Committee blasts NASA's financial management

'NASA does not currently have a financial system.'

'NASA's IG Robert Cobb

Zaid Hamid

Despite significant investments in new systems and an overhaul of NASA's financial organization, the space agency is still struggling to get its books in order.

At a joint hearing late last month before the House Government Reform Subcommittee on Government Management, Finance and Accountability and the Science Subcommittee on Space and Aeronautics, NASA officials argued that they are finally beginning to see progress in the implementation of their Integrated Financial Management Program, a single accounting system for the entire agency.

But Robert Cobb, NASA's inspector general, and Gregory Kutz of the Government Accountability Office both testified that the agency continues to suffer from fundamental problems in its accounts.

'NASA does not currently have a financial system,' Cobb told the joint panel.

His office does not expect the agency's current auditor, Ernst & Young LLP, to be able to certify its financial statements for fiscal 2005, the third year in a row.

'It is not just a lack of financial statements,' Kutz warned.

NASA has problems in its human capital, processes and overall systems, he said.

GAO implemented its high-risk list in 1990, Kutz added, and NASA has been on that list since it was started.

Gwendolyn Sykes, NASA's chief financial officer, defended the agency's prog-ress, citing a reorganization under which the CFOs at the agency's centers around the country report to her, rather than the individual directors of each center. She also said the agency's gap in reconciling its books with the fund balance at the Treasury Department has closed to $46.6 million for 2005, from more than $1.7 billion in 2003.

Patrick Ciganer, the executive officer in charge of implementing IFMP, pointed out that unlike private-sector companies that change their financial systems, NASA did not have 'the luxury' of running its legacy and new systems in parallel.

Sykes and Ciganer both acknowledged that many, though not all, of the problems have arisen from significant problems in moving data from the old to the new financial system. Existing problems in the financial coding of entries, along with actual errors in the information, have carried over into the new system, making reconciliation very difficult and requiring labor-intensive reviews.

Rep. Ken Calvert (R-Calif.), chairman of the Space and Aeronautics Subcommittee, said what he heard the witnesses saying was, ' 'We can't get our act together financially over a long period of time.' '

The new system provides the ability to make adjustments in accounts more automatic, Sykes said, and the agency has a plan to continue implementing additional phases of IFMP, which will address other recommendations made by GAO and the inspector general.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above