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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

December 2008: 

Inspectors General: 

Actions Needed to Improve Audit Coverage of NASA: 

GAO-09-88: 

GAO Highlights: 

Highlights of GAO-09-88, a report to congressional requesters. 

Why GAO Did This Study: 

GAO was asked to review the National Aeronautics and Space 
Administration (NASA) Office of Inspector General (OIG) and provide 
information on (1) the audit and investigative coverage of NASA; (2) 
the NASA OIG’s audit and investigative accomplishments; (3) the NASA 
OIG’s budget and staffing levels, including staff attrition rates; and 
(4) the results of external reviews of the NASA OIG. GAO obtained 
information from NASA OIG reports, interviews, and documentation. 

What GAO Found: 

The fundamental mission of the statutory federal IG offices, including 
the NASA OIG, includes identifying areas for improved economy, 
efficiency, and effectiveness through independent and objective 
oversight and preventing and detecting fraud, waste, and abuse. Of the 
71 reports issued by the OIG’s Office of Audits in fiscal years 2006 
and 2007, only 1 report had recommendations to address the economy and 
efficiency of NASA’s programs and operations with measurable monetary 
accomplishments. 

Over the 5-year period of fiscal years 2003 through 2007, audit reports 
contributed to only 1 percent of the OIG’s total monetary 
accomplishments. The remaining 99 percent came from the OIG’s 
investigative cases. Of about $9 million in total reported monetary 
accomplishments from audits over the 5-year period, almost $7 million 
was from one audit completed in fiscal year 2007. When the monetary 
accomplishments of both audits and investigations in fiscal year 2007 
are combined and compared to the OIG’s budget of $34 million, the 
return for each budget dollar is $0.36. This calculation for all 30 
OIGs with IGs appointed by the President and confirmed by the Senate 
averages $9.49, or 26 times that of the NASA OIG. 

The OIG’s relative lack of monetary accomplishments from audits is due, 
at least in part, to the OIG’s strategic and annual audit plans, which 
do not provide assurance that NASA’s economy and efficiency will be 
addressed or that measurable monetary accomplishments will be achieved. 
We believe that during the planning process, the OIG should consult 
with an objective third party with experience in providing economy and 
efficiency audits with potential monetary savings. 

The OIG’s budgets and staffing kept pace or did slightly better than 
all of NASA for these same resources during fiscal years 2003 through 
2007. When comparing the fiscal year 2007 budgets of all 30 IGs 
appointed by the President and confirmed by the Senate with their 
respective agencies’ budgets, the NASA OIG ranked 11th. Nevertheless, 
GAO noted that the OIG’s ability to retain experienced audit personnel 
was adversely affected by a staff attrition rate that has increased 
from 12 percent to almost 20 percent over fiscal years 2003 through 
2007. Due to the relatively high attrition rates, GAO believes that the 
OIG should use the assistance of an objective expert to identify the 
causes of staff turnover. 

The NASA OIG’s most recent peer reviews for both audits and 
investigations have resulted in unqualified opinions. A recent 
investigation by the Integrity Committee of the President’s Council on 
Integrity and Efficiency and the Executive Council on Integrity and 
Efficiency reported that the NASA IG had an appearance of a lack of 
independence. The investigation was closed, but corrective actions did 
not address this finding and the Integrity Committee considers the 
issue unresolved. This issue has been raised by members of the Congress 
as a limitation in obtaining independent oversight of NASA. 

What GAO Recommends: 

GAO is making two recommendations for the NASA IG to (1) revise 
strategic and annual planning to include audits of NASA’s program 
economy and efficiency with potential monetary savings by working with 
an objective third party to obtain external review and consultation 
during the planning process and (2) take actions to identify the causes 
of high staff turnover with the assistance of an objective expert. 

In addition, GAO is recommending that the Integrity Committee follow up 
on its investigative finding that the NASA IG had an appearance of a 
lack of independence. 

In comments on a draft of the report, the Integrity Committee and the 
NASA IG disagreed with the recommendations. GAO believes the 
recommendations are valid and provides a detailed response to these 
comments in the body of the report. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-88]. For more 
information, contact Jeanette Franzel at (202) 512-9471 or 
franzelj@gao.gov. 

Contents: 

Letter: 

Scope and Methodology: 

Results in Brief: 

Background: 

NASA OIG Provides Limited Monetary Accomplishments from Audits: 

NASA OIG's Budgets and Staffing: 

External Reviews of NASA OIG and the Integrity Committee's 
Investigation: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Monetary Accomplishments Reported in OIGs' Semiannual 
Reports to the Congress for Fiscal Year 2007: 

Appendix II: Comparison of OIGs' Budgetary Resources with Total 
Budgetary Resources of Their Agencies for Fiscal Year 2007: 

Appendix III: Comments from the Integrity Committee: 

GAO Comment: 

Appendix IV: Comments from the Inspector General, National Aeronautics 
and Space Administration: 

GAO Comments: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: NASA Mission Directorates and Their Primary Missions: 

Table 2: NASA OIG Offices and Responsibilities: 

Table 3: NASA OIG Audit Coverage of High-Risk Areas and Management 
Challenges in Fiscal Years 2006 and 2007: 

Table 4: NASA OIG's Reported Monetary Accomplishments and Return per 
Budget Dollar for Fiscal Years 2003 through 2007: 

Table 5: NASA OIG and NASA Budgets and FTEs, Fiscal Years 2003 through 
2007: 

Table 6: NASA OIG Attrition Rates for Fiscal Years 2003 through 2007: 

Figures: 

Figure 1: NASA OIG Investigations Closed During Fiscal Years 2006 and 
2007: 

Figure 2: Distribution of NASA OIG Staff for Fiscal Year 2007: 

Abbreviations: 

CAIB: Columbia Accident Investigation Board: 

DCAA: Defense Contract Audit Agency: 

ECIE: Executive Council on Integrity and Efficiency: 

FTE: Full-time equivalent: 

GAO: Government Accountability Office: 

IG: Inspector General: 

IG Act: Inspector General Act of 1978, as amended: 

JPL: Jet Propulsion Laboratory: 

NASA: National Aeronautics and Space Administration: 

OIG: Office of Inspector General: 

OMB: Office of Management and Budget: 

PCIE: President's Council on Integrity and Efficiency: 

SSRRC: Senior Staff Referral Review Committee: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

December 18, 2008: 

The Honorable Charles E. Grassley: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Bart Gordon: 
Chairman: 
Committee on Science and Technology: 
House of Representatives: 

The Honorable Brad Miller: 
Chairman: 
Subcommittee on Investigations and Oversight: 
Committee on Science and Technology: 
House of Representatives: 

This report responds to your request that we review the operations and 
activities of the National Aeronautics and Space Administration's 
(NASA) Office of Inspector General (OIG). The NASA OIG was established 
by the Inspector General (IG) Act of 1978[Footnote 1] to provide 
independent audits and investigations of NASA's programs and 
operations, promote economy and efficiency, detect and prevent fraud 
and abuse, and recommend actions for improvement. 

In the three decades since passage of the IG Act, the IGs have played 
an important role in enhancing government accountability and protecting 
the government from fraud, waste, abuse, and mismanagement. In the 
current environment of an escalating federal budget deficit and 
increasingly limited resources, effective IG functions are needed to 
help transform what government does and how it does business and to 
hold it accountable for achieving real, positive, and sustainable 
results. 

As discussed with your offices, we are providing information regarding 
(1) the NASA OIG's audit and investigative coverage of NASA, including 
oversight of high-risk areas and NASA's management challenges; (2) the 
NASA OIG's audit and investigative accomplishments; (3) the NASA OIG's 
budget and staffing levels, including staff attrition rates; and (4) 
the results of external reviews of the NASA OIG, including peer reviews 
of its quality assurance program and operations and an investigative 
report by the Integrity Committee of the President's Council on 
Integrity and Efficiency (PCIE) and the Executive Council on Integrity 
and Efficiency (ECIE).[Footnote 2] 

Scope and Methodology: 

To review the OIG's audit oversight coverage of NASA, we obtained the 
71 final reports from the Office of Audits as reported in the OIG's 
semiannual reports to the Congress for fiscal years 2006 and 2007, 
which included 46 audits with statements of compliance with Government 
Auditing Standards and 25 reports without reference to compliance with 
auditing standards. For purposes of our review, we considered only 
those reports that stated compliance with Government Auditing Standards 
as audit reports and refer to the reports without such statements as 
nonaudit reports.[Footnote 3] We compared the contents of the 46 audit 
reports with the high-risk areas designated by us and with the 
management challenges identified by the NASA OIG to determine the audit 
coverage of these areas. We also analyzed the nature and scope of all 
71 final reports and the resulting recommendations to determine the 
extent to which they addressed compliance with laws, regulations, and 
NASA policies and procedures; economy and efficiency; or the 
effectiveness of NASA's programs and operations. To review the 
investigative coverage, we used the identification of closed cases 
reported by the OIG in semiannual reports for fiscal years 2006 and 
2007. We also obtained the OIG's strategic and annual audit plans 
covering the same 2-year period to determine if they contained goals 
and objectives to provide audit coverage of NASA's program compliance 
with laws and regulations and program economy, efficiency, and 
effectiveness. 

We identified monetary and other audit and investigative 
accomplishments reported by the NASA OIG in semiannual reports to the 
Congress for fiscal years 2003 through 2007 in order to observe any 
long-term trends. We limited our review of the NASA OIG's 
accomplishments to the results of audits and investigations reported to 
the Congress for this period and did not audit or otherwise verify the 
dollar amounts of the monetary accomplishments or potential savings to 
the government reported by the NASA OIG. We also obtained the 
semiannual reports issued by all 30 IGs appointed by the President and 
confirmed by the Senate to obtain the monetary accomplishments reported 
by those IGs during fiscal year 2007. We obtained the total budgetary 
resources of each OIG for fiscal year 2007 from the Office of 
Management and Budget (OMB) and compared the reported monetary 
accomplishments with budgetary resources to obtain a return on 
investment for each IG office.[Footnote 4] 

We obtained the total budgetary resources at the NASA OIG and the 
agency for fiscal years 2003 through 2007 from OMB in order to observe 
any long-range budgetary trends. We obtained additional information on 
staffing levels, resource distribution, and attrition rates from the 
OIG to identify staffing trends over this period. The attrition rates 
for NASA overall were verified by NASA management officials. We 
compared the total budgetary resources for fiscal year 2007 of the 30 
IGs appointed by the President and confirmed by the Senate with the 
total budgetary resources of their respective agencies for the same 
year. We calculated a ratio for each OIG's budget information as a 
percentage of its respective agency's budget for comparative purposes. 

