Ofce of Inspector GeneralHotline1-800-424-9183 TDD: 1-800-535-8134Go to: http://oig.nasa.gov/hotline.htmlWrite: NASA Ofce of Inspector General P.O. BOX 23089, LEnfant Plaza Station Washington, DC 20026Beyond reporting safety issues through NASAs safety channels, including the NASA Safety Reporting System, employees and contractors may report safety issues to the NASA Ofce of Inspector General Hotline.If requested, anonymity is assured to the extent permitted by law. Information is condential.NP-2008-08-540-HQ N a t i o n a l A e r o n a u t i c s a n d S p ac e Ad m i n i s t r a t i o n O f f i c e o f I n s p e c t o r G e n e r a l SE M I A NN U A L R E P OR T A P RI L 1 S EP T E M B E R 3 0 2 0 0 8
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April 1September 30, 2008 FROM THE INSPECTOR GENERAL Inspector General General (OIG) for the period April 1September 30, 2008. of NASA and to prevent and detect crime, fraud, waste, and abuse. Our activities addressed a diverse range of issues, with particular reference to areas that constitute performance and management challenges facing the Agency. NASAs most pressing management and performance challenge continues to be the transition from the Space Shuttle to the next generation of space vehicles. In this regard, NASAs new authorization legislation directs the Agency to conduct two scheduled Shuttle contingency Also, pursuant to its new authorization legislation, NASA is to terminate or suspend until provision would provide a new Administration some time to consider extending the Shuttle Continuing Space Shuttle operations beyond the scheduled missions is inconsistent with the Presidents Vision for Space Exploration and the transition plan that NASA has executed for almost 5 years, which were dependent on the Shuttle retiring in 2010. In 2003, the Columbia many improvements to the Shuttle over the past 5 years, the in-depth and costly processes
Oce of Inspector General Semiannual Report program by 2010. Continuing to operate the Shuttle with its 30-year-old technology beyond for the Constellation Program, actions needed to improve security at a NASA Center, potential also completed investigations involving NASA employees and contractors that resulted in investigations that addressed safety inspections for a NASA aircraft, the misuse and theft of ensuring compliance with existing requirements. advice through review boards have, through their employers, interests associated with the very challenge of obtaining the independent advice it needs from the relatively small community of I believe this report fairly summarizes our audits and investigations and demonstrates the NASA, Congress, and the public. Inspector General
April 1September 30, 2008 Contents 3 Organization ...................................................... 5 Signicant Audits and Investigations Space Operations and Exploration (Transition) ........... 7 Safety (Managing Risk) .................................. 9 Financial Management ................................. 13 Acquisition and Contracting ............................ 15 Information Technology ................................ 19 Other Audit and Investigative Matters ................... 20 Legal Matters ..................................................... 26 Regulatory Review ............................................... 27 Signicant Outreach Activities .................................... 28 Awards ........................................................ 30 Appendixes ...................................................... 31 Inspector General Act Reporting Requirements .................... 33 Statistical Information ............................................ 34 Glossary and Acronyms ........................................... 44 NASA OIG Oces of Audits and Investigations ..................... 48
5 April 1September 30, 2008 ORGANIZATION INSPECTOR GENERALRobert W. Cobb DEPUTY INSPECTOR GENERALThomas J. Howard EXECUTIVE OFFICERRenee N. Juhans COUNSEL TO THE INSPECTOR GENERALFrancis P. LaRocca OFFICE OF AUDITS ASSISTANT INSPECTOR GENERAL Evelyn R. Klemstine OFFICE OF INVESTIGATIONS ASSISTANT INSPECTOR GENERAL Kevin H. Winters OFFICE OF MANAGEMENT AND PLANNING ASSISTANT INSPECTOR GENERALAlan J. Lamoreaux THE NASA I NS PEC T OR GE N ER A L THE DEPU T Y I NS PEC T OR GE N ER A L provides overall direction to the Assistant Inspectors General and Counsel to the Inspector General in the development and implementation of diverse audit, investigative, legal, and support operations of the OIG. THE E XECU TI VE O FF I CER serves as the OIG liaison to Congress and other Government entities,
Oce of Inspector General Semiannual Report 6 C OU NS EL T O T HE I NS PEC T OR GE N ER A L provides advice and assistance on a variety of legal issues matters that require OIG attention. Additionally, the staff provides advice and assistance on legal matters to OIG senior management, auditors, and investigators and serves as counsel in part of the prosecution or civil team or in which the OIG is a witness or defendant. THE O FF I CE OF AU DITS ( O A THE O FF I CE OF I N VE STIGATI O NS (OI) investigates allegations of crime, cybercrime, fraud, waste, crime indicators and recommends measures for NASA management that are designed to reduce NASAs vulnerability to criminal activity. THE O FF I CE OF M ANAG E M E NT AND P L ANNING ( O M P )
April 1September 30, 2008 7 SIGNIFICANT AUDITS AND INVESTIGATIONS Space Operations and Exploration (Transition) Space operations and space exploration remain the most highly visible aspects of NASAs effectiveness of NASAs operations and mission. During this semiannual reporting period, we focused on the role of the Standing Review Boards (SRBs) in providing independent assessments of the Agencys Constellation Program. Review Board Members the SRB until an evaluation of the legality and propriety of their membership is that include non-NASA personnel and evaluate the purpose, responsibilities, and membership of all SRBs to determine the optimum approach for accomplishing the SRB mission while ensuring compliance with all applicable guidance. approach for SRBs and to revise Agency guidance as appropriate. However, the former Associate Administrator for Program Analysis and Evaluation stated that he does not Final Memorandum on the Standing Review Board for the Orion Crew Exploration Vehicle Project (IG-08-018, April 28, 2008) f OIG Urges NASA to Improve Budget Process for Constellation Program
8 Oce of Inspector General Semiannual Report (OMB) and NASA policy and whether the CxP budget request was supported by welldocumented cost estimates. NASA could improve its budgeting process by providing additional guidance to ensure standards recommended by the GAO Cost Guide and ensuring that budget requests incorporate cost estimates based on historical or actual cost data, vendor quotes, and documented as to allow an independent cost analyst to reproduce the estimate. In response to a draft of this report issued August 12, 2008, the Associate Administrator stated that NASA incorporated the best practices from the exposure draft of the GAO recommendation and stated that CxP has been and will continue to apply the techniques managements actions. Cost Estimates Used to Support the Fiscal Year 2008 Budget Request for NASAs Constellation Program Could Have Been Better Documented (IG-08-030, September 18, 2008) f NASA OIG Finds Required Clause Omitted in Space Suit Request Space Suit System (CSSS), to include the acquisition approach, design architecture, pertinent guidance to gain an understanding of the Agencys life-cycle phases and approach, design architecture, cost and schedule plans, contract strategy, and oversight structure was conducted in accordance with NASA procedural requirements.
