NASA Property:

Poor Lending Practices and Controls at the Jet Propulsion Laboratory

NSIAD-94-116: Published: Apr 18, 1994. Publicly Released: May 10, 1994.

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Pursuant to a congressional request, GAO reviewed the relationship between the National Aeronautics and Space Administration (NASA) and the California Institute of Technology (Caltech) and their management of the Jet Propulsion Laboratory (JPL), focusing on: (1) property management weaknesses at JPL; and (2) NASA equipment loaned to JPL employees and provided to Caltech.

GAO found that: (1) there are major weaknesses in the JPL property management system; (2) JPL practices do not comply with NASA policies that restrict equipment loans and prohibit the purchase of equipment for the sole purpose of loaning it to employees; (3) JPL equipment loans have increased 40 percent in 2 years and, as of September 1993, equipment valued at $7.6 million was on loan to JPL employees; (4) about 96 percent of the loaned equipment was computer equipment and the remaining items included communications, recording, and scientific equipment; (5) JPL management believes that employees with loaned equipment perform additional unpaid work that exceeds the value of the borrowed equipment; (6) almost half of the loaned equipment was bought specifically to loan to employees and another 45 percent was retained for loaning after replacement of older equipment; (7) equipment loan requests are generally nonspecific and improperly authorized; (8) JPL equipment oversight and accountability is inadequate and does not comply with federal regulations; (9) JPL has lost over $5 million of NASA equipment in 2 years; (10) NASA is planning to reassess the JPL property system, require JPL to perform a complete inventory in 1994, and identify and correct inventory design and operation problems; (11) the JPL property control system does not properly identify or value the equipment in Caltech's possession; and (12) JPL and Caltech property control systems do not agree on the amount of NASA equipment in Caltech's possession.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: At JPL and agencywide, new procedures have been implemented to improve the review process for equipment loans to employees and controls have been strengthened for identifying and tracking loaned equipment. At JPL, the number of items of equipment on loan was reduced by 90 percent since the report was issued. Agencywide, the number of equipment items loaned to employees dropped by about 18 percent in 1994, and equipment items loaned for 1 year or more dropped by almost 60 percent.

    Recommendation: The Administrator, NASA, should review the policy on equipment loans, revise it to the extent necessary to ensure its adequacy for limiting at-home equipment loans, and direct NASA headquarters and field organizations to conform their lending procedures and practices to the revised policy and to establish adequate controls for identifying and tracking loaned equipment.

    Agency Affected: National Aeronautics and Space Administration

  2. Status: Closed - Implemented

    Comments: JPL identified and disposed of obsolete or excess equipment. The number of excess equipment items was reduced by about 85 percent compared with pervious levels. Procedures were improved by addressing equipment title for reimbursable agreements at the time of award.

    Recommendation: The Administrator, NASA, should require that JPL, with the advice and assistance of the NASA Management Office, identify and dispose of obsolete or excess equipment.

    Agency Affected: National Aeronautics and Space Administration

  3. Status: Closed - Implemented

    Comments: All accountable JPL equipment at Caltech was tagged with NASA identification tags, and property reconciliations were completed comparing Caltech and JPL records. The Office of Naval Research staff at Caltech is assisting in monitoring NASA's assets on the campus. A process action team is reviewing property controls at JPL and further actions are being taken to improve processes.

    Recommendation: The Administrator, NASA, should require that JPL, with the advice and assistance of the NASA Management Office, evaluate and revise its procedures for receiving, tagging, and tracking inventory items from receipt through final disposition, including equipment at Caltech.

    Agency Affected: National Aeronautics and Space Administration

  4. Status: Closed - Implemented

    Comments: A comprehensive physical inventory of JPL was completed in December 1994, and a property survey by NASA's Management Office was completed in March 1995. The inventory and the survey results were used to revise JPL's policies and improve its property control system.

    Recommendation: The Administrator, NASA, should require that JPL, with the advice and assistance of the NASA Management Office, use the upcoming property survey and inventory to improve its property control system by identifying and recording the location of all equipment.

    Agency Affected: National Aeronautics and Space Administration

  5. Status: Closed - Implemented

    Comments: JPL and NASA have reviewed and revised equipment lending policy, procedures, and practices. Key changes include reducing the maximum loan period from a year to 6 months, requiring new justification for loan renewals, requiring higher-level approval of loans, ensuring that each loan meets established criteria, recalling equipment that is inadequately authorized, and assigning user responsibility.

    Recommendation: The Administrator, NASA, should require that JPL, with the advice and assistance of the NASA Management Office, review its equipment lending policy, procedures, and practices and make them consistent with NASA policy.

    Agency Affected: National Aeronautics and Space Administration

  6. Status: Closed - Not Implemented

    Comments: NASA determined that this area should not be reported as a material weakness under the Federal Managers' Financial Integrity Act because of inventories and surveys completed and corrective actions taken.

    Recommendation: The Administrator, NASA, should determine the extent to which the property control weaknesses at JPL, as well as those found elsewhere in NASA as a result of the agencywide review, should be reported under the Federal Managers' Financial Integrity Act.

    Agency Affected: National Aeronautics and Space Administration

 

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