NASA OIG: NASA’s Conference Planning Process Needs Improvement
The Issue
The Consolidated Appropriations Act, 2008 (Public Law 110-161), requires NASA to submit quarterly reports to the Office of the Inspector General (OIG) on costs and contracting procedures used to provide NASA-sponsored fiscal year (FY) 2008 conferences or meetings with costs exceeding $20,000. The Act requires OIG to analyze these quarterly reports and provide an analytical report, with recommendations as necessary, to the House and Senate Appropriations Committees no later than September 30, 2008.
As of October 16, 2008, NASA had provided data on conferences with costs exceeding $20,000 for the first and second quarters of FY 2008 (October 2007-March 2008). NASA provided preliminary data for the first quarter of FY 2008 in a draft document dated May 15, 2008. However, NASA did not provide final first quarter data until July 7, 2008, and did not provide second quarter data until July 25, 2008. The timing of NASA’s submissions precluded OIG from providing a sufficiently thorough analysis to satisfy the reporting requirements for Public Law 110-161 and resulted in a scope limitation. Our review was limited to the three conferences identified by NASA in its May 2008 draft report. As NASA has recently revised its criteria for what is includable as a reportable conference, we identified an additional scope limitation on this review. We reviewed cost documentation for these conferences to determine if NASA followed Federal contracting procedures and Federal Travel Regulation (FTR). Rather than focus on assessing the completeness and accuracy of NASA’s report, we focused on reviewing the supporting information and data for the three conferences reported to us in May 2008. Details of the audit’s scope and methodology are in Appendix A.
Results
For the three conferences we reviewed, NASA conference planners did not incorporate all information required to accurately estimate conference costs. NASA requires conference planners to collect comprehensive cost information for two reasons: to allow managers to make informed business judgments about whether proposed expenditures are reasonable and necessary and to ensure that costs, when incurred, meet the Government’s expectations in terms of what it is getting and at what price. Failing to use the costestimating internal control for conferences prevents the Agency from exercising business judgment in decision making and makes the Agency vulnerable to excessive charges for meals, incidentals, and associated charges. Conference planners were unaware of the information required by NASA’s Financial Management Requirements (FMR) for conference cost estimation and location selection. As a result, conference planners significantly underestimated conference costs (at least in terms of required documentation) for the three conferences we reviewed by a total, for all three, of approximately $604,000, thus, costs averaged 263 percent more than estimated. For example, NASA spent approximately $147,000 on light refreshments for the three conferences we reviewed, which involved add-on costs not subject to review pursuant to the internal control system designed to cause such review. In addition, conference planners did not make informed, cost-effective decisions when selecting locations to meet the Government’s needs or comply with the Administration’s direction as regards avoiding conferences at resorts. By underestimating conference costs, conference planners increased the risk that program budgets could be negatively impacted by conference cost overruns.
In addition, some conference attendees claimed, and NASA reimbursed them for, unallowable meal costs. Specifically, we identified instances of travelers not adjusting M&IE rates to reflect when NASA provided meals. In addition, some travelers received full M&IE rates on days when they were in transit to or from the location, which is not in compliance with NASA policy. This occurred because NASA travelers and travel voucher preparers did not adjust M&IE rates appropriately and approvers did not identify inappropriate M&IE rates during review. As a result, NASA inappropriately spent approximately $768 for Government-provided meals and an additional $531 for the non-reduced M&IE.
Management Action
We recommended that the NASA Chief Financial Officer (CFO) revise NASA’s FMR (August 2008), Appendix A, to include instructions for completing the NASA Sponsored Conference – Approval to Conduct form, clarify the form number, and ensure that NASA conference planners are aware of Federal and Agency conference planning policies and procedures to include the policies put forth in the NASA Administrator’s November 16, 2005, memorandum. We also recommended that the NASA CFO issue an Agency-wide reminder to travelers, as well as travel voucher preparers and approvers, of the FTR requirement to reduce M&IE rates provided during temporary duty travel when the Government furnishes meals. Finally, we recommended that the NASA CFO require conference planners to notify conference attendees when M&IE rates should be adjusted due to the Government providing meals at NASA-sponsored conferences.
The Deputy CFO concurred with our recommendation to revise the NASA FMR and also concurred with our recommendation to remind travelers, travel voucher preparers, and approvers of requirements to reduce M&IE rates when the Government provides meals and stated that OCFO will issue appropriate instructions to address both recommendations by December 31, 2008. The Deputy CFO partially concurred with our recommendation to require conference planners to notify conference attendees when meals will be provided by the Government, noting that conference planners might not always be the appropriate or most effective person(s) to provide attendees with a reminder about the FTR’s requirements regarding reducing allowable M&IE rates. In addition, the Deputy CFO stated that OCFO will issue appropriate guidance on complying with the FTR’s requirements and NASA’s FMR by December 31, 2008. Management’s comments are responsive; however, all three recommendations will remain open until we have verified that the new instructions and guidance issued meets the intent of the recommendations. (See Appendix D for the full text of management’s comments.)