April 1September 30, 2008 9 management was also aware of the issue, had given it prioritized attention, and had a no recommendation for additional management action with regard to that issue. However, the contract for the CSSS did not include the Earned Value Management clause, a NASA establishing a system that generates timely, accurate, reliable, and traceable information Management clause is added to the contract as soon as permissible. Termination memorandum, Audit of NASAs Pre Acquisition Planning for the Constellation Space Suit System (Assignment No. A-07-019-00, July 29, 2008) f Safety (Managing Risk) NASA is challenged with effectively managing technologically complex programs while protecting the public from harm, ensuring the safety of employees, and preventing damage to high-value NASA to Take Action to Improve Security at a NASA Center Committee on Homeland Security and Governmental Affairs, requested that the NASA Center complied with NASA Security Program requirements, policies, and procedures. security police and the Centers physical security procedures. Our audit validated the overarching premise of the allegations in that we found the security posture at the Center to have degraded over the last few years and that the Centers Security Program was not in compliance with NASA Security Program
Oce of Inspector General Semiannual Report 10 NASA Headquarters was not inspecting the Centers Security Program, as required by NASA policy. As a result, NASA had no assurance that it was devoting the appropriate [A NASA] Centers Security Program Needed Improvement (IG-08-025, September 19, 2008) f Outside Agencies to Analyze NAOMS Methodology and Data the National Aviation Operations Monitoring Service (NAOMS) requested that NASA provide additional comments. NASA had nonconcurred with our recommendation to and conclusions, which could provide aviation safety specialists valuable insight to the NAOMS research for application and attainment of a safer National Airspace System. understanding of the validity of the survey methodology. Given that NASA has contracted with the National Research Council to assess the NAOMS methodology, we upon the assessment of the methodology. providing the aviation safety community greater access to the research through the publication of an analysis by the NASA personnel who developed the NAOMS research. spent and that the intent of the recommendation would be met by the National Research agreed with the ARMD Associate Administrator and closed the recommendation. Final Memorandum on the Review of the National Aviation Operations Monitoring Service (IG-08-014, March 31, 2008) f Addendum to Final Memorandum (IG-08-014 a, May 9, 2008) f
April 1September 30, 2008 11 Glenn Agrees with OIG Recommendations to Enhance Emergency Response System OA conducted this review to evaluate the effectiveness of Glenns emergency response the implementation of those policies and procedures, and Glenn managements oversight of the emergency response system. along with the absence of memorandums of understanding (MOUs) with off-site responding organizations, negatively affected Glenns ability to implement the Incident Command System (ICS) and respond effectively to emergencies. Although the Emergency Preparedness Plan (EPP) requires Glenn emergency responders to implement ICS authority, and limitations for each of the responders and responding organizations departments designating how they should coordinate and integrate with the Glenn responders during an emergency. Glenns ability to respond effectively to on site emergencies is contingent on the mobilization and use of resources from multiple and is not properly implemented during an emergency, the chain of command and lines of Our report made several recommendations to improve the effectiveness of Glenns analyze and determine the best organization for emergency response and develop a new emergency action plan for each facility at Glenn. In addition, during our review, Glenn instituted the use of ICS and implemented an aggressive training effort to upgrade the credentials of emergency responders. Emergency Response (IG-08-027, September 3, 2008) f
Oce of Inspector General Semiannual Report 12 Contractor Improves Procedures for Rocket Refurbishment primary function is to return used Space Shuttle hardware to a reusable condition the April 8, 2008, operation and reporting the incident to the crew supervisor. However, without adequate inspection or testing and that the report on the incident was inaccurate. Center Director reported the incident as a tooling issue. In interviews with the OA review team, the Director stated that no incident that could have resulted in damage to inaccurately reported because the Director did not have all the available information prior to his initial report. program critical hardware. E mail documentation of the incident by the move crew was not aware of those e mails until our review revealed them during our visit to the Director ordered an MRI examination of the segment, which did not reveal any damage handling and safety engineers, to reenact the steps involved in the operation, which was Final Memorandum on the Review of Rocket Segment Handling (IG-08-029, September 5, 2008) f
April 1September 30, 2008 13 Former Maintenance Chief Pleads Guilty is a result of the Chief falsifying maintenance cards related to inspections of NASA Financial Management semiannual reporting period, the OIG continued to monitor the Agencys progress in this area NASA Remains Noncompliant with FFMIA years to implement their remediation plans. Plans must identify resources, remedies, and intermediate target dates specifying when the agencys systems will be brought report when their agency has not met intermediate target dates established in its remediation plan. to the prior year issues, the auditors noted that NASA was unable to meet certain NASA did not have a process or controls for identifying and estimating environmental will be brought into compliance. Instead, the Agency prepared a discussion paper
Oce of Inspector General Semiannual Report 14 describing how its Comprehensive Compliance Strategy (CCS) and Continuing document, dated April 2008, the CCS was developed to help NASA focus on ensuring further states that it serves as the basis for implementing comprehensive proactive corrective actions Agency-wide through a phased approach executed on a continuous controls, compliance with GAAP, and evidence used to support that balances and while performing the control activities, the Center will document the description of the exception, actions needed for resolution, expected resolution date, and individuals responsible for resolution. locations. As such, the corrective actions performed to resolve the exceptions do not CMP does not specify when NASAs systems will be brought into compliance, as required to monitor the Agencys progress toward resolving instances of noncompliance with module, as designed, and the corresponding changes in NASAs business processes and
April 1September 30, 2008 15 NASA had not resolved an equipment management issue that allows employees to purchases that can be sent directly to an end-user. However, we did not address the module Final Memorandum on NASAs Development of the Integrated Asset Management September 25, 2008) f Former NASA Finance Employee Sentenced with a fraudulent scheme where she altered NASA vendor accounts to direct vendor Arrest and guilty plea previously reported March 31, 2008, page 16. Acquisition and Contracting OIG Finds NASA Missed Opportunity to Leverage Expertise and Resources
Oce of Inspector General Semiannual Report 16 options and selected the A-3 test stand to be built at Stennis without the required propulsion test community and request an independent review and assessment of the and will request that an independent review be completed by November 30, 2008. Final Memorandum on the Review of NASAs Plan to Build the A 3 Facility for Rocket Propulsion Testing (IG-08-021, July 8, 2008) f OIG Urges NASA to Ensure Best Value for the Agency documented, and the best value for NASA. costs and prices negotiated and that the costs and prices did not always provide the best documentation for us to verify NASAs position on rates used. However, we were unable documentation prevented us from verifying NASAs position for some or all of the rates for line items, such as labor, general and administrative expenses, business support, recommended by the Defense Contract Management Agency.
