NASA OIG: Final Report - IG-14-014 - NASA's Award Closeout Process


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NASA Inspector General Paul Martin today released a report examining NASA’s efforts to ensure Agency contracts, grants, and cooperative agreements are closed timely and in accordance with established requirements and that any unused funds are promptly made available for other uses.   

NASA spent approximately 80 percent of its $17.8 billion fiscal year (FY) 2012 appropriation on contracts to procure goods and services and grants and cooperative agreements with researchers, universities, and nonprofit entities to fund scientific research, fellowships, and educational activities.  Once performance under these instruments is complete, NASA must review and complete a series of steps to close the associated files, including ensuring any unused funds are deobligated.  Federal and NASA guidelines provide timeframes in which this closeout process should occur.  Meeting these timeframes can help limit NASA’s exposure to financial risk by promptly identifying any improper payments the Agency may have made and ensuring that contractors and grantees have satisfied the terms and conditions of the awards.  Moreover, timely deobligation of unused funds frees up money for other Agency or government uses.

As of October 2013, NASA had more than 15,000 award instruments that had expired but were not yet closed.  NASA contracts with a private company to assist with the closeout process.

The OIG found that although NASA has slowed the growth of its backlog of instruments awaiting closeout, the Agency needs to make further improvements to its closeout process.  First, NASA’s closeout process is not uniform across the Agency, with Centers varying in the types of award instruments they send to the contractor and when they do so.  As a result, some Centers are not optimizing the contractor’s services, which contributes to the Agency’s backlog.  Similarly, contract personnel at the Centers use different guidance when closing out award instruments, impairing their ability to share information and work across the Centers. 

Second, although we found that NASA generally deobligates unused funds in a timely manner, we identified $2.7 million in funds not timely deobligated.  Based on this finding, we estimated that Agency-wide, NASA has more than 4,000 instruments with $61 million in funds that were not deobligated in a timely manner.  Third, the Agency incurred $6,699 in unnecessary service fees associated with grant accounts that remained open past the period of expiration.  Statistically projected, this amounts to approximately $170,000 in unnecessary service fees.  Fourth, the Agency closed some award instruments without sufficient evidence that the associated funding had been appropriately spent.  Consequently, NASA has increased risk that the costs associated with more than $43 million in awards may not be allowable and reasonable.  Finally, the OIG identified several best practices that if applied across the Agency could help NASA strengthen its closeout process. 

The Agency concurred with our four recommendations to strengthen NASA’s award closeout process.  The full report can be found on the OIG’s website at http://oig.nasa.gov/ under “Reading Room” or at the following link: http://www.hq.nasa.gov/office/oig/hq/audits/reports/FY14/IG-14-014.pdf

Please contact Renee Juhans at 202-358-1220 if you have questions.

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