We obtained reports from the external reviews of the NASA OIG completed 
during fiscal years 2003 through 2007 to observe any long-term trends 
in OIG quality for both audits and investigations. Specifically, we 
obtained the audit peer review report of audit quality dated January 8, 
2004, completed by the Department of Justice OIG, and the March 13, 
2007, peer review report completed by the General Services 
Administration OIG. We also obtained the July 8, 2005, peer review 
report of the NASA OIG's investigative quality completed by the 
Department of Transportation OIG. In addition, we obtained the report 
of investigation completed by the Integrity Committee of PCIE and ECIE, 
which addressed allegations of the NASA IG's misconduct and appearance 
of a lack of independence. This investigative report was released in 
late March 2007 to the House Committee on Science and Technology, which 
has oversight responsibilities for scientific research and development 
at NASA and other nondefense agencies. We discussed the disposition of 
the investigation with the Integrity Committee. We met with the NASA IG 
and senior OIG staff at the beginning of our review regarding our scope 
and methodology. We conducted a series of interviews coordinated 
through the IG's Executive Officer which included the Deputy Inspector 
General, the Counsel to the IG, the Assistant IG for Audits, the 
Assistant IG for Investigations, and the Assistant IG for Management 
and Planning. At the completion of our work we met with the NASA IG and 
senior OIG staff to discuss our report findings, conclusions, and 
recommendations. 

We conducted this performance audit from November 2007 through December 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Results in Brief: 

The fundamental mission of the statutory federal OIGs includes 
identifying areas for improved economy, efficiency, and effectiveness 
through independent and objective oversight; preventing and detecting 
fraud, waste, and abuse; and recommending corrective actions. Over 
fiscal years 2006 and 2007 the OIG completed 71 audits and other 
reports which included oversight of NASA's high-risk areas and 
management challenges, and reported closing 153 investigations in 
response to allegations of fraud, waste, and abuse. However, only one 
audit report for the 2-year period included recommendations for 
improving NASA's economy and efficiency with potential cost savings. 

For fiscal years 2003 through 2007 the NASA OIG reported over $824 
million in total monetary accomplishments from audits and 
investigations. The results of the OIG's investigations accounted for 
over $815 million or 99 percent of this amount while audits contributed 
about $9 million, or 1 percent. In addition, two OIG investigations 
were responsible for $726 million, or 88 percent of the investigative 
total, and two audits were responsible for about $8.4 million, or about 
94 percent of all audit monetary accomplishments reported during the 5- 
year period. Contributing to the lack of reported monetary 
accomplishments from audits for this period, the OIG reported no 
monetary accomplishments from its audit activity from April 1, 2004, 
through September 30, 2005. 

We believe that the lack of OIG recommendations regarding the economy 
and efficiency of NASA's programs and activities has resulted in the 
relatively low amount of reported monetary accomplishments when 
compared to other OIGs during fiscal year 2007. By comparing the OIG's 
budgetary resources of about $34 million for the same year with the 
combined monetary accomplishments for audits and investigations, there 
is a $0.36 return for each budget dollar. When this calculation is made 
for all 30 OIGs with IGs appointed by the President and confirmed by 
the Senate, the cumulative return for each budget dollar is 
approximately $9.49, or about 26 times that of the NASA OIG. Also, when 
compared to these other OIGs, the year that the NASA OIG had its 
largest reported monetary accomplishment from audits, it ranked 27 in 
return for each budget dollar out of the 28 OIG offices reporting 
monetary accomplishments for fiscal year 2007. 

These results can be attributed, at least in part, to strategic and 
annual audit plans that lack goals and objectives to provide assurance 
that the economy and efficiency of NASA's programs will be addressed. 
Instead, NASA OIG management officials often act as a clearinghouse for 
allegations received by the OIG and provide auditors with assignments 
to address limited scope procurement issues and areas that involve 
violations of NASA regulations. This reactive approach to assigning 
audits can encroach on the ability of the OIG to assign staff needed 
for other audits to address the overall economy and efficiency of 
NASA's programs and activities. We believe that the OIG can improve its 
audit plans by providing more specific attention to performance audits 
that address potential cost savings through recommendations that affect 
the economy and efficiency of NASA's programs and operations and that 
the OIG should consult with an objective outside party with experience 
in this type of audit work when developing strategic and annual audit 
plans. 

The lack of OIG audits focused on NASA's economy and efficiency and the 
relative lack of reported monetary accomplishments from audits are not 
explained by a concurrent lack of budgetary resources. The NASA OIG's 
total budgetary resources increased about 17 percent from $29 million 
to $34 million in constant dollars over fiscal years 2003 through 2007. 
The OIG's full-time equivalents (FTE) over the same period increased 
from 191 to 199 at year-end (a 4 percent increase). A comparison of the 
NASA OIG budget with the overall NASA budget indicates that the OIG 
budget has increased slightly more than the NASA budget. In addition, 
when this comparison is made for all 30 OIGs where the IGs are 
appointed by the President and confirmed by the Senate, the NASA OIG's 
budget ranks 11th as a percentage of the agency's budget. 

The NASA OIG's staff attrition rate for fiscal year 2007 was almost 20 
percent, while the attrition rate for all other NASA offices was 5 
percent. The loss of experienced staff in the Office of Audits is a 
result of 9 of the 10 highest-level audit managers' leaving the OIG in 
the past 5-year period. These losses affect the ability of the OIG to 
maintain experienced audit personnel. 

Over the 5-year period of fiscal years 2003 through 2007 the NASA OIG 
had three routine external peer reviews to determine whether the OIG 
provides reasonable assurance of conforming to applicable professional 
standards and one nonroutine external review completed in fiscal year 
2007, conducted by the Integrity Committee of PCIE and ECIE. Two of the 
routine peer reviews concluded that the NASA OIG's system of quality 
control for the audit function provided reasonable assurance of 
material compliance with professional auditing standards. The other 
routine peer review concluded that the OIG's Office of Investigation's 
system of internal safeguards and management procedures was in full 
compliance with the quality standards established by PCIE and ECIE and 
the Attorney General's investigation guidelines. 

The nonroutine peer review was an investigation of allegations about 
the management practices of the NASA IG performed by the Department of 
Housing and Urban Development's OIG under the direction of the 
Integrity Committee. The Integrity Committee concluded that the NASA IG 
had created an abusive work environment and that other actions created 
an appearance of a lack of independence. The Chair of both PCIE and 
ECIE referred the results of the investigation to the current NASA 
Administrator who provided a course of action to address the 
investigation's conclusions. The Chair of PCIE and ECIE confirmed that 
the actions taken by the NASA Administrator constitute the final 
disposition of the investigation, and the case was closed by the 
Integrity Committee. Nevertheless, the Integrity Committee considers 
the actions taken by the NASA Administrator to be insufficient and the 
matter of the NASA IG's appearance of a lack of independence to be 
unresolved. 

We are making recommendations to the IG to help strengthen the 
oversight of NASA. Specifically, we recommend that the OIG's strategic 
and annual audit plans address NASA's economy and efficiency by working 
with an objective third party to obtain external review and 
consultation during the strategic and annual planning processes. In 
addition, we are recommending that the IG take actions to identify the 
causes of high staff turnover with the assistance of an objective 
expert. We are also making a recommendation to the Integrity Committee 
to follow up on its investigative report and make any recommendations 
needed to fully resolve its finding regarding the IG's appearance of a 
lack of independence. 

We obtained separate comments on a draft of this report from the 
Integrity Committee and the NASA IG. These comments are reprinted in 
their entirety in appendixes III and IV. Both the Integrity Committee 
and the NASA IG disagreed with our recommendations. The Integrity 
Committee stated that it did not have the power to compel any 
particular action regarding its investigative finding that the NASA IG 
lacked an appearance of independence and that we should make our 
recommendation to the Chair of PCIE and ECIE. However, our 
recommendation does not call for the Integrity Committee to take the 
corrective action to resolve its investigative finding but rather to 
exercise its authority and make appropriate recommendations for the 
Chair of PCIE and ECIE to take corrective action. The NASA IG objected 
to our report's scope, methodology, findings, conclusions, and 
recommendations but provided little additional information to show that 
NASA's economy and efficiency had been addressed through OIG audit 
recommendations for potential cost savings, or that actions had been 
taken to fully resolve the Integrity Committee's investigative finding 
that the NASA IG had an appearance of a lack of independence. We rebut 
disagreements and concerns raised by the Integrity Committee and the 
NASA IG in the Agency Comments and Our Evaluation section of this 
report. We also provide additional information in the GAO Comments 
section of this report. We reaffirm the need for the Integrity 
Committee and the NASA IG to take actions to address these findings. 

Background: 

NASA was established by the National Aeronautics and Space Act of 1958 
to provide research into problems of flight within and outside Earth's 
atmosphere and to ensure that the United States conducts activities in 
space devoted to peaceful purposes for the benefit of mankind. On 
January 14, 2004, the President announced a new vision for space 
exploration endorsed by the Congress in the NASA Authorization Act of 
2005 [Footnote 5] which includes a journey of exploring the solar 
system, returning astronauts to the moon in the next decade, and 
venturing to Mars and beyond. 

NASA comprises the Headquarters in Washington, D.C., nine field centers 
located throughout the country, and the Jet Propulsion Laboratory (JPL) 
operated for NASA by the California Institute of Technology.[Footnote 
6] The NASA centers and JPL conduct NASA's programs in exploration, 
discovery, and research and are led by four mission directorates at 
NASA Headquarters. (See table 1.) 

Table 1: NASA Mission Directorates and Their Primary Missions: 

NASA mission directorates: 

Aeronautics Research Mission Directorate: Conducts research to enable 
changes to the airspace system and the aircraft that fly within it 
while supporting NASA's space exploration missions. 

Exploration Systems Mission Directorate: Supports the development of 
human and robotic space exploration. 

Science Mission Directorate: Conducts the scientific exploration of the 
Earth, sun, and the rest of the solar system and the universe. 

Space Operations Mission Directorate: Directs space flight operations, 
space launches, and space communications and manages operations of the 
International Space Station. 

Source: NASA. 

[End of table] 

The NASA OIG was established by the IG Act to provide an independent 
office within NASA to conduct and supervise audits and investigations; 
provide leadership and coordination and recommend policies to promote 
economy, efficiency, and effectiveness; and prevent and detect waste, 
fraud, abuse, and mismanagement. The IG Act provides protections to 
IGs' organizational independence through key provisions that require 
specified IGs, including the NASA IG, to be appointed by the President 
with the advice and consent of the Senate. This appointment is required 
to be without regard to political affiliation and is to be based solely 
on an assessment of the candidate's integrity and demonstrated ability. 
Such presidentially appointed IGs can only be removed from office by 
the President who must communicate the reasons for removal to both 
houses of the Congress. The current NASA IG was appointed by the 
President on April 16, 2002, after Senate confirmation. In addition to 
the IG, the Deputy IG, and the Executive Officer, the OIG is organized 
into four offices to provide oversight of NASA, as shown in table 2. 

