NASA OFFICE OF INSPECTOR GENERAL SEMIANNUAL REPORT
Cover image: NASA astronaut during a spacewalk to install a new port for commercial
FROM THE INSPECTOR GENERAL The Office of Inspector General (OIG) issued a series of audit reports during the last 6 months that explore aspects of NASAs human exploration efforts. For example, in our examination of NASAs plans for human exploration beyond low Earth orbit we found the Agencys initial exploration missions face multiple cost and technical challenges that likely will affect their planned launch dates. In addition, NASAs plans beyond Exploration Mission-2 for achieving a crewed Mars surface mission in the late 2030s or early 2040s remain high level, and the Agency faces significant challenges to develop realistic cost and schedule estimates for future Mars missions. During this reporting period, we also issued an audit assessing NASAs management of its existing spacesuits and its plans for developing next-generation suits, and we found the Agency faces an array of risks in sustaining its current fleet of spacesuits for use on the International Space Station (ISS or Station). Moreover, despite spending almost $200 million on three spacesuit development efforts, NASA remains years away from having a flight-ready spacesuit capable of replacing the ISS spacesuits or suitable for use on future exploration missions. Our Office of Investigations continues to pursue allegations involving misuse of NASA funds; misconduct by NASA employees, contractors, and grant recipients; and cyberattacks on Agency systems. For example, during this reporting period a former lab supervisor at a Portland, Oregon, aluminum extrusion manufacturer pled guilty to mail fraud involving falsification of test results that resulted in over $6.8 million in additional revenue for the company. In the closing days of this reporting period, we identified the top management and performance challenges facing NASA in 2017: Deep Space Exploration NASAs Science Portfolio Information Technology Governance and Security Aging Infrastructure and Facilities Contracting and Grants Our full report discussing each of these top challenges will be published in mid-November. This Semiannual Report summarizes the OIGs activities and accomplishments between April 1 and September 30, 2017, and marks our transition to an all-electronic publication that will save printing costs and facilitate access to OIG work products highlighted in the report. We hope you find it informative.
Finally, we note with deep appreciation the significant contributions of Deputy Inspector General Gail Robinson, who retired at the end of this reporting period after more than two decades at NASA and the Department of Justice. Gail improved every work product she touched and every conversation she participated in. We wish her well. Inspector General November 30, 2017
TABLE OF CONTENTS Office of Audits ................................................................ ........................................ 3 ............................................ 7 .................................. 9 Infrastructure ............................................................... 11 Financial Management ....................................................... 13 .............................................................. 15 Office of Investigations ......................................................... ...................................... 22 Computer Crimes ............................................................ 24 Employee Misconduct ........................................................ 24 ............................................................. 25 Legal Issues ................................................................... Regulatory Review ........................................................... 30 .............................................................. 31 Appendixes ................................................................... ................................. 34 B. Peer Reviews ............................................................. 35 C. Acronyms ................................................................ 36 ................................ 37 ....................................................... 39
OFFICE OF AUDITS OFFICE OF AUDITS
OFFICE OF AUDITS beyond low Earth orbit with the Space Launch System and Orion crew capsule. In 2015, NASA published its framework for a Journey to Mars describing the Agencys strategy for deep space human exploration, including crewed missions to the Red Planet. We assessed the Agencys plans and found that NASAs initial exploration missions beyond low Earth orbit Exploration Mission-1 and Exploration Mission-2 face multiple cost and technical challenges that likely will affect their planned launch dates. In addition, NASAs plans beyond Exploration Mission-2 for achieving a crewed Mars surface mission in the late 2030s or early 2040s remain high level, and the Agency faces significant challenges in developing realistic cost and schedule estimates for future Mars missions. NASA acknowledges that to successfully execute deep space missions, cost-saving and cost-sharing measures must be part of its overall plans. Consequently, the Agency is exploring reusing systems and subsystems, developing new acquisition strategies, exploiting technology innovations, and sharing costs with foreign space agencies and the private sector. NASA management concurred or partially concurred with and described corrective actions to address our six recommendations. NASAs Plans for Human Exploration Beyond Low Earth Orbit (IG-17-017, April 13, 2017) https://oig.nasa.gov/audits/reports/FY17/IG-17017.pdf (report); https://oig.nasa.gov/Video/IG-17-017.html (video) OF SPACES U ITS NASA astronauts have ventured outside their spacecraft hundreds of times wearing specialized suits that protect them from the harsh environments of space and provide the oxygen and temperature control necessary to preserve life. The spacesuits NASA astronauts currently use on the ISS were developed more than 40 years ago and have far outlasted their original 15-year design life. We examined NASAs management of its current fleet of spacesuits and its development of next-generation suits and found the Agency faces an array of risks in sustaining its current suits for use on the ISS. Specifically, despite spending
