NASA OIG: Final Memorandum on the Audit of Space Shuttle Program Costs

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National Aeronautics and Space Administration
Office of Inspector General
Washington, DC 20546-0001

September 19,2007

TO: Associate Administrator for Space Operations Program Director, Integrated Enterprise Management Program

FROM:Assistant Inspector General for Auditing

SUBJECT: Final Memorandum on the Audit of Space Shuttle Program Costs (Report No. IG-07-026; Assignment No. A-06-004-00)

The Office of Inspector General (OIG) has completed an audit of Space Shuttle Program (SSP) costs. Our objectives were to determine whether the SSP established appropriate accounting systems to track costs and whether those costs were tracked in association with cost estimates. (See Enclosure 1 for details on the audit’s scope and methodology.)

Executive Summary

In accordance with “NASA Financial Management Requirements” (FMR), September 2004, the SSP was using the Core Financial module of the Integrated Enterprise Management program¹ (IEMP) as its financial system of record. However, the SSP’S ability to use Core Financial data to track actual costs in association with cost estimates was limited. Because Core Financial does not produce financial reports in the format needed by the SSP, the SSP developed a transfer process to extract actual cost data from Core Financial for input into the SSP’S management information system-One NASA Management Information System (NMIS). NMIS contains preformatted financial reports and assessment tools that enable SSP managers to track actual costs, compare those costs to cost estimates, and make cost-related management decisions. However, the transfer process used by the SSP was manually intensive and time consuming; for example, during the 8-month period from October 2006 to May 2007, we identified instances when the NMIS financial reports were not updated until 90 days after the end of the monthly reporting period.² To make informed decisions based on cost data, the SSP managers need more timely access to useful financial reports.

During our audit, IEMP initiated a “gap analysis” to compare the financial reporting needs of program and project managers against IEMP functionality and identify those areas where IEMP does not provide the financial data necessary to adequately manage NASA’s programs and projects. The gap analysis was completed in July 2007 and is part of NASA’s ongoing effort to improve the Agency’s ability to link financial management

to program and project management decision making. a key step in NASA’s improvement effort and that the should be considered as one of the functionality gaps. We believe that the gap analysis is timeliness of financial reports In the draft of this memorandum, we recommended that the Program Director, IEMP, include “timely reporting of financial data” as one of the IEMP functionality gaps and to consider development of a system interface between IEMP and NMIS as a possible solution to that functionality gap. We also recommended that the Associate Administrator for Space Operations determine whether NMIS cost data can be updated in a more timely manner and, if not, to evaluate the utility of continuing to update NMIS on a monthly basis.

In response to the draft of this memorandum (see Enclosure 2, “Management Comments”), NASA management generally concurred with the finding but took exception to several issues stated in the draft memorandum. We discussed those issues with representatives from IEMP and SSP and made revisions to the memorandum where necessary. Regarding our recommendation concerning the timeliness of financial data, the Program Director, IEMP, stated that the timeliness of financial reporting was a temporary problem, attributable to the October 2006 Systems Applications and Products (SAP) Version Update. He also stated that to build an interface between IEMP and NMIS, SAP would need to initiate the request through the established IEMP service request process. We disagree that timeliness of financial reporting was a temporary problem as our review of NMIS indicated that the problem with data timeliness was not limited to the October through December 2006 data, specifically in regards to the performance indicator and early warning system data. We believe that an Agency-wide enterprise management system should provide for timely financial reporting in a format required by the program or project and without extensive manual intervention. However, we are not requesting additional comments because the initial results of the IEMP gap analysis (which was completed after our draft memorandum was issued) indicate that corrective action taken to resolve the identified gaps should resolve our timeliness concerns. Therefore, we consider the recommendation resolved and closed.

Regarding our recommendation concerning cost updates to NMIS, the Associate Administrator for Space Operations stated that he would work with the SSP to determine the appropriate date each month to update NMIS. He also stated that additional personnel will be authorized to approve cost charts in NMIS and that the SSP Business Manager will approve cost charts when received instead of waiting until all charts are made available by the individual projects. We consider these actions responsive and consider the recommendation resolved and closed.

¹ IEMP, formerly the Integrated Financial Management Program (IFMP), was renamed in June 2005.

According to IEMP and SSP, the upgrade of the Agency’s Core Financial system software, known as the SAP Version Update, affected the timeliness of cost data between October and December 2006.

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