Table 2: NASA OIG Offices and Responsibilities: 

Offices: Office of Audits; 
Responsibilities: Responsible for financial and performance audits and 
other reviews to examine NASA activities, programs, operations, and 
organizations, and to focus on whether programs are organized, managed, 
and implemented economically, effectively, and efficiently; funds are 
expended in a manner consistent with laws, regulations, and policies; 
desired program results are achieved; and management controls are in 
place to prevent crimes, fraud, waste, abuse, and mismanagement. 

Offices: Office of Investigations; 
Responsibilities: Responsible for an investigations program to detect 
and deter crimes, fraud, waste, abuse, and mismanagement. This includes 
investigations of allegations of crime, cybercrime, fraud, abuse, or 
misconduct having an impact on NASA programs, operations, and 
resources. 

Offices: Office of Management and Planning; 
Responsibilities: Responsible for assembling the NASA OIG's strategic 
plans; handling personnel matters, including recruiting and performance 
management; and preparing budget estimates and resource needs. 

Offices: Counsel to the Inspector General; 
Responsibilities: Prepares legal reviews of statutes and regulations 
that apply to the work of the OIG's auditors and investigators, and 
addresses personnel matters and other legal matters affecting the 
office. 

Source: NASA OIG. 

[End of table] 

As a presidentially appointed IG, the NASA IG is a member of the PCIE, 
which together with the ECIE, operates a joint Integrity Committee that 
is empowered to investigate allegations of wrongdoing against IGs and 
certain members of their staff. The Inspector General Reform At of 
2008,[Footnote 7] enacted on October 14, 2008, authorizes a new 
statutory Council of the Inspector General on Integrity and Efficiency 
which is to have its own Integrity Committee with powers similar to the 
PCIE and ECIE Integrity Committee and disestablishes the PCIE and ECIE 
effective on the earlier of the creation of the new Council, or 180 
days after the passage of the Act. As of the date of this report the 
new Council has not yet been established, and the PCIE, ECIE, and their 
Integrity Committee continue operation. 

Since 1990, we have periodically reported on government operations that 
we have designated as high risk because of their greater 
vulnerabilities to fraud, waste, abuse, and mismanagement as well as 
challenges to economy, efficiency, or effectiveness.[Footnote 8] In 
January 2007, we identified 27 high-risk areas across the federal 
government. These included high-risk areas applicable to NASA that had 
been reported in prior high-risk reports. We specifically identified 
NASA's contract management as a high-risk area because of weaknesses in 
NASA's integrated financial management system. For example, we have 
reported that NASA's contractor cost reporting process does not provide 
cost information that program managers and cost estimators need to 
develop credible estimates and compare budgeted and actual cost with 
the work performed. Also, NASA has lacked a modern financial management 
system to provide accurate and reliable information on contract 
spending and placed little emphasis on product performance, cost 
controls, and program outcomes. On a governmentwide basis, we also 
identified protecting the federal government's information systems and 
strategic human capital management across the executive branch as high- 
risk areas. 

Beginning in 1997, the IGs were asked by congressional leaders to 
identify the 10 most serious management problems in their respective 
agencies. The request began a yearly process that continues in response 
to requirements established in the Reports Consolidation Act of 
2000.[Footnote 9] This act calls for executive agencies, including 
NASA, to report their IGs' lists of significant management challenges 
in their annual performance and accountability reports to the 
President, OMB, and the Congress. In fiscal years 2006 and 2007, the 
NASA OIG identified management challenges that included areas also 
identified in our high-risk reports and in the additional areas of 
financial management, space operations and exploration, and safety and 
security. 

The OIG has identified NASA's Integrated Enterprise Management Program 
as key to improving NASA's ability to provide reliable information to 
management, support compliance with federal requirements, and 
strengthen the internal control program to address continuing problems, 
such as NASA's internal control weaknesses over property, plant, and 
equipment and materials. Regarding space operations and exploration, 
the OIG has identified the transition from the space shuttle to the 
next generation of space vehicles as a management challenge as NASA 
balances schedule and resource constraints while maintaining the 
capabilities required to fly the space shuttle and simultaneously 
developing the next generation of space vehicles. In the area of safety 
and security the OIG has identified NASA's need to manage risk, safety, 
and mission assurance controls to ensure reliable operations in the 
context of aggressive launch and mission schedules, funding 
limitations, and future uncertainties as management challenges. 

NASA OIG Provides Limited Monetary Accomplishments from Audits: 

The IG Act requires independent IG offices to provide leadership on 
issues of economy and efficiency and to report on the effectiveness of 
programs, offices, and activities within their respective agencies. The 
NASA OIG's Office of Audits provides financial and performance audits 
and other reviews to examine NASA's operations.[Footnote 10] The NASA 
OIG has conducted audit activity in most high-risk areas identified by 
us and the management challenges identified by the OIG for fiscal years 
2006 and 2007. In addition to audits, the NASA OIG reported closing 153 
investigative cases during fiscal years 2006 and 2007 in response to 
allegations of fraud, waste, and abuse. In providing audit coverage, 
the NASA OIG has generally not focused on audits with recommendations 
for improving the economy and efficiency of NASA's programs and 
operations with potential monetary savings. For example, during fiscal 
years 2006 and 2007 the OIG had one audit with recommendations with 
potential monetary savings. 

During the 5-year period of fiscal years 2003 through 2007, 99 percent 
of NASA OIG's dollar accomplishments came from investigations with 88 
percent coming from two joint investigations with other OIGs. The 
remaining 1 percent of the monetary accomplishments reported by the 
NASA OIG during this 5-year period was from audits. We believe that 
improvements to the OIG's strategic and annual audit planning could 
help to ensure that audits with an emphasis on NASA's economy and 
efficiency through potential cost savings are included in its annual 
audit activities. 

Audit Coverage of High Risk Areas and Management Challenges: 

Over fiscal years 2006 and 2007 the NASA OIG's Office of Audits 
reported having completed 71 reports. Of these, the NASA OIG issued 13 
audit reports in fiscal year 2006 and 20 audit reports in fiscal year 
2007 on high-risk areas identified by us, and on NASA's management 
challenges identified by the OIG. As shown in table 3, multiple NASA 
OIG audit reports were completed in most of the areas designated as 
high risk and as management challenges with the exception of asset 
management and human capital. Most of the OIG's reports were in the 
areas of information technology security, contract management, and 
financial management. In contrast, the area of asset management had one 
report, and there were no audits of human capital issues even though 
these areas are both among GAO high-risk areas and NASA's management 
challenges. (The OIG is currently auditing an issue of asset management 
and has plans to address an issue of NASA's human capital.) 

In addition, the NASA OIG's audit reports also addressed areas not 
identified as high-risk areas or management challenges. These included 
quality control reviews of the audits of federal award recipients by 
nonfederal auditors to ensure that these audits are performed in 
compliance with government auditing standards.[Footnote 11] In 
addition, while the OIG's audit policy is to complete audits using 
Government Auditing Standards and the IG Act requires that all NASA OIG 
audits be completed using these standards, 25, or approximately 35 
percent, of the OIG's 71 reports completed by the NASA OIG Office of 
Audits were completed without using these standards. Those reports 
included transmittal letters and information without a statement of 
compliance with auditing standards. Consequently, we did not consider 
these reports as part of the OIG's audit coverage for high-risk areas 
and management challenges. 

Table 5: NASA OIG Audit Coverage of High-Risk Areas and Management 
Challenges in Fiscal Years 2006 and 2007: 

GAO high-risk areas for 2005[A] and 2007[B]: Protecting the federal 
government's information systems; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Information Technology & Security; 
NASA OIG reports: FY 2006: 5; 
NASA OIG reports: FY 2007: 3; 
NASA OIG reports: Total reports: 8. 

GAO high-risk areas for 2005[A] and 2007[B]: NASA contract management 
issues caused by weaknesses in the integrated financial management 
system; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Contractor performance oversight, acquisition and 
contracting processes; 
NASA OIG reports: FY 2006: 4; 
NASA OIG reports: FY 2007: 4; 
NASA OIG reports: Total reports: 8. 

GAO high-risk areas for 2005[A] and 2007[B]: Managing federal real 
property; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Asset management; 
NASA OIG reports: FY 2006: 0; 
NASA OIG reports: FY 2007: 1; 
NASA OIG reports: Total reports: 1. 

GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital 
management; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Human capital issues related to NASA's transition to next 
generation of space vehicles; 
NASA OIG reports: FY 2006: 0; 
NASA OIG reports: FY 2007: 0; 
NASA OIG reports: Total reports: 0. 

GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital 
management; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Financial management, systems, analyses, and oversight; 
NASA OIG reports: FY 2006: 1; 
NASA OIG reports: FY 2007: 9; 
NASA OIG reports: Total reports: 10. 

GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital 
management; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Space Operations & Exploration; 
NASA OIG reports: FY 2006: 1; 
NASA OIG reports: FY 2007: 2; 
NASA OIG reports: Total reports: 3. 

GAO high-risk areas for 2005[A] and 2007[B]: Strategic human capital 
management; 
Management challenges and issues identified by NASA OIG in 2006 and 
2007[C,D]: Safety and Security--space shuttle safety, operational and 
safety risks; 
NASA OIG reports: FY 2006: 2; 
NASA OIG reports: FY 2007: 1; 
NASA OIG reports: Total reports: 3. 

Total audits of high-risk areas and management challenges: 
NASA OIG reports: FY 2006: 13; 
NASA OIG reports: FY 2007: 20; 
NASA OIG reports: Total reports: 33. 

Quality control reviews[E]: 
NASA OIG reports: FY 2006: 5; 
NASA OIG reports: FY 2007: 4; 
NASA OIG reports: Total reports: 9. 

Other areas covered by audits: 
NASA OIG reports: FY 2006: 2; 
NASA OIG reports: FY 2007: 2; 
NASA OIG reports: Total reports: 4. 

Audit products not using Government Auditing Standards: 
NASA OIG reports: FY 2006: 15; 
NASA OIG reports: FY 2007: 10; 
NASA OIG reports: Total reports: 25. 

Total audit products: 
NASA OIG reports: FY 2006: 35; 
NASA OIG reports: FY 2007: 36; 
NASA OIG reports: Total reports: 71. 

Sources: GAO's 2007 and 2005 High-Risk Series and NASA OIG's fiscal 
year 2006 and 2007 audit reports. 

[A] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, DC.: 
January 2005). 

[B] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, DC.: 
January 2007). 

[C] NASA's Performance and Accountability Report, fiscal years 2006 and 
2007. 

[D] NASA's Most Serious Management and Performance Challenges, fiscal 
years 2006 and 2007. 