4 OFFICE OF AUDITS almost $200 million on three spacesuit development efforts, NASA remains years away from having a spacesuit capable of replacing the suits used on the ISS or suitable for use on future exploration missions. Furthermore, given the current development schedule, there is significant risk a next-generation prototype will not be sufficiently mature for testing on the ISS prior to the Stations planned 2024 retirement. In addition, we questioned NASAs decision to spend $80.8 million between 2011 and 2016 to fund a spacesuit development effort despite parallel development activities being conducted elsewhere in the Agency. NASA management concurred with and described corrective actions to address our three recommendations. NASA's Management and Development of Spacesuits (IG-17-018, April 26, 2017) https://oig.nasa.gov/audits/reports/FY17/IG-17018.pdf (report); https://oig.nasa.gov/Video/IG-17-018.html (video)
5 OFFICE OF AUDITS for the Advancement of Science in Space The NASA Authorization Act of 2010 required NASA to enter into a cooperative agreement with a nonprofit organization to manage the activities of the ISS National Laboratory for non-NASA research. The resultant agreement provides the Center for the Advancement of Science in Space (CASIS) $15 million annually through 2020 for these activities. In this audit, we are assessing whether CASIS has met NASAs expectations in managing the National Laboratory by producing useful and measurable results. Since its inception in 1998, the ISS has served as the preeminent platform to learn about living and working in space. However, the operation and maintenance of the ISS consume roughly half of the Agencys total human space flight budget, a funding level that limits development of systems needed to visit destinations beyond low Earth orbit, including Mars. Given this substantial annual investment, NASA must ensure it is managing the ISS in an efficient and effective manner to planned retirement in 2024. In this follow-up review, we are assessing NASAs progress in maximizing utilization of the ISS, efforts to reduce operating costs, and plans and challenges associated with the Stations eventual disposition. Since 2012, NASA has relied on private companies to deliver cargo to the ISS through Commercial Resupply Services (CRS) contracts. Although contractors have experienced issues such as launch failures, schedule delays, and capability limitations, overall these cargo missions have proven successful and are NASAs most visible and active launch activities. In this audit, we are examining the second round of these cargo resupply contracts known as CRS-2 as well as identifying technical and schedule risks to the CRS 2 contract and assessing the impact of CRS on
OFFICE OF AUDITS for NASA. Through its audits, the OIG helps ensure NASA engages in sound with the best possible value. Congress tasked NASA to assist the Federal Aviation Administration (FAA) with conducting the research needed to ensure the safe integration of unmanned aircraft systems (commonly known as aerial drones) into the national airspace. We found NASA has made significant contributions toward the development of performance standards and a prototype system to enable aerial drone operations in the national airspace. Specifically, NASA has performed research related to data exchange and information architecture, sense and avoidance of manned and unmanned vehicles, and communication and navigation. These research efforts have been managed in compliance with NASA research and technology development policy and have achieved all planned schedule and technical milestones within allocated time and budgets. Furthermore, NASAs research should positively affect the FAAs efforts to integrate aerial drones into the national airspace. However, the Agencys oversight of its own aerial drone assets needs improvement due to ineffective Center implementation of acquisition and inventory policies, leading to poor inventory control and unauthorized acquisition of drones. In addition, inaccurate and incomplete information about drones in NASAs property system hinders the Agencys ability to effectively share unmanned aircraft assets between Centers. NASA management concurred or partially concurred with and described corrective actions to address our six recommendations. NASAs Research Efforts and Management of Unmanned Aircraft Systems (IG-17-025, September 18, 2017) https://oig.nasa.gov/audits/reports/FY17/IG-17025.pdf (report); https://oig.nasa.gov/Video/IG-17-025.html (video)
OFFICE OF AUDITS Flight Projects NASA maintains a large supply of spare parts to support its scientific, aeronautics, and space exploration efforts. For example, NASA retains more than $200 million worth of spare parts from the Mars Science Laboratory (launched in 2011), some of which will be used for the Agencys upcoming Mars 2020 rover mission. We are evaluating NASAs procedures related to procurement, usage, storage, and disposal of spare parts used in development of the Agencys The study of human physiological response to space travel is fundamental to NASAs current and future human space flight missions, particularly lengthy missions to deep space destinations. To help perform many of these scientific studies, NASA entered into a cooperative agreement with the National Space Biomedical Research Institute (NSBRI) between 1997 and 2017 worth $484.2 million. In this audit, we are evaluating NASAs and the NSBRIs management of the cooperative agreement. Scheduled to launch in April 2021, this $755 million mission with an additional $400 million contribution from the French and Canadian space agencies is designed to provide the first global survey of Earths surface water to enable better prediction of weather and climate. In this audit, we are evaluating NASAs management of the Surface Water and Ocean Topography mission milestones, and controlling costs. NASA has relied on authority granted by the Space Act of 1958 to enter into a variety of agreements, including reimbursable agreements, with diverse groups of people and organizations to advance its annually provide more than $2.5 billion of additional spending authority to NASA. Prior OIG audits have identified process deficiencies in the Agencys management of contracts, grants, and other types of agreements. This audit is assessing the Agencys transparency, execution, and financial administration processes for reimbursable agreements. for Space Studies Since 1961, NASAs Goddard Institute for Space Studies (GISS) has collaborated with scientists throughout the world in researching the structure and atmosphere of planetary bodies, the Sun and other stars, and our solar system. More recently, GISS research has focused on global change the study of natural and man-made changes in our environment and the effect these changes have on the habitability of Earth. In this audit, we are examining NASAs management of GISS, including GISSs role in helping NASA achieve its science goals, the use of appropriated and non appropriated funds, and how well GISS coordinates with other members of the science community.