April 1September 30, 2008 17 also held a procurement staff meeting in response to our recommendation to reinforce requirements for developing and documenting independent Government cost estimates, Final Memorandum on Audit of International Space Station Contracts Government Cost and Price Analyses (IG-08-024, July 31, 2008) f found that Government surveillance and contractor performance evaluations were analysis to support its decision to consolidate Stennis and Marshall test operations contract services and management oversight. Final Memorandum on the Audit of NASAs Management of the Test Operations Contract (IG-08-019, May 9, 2008) f NASA Ensures Proper Contractor Payment During an audit of NASAs implementation of Defense Contract Audit Agency (DCAA) audit recommendations during the administration of cost-reimbursable procurement actions, we found that DCAAs incurred cost audit reports may have overstated a contractors cumulative allowable costs and could have resulted in NASA overpaying
Oce of Inspector General Semiannual Report 18 overpaid. In response, the Agency provided additional documentation from DCAA that agreed that no overpayment was made. Final Memorandum Regarding Potential Overpayment to Contractor (IG-08-028, August 28, 2008) f Company Agrees to Pay $15 Million to Resolve Fraud Allegations Command, and Department of Defense (DoD) revealed that companies in the carbon products to many of the U.S. Governments prime contractors, who then used them in In May 2008, after months of negotiation, the company denied any wrongdoing related U.S. Government $15 million in order to resolve fraud allegations. First conviction previously reported March 31, 2008, page 23.
April 1September 30, 2008 19 Information Technology issues the OIG has raised in past audits, evaluations, and investigations. During this NASA Continues to Enhance Internal Controls for Information Technology controls through establishment of management programs and processes, we have not management programs and processes can effectively demonstrate results can only be determined over time. Federal Information Security Management Act: Fiscal Year 2008 Report from the f Nigerian National Convicted after NASA Detects Intrusion In December 2006, the NASA OIG was informed of an intrusion of a NASA Headquarters malicious software (malware) was installed after an authorized NASA user opened a Commission was contacted and agreed to assist with the investigation, which resulted
Oce of Inspector General Semiannual Report 20 pretenses, both violations of Nigerian law. He is currently serving an 18 month prison IT Misuse Results in Administrative Actions Crimes Division conducted a number of investigations focusing on the misuse of NASA employees resigned. Former NASA Employee Sentenced in Pornography Case the State of California as a sex offender. Guilty plea previously reported March 31, 2008, page 18. Other Audit and Investigative Matters NASA Marginalized Research Disseminated to the Public During this reporting period, OI released a summary report of investigation into allegations that NASA had suppressed climate change research and denied media managed the topic of climate change in a manner that reduced, marginalized, or Investigative Summary Regarding Allegations that NASA Suppressed Climate Change Science and Denied Media Access to Dr. James E. Hansen, a NASA Scientist (June 2, 2008) In response to a hotline complaint, OA initiated an audit regarding the review, Center. In response to the request from Congress to investigate allegations that NASA
April 1September 30, 2008 21 and Marshall. adequately implemented at the four Centers we reviewed. In addition, the ability of the improved if the process was automated Agency-wide. NASA management concurred with our recommendations concerning the implementation and awareness of guidance and described appropriate corrective actions. Reviewed at Goddard Space Flight Center, Johnson Space Center, Langley Research Center, and Marshall Space Flight Center (IG-08-017, June 2, 2008) f Addendum to Final Report (IG 08 017 a, July 16, 2008) f NASA Continues Its Commitment to Improve Controls over Sensitive Technologies as Recommended by the OIG In our annual assessment report to Congress, we summarized the OIG-issued products the illegal transfer or theft of sensitive technologies and the extent to which NASA is with, established policies and regulations, which could place NASAs export-controlled As stated in the assessment report, OI is conducting investigations involving the potentially unlawful disclosure of sensitive information covered by the International conducting several computer intrusion investigations involving NASA systems containing information, which led to NASAs initiative to improve compliance with the review outsiders and unauthorized disclosures of information by NASA civilian and contract
Oce of Inspector General Semiannual Report 22 NASAs Compliance with Federal Export Control Laws and Risks Associated with the Illegal Transfer or Theft of Sensitive Technologies (IG 08 022, July 22, 2008) 8/IG-08-022.pdf NAS OIG Reviews Audit Organization, Department of the Interior OIG General Audit Organization in accordance with the standards and guidelines established Inspector General Audit Organization (August 8, 2008) Contract Employees Indicted charges that the individuals each falsely listed permanent addresses more than 50 maintained a permanent residence less than 50 miles from the facility. NASA Contract Employee Convicted and Sentenced A former NASA contract employee pled guilty to felony theft of titanium valued in Former Cashier Guilty A former NASA Exchange cashier was arrested and charged in state court with theft testing, maintain legal employment, perform 50 hours of community service, pay a
