GAO: Inspectors General: Actions Needed to Improve Audit Coverage of NASA
GAO-09-88, December 18
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.