9 OFFICE OF AUDITS data, provide security for its IT infrastructure, and enable NASA personnel to will require sustained improvements in NASAs overarching IT governance and NASAs Security Operations Center (SOC) serves as the Agencys nerve center for detecting and monitoring security incidents and providing continuous event detection, situational awareness, and incident management and tracking. In this review, we are assessing NASAs management of the SOC, including its capability, workload, and resource management. For more than two decades, NASA has struggled to implement an effective approach to IT governance that aligns authority and responsibility consistent with the Agencys overall mission. In 2013, we examined NASAs IT governance and made eight recommendations for improvement. In this follow-on audit, we are assessing the progress NASA has made since issuance of our 2013 report. In this required annual review, we are evaluating NASAs IT security program against the 2017 Federal Information Security Modernization Act metrics. Specifically, we are reviewing a sample of NASAand contractor-owned information systems to assess the effectiveness of information security policies, procedures, standards, and guidelines. deficiencies identified in our 2016 review have been addressed.
OFFICE OF AUDITS NASAs IT operations rely on global supply chains to fulfill mission needs. Such reliance can pose a significant risk as foreign-developed or -manufactured technology may be compromised in production. This audit will examine the effectiveness of NASAs security controls related to its IT supply chain risk management efforts. Specifically, we are assessing whether NASA has implemented Agency-wide controls to meet IT security requirements to protect the confidentiality, integrity, and availability of NASA
11 OFFICE OF AUDITS INFRASTRU CT U RE NASAs real property includes more than 5,000 buildings and other structures, such as wind tunnels, laboratories, launch pads, and test stands that occupy 44 million square feet and are valued at more than $34 billion. However, over In August 2013, NASA entered into an agreement with the Army Corps of Engineers to build two test stands at Marshall Space Flight Center (Marshall) to test liquid hydrogen and liquid oxygen tanks from the core stage of the Agencys new heavy-lift rocket. Our review found that the compressed design changes resulted in significant cost adequately consider alternative locations before selecting Marshall as the site for the test stands and therefore cannot ensure it made the most cost-effective decision regarding where to build the stands. NASA management concurred with and described corrective actions to address two of our three recommendations. While the Agency concurred with our third recommendation, its response did not adequately address the intent of the recommendation, so the recommendation will remain unresolved pending further discussion with Agency officials. Construction of Test Stands 4693 and 4697 at Marshall Space Flight Center (IG-17-021, May 17, 2017) https://oig.nasa.gov/audits/reports/FY17/IG-17021.pdf (report); https://oig.nasa.gov/Video/IG-17-021.html (video)
OFFICE OF AUDITS Since NASAs establishment in 1958, much of the real property used to accomplish its mission has been identified as historic property under the National Historic Preservation Act of 1966. Additionally, NASA has many other assets that are historically significant and are being preserved for future generations. In this audit, we are reviewing the Agencys management of its historic property, including the processes used to identify, account for, and maintain the property; determining the extent to which historic property is being used to further NASAs current missions; and identifying the challenges faced by the Agency in managing
OFFICE OF AUDITS in addressing weaknesses. As mandated, we examined whether NASA complied with the requirements of the Improper Payments Information Act (IPIA) in fiscal year 2016 and evaluated the completeness and accuracy of the Agencys IPIA reporting and its implementation of recommendations made in our prior IPIA reports. Although we concluded that NASA complied with IPIA, we identified several areas for improvement in the Agencys risk assessment process. NASA management concurred or partially concurred with and described actions to address our eight recommendations. NASAs Compliance with the Improper Payments Information Act for Fiscal Year 2016 (IG-17-020, May 15, 2017) https://oig.nasa.gov/audits/reports/FY17/IG-17020.pdf (report) Financial Statements The Chief Financial Officers Act of 1990, as amended by the Government Management Reform Act of 1994, requires an annual audit of NASAs consolidated financial statements. The OIG is overseeing the fiscal year 2017 audit conducted by the independent public accounting firm CliftonLarsonAllen LLP. The Digital Accountability and Transparency Act of 2014 seeks to expand the publics access to data on Government spending. The Act requires Federal agencies to report financial and award data in accordance with the established Government-wide financial data standards and Inspectors General to assess their agencys compliance with the Act. Card Programs We are participating in the Council of the Inspectors General on Integrity and Efficiencys purchase card data to determine risks associated with purchase and travel card transactions. NASA incurs approximately $125 million in charge card transactions annually by roughly 16,000 cardholders across both programs. We are determining whether the internal controls within NASAs charge card programs reduce illegal, improper, or erroneous transactions. HEADER
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15 OFFICE OF AUDITS STATISTICAL D ATA Report No. and Date Issued Title Impact Space Operations and Human Exploration IG-17-017, 4/13/2017 NASA's Plans for Human Exploration Beyond Low Earth Orbit and transparency of NASAs human exploration goals beyond low Earth orbit and to improve the Agencys cost-saving efforts. IG-17-018, 4/26/2017 NASA's Management and Development of Spacesuits spacesuits currently used aboard the ISS and ensure the successful delivery of the next-generation spacesuit. Acquisition and Project Management IG-17-025, 9/18/2017 NASAs Research Efforts and Management of Unmanned Aircraft Systems Increased the Agencys transparency, accountability, and oversight of its unmanned aircraft systems inventory. Infrastructure IG-17-021, 5/17/2017 Construction of Test Stands 4693 and 4697 at Marshall Space Flight Center Provided recommendations to improve construction project planning and execution. Financial Management IG-17-020, 5/15/2017 NASAs Compliance with the Improper Payments Information Act for Fiscal Year 2016 with the Improper Payments Information Act of 2002, as amended. Report No. and Date Issued Title Impact ML-17-003, 4/10/2017 Quality Control Review of Fiscal Year 2014 and 2015 Audits of the West Virginia High Technology Consortium Foundation and Subsidiaries Performed By Arnett Carbis Toothman LLP Virginia High Technology Consortium Foundation single audit reporting packages and underlying audit documentation, we attention of Arnett Carbis Toothman LLP and the Foundation for correction in future audits.