April 1September 30, 2008 23 Former Food Service Contract Employee Indicted receipts were generated from sales at the Glenn Research Center cafeteria. Food Service Manager Convicted and Sentenced Indictment previously reported March 31, 2008, page 25. NASA Contract Employee Sentenced A former NASA contract employee was charged in state court with felony theft related months probation and pay $250 in court costs. Former Contract Security Guard Indicted and Convicted conviction of a former NASA contract security guard for falsely representing himself as Security Guard Charged in Bomb Threat A former NASA contract security guard was charged with and pled guilty to a criminal Firearms Possession at Michoud A NASA subcontract employee entered a 12-month pre-trial diversion program for
Oce of Inspector General Semiannual Report 24 Former Contract Employee Charged A former contract employee was charged in state court with falsely claiming to hold a Master of Business Administration degree with the intent to obtain employment with a OIG Finds Trips of Former Administrator Noncompliant with NASA Regulations During this reporting period, OI submitted a management referral to the NASA Chief NASA regulations governing the use of the aircraft, the referral was made to NASA management for possible collection of funds from the former Administrator under the pursue any actions in this matter. Results of Mission Management Aircraft Investigation (May 29, 2008) http://oig.nasa.gov/investigations/ __f NASA Response to Results of Mission Management Aircraft Investigation (June 16, 2008) http://oig.nasa.gov/investigations/Agency_Response_MMA.pd f OIG Response to Results of Mission Management Aircraft Investigation (June 24, 2008) http://oig.nasa.gov/investigations/MMA_Reply_on-lh.pdf OIG Urges NASA to Emphasize Need to Safeguard Laptop Computers result of the high volume of matters concerning lost or stolen laptops that came to the attention of the OIG during the preceding year. As a result of this memorandum, a NASA-wide communication was sent by the Assistant Administrator for Internal Controls and Management Systems on May 19, 2008, that highlighted employee responsibilities with respect to safeguarding laptop computers. Lost and Stolen Laptop Computers (April 28, 2008) f Agency Efforts to MitigateLost and Stolen Laptop Computers (June 4, 2008) f
April 1September 30, 2008 25 Helicopter Misuse Leads to Revision in Flight Aircraft Procedures and Policies Center, concerning the misuse of a NASA-owned helicopter after an investigation found actions regarding the contractor would be addressed as an award-fee issue. NASA Scientist Misuses Position and signature included the scientists position and title in a manner that was inconsistent to the Associate Administrator for the Science Mission Directorate (SMD) and requested potential misperception on the part of the publisher that the views expressed in the letter
Oce of Inspector General Semiannual Report 26 LEGAL MATTERS OIG Supports the Acquisition Integrity Program of 3 days of training designed to train Agency attorneys who are points of contact to the fraud indicators in the procurement process. OI assisted by informing the audience of the investigative process and by illustrating the sessions with NASA cases. Another procurement personnel. OIG Legal Staff Supports Federal Law Enforcement Training particularly with state and local law enforcement entities. OIG Legal Intranet intranet, providing our OIG clients with useful information about the OIG legal staff, a provided by the legal staff.
April 1September 30, 2008 27 REGULATORY REVIEW During this reporting period, the OIG reviewed and commented on 30 directives and regulations, including 2 that were withdrawn. Of the directives we reviewed, the following were of particular FAR Case 2007-006 Agency Risk Management Procedural Requirements outlets, such as the NASA Safety Reporting System or the OIG Hotline, would reduce Safety and Mission Assurance Policy launch services missions from the requirement to conduct periodic audits. Audits involving safety critical elements should not be dismissed, especially when the lives of NASA personnel and crew, as well as the public, and the successful completion of In cases where periodic audits are not required, the NPR should describe acceptable Headquarters Continuity of Operations Plan
Oce of Inspector General Semiannual Report 28 SIGNIFICANT OUTREACH ACTIVITIES On April 23, 2008, a representative from the Procurement Directorate provided audit OIG, as requested, for use in conducting audits of procurement and contract management functions. results of our review of NAOMS. Directorate acted as chair for a PCIE Award panel that reviewed nominations from the OIG community for the annual PCIE awards ceremony. briefed representatives from the National Geospatial-Intelligence Agencys OIG on the On September 3, 2008, NASA OIG audit leadership met with GAO representatives to areas and to avoid duplication of efforts. OIGs hosting of two external customer applications on a reimbursable basis: the Special Inspector General for Iraq Reconstruction investigative case management system and
April 1September 30, 2008 29 Committee. He participated in survey development and results analysis to determine fee and performance-based contract audits.