[E] Reviews required by OMB Circular No. A-133, Audits of States, Local 
Governments, and Non-profit Organizations. 

[End of table] 

Investigative Coverage from Closed Cases: 

In addition to audits, the NASA OIG reported closing 153 investigative 
cases during fiscal years 2006 and 2007 in response to allegations of 
fraud, waste, and abuse. The OIG's Office of Investigations 
investigates allegations of crime, cybercrime, fraud, waste, abuse, and 
misconduct that could affect NASA's programs, projects, operations, and 
resources. The Office of Investigations refers its findings either to 
the Department of Justice for criminal prosecution and civil litigation 
or to NASA management for administrative action. In addition, the 
Office of Investigations identifies crime indicators and recommends 
measures for NASA management that are designed to reduce NASA's 
vulnerability to criminal activity. 

The OIG's closed cases focused on NASA procurements or procurement 
activities and investigations of computer crimes. (See figure 1.) In 
addition, there were investigations of conflicts of interest, large- 
scale thefts of government property, and false statements. Other 
investigations included safety, state and local crimes, travel card 
fraud, and drug abuse. 

Figure 1: NASA OIG Investigations Closed During Fiscal Years 2006 and 
2007: 

[Refer to PDF for image] 

This figure is a horizontal bar graph depicting the following data: 

NASA OIG Investigations Closed During Fiscal Years 2006 and 2007: 

Type of investigation: Procurement/procurement related: 
Closed FY 2007: 29; 
Closed FY 2006: 27. 

Type of investigation: Computer crime: 
Closed FY 2007: 13; 
Closed FY 2006: 21; 

Type of investigation: Conflict of interest: 
Closed FY 2007: 0; 
Closed FY 2006: 8. 

Type of investigation: Theft/conversion of government property: 
Closed FY 2007: 8; 
Closed FY 2006: 8. 

Type of investigation: Other: 
Closed FY 2007: 11; 
Closed FY 2006: 12. 

Type of investigation: False statements: 
Closed FY 2007: 5; 
Closed FY 2006: 11. 

Note: The types of investigations may include multiple categories. 
Also, other closed cases include investigations of safety, state and 
local crimes, travel card fraud, and drug investigations. 

[End of figure] 

NASA OIG's Monetary Accomplishments Are Largely from Investigations: 

Statutory OIGs subject to the IG Act, including the NASA OIG, are 
required to report the monetary value of certain findings and 
recommendations in their semiannual reports provided by the OIGs 
through their agency heads to the Congress. As required, the NASA OIG's 
semiannual reports for fiscal years 2003 through 2007 included the 
number of audit reports issued and the questioned costs, unsupported 
costs, and funds to be put to better use identified by the OIG's 
audits. As defined by the IG Act, questioned costs include either 
alleged violations of laws, regulations, contracts, grants, or 
agreements; costs not supported by adequate documentation; or the 
expenditure of funds for an intended purpose that was unnecessary or 
unreasonable. In addition, unsupported costs are defined as costs that 
do not have adequate documentation, and funds to be put to better use 
are inefficiencies identified by the OIG in the use of agency funds. 
These are often potential savings to the government. 

The monetary accomplishments of the NASA OIG's Office of Investigations 
are largely from closed investigations that result in recoveries of 
federal dollars which include fines and court ordered restitutions 
regarding individuals and contractors who have defrauded the 
government. As shown in table 4, almost all of the NASA OIG's monetary 
accomplishments have come from investigations during fiscal years 2003 
through 2007. 

Table 4: NASA OIG's Reported Monetary Accomplishments and Return per 
Budget Dollar for Fiscal Years 2003 through 2007: 

Fiscal year: 2007; 
Monetary accomplishments: $12,103,809; 
Dollar return on NASA's OIG budget: $0.36; Dollar return on NASA's OIG 
budget: (43 percent from investigations; 57 percent from one audit). 

Fiscal year: 2006; 
Monetary accomplishments: $657,116,285; 
Dollar return on NASA's OIG budget: $19.91; Dollar return on NASA's OIG 
budget: (Over 99 percent from investigations; 94 percent from one 
investigation). 

Fiscal year: 2005; 
Monetary accomplishments: $12,866,383; 
Dollar return on NASA's OIG budget: $0.39; Dollar return on NASA's OIG 
budget: (100 percent from investigations; $0.00 audit accomplishments). 

Fiscal year: 2004; 
Monetary accomplishments: $10,361,564; 
Dollar return on NASA's OIG budget: $0.35; Dollar return on NASA's OIG 
budget: (86 percent from investigations; 14 percent from one audit). 

Fiscal year: 2003; 
Monetary accomplishments: $131,985,231; 
Dollar return on NASA's OIG budget: $4.55; Dollar return on NASA's OIG 
budget: (Over 99 percent from investigations; 84 percent from one 
investigation). 

Source: NASA OIG. 

[End of table] 

In fiscal year 2006 the OIG reported the results of a joint 
investigation with the Department of Defense and Department of Justice 
OIGs that had total recoveries of $615 million from a settlement with 
the Boeing Company regarding criminal and civil allegations. Also, in 
fiscal year 2003 the OIG reported another joint investigation with 
recoveries of about $111 million. The results of these two 
investigations alone account for 88 percent of the NASA OIG's reported 
total monetary accomplishments of over $824 million from both audits 
and investigations over fiscal years 2003 through 2007. The total 
monetary accomplishments from OIG investigations for this period were 
$815 million, or 99 percent of all reported OIG monetary 
accomplishments. In contrast, over the same 5-year period the OIG's 
potential audit savings contributed about $9 million or about 1 percent 
of the OIG's total reported 5-year monetary accomplishments, with one 
audit in fiscal year 2007 responsible for $7 million of this amount and 
another audit in fiscal year 2004 responsible for about $1.5 million. 
Therefore, approximately 94 percent of all NASA OIG audit monetary 
accomplishments reported over the 5-year period came from the results 
of two audits. In addition, during the 1-1/2-year period from April 1, 
2004, through September 30, 2005, the OIG reported no monetary 
accomplishments from its audit activity. 

A comparison of the OIG's fiscal year 2007 total budgetary resources of 
$34 million to its reported combined monetary accomplishments for that 
year results in a return of $0.36 for each budget dollar. When this 
same calculation is made based on the monetary accomplishments reported 
by all 30 OIGs with IGs appointed by the President and confirmed by the 
Senate, the overall average return on their total budgetary resources 
in fiscal year 2007 was $9.49 for every dollar spent by the government 
for their offices, or almost 26 times that of the NASA OIG for fiscal 
year 2007. In addition, when compared to these other OIGs, the year 
that the NASA OIG had its largest monetary accomplishment from audits 
it ranked 27 out of the 28 OIG offices reporting monetary 
accomplishments for fiscal year 2007. (See appendix I.) 

OIG Planning Lacks Economy and Efficiency Objectives: 

Of the 71 reports completed by the NASA OIG's Office of Audits over 
fiscal years 2006 and 2007, 70 did not include recommendations that 
address the economy and efficiency of NASA's programs and operations 
with potential cost savings. The one exception to this was an OIG audit 
that addressed an area of NASA's economy and efficiency and resulted in 
about $7 million in reported potential monetary savings. The remaining 
70 reports included recommendations for improving compliance with laws, 
regulations, and NASA policies and procedures; internal controls; and 
addressed specific areas of NASA's operations. Nevertheless, these 
recommendations did not provide measurable improvements to the costs 
and resources used to achieve program results. 

To illustrate, in fiscal year 2006 the NASA OIG audited the awards of 
subcontracts worth $4.6 billion for NASA's space flight operations. The 
OIG found that the primary government contractor's actions had complied 
with requirements for competition, quality assurance, and other 
procurement regulations, but also found examples of inadequate pricing 
determinations. The report recommended that the NASA contracting 
officer ensure compliance with contract agreements and procurement 
regulations but did not include recommendations to help ensure that 
this area will be effective or efficient in the future and did not 
identify any measurable cost savings to the government resulting from 
inadequate pricing. In addition, over the 2-year period we reviewed 
there were no OIG audits with recommendations to increase the economy 
and efficiency of NASA's space flight operations with identified cost 
savings even though the IG had identified this program as one of NASA's 
management challenges. 

The OIG's annual audit plan addresses NASA's programs in high-risk 
areas and management challenges but does not have a strategy to deal 
with economy and efficiency associated with these NASA programs. The 
OIG's strategic plan and annual audit plans do not identify goals and 
audit objectives related to evaluating NASA's programs and operations 
through economy and efficiency audits. The OIG's annual audit plans for 
fiscal years 2006 and 2007 provided details on the objectives of each 
individual audit; however, similar to the results that we found for the 
OIG's audits, the objectives of the audits in these plans were not 
directed at audits that might result in measurable cost savings. A 
subsequent revision of the fiscal year 2007 audit plan also had no 
specific objectives for addressing NASA's economy and efficiency. 

In addition, through limited scope audits of compliance as well as 
investigations, the OIG addresses allegations received. To illustrate, 
OIG auditors and investigators are often assigned reviews of 
allegations or other assignments received from the OIG's Senior Staff 
Referral Review Committee (SSRRC). The SSRRC was established by the 
NASA IG in the fall of 2005 to act as a clearinghouse for allegations 
and to review all work planned for OIG staff. The SSRRC is composed of 
the Assistant IG for Investigations, the Deputy Assistant IG for 
Audits, the OIG Counsel, and the IG's Executive Officer. The SSRRC 
meets once a week to coordinate audit and investigative assignments, 
review fraud hotline information, review letters with allegations, and 
decide on where to assign the work. Generally, if the issues involve 
wrongdoing by NASA employees or contract fraud the OIG investigators 
will handle the cases. The OIG auditors are generally assigned limited 
scope procurement issues and issues that involve violations of NASA 
regulations. Issues involving standards of conduct or personnel matters 
will generally be referred to NASA management. 

The NASA OIG's limited monetary accomplishments from its audit activity 
can be attributed to (1) the lack of emphasis in its annual audit plan 
on goals and objectives for areas to improve economy and efficiency of 
NASA's programs and operations and (2) the OIG's focus on reviews of 
allegations and limited scope issues in a reactive approach to audit 
planning through assignments from the SSRRC, which can encroach on the 
ability to assign staff needed for other performance audits that can 
address potential dollar savings. We believe that the OIG can improve 
its audit plans by providing more specific attention to performance 
audits that address the economy and efficiency of NASA's programs and 
operations, and that the OIG should consult with an objective, 
knowledgeable outside party with experience in these types of audits 
when completing these plans. 