16 OFFICE OF AUDITS Report No. and Date Issued Report Title Date Resolved Number of Recommendations Latest Target Completion Date Potential Cost Savings Open Closed Space Operations and Human Exploration IG-17-017, 4/13/2017 NASA's Plans for Human Exploration Beyond Low Earth Orbit 8/10/2017 6 0 12/31/2017 $0 IG-17-018, 4/26/2017 NASA's Management and Development of Spacesuits 4/26/2017 3 0 9/30/2017 $0 Acquisition and Project Management IG-17-025, 9/18/2017 NASAs Research Efforts and Management of Unmanned Aircraft Systems 9/18/2017 6 0 12/3/2018 $17,308 Infrastructure IG-17-021, 5/17/2017 Construction of Test Stands 4693 and 4697 at Marshall Space Flight Center 3 0 7/31/2019 $17,115,009 Financial Management IG-17-020, 5/15/2017 NASAs Compliance with the Improper Payments Information Act for Fiscal Year 2016 9 0 5/31/2018 $0 Report No. and Date Issued Report Title Date Resolved Number of Recommendations Latest Target Completion Date Potential Cost Savings Open Closed Space Operations and Human Exploration IG-17-012 3/9/2017 NASAs Management of Electromagnetic Spectrum 3/9/2017 2 0 11/30/2019 $0 IG-16-029 9/6/2016 NASAs Management of the Orion Multi-Purpose Crew Vehicle Program 9/6/2016 3 1 9/30/2017 $0 IG-16-025 6/28/2016 NASAs Response to SpaceXs June 2015 Launch Failure: Impacts on Commercial Resupply of the International Space Station 10/17/2016 4 2 12/31/2018 $0 IG-16-015 3/28/2016 Audit of the Spaceport Command and Control System 3/28/2016 1 0 9/30/2018 $0 IG-16-014 3/17/2016 NASAs Management of the Near Earth Network 8/10/2016 8 6 3/30/2018 $0 IG-16-008 12/15/2015 NASAs Efforts to Manage Its Space Technology Portfolio 4/13/2016 2 3 11/1/2017 $0
OFFICE OF AUDITS Report No. and Date Issued Report Title Date Resolved Number of Recommendations Latest Target Completion Date Potential Cost Savings Open Closed IG-15-023 9/17/2015 NASAs Response to Orbitals October 2014 Launch Failure: Impacts on Commercial Resupply of the International Space Station 12/2/2015 1 6 9/30/2017 $0 IG-15-013 3/26/2015 NASAs Management of the Deep Space Network 3/26/2015 4 8 11/30/2018 $0 IG-14-031 9/18/2014 Extending the Operational Life of the International Space Station Until 2024 9/29/2014 1 2 9/30/2017 $0 IG-14-026 7/22/2014 Audit of the Space Networks Physical and Information Technology Security Risks 7/22/2014 2 2 4/30/2018 $0 Acquisition and Project Management IG-17-016 3/29/2017 NASAs Parts Quality Control Process 3/29/2017 8 0 12/31/2017 $0 IG-17-003 11/2/2016 NASAs Earth Science Mission Portfolio 11/2/2016 2 0 6/30/2019 $0 IG-16-017 5/5/2016 Audit of NASAs Engineering Services Contract at Kennedy Space Center 9/30/2016 3 1 3/29/2019 $0 IG-16-013 2/18/2016 Audit of NASA Space Grant Awarded to the University of Texas at Austin 2/18/2016 2 2 9/30/2017 $322,500 Information Technology Governance and Security IG-17-011 2/8/2017 Industrial Control System Security within NASAs Critical and Supporting Infrastructure 2/8/2017 5 1 10/1/2018 $0 IG-17-010 2/7/2017 Security of NASAs Cloud Computing Services 6/9/2017 6 0 1/31/2019 $0 IG-16-016 4/14/2016 Review of NASAs Information Security Program 4/14/2016 1 0 12/6/2019 $0 IG-14-015 2/27/2014 NASAs Management of its Smartphones, Tablets, and Other Mobile Devices 2/27/2014 1 1 1/24/2019 $0 IG-12-017 8/7/2012 Review of NASAs Computer Security Incident Detection and Handling Capability 8/7/2012 2 1 5/1/2018 $0
OFFICE OF AUDITS Report No. and Date Issued Report Title Date Resolved Number of Recommendations Latest Target Completion Date Potential Cost Savings Open Closed Infrastructure IG-17-015 3/21/2017 NASAs Efforts to Rightsize its Workforce, Facilities, and Other Supporting Assets 3/21/2017 4 0 9/30/2018 $0 IG-15-019 6/30/2015 Review of NASAs Pressure Vessels and Pressurized Systems Program 6/30/2015 1 9 10/13/2017 $0 IG-13-008 2/12/2013 NASAs Efforts to Reduce Unneeded Infrastructure and Facilities 2/12/2013 2 3 2/1/2018 $0 Financial Management IG-17-007 12/14/2016 Fiscal Year 2016 Financial Accounting Management Letter 12/14/2016 46 0 12/31/2017 $0 IG-17-006 12/1/2016 Fiscal Year 2016 Information Technology Management Letter 12/1/2016 25 0 12/31/2017 $0 IG-17-004 11/15/2016 Audit of NASAs Fiscal Year 2016 Financial Statements 11/15/2016 13 0 11/30/2017 $0 IG-17-001 10/31/2016 Vulnerability Assessment and Penetration Testing of NASAs Financial Network 10/31/2016 19 0 11/30/2017 $0 IG-16-021 5/12/2016 NASAs Compliance with the Improper Payments Information Act for Fiscal Year 2015 10/28/2016 4 1 5/31/2018 $0 IG-15-015 5/15/2015 NASAs Compliance with the Improper Payments Information Act for Fiscal Year 2014 5/15/2015 6 4 5/31/2018 $0 Other Audit Matters IG-16-030 9/28/2016 Follow-up Evaluation of NASAs Implementation of Executive Order National Security Information 9/28/2016 3 1 12/31/2017 $0 IG-16-001 10/19/2015 NASAs Education Program 10/19/2015 2 3 6/29/2018 $0