Oce of Inspector General Semiannual Report 30 AWARDS OIG Employee Recognized States and engaged in a pattern of fraudulent conduct to improperly obtain payments from the United States under Government funded research contracts awarded by not performed and manipulated timesheets and research logs in order to bill the agencies for time spent on commercial contracts. Special Agent Matayas exceptional performance during the investigation was instrumental in securing a $5 million
April 1September 30, 2008 31 AWARDS OIG Employee Recognized States and engaged in a pattern of fraudulent conduct to improperly obtain payments from the United States under Government funded research contracts awarded by not performed and manipulated timesheets and research logs in order to bill the agencies for time spent on commercial contracts. Special Agent Matayas exceptional performance during the investigation was instrumental in securing a $5 million Appendixes A Inspector General Act Reporting Requirements ................. 33 B Statistical Information Table 1: Audit P roducts and Impact ............................... 34 Table 2: Allegations U nsubstantiated or Without Merit ............................................ 37 Table 3: P rior Signicant Audit Recommendations Y et to Be Implemented ................................... 38 Table 4: Audits with Funds P ut to Better U se ...................... 40 Table 5: Status of A-133 Findings and Questioned Costs Related to NASA Awards . . . . . . . . . . . . . . 41 Table 6: Legal Activities and Reviews .............................. 41 Table 7: Investigations Activities ................................... 41 Table 8: DCAA Audits Reports with Questioned Costs and Recommendations that Funds Be P ut to Better U se, and Amounts Agreed to during the Reporting P eriod .................... 43 C Glossary and Acronyms ........................................ 44 D NASA OIG Oces of Audits and Investigations .................. 48
April 1September 30, 2008 33 APPENDIXES Appendix A. Inspector General Act Reporting Requirements I NS P ECTOR G ENERAL A CT C ITATION R EQ U IREMENT D EFINITION C ROSS R EFERENCE PAGE NU MBER S Section 4(a)(2) Review of Legislation and Regulations 27 Section 5(a)(1) Signicant P roblems, Abuses, and Deciencies 7 Section 5(a)(2) Recommendations for Corrective Actions 7 Section 5(a)(3) P rior Signicant Audit Recommendations Y et To Be Implemented 38 Section 5(a)(4) Matters Referred to P rosecutive Authorities 42 Sections 5(a)(5) and 6(b)(2) Summary of Refusals To P rovide Information None Section 5(a)(6) OIG Audit P roducts IssuedIncludes Total Dollar V alues of Questioned Costs, U nsupported Costs, and Recommendations That Funds Be P ut to Better U se 34 Section 5(a)(7) Summary of Signicant Audit and Investigations 7 Section 5(a)(8) Total Number of Reports and Total Dollar V alue for Audits with Questioned Costs None Section 5(a)(9) Total Number of Reports and Total Dollar V alue for Audits with Recommendations that Funds Be P ut to Better U se 40 Section 5(a)(10) Summary of P rior Audit P roducts for which No Management Decision Has Been Made None Section 5(a)(11) Description and Explanation of Signicant Revised Management Decisions None Section 5(a)(12) Signicant Management Decisions with which the Inspector General Disagreed None Section 5(a)(13) Reporting in Accordance with Section 05(b) of the Federal Financial Management Improvement Act of 1996 Remediation P lan 13
34 Oce of Inspector General Semiannual Report Appendix B. Statistical Information and 2 addendums. Table 1: Audit Products and Impact R E P ORT N O. / D ATE I SS U ED T ITLE IM P ACT Audit Area: Space Operations and Exploration (Transition) IG-08-018 4/28/08 Final Memorandum on the Standing Review Board for the Orion Crew Exploration V ehicle P roject Improvements in dening purpose, roles, and responsibilities of NASAs SRBs, and particularly addressing conict of interest and independence issues on the Orion SRB n/a 7/29/08 Audit of NASAs P re-Acquisition P lanning for the Constellation Space Suit System NASA meets key pre-acquisition planning requirements for CSSS IG-08-030 9/18/08 Cost Estimates U sed to Support the Fiscal Y ear 2008 Budget Request for NASAs Constellation P rogram Could Have Been Better Documented Budgeting process improved by adoption of GAO standards Audit Area: Safety (Managing Risk) IG-08-014-a 5/9/08 Addendum to Final Memorandum on the Review of the National Aviation Operations Monitoring Service National Research Council and GAO to analyze NAOMS methodology and data IG-08-025 9/19/08 [A NASA] Centers Security P rogram Needed Improvement Improved security at a NASA Center and increased awareness of security posture throughout NASA IG-08-027 9/3/08 Glenn Research Center Needs to Better Dene Roles and Responsibilities for Emergency Response Increased eectiveness of Glenns emergency response system IG-08-029 9/5/08 Final Memorandum on the Review of Rocket Segment Handling Improved procedures for rocket refurbishment established by contractor Audit Area: Financial Management IG-08-032 9/25/08 Final Memorandum on NASAs Development of the Integrated Asset Management P roperty, P lant, and Equipment Module to P rovide Identied Benets P roperty management improved with use of the IAM/ PP &E module Audit Area: Acquisition and Contracting IG-08-019 5/9/08 Final Memorandum on the Audit of NASAs Management of the Test Operations Contract Cost-benet analysis of contract consolidation options may allow NASA to avoid costs in con tract services and management oversight
35 April 1September 30, 2008 APP ENDI X ES Table 1: Audit Products and Impact (continued) R E P ORT N O. / D ATE I SS U ED T ITLE IM P ACT Audit Area: Acquisition and Contracting (continued) IG-08-021 7/8/08 Final Memorandum on the Review of NASAs P lan to Build the A-3 Facility for Rocket P ropulsion Testing NASA to obtain an independent review of pro posed test facility to ensure technical and cost risks are identied and mitigated IG-08-024 7/31/08 Final Memorandum on Audit of International Space Station Contracts Government Cost and P rice Analyses Contracting ocers work toward better docu mentation of costs and prices negotiated for ISS contracts to ensure best value for NASA IG-08-028 8/28/08 Final Memorandum Regarding P otential Overpayment to Contractor Johnsons Oce of P rocurement ensures proper contractor payment Audit Area: Information Technology IG-08-031 9/30/08 Federal Information Security Management Act: Fiscal Y ear 2008 Report from the Oce of Inspector General Improvements in internal controls for IT security through the establishment of management pro grams and processes Audit Area: Other IG-08-017 6/2/08 Actions Needed to Ensure Scientic and Technical Information Is Adequately Reviewed at Goddard Space Flight Center, Johnson Space