NASA OIG's Budgets and Staffing: 

From fiscal year 2003 through fiscal year 2007, the NASA OIG's total 
budgetary resources increased by approximately 17 percent, from 
approximately $29 million to $34 million in constant dollars, while the 
FTEs increased 4 percent, from 191 to 199. Of the 199 FTEs at the end 
of fiscal year 2007, 47 percent were in the Office of Audits, 37 
percent in the Office of Investigations, 10 percent in the Office of 
Management and Planning, and 4 percent and 2 percent, respectively, for 
the Counsel to the IG and the IG's immediate office. (See figure 2.) 

Figure 2: Distribution of NASA OIG Staff for Fiscal Year 2007: 

[Refer to PDF for image] 

This figure is a pie-chart depicting the following data: 

Distribution of NASA OIG Staff for Fiscal Year 2007: 
Office of Audits: 47%; 
Office of Investigations: 37%; 
Office of Management and Planning: 10%; 
Counsel to the IG: 4%; 
IG, Deputy IG, Executive Director: 2%. 

Source: NASA OIG. 

[End of figure] 

A comparison of NASA OIG's total budgetary resources with NASA's total 
budgetary resources shows that the OIG's budget as a percentage of 
NASA's budget has increased. In addition, NASA OIG's staffing levels 
have increased while NASA's staffing level has decreased. During fiscal 
years 2003 through 2007, NASA's overall total budgetary resources 
increased by about 4 percent, compared with the OIG's budgetary 
resources, which increased by about 17 percent. Therefore, the NASA 
OIG's total budgetary resources as a percentage of NASA's total 
budgetary resources increased from 0.15 percent to 0.17 percent. (See 
table 5.) During that same period, NASA's FTEs decreased by 
approximately 2.7 percent, compared with the OIG's FTE increase of 
about 4 percent. 

Table 5: NASA OIG and NASA Budgets and FTEs, Fiscal Years 2003 through 
2007: 

Fiscal year: 2007; 
NASA's total budgetary resources (dollars in millions): $20,011; 
NASA OIG's total budgetary resources (dollars in millions): $34; 
NASA OIG's total budgetary resources as a percentage of NASA's total 
budgetary resources: 0.17; 
NASA's FTEs (on board staff): 18,212; 
NASA OIG's FTEs (on board staff): 199; 
NASA OIG's authorized FTEs: 213. 

Fiscal year: 2006; 
NASA's total budgetary resources (dollars in millions): $20,315; 
NASA OIG's total budgetary resources (dollars in millions): $33; 
NASA OIG's total budgetary resources as a percentage of NASA's total 
budgetary resources: 0.16; 
NASA's FTEs (on board staff): 18,280; 
NASA OIG's FTEs (on board staff): 199; 
NASA OIG's authorized FTEs: 213. 

Fiscal year: 2005; 
NASA's total budgetary resources (dollars in millions): $20,121; 
NASA OIG's total budgetary resources (dollars in millions): $33; 
NASA OIG's total budgetary resources as a percentage of NASA's total 
budgetary resources: 0.16; 
NASA's FTEs (on board staff): 18,807; 
NASA OIG's FTEs (on board staff): 183; 
NASA OIG's authorized FTEs: 213. 

Fiscal year: 2004; 
NASA's total budgetary resources (dollars in millions): $20,743; 
NASA OIG's total budgetary resources (dollars in millions): $30; 
NASA OIG's total budgetary resources as a percentage of NASA's total 
budgetary resources: 0.15; 
NASA's FTEs (on board staff): 18,821; 
NASA OIG's FTEs (on board staff): 189; 
NASA OIG's authorized FTEs: 213. 

Fiscal year: 2003; 
NASA's total budgetary resources (dollars in millions): $19,254; 
NASA OIG's total budgetary resources (dollars in millions): $29; 
NASA OIG's total budgetary resources as a percentage of NASA's total 
budgetary resources: 0.15; 
NASA's FTEs (on board staff): 18,709; 
NASA OIG's FTEs (on board staff): 191; 
NASA OIG's authorized FTEs: 213. 

Source: GAO analysis of OMB and NASA OIG data. 

Note: Budgetary resources are in constant 2007 dollars. 

[End of table] 

When NASA OIG's budget-to-agency-budget ratio is compared to this same 
ratio for other OIGs in which the IG is appointed by the President with 
Senate confirmation, the percentages vary depending on the size of the 
federal agencies, their missions, and the oversight issues emphasized 
by each OIG. Such a comparison for fiscal year 2007 budgets indicates 
that the ratio of the NASA OIG's total budgetary resources to the total 
budgetary resources for NASA was within the range of these percentages 
for other OIGs and their agencies. Specifically, the comparison of 
these other OIGs' budgets with those of their agencies ranged from 
0.005 percent to 1.10 percent, and the NASA OIG's percentage of NASA 
resources was at 0.17 percent, which ranks 11th of these 30 agencies. 
(See appendix II.) 

Regarding staffing levels, we obtained the attrition rates for the NASA 
OIG for fiscal years 2003 through 2007. Attrition is the percentage of 
personnel losses for all reasons during the fiscal year, and is 
measured by comparing personnel losses during the year to the total 
personnel strength on board at the beginning of the year. The staff 
attrition rate for NASA OIG has increased over the 5-year period from 
12.4 percent in 2003 to 19.9 percent in 2007. Specifically, the NASA 
OIG had losses of 24 personnel in fiscal year 2003 compared to a loss 
of 40 personnel in fiscal year 2007, an increase of approximately 67 
percent. (See table 6.) As a comparison, the overall attrition rate for 
NASA was about 5 percent in both fiscal years 2006 and 2007. 

From fiscal years 2003 through 2007, the NASA OIG lost 157 staff. These 
losses affect the ability of the OIG to maintain experienced audit 
personnel. To illustrate this effect on the Office of Audits, we 
compared the audit staff on board in January 2003, shortly after the 
current IG took office, to the audit staff on board in March 2008. Of 
the 78 auditors on board in January 2003, 42 auditors have left the OIG 
audit directorate, including 9 of the 10 management-level auditors. 
Those leaving included all but one of the audit directors, the 
Assistant IG for Audits, and 2 deputy assistant IGs for audits. We did 
not review the reasons for the OIG's employee turnover but believe that 
the OIG would benefit from a review by an objective third-party expert 
to address the reasons for the relatively high attrition rate as 
compared to the overall rate for NASA. 

Table 6: NASA OIG Attrition Rates for Fiscal Years 2003 through 2007: 

Fiscal year: 2003; 
Beginning of year personnel strength[A]: 194; 
Gains: 21; 
Losses: 24; 
End of year personnel strength[A]: 191; 
Attrition rate: 12.4. 

Fiscal year: 2004; 
Beginning of year personnel strength[A]: 191; 
Gains: 21; 
Losses: 26; 
End of year personnel strength[A]: 186; 
Attrition rate: 13.6. 

Fiscal year: 2005; 
Beginning of year personnel strength[A]: 186; 
Gains: 37; 
Losses: 35; 
End of year personnel strength[A]: 188; 
Attrition rate: 18.8. 

Fiscal year: 2006; 
Beginning of year personnel strength[A]: 188; 
Gains: 45; 
Losses: 32; 
End of year personnel strength[A]: 201; 
Attrition rate: 17.0. 

Fiscal year: 2007; 
Beginning of year personnel strength[A]: 201; 
Gains: 40; 
Losses: 40; 
End of year personnel strength[A]: 201; 
Attrition rate: 19.9. 

Sources: NASA OIG. 

[A] Actual personnel on board. 

[End of table] 

External Reviews of NASA OIG and the Integrity Committee's 
Investigation: 

Over the 5-year period of fiscal years 2003 through 2007, NASA OIG had 
three routine external peer reviews--two reviews of its auditing 
practice and one review of its investigative practice. The NASA OIG 
also had a nonroutine external review performed by the Integrity 
Committee of PCIE and ECIE completed in fiscal year 2007 as a result of 
concerns about the management practices and conduct of NASA's IG. 

Routine Peer Reviews: 

Government Auditing Standards requires audit organizations that perform 
audits in accordance with the standards to have external peer reviews 
on a routine basis, at least once every 3 years. Those reviews are to 
be performed by reviewers independent of the audit organization. In the 
federal IG community, other federal IGs perform these peer reviews. The 
purpose of the peer review is to conclude whether the audit 
organization has a system of quality control that is suitably designed 
and implemented in order to provide reasonable assurance of conforming 
to applicable professional standards. In addition, for investigations, 
the Homeland Security Act of 2002[Footnote 12] amended the IG Act to 
require that each OIG with investigative or law enforcement authority 
under the act have its investigative function reviewed periodically by 
another IG office. 

For peer reviews of the audit practices,[Footnote 13] the external 
reviewers concluded that NASA OIG's system of quality control for the 
audit function provided reasonable assurance of material compliance 
with professional auditing standards. The peer review of the NASA OIG's 
investigative function[Footnote 14] concluded that the system of 
internal safeguards and management procedures for the Office of 
Investigations was in full compliance with the quality standards 
established by PCIE and ECIE and the Attorney General's investigation 
guidelines. 

Integrity Committee's Investigation: 

The NASA OIG also had a nonroutine external review completed in fiscal 
year 2007 as a result of serious concerns that had been raised about 
the management practices and conduct of the IG. At the request of the 
Integrity Committee of PCIE and ECIE, the Department of Housing and 
Urban Development's (HUD) OIG conducted an investigation into the 
allegations of possible misconduct by the NASA IG. The Integrity 
Committee initiated the investigation through a request letter to the 
HUD OIG dated January 6, 2006, and forwarded 18 complaints with 79 
separate allegations regarding actions of the NASA IG to the HUD OIG 
investigators. 

The HUD OIG submitted the results of its investigation for the 
Integrity Committee's consideration on August 30, 2006. In a January 
22, 2007, letter to the OMB Deputy Director for Management who serves 
as the Chair of both PCIE and ECIE, the Integrity Committee concluded 
that (1) the NASA IG had engaged in abuse of authority by creating an 
abusive work environment and (2) the NASA IG's actions in two instances 
created an appearance of a lack of independence. In addition, the 
Integrity Committee stated that the IG had sought to develop and 
maintain a close relationship with the former NASA Administrator and 
that this effort contributed to an appearance that his independence was 
being compromised. However, the Integrity Committee offered no 
recommendations for corrective actions in their letter. 

Executive Order 12993 entitled Administrative Allegations Against 
Inspectors General provides guidance to address investigations of 
alleged IG wrongdoing. Under this guidance the Integrity Committee is 
responsible for deciding whether the investigative report prepared at 
its request establishes any administrative misconduct within its 
oversight jurisdiction. If in the Integrity Committee's opinion the 
report establishes such issues or otherwise requires action, the report 
is referred to the Chair of PCIE and ECIE with recommendations for 
appropriate action. The Integrity Committee advised us that they had 
not believed it necessary to include specific recommendations in this 
case due to the extent of the findings and the presumption that the 
Chair of PCIE and ECIE would take disciplinary action commensurate with 
these findings. 

