plates;
04/28/06;
Report Number: IG-06-011;
Title: Final Memorandum on the Audit of NASA's Response to Columbia
Accident Investigation Board Recommendations Concerning MMT Training;
Date: 05/09/06.
Report Number: IG-06-010-R;
Title: NASA Should Improve Employee Awareness of Requirements for
Identifying and Handling Sensitive But Unclassified Information
(Redacted);
Date: 05/09/06.
Report Number: IG-06-009;
Title: Antideficiency Act Violations at the National Aeronautics and
Space Administration;
Date: 04/10/06.
Report Number: 0IG-06-008;
Title: Security of [a NASA Center's Computer] Network;
Date: 06/02/06.
Report Number: IG-06-007;
Title: NASA's Implementation of Patch Management Software Is
Incomplete;
Date: 03/17/06.
Report Number: IG-06-006;
Title: Final Memorandum on NASA's Policies for Protecting Technology
Exported to Foreign Entities;
Date: 03/14/06.
Report Number: N/A;
Title: Letter to Congress on NASA's Export Controls;
Date: 02/23/06.
Report Number: IG-06-005;
Title: Final Quality Control Review of PricewaterhouseCoopers LLP and
the Defense Contract Audit Agency Office of Management and Budget
Circular A-133;
Date: 02/23/06.
Report Number: IG-06-004;
Title: Information Assurance Controls on [a Center's Networked] Systems
Need Strengthening;
Date: 03/21/06.
IG-06-003R;
Integrated Enterprise Management Program Contract Oversight Needs
Improvement;
02/06/06.
N/A;
Review of NASA's Classroom of the Future Cooperative Agreement with WJ
University;
01/30/06.
N/A;
Final Memorandum on the Procurement of Organizational Development and
Training Services at Goddard Space Flight Center;
01/23/06.
N/A;
Review of the Use of Voice Over Internet Protocol at NASA;
01/19/06.
N/A; Early Planning for the Integrated Enterprise Management Program's
Contract Management Module Requirements and Life-Cycle Operations;
01/17/06;
N/A; Letter to Congress on Contract Reform;
12/20/05.
N/A; Final Memorandum on the Review of Unallowable Costs Charged to
NASA/Marshall Space Flight;
12/20/05.
N/A;
NASA Lacks Procedures to Define, Recognize and Protect Meta-Data;
12/19/06.
IG-06-002;
Quality Control Review of R.J. Ricciardi, CPA, OMB Circular A-133 Audit
of the Molecular Research Institute for FY Ended June 30, 2005;
11/21/05;
IG-06-001;
QCR of Deloitte & Touche, LLP, OMB Circular A-133 Audit of San Jose
State University Foundation for Fiscal Year Ended June 30, 2004;
11/18/05.
The following are GAO's comments on the NASA Inspector General's letter
dated October 14, 2008.
GAO Comments:
Comment 1.
The meetings referred to by the IG do not result in an endorsement of
the OIG's work plans but rather are discussions between the NASA OIG
and GAO for purposes of coordination and cooperation. Our review of the
NASA OIG's strategic and annual plans on this audit was in response to
our findings regarding the need for additional oversight of NASA's
economy and efficiency and measurable potential cost savings from OIG
audits. We are encouraged by the NASA IG's intent to benchmark with the
PCIE community to provide assurance that audits addressing program
effectiveness, economy, and efficiency fulfill the OIG mission.
Therefore, we have modified our report recommendation to have the OIG
work closely with an objective outside party to include audits of
NASA's economy and efficiency with potential monetary savings in
strategic and annual plans.
Comment 2.
The IG's comments do not cite any specific recommendations that are
targeted toward economy and efficiency with potential cost savings. In
addition, we reviewed all the recommendations in the OIG's audit
products issued during fiscal years 2006 and 2007 and found only one
report with these types of recommendations. By providing the titles of
OIG reports, the IG provides little if any additional information on
whether economy and efficiency issues were addressed by the outcomes of
the reports. Therefore, our report continues to focus on the OIG's lack
of economy and efficiency audit results with measurable cost savings as
well as the lack of a strategy for dealing with these types of
objectives in the annual and strategic audit plans.
