NASA IG Identifies Top Management Challenges, Compliments Agency on Audit Improvement

NASA’s Inspector General (IG), Paul Martin, has issued his office’s annual listing of the top management and performance challenges facing the agency. He also released this year’s independent financial audit of the agency. The latter is an improvement over the previous seven years of audits.

According to Martin’s Office of Inspector General (OIG), the key challenges are:

• Future of U.S. Spaceflight
• Acquisition and Project Management
• Infrastructure and Facilities Management
• Human Capital
• Information Technology Security
• Financial Management

In the last area, the report notes that for seven years NASA received “disclaimed” audits. The primary reason was that independent auditors could not obtain sufficient usable information from the agency to determine whether NASA was in compliance with relevant government financial standards or not.

At a House Science and Technology subcommittee hearing last year shortly after Mr. Martin became IG and Elizabeth (Beth) Robinson took the reins as NASA’s Chief Financial Officer, optimism was expressed that the agency would not get another disclaimed audit. In this report, Martin states that the auditors, Ernst & Young, gave the agency a “qualified” opinion this year. Though not as good as an unqualified opinion, he indicates it is a step in the right direction:

“Over the past several years, NASA financial managers – working with the OIG and the independent accounting firm – have continued to make steady progress resolving previously identified weaknesses and their efforts resulted in the auditors’ qualified opinion. While the ultimate goal for the Agency is an unqualified opinion, the FY 2010 results are a significant accomplishment and position NASA well for the future.”

Mr. Martin’s office posted the Ernst & Young audit today. As in other government agencies, the IG’s office is responsible for contracting with an independent auditor each year to determine if an agency is complying with financial accountability standards set by the Government Accountability Office (GAO) and the Office of Management and Budget (OMB). The one aspect of NASA’s financial management that continues to require improvement is accounting for property, plant and equipment (PP&E) and operating materials and supplies (OM&S) according to the Ernst & Young report.