In accordance with the Executive Order, the Chair of PCIE and ECIE 
advised the NASA Administrator to determine the appropriate actions to 
address the investigation's conclusions. The NASA Administrator 
proposed to the Chair that the NASA IG attend the Federal Executive 
Institute to develop a leadership and management training plan, attend 
at least one management/leadership program annually, obtain the 
services of an executive coach, and meet with the Deputy NASA 
Administrator on a bimonthly basis to discuss implementation of the 
leadership and management plan as well as the NASA IG's professional 
growth. The NASA Administrator also stated that the proposed actions 
would resolve any concerns he had after reviewing the Integrity 
Committee's report of investigation. 

Reacting to the NASA Administrator's response, the Integrity Committee 
expressed its view in a March 20, 2007 letter to the Chair of PCIE and 
ECIE that the proposed actions were inadequate to address the 
investigation's conclusions. Specifically, the Integrity Committee 
stated that "all members of the committee believed the proposed course 
of action recommended by the Administrator of NASA was inadequate to 
address the conduct of [the IG]. All members of the committee further 
believed that disciplinary action up to and including removal could be 
appropriate." 

In a follow-up letter dated March 29, 2007, the NASA Administrator 
reaffirmed his belief that his proposed actions were adequate. With 
respect to the appearance of a lack of impartiality he stated that he 
and the IG had a professional arms-length relationship and that he did 
not believe that additional corrective measures were necessary. In a 
letter also dated March 29, 2007, the Chair of PCIE and ECIE asked the 
Integrity Committee for confirmation on several matters including that 
its members (1) had not concluded that the IG had broken any laws or 
acted illegally; (2) had no uniform view on what actions would be 
appropriate to address its concerns regarding the IG; (3) that it was 
not now recommending removal of the IG as a disciplinary action; and 
(4) that the January 22, 2007, letter to the PCIE and ECIE Chair had 
not contained recommendations on this matter. That same day, the Chair 
of the Integrity Committee confirmed that the PCIE and ECIE Chair's 
understanding accurately reflected the intent of the Integrity 
Committee. In accordance with the discretion afforded in the Executive 
Order and the related implementing guidance, on April 18, 2007, the 
Chair of PCIE and ECIE advised the Chair of the Integrity Committee to 
consider the actions in the NASA Administrator's March 29, 2007, letter 
as constituting the final disposition of the investigation. In line 
with the Executive Order, the Integrity Committee informed the NASA IG 
that their review was complete and that the case is considered closed. 

Notwithstanding the formal process outlined by the Executive Order, the 
Integrity Committee confirmed in a written response to our questions, 
its continued concern that the actions taken regarding the appearance 
of a lack of independence were insufficient. In the same response, the 
Integrity Committee stated that the views expressed in its March 20, 
2007, letter remain unchanged and that the NASA IG's lack of an 
appearance of independence was not resolved by the actions proposed by 
the NASA Administrator. 

In late March 2007, both the Chairman of the Subcommittee on Space, 
Aeronautics, and Related Matters, Senate Committee on Commerce, Science 
and Transportation, and the Chairman of the Subcommittee on 
Investigations and Oversight, House Committee on Science and 
Technology, received a copy of the Integrity Committee's report of 
investigation. In their letter of April 2, 2007, to the President of 
the United States, the Chairmen requested that the President remove the 
NASA IG from office based on the results of the investigation. The 
letter states that the committees and the public are not receiving 
useful assistance from the NASA IG, one of their primary tools for 
oversight, and that the NASA IG can no longer be effective in his 
office and should be replaced immediately. 

In prepared testimony on June 7, 2007, before a joint hearing between 
the Subcommittee on Space, Aeronautics, and Related Sciences, Senate 
Committee on Commerce, Science and Transportation, and the Subcommittee 
on Investigations and Oversight, House Committee on Science and 
Technology, the NASA IG disputed the findings of the Integrity 
Committee investigation by calling the allegations unjustified and the 
investigation flawed. The IG pointed out his views regarding possible 
mistakes by the investigators, and provided arguments to explain his 
actions regarding many of the allegations investigated. In this joint 
hearing members of both the House and the Senate called for the IG to 
resign. 

Independence is the cornerstone of professional auditing. The IG Act 
requires that IGs comply with Government Auditing Standards, which 
specifies that auditors and audit organizations be free from personal, 
external, and organizational impairments and avoid the appearance of 
such impairments to independence. Auditors and audit organizations must 
maintain independence so that their opinions, findings, conclusions, 
judgments, and recommendations will be impartial and, just as 
important, viewed as impartial by objective third parties with 
knowledge of the relevant information. 

Quality Standards for Federal Offices of Inspector General issued by 
PCIE and ECIE include requirements for IGs to be objective with an 
obligation to be impartial, intellectually honest, and free of 
conflicts of interest. Independence is considered by these standards to 
be a critical element of objectivity, and without independence both in 
fact and in appearance, objectivity is impaired. 

As noted above, the absence of actions to address the perceived lack of 
independence can perpetuate concerns regarding the IG's objectivity in 
dealing with IG responsibilities related to audits and investigations. 
Given the importance of IG independence both in fact and appearance and 
the lack of any corrective actions to fully resolve this matter, we 
believe that additional follow up and recommendations by the Integrity 
Committee are warranted related to its investigative finding dealing 
with the NASA IG's appearance of a lack of independence. 

Conclusions: 

The fundamental mission of the NASA OIG includes providing independent 
and objective oversight of NASA to identify areas for improved economy, 
efficiency, and effectiveness, and to detect and prevent fraud, waste, 
and abuse. While the OIG has conducted audits in areas of high risk and 
management challenges and provided the results of investigations, the 
OIG's monetary accomplishments from its audit activities have been 
limited by a lack of audits to evaluate the economy and efficiency of 
NASA's programs and operations that result in recommendations for 
measurable cost savings. 

The NASA OIG's monetary accomplishments and recommendations in the 
areas of economy and efficiency significantly lag behind the 
accomplishments and return on investment of the federal OIG community 
as a whole. A reevaluation of audit planning and methods within NASA's 
OIG is needed to include audits that hold NASA accountable for its 
stewardship of public funds through independent audits and 
investigations that include recommendations for economy and efficiency. 
Due to the importance of this issue, we believe that a reexamination of 
the audit strategy and planning approach within the OIG can best be 
accomplished with the assistance of an objective outside party with 
experience in these types of audits. 

The OIG's budgets and staffing levels have not been adversely affected 
when compared to both the NASA budgets and staffing and to the budgets 
of other OIGs. However, the effectiveness of the OIG can be negatively 
affected by an environment of high staff turnover, which has especially 
affected audit management staff. The reasons for the relatively high 
rate and recent increases in employee turnover should be examined by an 
objective expert so that any underlying issues can be addressed and the 
NASA OIG can effectively meet its mission of providing objective and 
reliable information. 

The independence of the IG is central to the effectiveness of the IG's 
office. The Integrity Committee, which has the authority to make 
recommendations regarding the outcomes of its investigations, considers 
the actions taken by the NASA Administrator to be insufficient, that 
the NASA IG's lack of an appearance of independence is not resolved, 
and that the views expressed in its letter of March 20, 2007, are 
unchanged. Because independence is fundamental to effective oversight 
and professional auditing, we believe that additional follow up actions 
are warranted related to the Integrity Committee's findings dealing 
with the appearance of a lack of independence on the part of NASA's IG. 

Recommendations for Executive Action: 

In order to strengthen audit oversight and management of the NASA OIG, 
we recommend that the NASA IG: 

* include in strategic and annual planning, performance audits that 
address NASA's economy and efficiency with potential monetary savings 
and that the OIG work closely with an objective outside party to obtain 
external review and consultation in the strategic and annual planning 
processes, and: 

* identify the causes of high employee turnover with the assistance of 
an objective expert, and determine actions needed as appropriate. 

In order to resolve the matter regarding the appearance of independence 
of the NASA IG, we recommend that the Integrity Committee: 

* follow up regarding its investigative finding regarding the NASA IG's 
appearance of a lack of independence and make any recommendations 
needed. 

Agency Comments and Our Evaluation: 

In written comments on a draft of our report, the NASA IG expressed 
widespread disagreement with our conclusions and recommendations and 
questioned the depth and scope of our evaluation. We disagree with the 
IG and in the following paragraphs reaffirm our conclusions and 
recommendations. We augmented our discussions of the scope and 
methodology of our work and expanded the evidentiary matter in the body 
of this report for issues related to the Integrity Committee's 
investigation and the monetary accomplishments reported by the NASA OIG 
over fiscal years 2003 through 2007. We rebut what we consider the most 
important aspects of his disagreement in this section of the report. In 
addition, please refer to the appendix section of this report following 
our reprint of the IG's comments (see app. IV) in which we rebut or 
clarify other less material matters. 

The Integrity Committee limited its comments to matters in our draft 
report concerning the committee's investigation of allegations against 
the NASA IG. The Integrity Committee restates its determination that 
actions taken by NASA regarding the appearance of a lack of 
independence findings were insufficient, states that the Integrity 
Committee has no power to compel any particular action, and suggests 
that we should present our recommendation to the Chair of PCIE and 
ECIE. However, we see nothing in the guidance in Executive Order 12993 
to prohibit the Integrity Committee from making recommendations to the 
Chair of PCIE and ECIE regarding its investigative finding which has 
not been fully resolved. Therefore, we reaffirm our recommendation to 
the Integrity Committee. (See appendix III.) 

Integrity Committee Investigation: 

In the written comments, the NASA IG stated that the Integrity 
Committee investigation of allegations against him was a closed matter. 
He emphasized that the Integrity Committee's views regarding the 
independence matter were from a historical perspective and that there 
was nothing to suggest that the appearance of a lack of independence 
was an ongoing issue. Further, he stated that the Integrity Committee 
had not included any recommendations in its report and that therefore, 
nothing is unresolved. 

The IG commented that we had ignored the documented final disposition 
of this matter in the PCIE and ECIE Chair's April 18, 2007 letter, and 
that we had selectively included or excluded information to suggest 
that a closed matter is still open. We fully understand that the formal 
investigation has run its course, and we have added discussion to the 
body of the report to reflect the documented interactions among the 
Chairman of PCIE and ECIE, the Integrity Committee, the NASA 
Administrator, and the NASA IG. Our report acknowledges that the 
Integrity Committee did not make any specific recommendations to 
address either the investigative findings of an abusive work 
environment or the perception of a lack of independence. However, 
despite the PCIE and ECIE Chair's acceptance of the actions proposed by 
the NASA Administrator and closure of the case, the Integrity Committee 
stated in response to our questions, that the actions were not adequate 
to resolve the investigative conclusion that the IG lacked an 
appearance of independence. 