Comment 3.
The OIG's audit of NASA's plan for Space Shuttle transition concluded
that NASA's transition plan did not comprehensively address all
elements critical for a successful transition and recommended that the
planning be enhanced and that the transition be recognized as an agency
management challenge. Neither this report nor any other OIG report
issued during fiscal years 2006 and 2007 had any specific
recommendations to improve NASA's economy and efficiency with
measurable cost savings related to this important and costly transition
program.
Comment 4.
We did not include the percent of OIG recommendations implemented as
part of our review. We evaluated the substance of the recommendations
to determine whether they identified opportunities for improvements to
NASA's economy and efficiency with measurable potential cost savings.
Comment 5.
This investigation was a coordinated effort by several offices
including those from NASA, components of the Department of Defense, and
academia, but was not performed by the NASA OIG. Our scope was to
review the results of audits and investigations by the OIG and thus,we
did not include it in our review.
The IG also provided the title of an investigative report regarding
allegations that NASA had suppressed climate change information as an
example of an accomplishment. This information does not deal with the
economy and efficiency of NASA's programs and operations and monetary
accomplishments which is a focus of our findings and recommendations.
Comment 6.
We did not consider DCAA audits to be related to the NASA OIG's
accomplishments since they are routinely provided as a service to
NASA's contracting officers. The NASA IG points out that in our
comparison of monetary accomplishments and the return on investment by
30 IG offices where the IGs are appointed by the President and
confirmed by the Senate, our presentation of monetary accomplishments
for the Department of Agriculture OIG and the Department of Homeland
Security OIG includes the accomplishments of DCAA. Accordingly, we have
removed the DCAA amounts from the accomplishments reported for these
OIGs and adjusted the total monetary accomplishments for all 30 OIGs
for fiscal year 2007 from a $9.52 dollar return on all their budgets to
a $9.49 return. This did not affect the status of the NASA OIG's
monetary accomplishments, which continues to be a $0.36 dollar return
on the OIG's budgetary resources and continues to rank 27th out of 28
OIGs reporting such accomplishments for fiscal year 2007.
Comment 7.
We selected fiscal year 2007 for comparison because at the time of our
review it was the most recent full year with comparative data among the
OIGs, and it was the year with the largest reported dollar savings
resulting from NASA OIG's audits. However, in response to the NASA IG's
suggestion that we provide data on accomplishments over a 5-year
period, we added table 4 to our report. It shows the NASA OIG's
monetary accomplishments from fiscal years 2003 through 2007 and
further supports our conclusion that the OIG provides limited monetary
accomplishments from audits.
Comment 8.
We agree that the NASA IG should be committed to the full range of
activities and objectives stated in the IG Act. Those objectives and
activities include audits that result in recommendations to improve the
economy and efficiency of NASA's programs and operations with
measurable cost savings, as well as receiving whistleblower complaints.
Comment 9.
[End of section]
Our review compared the NASA OIG's total budgetary resources to NASA's
total budgetary resources for fiscal years 2003 through 2007 to
determine whether the OIG's budgets were increasing or decreasing
relative to NASA's overall budgets. As stated in our report, the OIG's
budget as a percent of NASA's budget increased from 0.15 to 0.17
percent during this period. The NASA IG states that $3.5 million in
funding was shifted from NASA to the OIG to pay for financial audits
but cites this as having no actual impact on funds available for OIG
operations. We disagree that these funds do not contribute to the
resources available for OIG operations. The NASA IG is subject to the
Chief Financial Officers Act of 1990[Footnote 15] which specifies that
the IG is responsible for the financial statement audits of the agency.
The increase of $3.5 million provides resources in the OIG's budget for
these mandated audits. As stated in our report, over the 5-year period
we reviewed the OIG's budgets kept pace with or were slightly better
than NASA's budgets as a whole. In addition, when compared to other
OIGs for fiscal year 2007, the NASA OIG ranked 11th out of 30 agencies
in the ratio of the OIGs' budgets to their agencies' budgets.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Jeanette M. Franzel, (202) 512-9471 or franzelj@gao.gov:
Acknowledgments:
In addition to the contact named above, Jackson Hufnagle, Assistant
Director; Francis Dymond; Jacquelyn Hamilton; Jason Kirwan; and
Clarence Whitt made key contributions to this report.