19 OFFICE OF AUDITS Number of Audit Reports Total Questioned Costs Total Unsupported Costs Management decisions pending, beginning of reporting period 0 $0 $0 Issued during period 3 $97,932,317 $17,115,009 Needing management decision during period 3 $97,932,317 $17,115,009 Management Decision Made During Period Amounts agreed to by management 2 $17,132,317 $17,115,009 Amounts not agreed to by management 1 $80,800,000 $0 No Management Decision at End of Period Less than 6 months old 0 $0 $0 More than 6 months old 0 $0 $0 of funds for the intended purpose is unnecessary or unreasonable. Number of Audit Reports Funds To Be Put to Better Use Management decisions pending, beginning of reporting 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 0 $0 Amounts not agreed to by management 0 $0 No Management Decision at End of Period Less than 6 months old 0 $0 More than 6 months old 0 $0
OFFICE OF AUDITS 17 Findings and Questioned Costs Number of Findings Questioned Costs Management decisions pending, beginning of reporting period 22 $0 Findings added during the reporting period 31 $9,502,901 Management decisions made during reporting period (50) Agreed to by management ($1,036) Not agreed to by management ($9,501,865) Management decisions pending, end of reporting period 3 $0 Note: The Single Audit Act, as amended, requires Federal award recipients to obtain audits of their Federal awards. The data in this table is provided by NASA. NASA CONTRACTORS The Defense Contract Audit Agency (DCAA) provides audit services to NASA on a reimbursable basis. DCAA provided the following information during this period on reports involving NASA contract activities. D CAA AUD IT REPORTS ISS U E D During this period, DCAA issued 62 audit reports on contractors who do business with NASA. Corrective actions taken in response to DCAA audit report recommendations usually result from negotiations between the contractors doing business with NASA and the Government contracting officer with cognizant responsibility (e.g., the Defense Contract Management Agency and NASA). The cognizant agency responsible for administering the contract negotiates recoveries with the contractor after deciding whether to recommendations for funds to be put to better use. The following table shows the amounts of questioned costs and funds 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. Amounts in Issued Reports Amounts Agreed To Questioned costs $28,991,000 $28,595,000 Funds to be put to better use $0 $2,349,000 contracts not awarded or in which the contractor was not successful.
OFFICE OF INVESTIGATIONS Small solid rocket motor test designed to mimic NASA's
misconduct involving NASA personnel and contractors. GRANT FRAUD A Maryland contractor agreed to pay $58,000 in a civil settlement to resolve allegations the companys employees mischarged labor hours to a NASA contract. A former Goddard Space Flight Center (Goddard) contractor employee was charged with three counts of video voyeurism after videotaping a female employee from underneath an office table. The contractor was subsequently fired. Government Contractors Sentenced and Indicted As the result of an investigation conducted by the NASA OIG, the U.S. Air Force Office of Special Investigations, and the Defense Criminal Investigative Service (DCIS), the co-owner of a Beavercreek, Ohio, firm pled guilty to one count of conspiracy to defraud the U.S. Government after falsely claiming disabled veteran status. He was sentenced to 3 years of probation and ordered to pay a $50,000 fine. In June 2017, a co owner of the firm was indicted on one count of conspiracy to defraud the U.S. Government for the same offense. A small business and its owners have been suspended from receiving Federal contracts for an indefinite period after submitting a Small Business Innovative Research (SBIR) proposal containing duplicative efforts previously performed for the investigation by multiple OIGs and DOD law enforcement agencies revealed the company used the identities of unwitting persons to falsely bolster its proposals. In May 2017, former Pennsylvania Congressman Chaka Fattah was debarred for 16 years from receiving Federal contracts in response to his participation in a racketeering conspiracy involving the misappropriation of Federal, charitable, and campaign funds. The NASA OIG assisted the Federal Bureau of Investigation (FBI) and the Internal Revenue Service in the underlying investigation. Investigative efforts by the NASA OIG helped prove a $5.1 million claim against NASA by a Cleveland, Ohio, construction contractor was meritless. The investigation revealed the prime contractor greatly exceeded subcontracting limitations and failed to hire qualified safety Research Center. This contributed to the serious construction companys claim.
