From: NASA Office of Inspector General
Posted: Friday, March 1, 2002
The NASA Office of Inspector General (OIG) contracted with the independent certified public accounting firm of PricewaterhouseCoopers, LLP to audit NASA's financial statements as of, and for the year ended, September 30, 2001. The contract required that the audit be performed in accordance with generally accepted government auditing standards, Office of Management and Budget (OMB) Bulletin 01-02, "Audit Requirements for Federal Financial Statements," and the General Accounting Office/President's Council on Integrity and Efficiency "Financial Audit Manual." PricewaterhouseCoopers produced three reports:
The "Report of Independent Accountants" discusses PricewaterhouseCoopers' disclaimer on NASA's consolidated and combined financial statements as of, and for the year ended, September 30, 2001. The disclaimer resulted primarily from NASA's inability to provide in a timely manner fully supported documentary evidence to substantiate the accuracy and the classification of amounts reported as obligations, expenses, property, plant, and equipment, and materials. The report is available on the OIG web site at: http://www.hq.nasa.gov/office/oig/hq/igfy01fsaudit.pdf
The "Report of Independent Accountants on Internal Control" identified a material weakness involving NASA's lack of adequate controls to reasonably assure that property and materials are presented fairly in the financial statements. Specifically, NASA did not provide sufficient documentation for amounts capitalized to the International Space Station, and the Agency needs to improve the controls surrounding classification and accounting treatment of contractor-held property and inventory items. In addition, PricewaterhouseCoopers identified five reportable conditions involving the operational effectiveness of NASA's financial management processes, the process of estimating environmental liability, and three conditions involving the NASA Automated Data Processing Consolidation Center. The report is available on the OIG web site at: http://www.hq.nasa.gov/office/oig/hq/lrreport022602.pdf
The "Report of Independent Accountants on Compliance with Laws and Regulations" discusses how PricewaterhouseCoopers performed tests of compliance with certain provisions of laws and regulations, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. The report also discusses certain other laws and regulations specified in OMB Bulletin No. 01-02, including the requirements referred to in the Federal Financial Management Improvement Act (FFMIA). The results disclosed instances in which NASA's financial management systems did not substantially comply with Federal financial management systems requirements and applicable Federal accounting standards. The report is available on the OIG web site at: http://www.hq.nasa.gov/office/oig/hq/opinion022602.pdf
In connection with the contract, the NASA OIG reviewed PricewaterhouseCoopers' reports and selected related work papers and inquired of their representatives. The OIG review, as differentiated from an audit in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, opinions on NASA's financial statements or conclusions about the effectiveness of internal control or conclusions on whether NASA's financial management systems substantially complied with the FFMIA or conclusions on compliance with laws and regulations. PricewaterhouseCoopers is responsible for the auditor's reports and the conclusions expressed in the reports. However, although the OIG quality control review is ongoing, to date we have identified no instances where PricewaterhouseCoopers did not comply, in all material respects, with generally accepted government auditing standards.
For more information, please contact Mr. Alan J. Lamoreaux, Assistant Inspector General for Audits, at (202) 358-1232.
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