[End of section]
Footnotes:
[1] Pub. L. No. 95-452, 92 Stat. 1101 (Oct. 12, 1978) (codified, as
amended, at 5 U.S.C. App.)
[2] PCIE is composed principally of the presidentially appointed and
Senate-confirmed IGs, and ECIE is composed principally of IGs appointed
by the heads of designated federal entities defined by the IG Act. Both
were established by executive order to coordinate and enhance the work
of the IGs and are chaired by the Deputy Director for Management,
Office of Management and Budget. In addition, Executive Order 12993,
Administrative Allegations Against Inspectors General, provides an
independent investigative mechanism to ensure that allegations against
IGs and senior IG staff are expeditiously investigated and resolved.
The executive order provides the authority for the Integrity Committee,
as part of PCIE and ECIE, to address these allegations. The Integrity
Committee is chaired by a designee of the Federal Bureau of
Investigation. Other government members include the Special Counsel of
the Office of Special Counsel, the Director of the Office of Government
Ethics, and at least three IGs selected from PCIE and ECIE.
On October 14, 2008, Public Law 110-409, the Inspector General Reform
Act of 2008, was enacted. Among other provisions, it authorizes a new
statutory Council of the Inspectors General on Integrity and
Efficiency, which is to have its own Integrity Committee with powers
similar to the PCIE and ECIE Integrity Committee, and disestablishes
the PCIE and ECIE, effective on the earlier of the creation of the new
Council, or 180 days after the passage of the Act.
[3] GAO, Government Auditing Standards, July 2007 Revision, [hyperlink,
http://www.gao.gov/products/GAO-07-731G] (Washington, D.C.: July 2007).
[4] Amounts presented as budgetary resources in this report for any
given fiscal year may not equal the amount made available as new
appropriations for that year because the OMB data include other
available amounts.
[5] Pub. L. No. 109-155, 119 Stat. 2895 (Dec. 30, 2005).
[6] The NASA centers are Ames Research Center, Dryden Flight Research
Center, Glenn Research Center, Goddard Space Flight Center, Johnson
Space Center, Kennedy Space Center, Langley Research Center, Marshall
Space Flight Center, and Stennis Space Center.
[7] Pub. L. No. 110-409, 122 Stat. 4302 (Oct. 14, 2008).
[8] GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-07-310] (Washington, D.C.: January
2007).
[9] Pub. L. No. 106-531, 114 Stat. 2537 (Nov. 22, 2000).
[10] A financial audit provides an independent assessment of and
reasonable assurance about whether an entity's reported financial
condition, results, and use of resources are presented fairly in
accordance with recognized criteria. A performance audit is an
engagement that provides assurance or conclusions based on an
evaluation of sufficient appropriate evidence against stated criteria,
such as specific requirements, measures, or defined business processes.
[11] Federal awarding agencies such as NASA have responsibilities under
OMB Circular No. A-133, Audits of States, Local Governments, and Non-
profit Organizations, to conduct these quality control reviews.
[12] Pub. L. No. 107-296, § 812, 116 Stat. 2135, 2223 (Nov. 25, 2002).
[13] The Department of Justice OIG issued its peer review report of the
NASA OIG on January 8, 2004, and the General Services Administration
OIG completed the subsequent peer review and reported on March 13,
2007.
[14] Department of Transportation OIG conducted the peer review of NASA
OIG's investigative practice and issued its report on July 8, 2005.
[15] Pub. L. No. 101-576, 104 Stat. 2838 (Nov. 15, 1990).
[16] The draft report responds to the joint request of three
Congressmen. The request asks GAO to "make recommendations as needed to
achieve enhanced effectiveness and independence of the NASA 0IG."