As the result of an investigation conducted by the NASA OIG and DCIS, a Huntsville, Alabama, small business was convicted of making a false statement after submitting the same research to NASA and the DOD. The company was sentenced to 3 years of probation and ordered to pay a $400 special assessment, a $300 fine, and $250,000 in restitution. NASA Contractor Convicted As the result of an investigation by the NASA OIG, Small Business Administration (SBA) OIG, and Department of Labor OIG, a small business owner holding over $6 million in NASA contracts was convicted of making false statements on her SBA Form 912, Statement of Personal History which the SBA uses to assess 8(a) Business Development Program eligibility. DCIS, and FBI, a former lab supervisor at a Portland, Oregon, aluminum extrusion manufacturing facility pled guilty to mail fraud. The supervisor directed lab technicians to falsify test results for extrusions that failed to meet industry specifications. The falsification of testing results resulted in over $6.8 million in additional revenue for the company. A Kennedy Space Center contract engineer was charged with possession of firearms and dangerous weapons in Federal facilities after bringing a concealed weapon into the workplace. The engineer was terminated by the NASA contractor. A small business owner was charged with multiple counts of wire fraud and aggravated identity theft National Science Foundation OIG, Department of Health and Human Services OIG, and FBI. The owner submitted fraudulent contract proposals and other documents to NASA, the National Science Foundation, and the Department of Health and Human Services, which falsely induced contract awards valued at over $1.8 million. A Houston research firm and a former University of Houston professor were debarred from obtaining government contracts until August 2018. The firm previously pled guilty to one count of conspiracy to submit false statements and the professor to misdemeanor charges related to more than $7 million in SBIR contracts awarded by NASA and other Federal agencies. Lease Agreements A NASA contractor who leased office space at Ames Research Center mischarged payments of over $200,000 against its NASA contract, which was clearly prohibited in the lease agreement. The entire amount was credited back to NASA and the company reduced future overhead rates accordingly.
In April 2017, a former Stennis Space Center contractor employee was indicted on two counts of possession of child pornography. In May 2017, a two counts of possession of child pornography and one count of receipt of child pornography. Between November 2013 and March 2016, a former Goddard civil servant conducted approximately 610 sales of counterfeit apparel and accessories on eBay, some of which were completed during work hours on his government computer. As a result, he was convicted of trafficking in counterfeit goods and sentenced to 9 months of supervised release, and a forfeiture position in lieu of termination. A former Goddard civil servant was debarred from government procurement and non procurement activity for 3 years after providing his rsum to a contractor and making numerous false statements to NASA OIG investigators. The pressuring a contractor to award a task order to his friends company. in Florida
STATISTICAL D ATA Source of Complaint Zero Files a Administrative Investigations b Management Referrals c Preliminary Investigations d Total Hotline 25 16 5 26 72 All others 33 31 5 56 125 Total 58 47 10 82 197 a another agency. c Management referrals are those complaints referred to NASA management for which a response is requested. d Full Criminal/Civil Investigations a 27 a Full, Preliminary, and Administrative Investigations 93 Preliminary Investigations 63 Full Criminal/Civil Investigations 137 Administrative Investigations 74 Total 274 Qui Tam Matters Opened This Reporting Period 2 Qui Tam Matters Pending at End of Reporting Period 5
Total Cases Referred for Prosecution a 58 Individuals Referred to the Department of Justice b 49 Individuals Referred to State and Local Authorities b 9 Indictments/Informations c 15 Convictions/Plea Bargains 8 Sentencing/Pre-Trial Diversions 6 Civil Settlements/Judgments 1 a c Referrals to NASA Management for Review and Response 18 Referrals to NASA Management Information Only 22 1 Referrals to Security or Other Agencies 5 Recommendation to NASA Management for Disciplinary Action Involving a NASA Employee 7 Involving a Contractor Firm 2 Involving a Contractor Employee 4 Other Recommendations to NASA Management on Program Improvements Matters of Procedure 5 Total 64 Administration/Disciplinary Actions Taken Against a NASA Employee 8 Against a Contractor Employee 4 Against a Contractor Firm Procedural Change Implemented 10 Total 22 Suspensions or Debarments from Government Contracting Involving an Individual 11 Involving a Contractor Firm 2 Total 13
Judicial $732,484 Administrative a $580,955 Total $1,313,439 Total NASA $738,589 a Case Number Allegation Referral Date Disposition 17-0086-O Alleged sexual assault 6/28/2017 States Attorney declined prosecution based on lack of physical and testimonial evidence. Case Number Closure Date Allegation Disposition 16-0260-O 6/30/2017 Alleged cash restructuring activities Unsubstantiated. Financial analysis found no restructuring activities. 17-0110-S 8/24/2017 Contract mismanagement and personal services Substantiated. Employee was counseled and detailed to another division. 17-0167-S 8/30/2017 hire friend Unsubstantiated. Friend was hired, but appearance issues. 17-0176-HL-S 9/13/2017 Unsubstantiated. Investigation found no evidence of disclosure of sensitive information from employee to lobbyist spouse. 17-0256-HL-S 8/2/2017 Unsubstantiated. Employee was counseled on acceptance of travel and related expenses from a non-Federal source and failure to report travel reimbursement on OGE Form 450, Confidential Financial Disclosure Report
L EGAL I SS U ES LEGAL ISSUES
