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NASA OIG: Semiannual Report, October 1, 2002--March 31, 2003

Status Report From: NASA Office of Inspector General
Posted: Saturday, June 14, 2003

Full report: Semiannual Report, October 1, 2002--March 31, 2003, PDF

SEMIANNUAL REPORT
Office of Inspector General
October 1, 2002–March 31, 2003

FROM THE INPECTOR GENERAL

On February 1, 2003, Space Shuttle Columbia was lost during its re-entry into Earth's atmosphere after a 16-day science mission. The NASA Office of Inspector General (OIG), along with the rest of NASA and the nation as a whole, mourns the loss of Columbia and her heroic crew: Commander Rick Husband, Pilot William McCool, Payload Specialist Ilan Ramon, and Mission Specialists Michael Anderson, David Brown, Kalpana Chawla, and Laurel Clark.

Determining the cause of the Columbia accident is of tremendous significance to NASA and the future of human space flight. Columbia accident related activities have been a primary focus of the OIG since February 1. On February 2, at my request, the Administrator designated me to serve as an observer to the Columbia Accident Investigation Board (CAIB) and its efforts to determine what caused the accident. As an observer to the CAIB's activities, I expect to be able to report to the Administrator and to Congress on whether the CAIB carried out its responsibilities independently and whether NASA cooperated fully with the CAIB's investigation. Also, my involvement has facilitated the referral by the CAIB of matters appropriate for investigation by the OIG. Finally, through my role as an observer of the CAIB's activities, the OIG will be in a better position to participate in ensuring that NASA takes the appropriate steps to address the recommendations of the CAIB. Other Columbia related activities of the OIG are discussed more fully in this semiannual report.

More generally, I am concerned that there may be a public perception that human space flight can be safe when, in fact, it is inherently risky and dangerous and will be for the foreseeable future. This said, that we as a society can undertake to pursue such inspirational and challenging endeavors as human space flight is a credit to the human spirit and the United States of America. The OIG aspires to add value to NASA's efforts to mitigate the risks of these awesome undertakings.

Changes to the OIG

During this period, I combined the Office of Audits and the Office of Inspections and Assessments into a single Office of Audits. This reorganization has brought the management of the Office of Audits to headquarters and will allow the OIG to more effectively fulfill its reporting obligations to the Administrator and to Congress. Also, this reorganization eliminates the duplicative missions of the former audits and inspections offices. I believe that the reorganized Office of Audits will be better able to focus on critical issues, produce meaningful value-added products in a timely and effective manner, and consistently follow through to ensure that the Agency takes responsive action. I appointed David Cushing as the Assistant Inspector General for Auditing (AIGA) and Alan Lamoreaux as the Deputy AIGA. The office consists of six functional directorates—Financial Management, Information Technology, Institutional and Infrastructure Management, Procurement, Safety and Security, and Strategic Enterprises. These directorates reflect the responsibilities and priorities of the Office of Audits and the division of labor to address them. In addition, a Quality Control Division oversees compliance with applicable standards and an Administrative and Operations group supports the six directorates.

Key Issues

In the two previous semiannual reports, I expressed concerns relating to the Chief Financial Officer financial statement FY 2002 audit, conducted by PriceWaterhouseCoopers (PwC) under contract to the OIG. NASA's prior year FY 2001 audit resulted in a disclaimer due to several factors, but primarily NASA's inability to provide the information necessary to complete the audit.

NASA's FY 2002 audit also presented a significant challenge to the Agency, PwC, and the OIG. At the end, NASA received a clean opinion on its FY 2002 financial statement audit. But PwC reported a repeat material weakness in internal controls over NASA-owned contractor-held property as well as a material weakness in the process for preparing the financial statements and performance and accountability report. These weaknesses necessitated an inordinate amount of work by NASA to bring the financial statements into good order.

These issues will continue to require senior level management attention as NASA implements its Integrated Financial Management Program (IFMP). NASA's IFMP is the keystone in the Agency's efforts to improve its financial, physical, and human resources management systems and processes and provide for accurate and timely management information. Accordingly, the NASA OIG will continue to closely monitor IFMP implementation.

We will continue to focus the efforts of the OIG on those areas that we believe will bring the most value to NASA and the taxpayer. Fortunately, NASA senior management embraces the principle that an independent OIG brings value to the Agency, and this perspective has facilitated the OIG's fulfillment of its mandate to promote economy and efficiency in Agency programs. At the one-year mark of my tenure as Inspector General (IG), I believe that the NASA OIG is well positioned to conduct investigations and audits that advance the best interests of the American taxpayer.

This semiannual report fairly summarizes the activities of the NASA OIG during the reporting period.

Robert W. Cobb
Inspector General

Full report: Semiannual Report, October 1, 2002--March 31, 2003, PDF

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