As discussed in our report, the Integrity Committee told us that it did 
not include recommendations for corrective actions in its January 22, 
2007, letter to the Chair of PCIE and ECIE regarding the results of its 
investigation because of the extent of the findings and a presumption 
that the Chair of PCIE and ECIE would take disciplinary action 
commensurate with these findings. These concerns are captured in the 
Integrity Committee's March 20, 2007, letter to the Chair of PCIE and 
ECIE, which stated that "all members of the committee further believed 
that disciplinary action up to and including removal, could be 
appropriate." 

Given the Integrity Committee's documented dissatisfaction with the 
corrective actions and that no actions we are aware of address the 
independence issue, we disagree that this matter has been fully 
resolved. Objective third parties with knowledge of the relevant 
information including that of the Integrity Committee's investigation; 
the lack of actions to attempt to change perceptions; and the Integrity 
Committee's continuing concern, expressed in a written response to our 
questions, that the actions taken were inadequate; could conclude that 
the appearance of independence issues have not been resolved. As a 
result, the decisions and actions of the IG may not be fully accepted 
as a basis for policy or other changes. This perspective is illustrated 
by the stances taken by the leadership of NASA's oversight committees. 
As noted in the body of the report, in their joint letter dated April 
2, 2007, the Chairman of the Subcommittee on Space, Aeronautics, and 
Related Matters, Senate Committee on Commerce, Science and 
Transportation, and the Chairman of the Subcommittee on Investigations 
and Oversight, House Committee on Science and Technology, requested 
that the President of the United States remove the NASA IG from office 
based on the results of the Integrity Committee's investigation. The 
letter states that the oversight committees and the public are not 
receiving useful information from the NASA IG, one of their primary 
tools for oversight, and that the IG can no longer be effective in his 
office and should be replaced. 

The Integrity Committee commented that it could not concur with our 
recommendation because it lacked the authority to compel any particular 
corrective action. However, our recommendation to the Integrity 
Committee does not call for it to compel the corrective action, but 
rather to exercise its authority as allowed in Executive Order 12993 
and acknowledge the concerns of its own members and make appropriate 
recommendations to the Chair of PCIE and ECIE for corrective action 
regarding its unresolved investigative finding that the NASA IG lacked 
an appearance of independence. The Integrity Committee confirmed its 
opinion that the actions taken were not sufficient and restated its 
opinion in the March 20, 2007 letter to the Chair of PCIE and ECIE that 
it supported a range of actions to be considered, up to and including 
removal of the NASA IG from office. Because the Integrity Committee has 
the authority to make recommendations within the guidance of the 
Executive Order, we reaffirm our report recommendation. 

Interviews with OIG Management: 

Contrary to the NASA IG's statement that we failed to consult with NASA 
OIG's senior leadership on the important issues in this report, we met 
with the NASA IG and the senior OIG staff at the beginning of our 
review regarding our scope and methodology. We also coordinated a 
series of interviews through the IG's Executive Officer with the OIG 
senior management officials responsible for all areas addressed in our 
report. In all instances, we identified the purpose of our planned 
contacts, and the IG's Executive Officer scheduled meetings with those 
NASA OIG management staff who were best suited to address each matter. 
These included the Deputy Inspector General, the Counsel to the IG, the 
Assistant IG for Audits, the Assistant IG for Investigations, and the 
Assistant IG for Management and Planning. At the completion of our work 
we met with the NASA IG and the senior OIG staff to discuss our report 
findings, conclusions, and recommendations. All meetings were 
coordinated through the IG's office, and we were available for any 
input the IG may have wished to provide. 

Audit Coverage: 

The NASA IG disagreed with our recommendation to revise approaches 
taken in audits to include in strategic and annual planning, 
performance audits that address NASA's program results, effectiveness, 
and outcomes as well as audits of economy and efficiency by working 
closely with an objective outside party. Specifically, the NASA IG did 
not agree with our conclusion that the OIG's effectiveness has been 
hindered by reliance on audits that do not include evaluating NASA's 
program economy, efficiency, and effectiveness, and result in limited 
monetary accomplishments. The IG Act requires that IGs address issues 
of economy and efficiency and provide independent audits and 
investigations. We have removed our concern regarding effectiveness 
because of the subjective nature of evaluating the OIG's efforts in 
this regard. However, as stated in our report, the NASA OIG had 
reported only one audit with recommendations for economy and efficiency 
and potential cost savings to the agency over fiscal years 2006 and 
2007. Therefore, we have narrowed the focus of our report and our 
recommendation in order to address our major concern that the OIG has 
an insufficient number of economy and efficiency audits that result in 
reported monetary savings. 

In addition, the IG does not believe that our conclusions regarding 
audit coverage are sufficiently balanced to recognize audits that are 
focused on areas other than economy and efficiency. Contrary to this 
statement, our report provides information stating that the OIG's 
audits have addressed areas designated as high-risk and management 
challenges. We also state that while the OIG's audits do not adequately 
address the economy and efficiency of NASA's programs and operations, 
they do include recommendations for improving compliance with laws, 
regulations, and NASA policies and procedures; internal controls; and 
other specific areas of NASA's operations. 

The IG provided a listing of issued audit products that he said have 
addressed economy, efficiency, and effectiveness issues and 
specifically highlighted nine examples. While the report 
recommendations may affect the economy and efficiency of NASA's 
operations, none of these reports highlighted by the IG have specific 
recommendations to improve NASA's economy and efficiency with potential 
cost savings. In addition, the reports' recommendations address 
compliance with laws, regulations, policies and procedures, internal 
controls, and other areas. In addition, two of the highlighted reports 
were not audits and made no reference to professional auditing 
standards. To illustrate our concerns regarding the lack of OIG audit 
reports with recommendations for improving NASA's economy and 
efficiency, our report provides an example of an OIG audit regarding a 
NASA contractor's inadequate pricing determinations. The audit 
recommends that the contracting officer ensure compliance with contract 
agreements. However, even though the OIG had the opportunity, the 
report did not identify any measurable cost saving to the government 
resulting from the inadequate pricing and made no recommendations to 
help ensure that pricing determinations will be accurate in the future. 

Monetary Accomplishments: 

The NASA IG states the difference between actual monetary recoveries 
from investigations and potential monetary accomplishments from audits. 
The IG comments that the results of audits are more speculative and 
must rely on the implementation of management to be realized. This 
statement acknowledges the different purposes of audits and 
investigations: audits can recommend improvements to future operations, 
and investigations tend to focus on the identification of fraudulent 
and illegal activities that have occurred. 

Audit Planning: 

Our review found that the OIG's strategic and annual audit plans did 
not have goals and objectives that specifically address the economy and 
efficiency of NASA's programs and operations. We had recommended that 
the NASA IG include in strategic and annual planning, performance 
audits that address NASA's economy and efficiency with potential 
monetary savings and that the OIG work closely with an objective 
outside party, such as the PCIE, to obtain external review and 
consultation in the strategic and annual planning processes. The NASA 
IG stated his intent to benchmark with the PCIE community to provide 
assurance that audits address these areas. While this is a positive 
statement we continue to make our recommendation that the IG work 
closely with an objective outside party during the strategic and annual 
planning processes. However we no longer specify that the IG work with 
the PCIE Audit Committee on this issue. 

Staff Attrition: 

The NASA IG also disagrees with our recommendation to identify the 
causes of high employee turnover with the assistance of an objective 
expert and determine actions needed as appropriate. The IG states that 
we did not discuss employee turnover with OIG leadership. To the 
contrary, our discussions with OIG management, both past and present, 
provided the information on turnover in our report and alerted us to 
the problem of the OIG's relatively high staff attrition rate. The IG 
also provides attrition rates of other agency OIGs that are all lower 
than that of the NASA OIG and supports our conclusion that the NASA OIG 
has a comparably high staff attrition rate even when compared to other 
OIGs. The IG also states that a number of steps have been taken to 
address the continuing significant turnover rates. We are encouraged 
that the IG is already taking steps in this area, however, because of 
the OIG's relatively high rate of staff attrition we are recommending 
that the NASA IG use the assistance of an objective expert to identify 
the causes of employee turnover. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we will not distribute it until 30 days from 
its date. At that time we will send copies of the report to the NASA 
Administrator; the NASA IG; the Chairman of the Integrity Committee; 
the OMB Deputy Director for Management; the Chairman and Ranking Member 
of the Senate Committee on Commerce, Science and Transportation; 
interested congressional committees; and other parties. This report 
will also be available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you have any questions or would like to discuss this report, please 
contact me at (202) 512-9471 or franzelj@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Major contributors to this report are 
listed in appendix V. 

Signed by: 

Jeanette M. Franzel: 
Director: 
Financial Management and Assurance: 

[End of section] 

Appendix I: Monetary Accomplishments Reported in OIGs' Semiannual 
Reports to the Congress for Fiscal Year 2007: 

Table: 

Federal agency: Social Security Administration; 
IG total budgetary resources: $92,000,000; 
Monetary accomplishments: $4,802,207,264; 
Dollar return on IG's budget[A]: $52.20. 

Federal agency: General Services Administration; 
IG total budgetary resources: $58,000,000; 
Monetary accomplishments: $1,121,385,515; 
Dollar return on IG's budget[A]: $19.33. 

Federal agency: Department of Transportation; 
IG total budgetary resources: $71,000,000; 
Monetary accomplishments: $1,086,688,396; 
Dollar return on IG's budget[A]: $15.31. 

Federal agency: Department of Education; 
IG total budgetary resources: $50,000,000; 
Monetary accomplishments: $639,389,462; 
Dollar return on IG's budget[A]: $12.79. 

Federal agency: Department of Health and Human Services; 
IG total budgetary resources: $285,000,000[B]; 
Monetary accomplishments: $3,537,923,000; 
Dollar return on IG's budget[A]: $12.41. 

Federal agency: Department of Housing and Urban Development; 
IG total budgetary resources: $121,000,000; 
Monetary accomplishments: $1,347,799,879; 
Dollar return on IG's budget[A]: $11.14. 

Federal agency: Office of Personnel Management; 
IG total budgetary resources: $19,000,000; 
Monetary accomplishments: $188,856,301; 
Dollar return on IG's budget[A]: $9.94. 

Federal agency: Department of Defense; 
IG total budgetary resources: $221,000,000; 
Monetary accomplishments: $2,083,836,000; 
Dollar return on IG's budget[A]: $9.43. 

Federal agency: Department of Veterans Affairs; 
IG total budgetary resources: $74,000,000; 
Monetary accomplishments: $670,200,000; 
Dollar return on IG's budget[A]: $9.06. 

Federal agency: Department of Justice; 
IG total budgetary resources: $89,000,000; 
Monetary accomplishments: $754,357,601; 
Dollar return on IG's budget[A]: $8.48. 