L EGAL I SS U ES OIG legal staff and Special Agents met with the Government Accountability Office (GAO) to kick off a GAO audit of contractor and grantee employee whistleblower reprisal investigations. We discussed our process, results to date, and interaction with NASA. In addition, the auditors visited the Johnson Space Center where they discussed the whistleblower protection process with agents and an OIG attorney who handles many of the cases. The auditors were particularly interested in outreach activities and our performance metrics in dispositioning whistleblower cases. We provided input for a Director of National Intelligence (DNI) study into the potential expansion of whistleblower protections for contractor employees working on classified or intelligence contracts. The DNI was interested in our caseload, number of substantiated cases, remedies, and liaison activities with contractor personnel. During this reporting period, the Fifth Circuit Court of Appeals decided a whistleblower case involving two former NASA contractor employees. The court ruled that the statute, as it existed at the time of the whistleblowing disclosures, did not protect the type of disclosure made by the employees. The case can be found online at http://www.ca5.uscourts.gov/opinions/ unpub/16/16-60221.0.pdf
L EGAL I SS U ES NASA FE D ERAL ACQ U ISITION REG U LATION Improper Business Practices and Personal Conflicts of Interest sets forth NASAs implementation of various rules relating to integrity in the procurement process. Topics covered include protection of source selection information, improper gratuities, suspected antitrust violations, the Anti-Kickback Act, and lobbying restrictions. As part of a quality review of Part 1803, the OIG submitted several suggested revisions intended to ensure that NASAs policy remains aligned with the most recent changes to Federal law concerning whistleblower protections for contractor employees. Implementation of the Federal Civil Penalties Inflation Adjustment Act is an interim final rule Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and further amended Act Improvements Act of 2015 (2015 Act). The various statutory authorities, along with Office of Management and Budget guidance, prescribe the methods agencies are to use to calculate that the increase made by the initial (post 2015) penalty amount in effect on the date of the 2015 Act (November 2, 2015). The OIG submitted recommendations for revisions to the interim final rule intended to ensure that NASAs inflation penalty amounts at levels below the legally required levels. Software License Management describes the procedural requirements for managing software at NASA and supports compliance with the Federal Information Technology Acquisition Reform Act. The NID provides guidance that establishes a comprehensive software inventory, regularly tracks and maintains software licenses, tracks software maintenance and cost, improves NASAs security posture, and eliminates unnecessary costs, duplication, and waste. By defining the requirements, roles, and responsibilities, a stronger, more capable and efficient organization will be in place to support the overall Agency strategy and ensure compliance with software license management requirements. The OIG submitted comments intended to ensure that the NID is not implemented in a way which would improperly limit the authority of the Inspector General to approve acquisition or use of software which he or she determines is necessary to carry out the unique mission of the OIG.
L EGAL I SS U ES STATISTICAL D ATA Freedom of Information Act Matters 33 Appeals 3 Inspector General Subpoenas Issued 67 Regulations Reviewed 15
APPENDIX ES Appendixes ................................ 34 B. Peer Reviews ............................................................. 35 C. Acronyms ............................................................... 36 ............................... 37 ....................................................... 39
ppendixes Inspector General Cross Reference Act Citation Page Numbers Section 4(a)(2) Review of legislation and regulations Section 5(a)(1) Sections 5(a)(5) and 6(b)(2) Summary of refusals to provide information Section 5(a)(6) values of questioned costs, unsupported costs, and recommendations that funds be put to better use Total number of reports and total dollar value for audits Section 5(a)(8) 19 with questioned costs Total number of reports and total dollar value for audits Section 5(a)(9) 19 with recommendations that funds be put to better use Section 5(a)(10)Summary of audit, inspection, and evaluation reports Summary of prior audit products for which no Section 5(a)(10)(A) management decision has been made Reports for which no Agency comment was provided Section 5(a)(10)(B) within 60 days Unimplemented recommendations and associated Section 5(a)(10)(C) potential cost savings Section 5(a)(11) management decisions Section 5(a)(12) Inspector General disagreed Reporting in accordance with Section 5(b) of the Federal Section 5(a)(13) Financial Management Improvement Act of 1996 Remediation Plan Section 5(a)(14) Peer review conducted by another OIG 35 Outstanding recommendations from peer reviews of the Section 5(a)(15) NASA OIG Outstanding recommendations from peer reviews Section 5(a)(16) conducted by the NASA OIG Section 5(a)(17)(A) Summary of investigations Section 5(a)(17)(B) (C) and (D)Matters referred to prosecutive authorities 26 Section 5(a)(18)Descriptions of table metrics Summary of investigations involving senior Section 5(a)(19)(A) and (B)(i)(ii) 27 Government employees Section 5(a)(20)Summary of whistleblower investigations Section 5(a)(21)(A) and (B) Agency attempts to interfere with OIG independence Closed inspections, evaluations, and audits not disclosed Section 5(a)(22)(A) 15 to the public Closed investigations of senior Government employees not Section 5(a)(22)(B) 27 disclosed to the public en-US
to include in its semiannual reports any peer review results provided or received OFFICE OF AUD ITS No external peer reviews were conducted of or performed by our Office of Audits during this semiannual period. The date of the last external peer review of the NASA OIG was September 1, 2015, and it was conducted by the Department of State OIG. The NASA OIG received outstanding recommendations from the review. The last peer review conducted by our Office of Audits examined the Special Inspector General for Afghanistan Reconstructions audit organization and was completed March 30, 2016. There are no outstanding recommendations from that review. No external peer reviews were conducted of or performed by the Office of Investigations during this semiannual period. In October 2014, the Department of Energys OIG reviewed NASA OIGs Office of Investigations and found the office to be in compliance with all relevant guidelines. There are no unaddressed recommendations outstanding from this review.