[17] The draft report refers to the three peer reviews of the NASA OIG
conducted during the 5-year period 2003 through 2007 (a fourth review,
of the Office of Investigations, was completed in 2008). In the two
reviews addressing the Office of Audits, and the one review addressing
the Office of Investigations, the peers conducting the reviews
concluded that the NASA OIG's systems of quality control for the audit
function provided reasonable assurance of material compliance with
professional auditing standards. The single review of the Office of
Investigations completed in 2007 found that Office to be in full
compliance with applicable quality standards. With respect to both
audit and investigative activities, none of these four reviews suggest
any impediment or noncompliance with respect to independence or
appearance of lack of independence at the NASA OIG. It was only the
congressionally requested, non-routine, reviews-this one by the GAO and
the one conducted by the IC and HUD OIG-that raised questions about
appearances. And, despite the wide scope of review of the GAO audit, it
identified no new independence issue, apparently not finding any.
[18] GAO's draft report cites the findings of the IC by stating that
the IC concluded that "the NASA IG's actions, including his
relationship with the former NASA Administrator, created an appearance
of a lack of independence." There is no reference to any "relationship"
with NASA's then-Administrator (who resigned in February 2005) in the
paragraph reflecting the IC's conclusion, and there is no finding by
the IC of any continuing appearance problem. After an investigation of
more than a year, with $620,000 paid by the NASA OIG to the HUD OIG for
the investigation (the real cost was actually much greater), the IC
could cite to no instance of a lack of independence. It only cited two
instances from years earlier, in which persons not in a position to
know the relevant facts thought there was an appearance of lack of
independence; in those two instances, the Inspector General's actions
were appropriate and the IC does not conclude otherwise. The NASA
Inspector General's testimony on June 7, 2007, at the Joint Hearing
Between the Senate Commerce Committee's Subcommittee on Space,
Aeronautics, and Related Sciences and the House Science and Technology
Committee's Subcommittee on Investigations and Oversight (available at
[hyperlink, http://oig.nasa.gov/congressional/Statement060707.pdf] and
exhibits, thereto, available at hyperlink,
http://oig.nasa.gov/congressional/Exhibits060707.pdf]; see,
particularly, Exhibit B thereof) demonstrated the totally
unsubstantiated nature of the conclusion of the IC as regards
"appearances." The testimony, given long after the resolution of the IC
matter, was the NASA IG's first opportunity to rebut the IC's findings.
[19] The draft report states "the NASA Administrator is not in the most
appropriate position to determine the actions necessary to address the
IG's independence, especially those related to the actions of the
Inspector General and the Administrator's office." The NASA
Administrator was not the determining official. The determining
official, as reflected by the correspondence and the EO, was the PCIE
Chair. GAO stated at the exit conference with the NASA OIG, September
12, 2008, that the PCIE Chair was not contacted in connection with the
draft report. EO 12993 clearly provides a role for an Agency head in
consideration of IC matters: "Where the Chairperson of the PCIE/ECIE
determines that dissemination of the report to the head of the
subject's employing agency or entity is appropriate," the Chair of the
PCIE can disseminate the report to that person for views or action. The
views of the Administrator under whose "general supervision" the
Inspector General carries out his role under the Inspector General Act
of 1978 were perfectly appropriate for the PCIE Chair to take into
consideration in his resolution of the matter.
[20] The letter from the PCIE Chair on April 18, 2007, was the document
actually reflecting the final disposition of the matter. While the GAO
conveyed at the exit conference that they had been provided full access
to the IC files on this matter, the NASA OIG has never seen this
letter; it is only known to the NASA OIG by virtue of the April 26
notice of the closing of the matter pursuant to section (e) of EO
12993, which states: "The Chairperson of the PCIE/ECIE shall report to
the Integrity Committee the final disposition of the matter, including
what action, if any, has been or is to be taken by the head of the
subject's employing agency or entity. When the Integrity Committee
receives notice of the final disposition, it shall advise the subject
of the investigation that the matter referred to the Integrity
Committee for review has been closed."
[21] The draft report completely fails in meeting one of the audit's
stated objectives-to address the "audit and investigative
accomplishments reported by the NASA 0IG."
[22] For example, on October 1, 2008, the Chairman of the House Science
and Technology Subcommittee on Investigations and Oversight relied
heavily on the body of the NASA OIG's extensive IT security work and
its identification of systemic issues to query NASA on IT security
matters.