Center, Langley Research Center, and Marshall Space Flight Center Improved awareness and processes to ensure that authors obtain appropriate review of scien tic and technical information before release IG-08-017-a 7/16/08 Addendum IG-08-022 7/22/08 NASAs Compliance with Federal Export Control Laws and Risks Associated with the Illegal Transfer or Theft of Sensitive Technologies Annual assessment reports NASAs commit ment to improving controls over sensitive technologies Audit Area: Quality Control Reviews IG-08-020 6/13/08 Quality Control Review of the House & Albright P. C Audit of the Marshall Space Flight Center Exchange Financial Statements for Fiscal Y ear Ended September 30, 2007 Corrective actions to ensure compliance with generally accepted government audit standards IG-08-023 7/28/08 Quality Control Review of the L F Harris & Associates, C P A, P. A Audit of the Kennedy Space Center Exchange Financial Statements for Fiscal Y ear Ended September 30, 2007 Corrective actions to ensure compliance with Department of the Treasury regulations and generally accepted government auditing standards IG-08-026 9/2/08 Quality Control Review of P ricewaterhouseCoopers, LL P Oce of Management and Budget Circular A-133 Audit of The U niversity of Alabama in Huntsville for the Fiscal Y ear Ended September 30, 2006 Corrective actions to ensure compliance with generally accepted government auditing standards and OMB Circular A-133
36 Oce of Inspector General Semiannual Report Table 1: Audit Products and Impact (continued) R E P ORT N O. / D ATE I SS U ED T ITLE IM P ACT Audit Area: Initial Reviews ML-08-005 4/18/08 Initial Review of Rogers & Company P LLC Audit Report on the KISS Institute for P ractical Robotics Fiscal Y ear Ended August 31, 2006 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133 ML-08-006 4/23/08 Initial Review of P eter Schilz & Co Audit Report on Earth & Space Research for the Fiscal Y ear Ended June 30, 2006 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133 ML-08-007 4/23/08 Initial Review of West & Company C P As P C Audit Report on Clinton-Essex-Warren-Washington Counties Board of Cooperative Educational Services for the Fiscal Y ear Ended June 30, 2007 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133 ML-08-008 6/11/08 Initial Review of CD P A, P C Audit Report on North Alabama Science Center, Inc for the Fiscal Y ear Ended December 31, 2006 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133 ML-08-009 6/11/08 Initial Review of McGregor & Company, LL P Audit Report on Orangeburg Consolidated School District Four for the Fiscal Y ear Ended June 30, 2007 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133 ML-08-010 8/5/08 Initial Review of McGladrey & P ullen, LL P Audit Report on the Friends of the North Carolina State Museum of Natural Sciences for the Fiscal Y ear Ended June 30, 2007 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133 ML-08-011 8/7/08 Initial Review of Ciuni and P anichi, Inc Audit Report on the Lorain County Joint V ocational School District for the Fiscal Y ear Ended June 30, 2007 Ensure compliance with generally accepted government auditing standards and OMB Circular A-133
37 April 1September 30, 2008 APPENDIXES it received as referralsor inquiries that were either unsubstantiated, without merit, or overcome by events and did not result in an audit report. Table 2: Allegations Unsubstantiated or Without Merit D ATE C LOSED A LLEGATION C ONCL U SION 7/7/08 Alleged solicitation procedures avoid the fair bidding process Concerns were overtaken by events, as management took appropriate action to issue a new solicitation 7/31/08 Oversight of NASA contractors failing to provide proper requirement denitions to its subcontractors Expectation to have specications for hardware, which is still in the design process, appeared to be unreasonable 7/31/08 Contract inappropriately awarded to a contrac tor that did not meet the criteria of the annual receipt limitation for a small business award Contract was appropriately awarded to a certied small business that met the exception criteria of the annual receipt limitation 8/21/08 P otential safety concerns for the Space Shuttles Reinforced Carbon Carbon panels Concerns were overtaken by events, as management took appropriate action to exchange the panels with spares 8/21/08 Lockheed Martin Space Systems contract mod ication for employee retention plan appeared questionable Business and technical factors considered in NASAs decision to provide incentives to retain the contractors external tank workforce were adequate 9/5/08 Research and development funds being used to duplicate research grants being awarded for the same project A small business innovative research contract and grant were awarded for dierent projects and funding used was appropriate in accordance with Federal regulations 9/12/08 Intimidation and unfair practices in the proposal application process for minority universities We found no evidence to substantiate the anonymous complainants allegations of limitations in the applica tion process that warranted further review
38 Oce of Inspector General Semiannual Report Table 3: Prior Signicant Audit Recommendations Yet to Be Implemented R E P ORT N O. / D ATE I SS U ED T ITLE D ATE R ESOL V ED NU MBER OF R ECOMMENDATIONS L ATEST T ARGET C LOS U RE D ATE OP EN C LOSED NEW SINCE LAST REPORTING PERIOD Audit Area: Space Operations and Exploration (Transition) IG-07-013-a 2/19/2008 Addendum to Final Memorandum on Marshall Space Flight Centers Approach to Establishing P roduct Data Management and Mechanical Computer-Aided Design Software Tools as Standard Center-Wide (IG-07-013, July 24, 2007) 2/19/2008 1 2 1/29/2010 Audit Area: Safety (Managing Risk) IG-08-014 3/31/2008 National Aviation Operations Monitoring Service 3/31/2008 1 2 6/30/2009 Audit Area: Financial Management IG-08-005 12/11/2007 NASAs Accounting for Capitalized Real P roperty Designated as Inactive 12/11/2007 4 0 9/30/2009 IG-08-004 12/11/2007 NASAs Accounting for Real P roperty Leased to Other Entities 12/11/2007 4 0 9/30/2009 IG-08-002 11/26/2007 Ernst & Y oung Final Report on Information Technology Findings and Recommendations in Connection with the Audit of NASAs F Y 2007 Financial Statements 11/26/2007 4 3 12/31/2007 1 IG-08-001 11/15/2007 Audit of the National Aeronautics and Space Administrations Fiscal Y ear 2007 Financial Statements P erformed by Ernst & Y oung LL P 11/15/2007 26 1 9/30/2016 Audit Area: Acquisition and Contracting IG-08-016 3/31/2008 NASAs Global P recipitation Measurement P roject 3/31/2008 1 0 7/31/2008 2 1 Although the Latest Target Closure Date has passed, the status of the open recommendations will be updated shortly after the report on 2 Management negotiations with a contractor are ongoing. Estimated closure date is December 1, 2008.
