NASA OIG: NASA’s Small Business Innovation Research (SBIR) Program (Report No. IG-09-023; Assignment No. A-09-015-01)
National Aeronautics and Space Administration OFFICE OF INSPECTOR GENERAL WASHINGTON, DC 20546-0001
August 13, 2009
TO: Director, Innovative Partnerships Program Director, Office of Program and Institutional Integration
FROM: Acting Assistant Inspector General for Auditing
SUBJECT: NASA’s Small Business Innovation Research (SBIR) Program (Report No. IG-09-023; Assignment No. A-09-015-01)
On August 6, 2009, the Acting Inspector General was a witness at a hearing held by the U.S. Senate Committee on Commerce, Science, and Transportation on waste, fraud, and abuse in the SBIR Program. The Acting IG discussed the Office of Inspector General’s audit and investigative work related to NASA’s SBIR Program. (See the Enclosure for the statement for the record.)
The Acting IG noted that our work has identified instances of fraud, waste, and abuse by Program participants that bring into question the effectiveness of the Program’s internal controls. Specifically, of the 46 SBIR investigations we closed since 2001, eight or 17 percent have resulted in criminal convictions, civil judgments, or administrative corrective action. Currently, we have five open investigations involving allegations of potential fraud, waste, or abuse in the SBIR Program.
Our investigative and audit work has shown that some SBIR contractors
* received awards from multiple agencies for essentially the same work,
* submitted different proposals to multiple agencies but then provided all of them the same deliverable, or
* misrepresented information including the role of a principal investigator who was supposed to perform the research.
We identified many of these violations as early as 1992, and while NASA has taken corrective action to improve internal controls in the SBIR Program, we continue to identify the same violations in recent and ongoing investigations.
Questions posed by Committee members during the August 6, 2009, hearing indicate a continuing high degree of congressional interest in all Federal agencies’ SBIR programs; specifically, how agencies are addressing fraud committed by program participants. In responding to such questions, the Acting IG told the Committee Chairman that the OIG was initiating a comprehensive audit of NASA’s management of the SBIR Program that will focus specifically on assessing the adequacy and implementation of the Program’s internal controls and the extent of fraud, waste, and abuse by Program participants.
The Acting IG also told the Committee Chairman that we would recommend that NASA consider whether the SBIR program represents a weakness in internal controls that warrant monitoring as part of the Agency’s implementation of OMB Circular A-123. Accordingly, we are recommending that the Director, Innovative Partnerships Program, take into consideration the OIG’s past audit and investigative work concerning the SBIR Program when conducting the Statement of Assurance Process for 2009. We also recommend that the Senior Assessment Team (SAT) discuss NASA’s SBIR Program and consider whether the Program’s internal controls represent a vulnerability that should be monitored.
We request a response to this memorandum from the Director, Innovative Partnerships Program, and from the Director, Office of Program and Institutional Integration. We request that management provide a single, coordinated Agency response by September 14, 2009. Management comments should indicate concurrence or nonconcurrence with each applicable recommendation. Comments should describe actions taken or planned in response to agreed-upon recommendations and provide the completion dates of the actions. State specific reasons for any nonconcurrence and propose alternative actions, if appropriate.
We are available should you have questions. The OIG point of contact (POC) for this issue is Mr. Ray Tolomeo, Science and Aeronautics Research Director, Office of Audits, at 202-358-7227 or
Raymond.Tolomeo@nasa.gov.
signed by Mark Jenson for
Debra D. Pettitt
Enclosure
cc: Assistant Administrator for Internal Controls and Management Systems