[23] Shuttle safety-related reports include the 2005 Summary of the
Office of Inspector General's Reviews on Aspects of NASA's Response to
the Columbia Accident Investigation Board Report; the 2005 report Risks
Associated with NASA's Plan for Technical Authority and Safety and
Mission Assurance; the 2005 Space Shuttle Orbiter Wiring Inspection;
the 2006 Final Memorandum on the Audit of NASA's Response to Columbia
Accident Investigation Board Recommendations Concerning MMT Training;
the 2006 Final Memorandum on the Review of Space Shuttle Cold Plates;
the 2006 report Space Shuttle Program Problem Reporting and Corrective
Action Process at Kennedy Space Center Needs Improvement; the 2007
Final Memorandum on the Review of T-0 Access Stair Trucks Located at
Dryden Flight Research Center; the 2008 Final Memorandum on the Review
of Rocket Segment Handling; and the 2008 Review of a Shuttle Training
Aircraft Mishap on October 19, 2007. And, of course, as the GAO limited
itself to products of the OIG and did not conduct interviews of audit
staff, it is apparently completely unaware of monitoring of issues
regarding Shuttle safety, for example, that is carried out by OIG
technical specialists.
[24] Moreover, comparing NASA OIG audits with the audits at agencies
like the Social Security Administration makes little sense; just one
recent audit at that agency found that obtaining certain information
from 276,000 benefit applicants would save $473 million. NASA programs
and operations are different in kind from other agencies.
[25] The GAO report overlooked many significant cases, besides Boeing,
where NASA OIG recovered significant amounts of money for the
Government. While the Boeing case involved the largest ever recovery to
NASA from an OIG investigation, the TRW case represented to the second
largest. In this case, which was settled in June 2003, over $111
million was recovered, of which over $11 million went directly to NASA.
Also in that same month, Lockheed settled a matter for $7.1 million, of
which $6.7 million was returned to NASA. In June 2005,
PricewaterhouseCoopers paid the Government $41.9 million as a result of
an investigation conducted by this office. In December 2005, Bearing
Point (formerly KPMG) settled a matter investigated by this office for
$I5 million; and in June 2006, BP Amoco paid the Government $ 10
million, of which $1.7 million came back to NASA, to settle a matter.
[26] According to the draft report, the office with "worse" monetary
accomplishments than the NASA OIG is the OIG of the Nuclear Regulatory
Commission. The logic of the draft report would support a reallocation
of resources by that Office away from "compliance" to activities with
monetary recoveries. What the draft report overlooks is that compliance
with critical requirements establishes economy, effectiveness, and
efficiency of operations and program safety.
[27] Our annual Strategic Plan Results Report includes data in a
variety of areas. We use the data, including customer feedback, to
measure accomplishments, the relevance and timeliness of our work, and
the impact of recommendations on Agency programs, policies, and
procedures. Agency officials view our work as useful and timely and
feel our recommendations are addressing programmatic and policy issues,
as revealed in the following examples:
* For FY 2006, 71 percent of customers surveyed felt that our audit
products "provided meaningful results," 90 percent felt that our audit
products "covered areas in sufficient detail."
* For FY 2007, 74 percent of customers surveyed felt that our audit
products "provided meaningful results," and 83 percent of felt that our
audit products "covered areas in sufficient detail."
[28] For FY 2005 and thereafter, approximately $3,500,000 was shifted
from NASA to the NASA OIG to pay for the financial audits, giving the
appearance of a significant budget increase (more than 10% annually) to
OIG with no actual impact to funds available for OIG operations. This
reallocation was to assure OIG independence in the management of the
audit of NASA's financial statements under the Chief Financial Officer
Act of 1990.
[29] For FY 2007 and FY 2008, OIG absorbed reductions of 3.9 percent
($1.3 million) and 5.8 percent ($2.0 million), respectively, from the
President's budget. While OIG's actual budget authority for those years
rose by 0.7 and 1.2 percent, respectively, the increases were
significantly smaller than the cost-of-living adjustment increases and
general spending inflation.
[End of section]
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