From: NASA Office of Inspector General
Posted: Thursday, October 2, 2008
National Aeronautics and Space Administration
Office of Inspector General
Washington, DC 20546-0001
September 25, 2008
TO: Chief Financial Officer
Chief Information Officer
Deputy to Chief Information Officer
Director, Marshall Space Flight Center
FROM: Assistant Inspector General for Auditing
SUBJECT: Final Memorandum on NASA's Development of the Integrated Asset Management - Property, Plant, and Equipment Module to Provide Identified Benefits (Report No. IG-08-032; Assignment No. A-08-001-00)
The Office of Inspector General conducted an audit of NASA's Integrated Asset Management - Property, Plant, and Equipment (IAM/PP&E) module. A component of NASA's Integrated Enterprise Management Program (IEMP), the IAM/PP&E module is an automated asset-management system that performs two main functions: equipment management (logistics) and asset accounting (finance) and was designed to integrate logistics and financial processes to account for and facilitate management of NASA personal property.
Our overall objective was to determine whether NASA adequately defined the IAM/PP&E module's project requirements to achieve identified benefits and address stakeholder needs. Specifically, we focused on determining whether NASA adequately defined its project requirements to ensure that the module provided the following benefits: (1) more accurate, timely valuation of PP&E; (2) improved valuation, capitalization, and depreciation processes; (3) improved audit trail of capitalized1 PP&E; (4) standardization of NASA-held and contractor-held property management processes; (5) elimination of manual processes; and (6) reduced operational costs. An additional objective, initially, was to determine the status of the IAM/PP&E module project and whether the project's cost and schedule estimates were reasonable and reliable. The IAM/PP&E module went live in May 2008, and the project's actual costs were within the total budget of approximately $30 million. Inasmuch as the project has been implemented and was completed within budget, we make no further comment on the schedule or budget in this memorandum.
We conducted our audit at Marshall Space Flight Center and NASA Headquarters. (See Enclosure for details on the audit's scope and methodology.)
We found that NASA adequately defined the IAM/PP&E module project requirements to ensure the six benefits are achieved and that the achievement would be measurable. To determine that the project requirements were adequately defined, we verified that the requirements were crosswalked to each anticipated benefit; we verified that project personnel had reviewed the Federal financial system requirements and could trace the project requirements to the Federal requirements; and we reviewed the project's Performance Measurement Plan to verify that a performance measure could be tied to each of the six identified benefits. We determined that the IAM/PP&E module, as designed, and the corresponding changes in NASA's business processes and controls should help mitigate deficiencies reported as material weaknesses by Ernst and Young (E&Y), the independent public accounting firm that conducted the audit of NASA's financial statements for the past 4 years.
We also found that, to help ensure that stakeholders' needs were met, project management incorporated stakeholders in the requirements development process. Stakeholders identified and reviewed project requirements and, during system development, helped determine whether each portion of the system would meet their requirements. Stakeholders also participated in IAM/PP&E Steering Committee meetings.
We note, however, that the system's contribution to improved financial reporting may be limited by inaccurate data. NASA did not validate approximately 6,300 records of capital assets that have an acquisition value of $32 billion (and a net value of approximately $18.6 billion) prior to transferring the data into IAM/PP&E. In addition, NASA has not resolved an operating policy issue involving identifying purchases of controlled equipment, which could bear on the successful operations of the system. However, we did not conduct audit work to address the impact of these issues because E&Y plans to perform tests of the IAM/PP&E module and NASA's corresponding manual controls as part of the fiscal year (FY) 2008 financial statement audit. Accordingly, we made no recommendations for management action. We issued a draft of this memorandum on September 17, 2008, and provided NASA management an opportunity to comment on the draft, but comments were not required and no formal comments were received.
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