39 April 1September 30, 2008 APP ENDI X ES Table 3: Prior Signicant Audit Recommendations Yet to Be Implemented (continued) R E P ORT N O. / D ATE I SS U ED T ITLE D ATE R ESOL V ED NU MBER OF R ECOMMENDATIONS L ATEST T ARGET C LOS U RE D ATE OP EN C LOSED REPORTED IN PREVIOUS SEMIANNUAL REPORTS Audit Area: Space Operations and Exploration (Transition) IG-07-005 1/29/2007 NASAs P lan for Space Shuttle Transition Could Be Improved by Following P roject Management Guidelines 5/7/2007 2 2 9/30/2008 Audit Area: Financial Management IG-07-025 8/14/2007 Audit of NASAs Compliance with Federal Internal Control Reporting Requirements 8/14/2007 5 3 1/31/2009 IG-07-022 7/20/2007 Internal Controls over NASAs Transit Subsidy P rogram at Headquarters and Goddard Space Flight Center Needed Improvement 7/20/2007 2 2 3/31/2009 IG-07-019 7/18/2007 NASA Could Improve Controls and Lower the Costs of the Intergovernmental P ersonnel Act Mobility P rogram 7/18/2007 6 2 12/31/2008 ML-07-005 3 3/13/2007 FollowU p Review of the Management of the Headquarters Exchange 3/13/2007 2 5 10/31/2008 IG-07-007 4 11/29/2006 Information Technology Findings and Recommendations 11/29/2006 1 10 1/31/2008 5 IG-07-004 6 11/9/2006 Audit of the National Aeronautics and Space Administrations Fiscal Y ear 2006 Financial Statements (Enclosure 2) 1/19/2007 6 13 10/31/2008 IG-07-003 11/21/2006 Governance of the Systems, Applications, and P roducts V ersion U pdate P roject Needs Improvement 11/21/2006 3 3 9/30/2009 n/a 7 1/28/2004 Audit of NASAs Fiscal Y ear 2003 Financial Statements 1/28/2004 3 15 12/31/2009 Audit Area: Acquisition and Contracting IG-07-029 9/18/2007 Audit of NASA Education and Training Grants 9/18/2007 1 2 8/29/2008 8 3,4,6,7 5 Although the Latest Target Closure Date has passed, the status of the open recommendation will be updated shortly after the report on 8
40 Oce of Inspector General Semiannual Report Table 3: Prior Signicant Audit Recommendations Yet to Be Implemented (continued) R E P ORT N O. / D ATE I SS U ED T ITLE D ATE R ESOL V ED NU MBER OF R ECOMMENDATIONS L ATEST T ARGET C LOS U RE D ATE OP EN C LOSED Audit Area: Information Technology IG-07-024 8/28/2007 NASAs Implementation of the P rivacy P rovisions of the Electronic Government Act 8/28/2007 1 1 5/30/2008 9 IG-07-014 6/19/2007 Controls over the Detection, Response, and Reporting of Network Security Incidents Needed Improvement at Four NASA Centers Reviewed 6/19/2007 4 4 5/31/2010 IG-06-007 10 3/17/2006 NASAs Implementation of P atch Management Software Is Incomplete 3/17/2006 2 0 9/30/2009 IG-05-025 9/16/2005 NASAs P erformance Measure Data U nder the Federal Information Security Management Act 9/16/2005 1 4 9/30/2008 11 IG-05-016 5/12/2005 NASAs Information Technology V ulnerability Assessment P rogram 5/12/2005 1 3 9/30/2009 Audit Area: Other IG-06-016 8/29/2006 NASAs Implementation of the National Incident Management System 8/29/2006 1 5 11/30/2008 IG-04-025 12 9/7/2004 NASAs Implementation of the Mission Critical Space System P ersonnel Reliability P rogram 9/7/2004 1 5 12/31/2008 9 Management is preparing a request for an extension. 10, 12 11 Table 4: Audits with Funds Put to Better Use N U MBER OF A U DIT RE P ORTS TOTAL F U NDS PU T TO BETTER U SE No management decision made by beginning of period 0 0 Issued during period 0 0 Needing management decision during period 0 0 Management decision made during period Amounts agreed to by management Amounts not agreed to by management 1 1 0 $300,000 1 $300,000 0 No management decision at end of period Less than 6 months old More than 6 months old 0 0 0 0 0 0 1 In our report, Final Memorandum on Audit of NASAs Global Precipitation Measurement Project (IG-08-016, March 31, 2008), we recommended that NASA conduct an independent assessment of a contractors cost estimate for the Global Precipitation Measurement management has yet to determine the exact amount of funds put to better use.
41 April 1September 30, 2008 APP ENDI X ES Table 5: Status of A-133 1 Findings and Questioned Costs Related to NASA Awards Total audits reviewed 5 Audits with recommendations 5 Total disallowed/questioned costs $38,641 Total disallowed/questioned costs recovered/sustained 0 Recommendations: Beginning balance 12 New recommendations 6 Recommendations dispositioned 0 Ending balance 18 1 audits of their Federal awards. Table 6: Legal Activities and Reviews FOIA matters 19 Appeals 3 Inspector General subpoenas issued 40 Regulations reviewed, including 2 withdrawn 30 Table 7: Investigations Activities a. Complaint Intake Disposition S O U RCE OF C OM P LAINT Z ERO F ILES 1 A DMINISTRATI V E I N V ESTIGATIONS 2 M ANAGEMENT R EFERRALS 3 PRELIMINAR Y I N V ESTIGATIONS T OTAL Hotline 61 16 16 7 100 All others 68 11 3 86 168 Total 129 27 19 93 268 1 agency. 2 3 Management referrals are complaints referred to NASA management for which a response is requested. 4 b. Full Investigations Opened this Reporting Period Full criminal/civil investigations 1 26 1
42 Oce of Inspector General Semiannual Report c. Cases Pending at End of Reporting Period Administrative investigations 46 P reliminary investigations 80 Full criminal/civil investigations 117 Total 243 d. Qui Tam 1 Investigations Opened this reporting period 4 P ending at end of reporting period 2 20 1 2 e. Judicial Actions Cases referred for prosecution 42 Indictments/informations 17 Convictions/plea bargains 16 Sentencing/pre-trial diversions 15 Civil settlements/judgments 1 Court-ordered recoveries from criminal/civil cases 1 $15,478,237 NASA attributions $4,000,640 1 f. Administrative Actions Case results referred to NASA management for disciplinary action 1 32 Involving NASA employee(s) 17 Involving contractor employee(s) 0 Involving contractor rm(s) 14 Other 1 Administrative/disciplinary actions 22 Against NASA employee(s) 9 Against contractor rm(s) 0 Reported action taken by contractor against contractor employee 13 P rogram recommendations made to NASA management 15 Cases referred to other agencies 8 Suspensions or debarments from Government contracting 0 Involving individuals 0 Involving contractor rms 0 Total administrative recoveries 1 $32,521 NASA attributions $32,521 NASA property 0 1
43 April 1September 30, 2008 APP ENDI X ES Defense Contract Audit Agency Audits of NASA Contractors reimbursable basis. DCAA provided the following information during this period on reports involving NASA contract activities. DCAA Audit Reports Issued During this period, DCAA issued 360 audit reports on contractors who do business usually result from negotiations between the contractors doing business with NASA administering the contract negotiates recoveries with the contractor after deciding to be put to better use included in DCAA reports issued during this semiannual reporting period and the amounts that were agreed to during the reporting period. Table 8: DCAA Audit Reports with Questioned Costs and Recommendations that Funds Be Put to Better Use, and Amounts Agreed To 1, 2 AMO U NTS IN ISS U ED RE P ORTS AMO U NTS AGREED TO Questioned costs $22,257,000 $12,773,000 Funds be put to better use $166,955,000 $113,634,000 1 subject to change based on subsequent DCAA authentication. 2 The data presented does not include statistics on audits that resulted in contracts not awarded or in which the contractor was not successful.