CASIS Center for the Advancement of Science in Space CRS Contract Resupply Services D CAA Defense Contract Audit Agency D CIS Defense Criminal Investigative Service DNI Director of National Intelligence D O D Department of Defense FAA Federal Aviation Administration Federal Bureau of Investigation GAO Government Accountability Office GISS Goddard Institute for Space Studies IPIA Improper Payments Information Act ISS International Space Station IT Information Technology NID NASA Interim Directive National Space Biomedical Research Institute OIG Office of Inspector General Small Business Administration Small Business Innovative Research SOC Security Operations Center
of 0.6791 percent. This budget supports the work of 191 employees in their THE NASA OFFICE OF INSPECTOR GENERAL conducts audits, reviews, and investigations of NASA programs and operations to prevent and detect fraud, waste, abuse, and mismanagement and to assist NASA management in promoting economy, efficiency, and effectiveness. THE INSPECTOR GENERAL provides policy direction and leadership for the NASA OIG and serves as an independent voice to the NASA Administrator and Congress by identifying opportunities for improving the Agencys performance. The Deputy Inspector General assists the Inspector General in managing the full range of the OIGs programs and activities and provides supervision to the Assistant Inspectors General and Counsel in the development and implementation of the OIGs diverse audit, investigative, legal, and support operations. The Executive Officer serves as the OIG liaison to Congress and other Government entities, conducts OIG outreach both within and outside NASA, and Counsel serves as a senior advisor for OIG investigative activities and conducts special reviews of NASA programs and personnel. INSPECTOR GENERAL Gail A. Robinson Renee N. Juhans Leslie B. McClendon OFFICE OF A UDITS ASSISTANT INSPECTOR GENERAL James L. Morrison AND PLANNING ASSISTANT INSPECTOR GENERAL Ross W. Weiland FIEL D OFFICES Glenn Research Center Goddard Space Flight Center Jet Propulsion Laboratory Johnson Space Center Kennedy Space Center Langley Research Center Marshall Space Flight Center ASSISTANT INSPECTOR GENERAL James R. Ives CO U NSEL TO THE INSPECTOR GENERAL Francis P. LaRocca FIEL D OFFICES Ames Research Center Glenn Research Center Goddard Space Flight Center Jet Propulsion Laboratory Johnson Space Center Kennedy Space Center Langley Research Center Marshall Space Flight Center Stennis Space Center
THE OFFICE OF A UD ITS conducts independent and addition, the Office of Audits oversees the work of an independent public accounting firm in its annual audit of NASAs financial statements. THE OFFICE OF COU NSEL TO THE INSPECTOR GENERAL provides legal advice and assistance to OIG managers, auditors, and investigators. The Office serves as OIG counsel in administrative litigation and assists the Department of Justice when the OIG participates as part of the prosecution team or when the OIG is a witness or defendant in legal proceedings. In addition, the Inspector General has designated the Counsel as Whistleblower Protection Ombudsman, who is responsible for educating Agency employees about prohibitions on retaliation for protected disclosures and about rights and remedies for protected whistleblower disclosures. investigates allegations of cybercrime, fraud, waste, abuse, and misconduct that may affect NASA programs, refers its findings either to the Department of Justice for criminal prosecution and civil litigation or to NASA management for administrative action. Through its investigations, the Office develops recommendations for NASA management to reduce the Agencys vulnerability to criminal activity and misconduct. provides financial, procurement, human resources, administrative, and information technology services and support to OIG staff.
A NASA OIG HEA D Q U ARTERS 300 E Street SW, Suite 8U71 Washington, DC 20546-0001 Tel: 202-358-1220 Ames Research Center Mail Stop 11, Building N207 C GLENN RESEARCH CENTER Mail Stop 14-9 Glenn Research Center at Lewis Field Cleveland, OH 44135-3191 Tel: 216-433-9714 (Audits) D GO DD AR D SPACE FLIGHT CENTER Code 190 Goddard Space Flight Center Greenbelt, MD 20771-0001 Tel: 301-286-6443 (Audits) 402 East State Street Room 3036 Trenton, NJ 08608 Tel: 609-656-2543 or 609-656-2545 E Jet Propulsion Laboratory 4800 Oak Grove Drive Pasadena, CA 91109-8099 Mail Stop 180-202 Tel: 818-354-3451 Mail Stop 180-203 Tel: 818-354-6630 Glenn Anderson Federal Building 501 West Ocean Boulevard Suite 5120 Long Beach, CA 90802-4222 Tel: 562-951-5485 F Lyndon B. Johnson Space Center 2101 NASA Parkway Houston, TX 77058-3696 Mail Stop W-JS Building 1, Room 161 Tel: 281-483-9572 Mail Stop W-JS2 Building 45, Room 514 Tel: 281-483-8427 G Mail Stop W/KSC-OIG Kennedy Space Center, FL 32815 Tel: 321-867-3153 (Audits) H Langley Research Center 9 East Durand Street Mail Stop 375 Hampton, VA 23681 Tel: 757-864-8562 (Audits) I Mail Stop M-DI Marshall Space Flight Center, AL 35812-0001 Tel: 256-544-1149 (Audits) STENNIS SPACE CENTER Building 3101, Room 119 Stennis Space Center, MS 39529-6000 Tel: 228-688-1493 A H D C G I F E
OIG HOTLINE 1-800-424-9183 / TDD: 1-800-535-8134 https://oig.nasa.gov/hotline.html NASA Office of Inspector General P.O. Box 23089, LEnfant Plaza Station Washington, DC 20026 https://oig.nasa.gov