44 Oce of Inspector General Semiannual Report C. Glossary and Acronyms Glossary Investigative Recoveries. Investigative recoveries are the total dollar value of (1) recoveries administrative actions resulting in non-court settlements. Investigative Referrals. Investigative referrals are cases that require additional investigative management or administrative action. An individual case may be referred for disposition to one or more of these categories. Judicial Actions. Investigative cases referred for prosecution that are no longer under the convictions. Indictments and convictions represent the number of individuals or organizations Latest Target Closure Date. Managements current estimate of the date it will complete the agreed-upon corrective action(s) necessary to close the audit recommendation(s). including actions that management concludes are necessary. Material Weakness. A cost that is questioned by the OIG because of (1) alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, the expenditure of funds for the intended purpose is unnecessary or unreasonable. Recommendation Resolved. A recommendation is considered resolved when (1) management
45 April 1September 30, 2008 APP ENDI X ES recommended improvements related to the operations of the establishment, a contractor, or Qui Tam. the whistleblower. An unsupported cost is a cost that is questioned by the OIG because the OIG found that, at the time of the audit, the cost was not supported by adequate documentation. Acronyms AEDC Arnold Engineering Development Center AIP Acquisition Integrity Program ARMD Aeronautics Research Mission Directorate ATK CAIB Columbia Accident Investigation Board CCS Comprehensive Compliance Strategy CMP Continuing Monitoring Program CSSS Constellation Space Suit System CxP Constellation Program DCAA Defense Contract Audit Agency
46 Oce of Inspector General Semiannual Report DoD Department of Defens e DOJ E&Y EPP Emergency Preparedness Plan FACA FAEC FAR FFMIA FISMA FOIA FY GAAP Generally Accepted Accounting Principles GAO GSA General Services Administration IAM/PP&E Integrated Asset Management Property, Plant, and Equipment ICS Incident Command System IG Inspector General IPA Independent Public Accounting ISS International Space Station IT LPT MOA Memorandum of Agreement
47 April 1September 30, 2008 APP ENDI X ES MOU Memorandum of Understanding NAOMS National Aviation Operations Monitoring Service NASA National Aeronautics and Space Administration NPD NASA Policy Directive NPR NASA Procedural Requirements NRPTA OA OCFO OI OIG OMB OMP PBS PCIE RFP Request for Proposal RPTMB SFFAS SMD Science Mission Directorate SRB Standing Review Board STI TOC WSTF
48 Web Site Address: http://oig nasa gov Cyberhotline: http://oig nasa gov/hotline html Toll-Free Hotline: 1-800-424-9183 or TDD: 1-800-535-8134 NASA OIG Headquarters Ames Research Center Ames Research Center Glenn Research Center Mail Stop 501-9 Glenn Research Center Goddard Space Flight Center Code 190 Room 3036 Jet Propulsion Laboratory Pasadena, CA 91109-8099 Mail Stop 180-202 Mail Stop 180-301 Suite 5120 Johnson Space Center Building 1, Room 161 Kennedy Space Center 32815-0001 Langley Research Center VA 23681-2199 Mail Stop 292 Mail Stop 205 Marshall Space Flight Center Mail Stop M-DI 35812-0001 Stennis Space Center Building 3101, Room 119 Stennis Space Center, MS 39529 AMES DRYDEN FLIGHT RESEARCH CENTER GLENN RESEARCH CENTER GLEN RESEARCH CENTER PLUMBROOK STATION GODDARD INSTITUTE FOR SPACE STUDIES GODDARD SPACE FLIGHT CENTER JET PROPULSION LABORATORY JOHNSON SPACE CENTER KENNEDY SPACE CENTER LANGLEY RESEARCH CENTER MARSHALL SPACE FLIGHT CENTER STENNIS SPACE CENTER ALABAMA CALIFORNIA FLORIDA LOUISIANA MARYLAND MISSISSIPPI NEW MEXICO NEW YORK OHIO TEXAS VIRGINIA WEST VIRGINIA Ames Research Center California Jet P ropulsion Laboratory California Johnson Space Center Texas Stennis Space Center Mississippi Marshall Space Flight Center Alabama Kennedy Space Center Florida Langley Research Center V irginia NASA Headquarters Washington, DC Goddard Space Flight Center Maryland Glenn Research Center Ohio
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National Aeronautics and SpaceAdministration Office of Inspector General SEMIANNUAL REPORTAPRIL1SEPTEMBER 30, 2008 O f c e o f I n s p e c t o r G ene r a l H o tl i ne 1 8 0 0 4 2 4 9 1 8 3 T D D : 1 8 0 0 5 3 5 8 1 3 4 G o t o : http://oig.nasa.gov/hotline.html W rit e : N A S A O f c e o f I n s p e c t o r G e n e r a l P O B O X 2 3 0 8 9 L E n f a n t P l az a S t a t i o n W a s h i n g t o n D C 2 0 0 2 6 Beyond reporting safety issues through NASAs safety channels, including the NASA Safety Reporting System, employees and contractors may report safety issues to the NASA Ofce of Inspector General Hotline. If requested, anonymity is assured to the extent permitted by law. Information is condential. NP-2008-08-540-HQ