Federal agency: Department of Labor; 
IG total budgetary resources: $73,000,000; 
Monetary accomplishments: $561,849,158; 
Dollar return on IG's budget[A]: $7.70. 

Federal agency: Small Business Administration; 
IG total budgetary resources: $21,000,000; 
Monetary accomplishments: $130,177,723; 
Dollar return on IG's budget[A]: $6.20. 

Federal agency: Federal Deposit Insurance Corporation; 
IG total budgetary resources: $26,000,000; 
Monetary accomplishments: $116,280,993; 
Dollar return on IG's budget[A]: $4.47. 

Federal agency: Agency for International Development; 
IG total budgetary resources: $51,000,000; 
Monetary accomplishments: $193,342,475; 
Dollar return on IG's budget[A]: $3.79. 

Federal agency: Department of the Interior; 
IG total budgetary resources: $43,000,000; 
Monetary accomplishments: $142,527,564; 
Dollar return on IG's budget[A]: $3.31. 

Federal agency: Department of Energy; 
IG total budgetary resources: $42,000,000; 
Monetary accomplishments: $99,409,187; 
Dollar return on IG's budget[A]: $2.37. 

Federal agency: Department of Commerce; 
IG total budgetary resources: $23,000,000; 
Monetary accomplishments: $51,736,992; 
Dollar return on IG's budget[A]: $2.25. 

Federal agency: Department of the Treasury; 
IG total budgetary resources: $19,000,000; 
Monetary accomplishments: $40,257,085; 
Dollar return on IG's budget[A]: $2.12. 

Federal agency: Environmental Protection Agency; 
IG total budgetary resources: $54,000,000; 
Monetary accomplishments: $92,792,457; 
Dollar return on IG's budget[A]: $1.72. 

Federal agency: Corporation for National and Community Service; 
IG total budgetary resources: $7,000,000; 
Monetary accomplishments: $11,974,636; 
Dollar return on IG's budget[A]: $1.71. 

Federal agency: Department of State; 
IG total budgetary resources: $34,000,000; 
Monetary accomplishments: $52,500,036; 
Dollar return on IG's budget[A]: $1.54. 

Federal agency: Tennessee Valley Authority (TVA); 
IG total budgetary resources: $16,000,000[C]; 
Monetary accomplishments: $15,854,105; 
Dollar return on IG's budget[A]: $0.99. 

Federal agency: Department of Agriculture; 
IG total budgetary resources: $91,000,000; 
Monetary accomplishments: $81,412,378; 
Dollar return on IG's budget[A]: $0.89. 

Federal agency: Department of Homeland Security; 
IG total budgetary resources: $128,000,000; 
Monetary accomplishments: $100,916,585; 
Dollar return on IG's budget[A]: $0.79. 

Federal agency: Railroad Retirement Board; 
IG total budgetary resources: $7,000,000; 
Monetary accomplishments: $5,179,515; 
Dollar return on IG's budget[A]: $0.74. 

Federal agency: Treasury Inspector General for Tax Administration; 
IG total budgetary resources: $135,000,000; 
Monetary accomplishments: $54,902,108; 
Dollar return on IG's budget[A]: $0.41. 

Federal agency: National Aeronautics and Space Administration; 
IG total budgetary resources: $34,000,000; 
Monetary accomplishments: $12,103,809; 
Dollar return on IG's budget[A]: $0.36. 

Federal agency: Nuclear Regulatory Commission; 
IG total budgetary resources: $10,000,000; 
Monetary accomplishments: $495,065; 
Dollar return on IG's budget[A]: $0.05. 

Federal agency: Export-Import Bank of the United States; 
IG total budgetary resources: $2,000,000; 
Monetary accomplishments: na[D]; 
Dollar return on IG's budget[A]: na[D]. 

Federal agency: Central Intelligence Agency; 
IG total budgetary resources: na[D]; 
Monetary accomplishments: na[D]; 
Dollar return on IG's budget[A]: na[D]. 

Federal agency: Total; 
IG total budgetary resources: $1,896,000,000; 
Monetary accomplishments: $17,996,355,289; 
Dollar return on IG's budget[A]: $9.49. 

Source: GAO analysis of OMB and IG semiannual reports to the Congress 
for fiscal year 2007. 

Note: The agencies presented are those with presidentially appointed 
IGs confirmed by the Senate. 

[A] Dollar return on each IG's budget is calculated by dividing the 
total monetary accomplishments by the IG's total budgetary resources. 

[B] Includes budget authority to combat Medicare and Medicaid fraud. 

[C] Amounts for TVA's OIG are from PCIE's fiscal year 2007 profile 
data. 

[D] Information not available. 

[End of table] 

[End of section] 

Appendix II: Comparison of OIGs' Budgetary Resources with Total 
Budgetary Resources of Their Agencies for Fiscal Year 2007: 

Table: 

Federal agency: Nuclear Regulatory Commission; 
IG total budgetary resources: $10 million; 
Agency total budgetary resources: $910 million; 
IG budget resources as a percentage of agency budgetary resources: 
1.10. 

Federal agency: Small Business Administration; 
IG total budgetary resources: $21 million; 
Agency total budgetary resources: $2,869 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.73. 

Federal agency: Corporation for National and Community Service; 
IG total budgetary resources: $7 million; 
Agency total budgetary resources: $1,154 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.62. 

Federal agency: Environmental Protection Agency; 
IG total budgetary resources: $54 million; 
Agency total budgetary resources: $12,795 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.42. 

Federal agency: Agency for International Development; 
IG total budgetary resources: $51 million; 
Agency total budgetary resources: $15,156[A] million; 
IG budget resources as a percentage of agency budgetary resources: 
0.34. 

Federal agency: Export-Import Bank of the United States; 
IG total budgetary resources: $2 million; 
Agency total budgetary resources: $730 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.27. 

Federal agency: Department of Justice; 
IG total budgetary resources: $89 million; 
Agency total budgetary resources: $35,661 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.25. 

Federal agency: General Services Administration; 
IG total budgetary resources: $58 million; 
Agency total budgetary resources: $24,756 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.23. 

Federal agency: Treasury Inspector General for Tax Administration; 
IG total budgetary resources: $135 million; 
Agency total budgetary resources: $69,016 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.20. 

Federal agency: Department of Commerce; 
IG total budgetary resources: $23 million; 
Agency total budgetary resources: $11,926 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.19. 

Federal agency: National Aeronautics and Space Administration; 
IG total budgetary resources: $34 million; 
Agency total budgetary resources: $20,011 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.17. 

Federal agency: Department of Homeland Security; 
IG total budgetary resources: $128 million; 
Agency total budgetary resources: $75,903 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.17. 

Federal agency: Tennessee Valley Authority; 
IG total budgetary resources: $16[B] million; 
Agency total budgetary resources: $9,666 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.17. 

Federal agency: Department of the Interior; 
IG total budgetary resources: $43 million; 
Agency total budgetary resources: $26,681 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.16. 

Federal agency: Department of Housing and Urban Development; 
IG total budgetary resources: $121 million; 
Agency total budgetary resources: $86,641 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.14. 

Federal agency: Department of Energy; 
IG total budgetary resources: $42 million; 
Agency total budgetary resources: $34,647 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.12. 

Federal agency: Department of State; 
IG total budgetary resources: $34 million; 
Agency total budgetary resources: $30,954[C] million; 
IG budget resources as a percentage of agency budgetary resources: 
0.11. 

Federal agency: Department of Labor; 
IG total budgetary resources: $73 million; 
Agency total budgetary resources: $76,789 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.10. 

Federal agency: Department of Veterans Affairs; 
IG total budgetary resources: $74 million; 
Agency total budgetary resources: $96,168 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.08. 

Federal agency: Department of Agriculture; 
IG total budgetary resources: $91 million; 
Agency total budgetary resources: $131,486 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.07. 

Federal agency: Department of Transportation; 
IG total budgetary resources: $71 million; 
Agency total budgetary resources: $121,093 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.06. 

Federal agency: Railroad Retirement Board; 
IG total budgetary resources: $7 million; 
Agency total budgetary resources: $12,131 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.06. 

Federal agency: Department of Education; 
IG total budgetary resources: $50 million; 
Agency total budgetary resources: $88,037 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.06. 

Federal agency: Federal Deposit Insurance Corporation; 
IG total budgetary resources: $26 million; 
Agency total budgetary resources: $53,083 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.05. 

Department of Health and Human Services; 
IG total budgetary resources: $285[D] million; 
Agency total budgetary resources: $976,749 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.03. 

Federal agency: Department of Defense; 
IG total budgetary resources: $221 million; 
Agency total budgetary resources: $843,179 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.03. 

Federal agency: Social Security Administration; 
IG total budgetary resources: $92 million; 
Agency total budgetary resources: $664,305 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.014. 

Federal agency: Office of Personnel Management; 
IG total budgetary resources: $19 million; 
Agency total budgetary resources: $201,742 million; 
IG budget resources as a percentage of agency budgetary resources: 
0.009. 

Federal agency: Department of the Treasury; 
IG total budgetary resources: $19 million; 
Agency total budgetary resources: $413,634[E million; 
IG budget resources as a percentage of agency budgetary resources: 
0.005. 

Federal agency: Central Intelligence Agency; 
IG total budgetary resources: na[F]; 
Agency total budgetary resources: na[F]; 
IG budget resources as a percentage of agency budgetary resources: 
na[F]. 

Source: GAO analysis of OMB data. 

Note: The agencies presented are those with IGs appointed by the 
President with Senate confirmation. 

[A] Total budgetary resources are from the Agency for International 
Development's fiscal year 2007 financial report. 

[B] Amounts for TVA's IG are from PCIE's fiscal year 2007 profile data. 

[C] Total budgetary resources are from the State Department's fiscal 
year 2007 financial report. 

[D] Includes budget authority to combat Medicare and Medicaid fraud. 

[E] The Department Of The Treasury's total budgetary resources excludes 
the Internal Revenue Service. 

[F] Information not available. 

[End of table] 

[End of section] 

Appendix III: Comments from the Integrity Committee: 

Note: GAO comments supplementing those in the report text appear at the 
end of this appendix. 

Integrity Committee: 
President's Council on Integrity and Efficiency: 
Executive Council on Integrity and Efficiency: 
935 Pennsylvania Ave., NW, Room 3973: 
Washington, D.C. 20535-0001: 

October 10, 2008: 

Ms. Jeanette M. Franzel: 
Director, Financial Management and Assurance: 
United States Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Re: GAO-08-1035: 

Dear Ms. Franzel: 

Thank you for the opportunity to review and comment on the Government 
Accountability Office (GAO) Draft Report entitled, "Actions Needed to 
Improve Audit Coverage of NASA." Although not the primary focus of this 
GAO audit, the Draft Report also contains a brief discussion of another 
investigation pertaining to the NASA Inspector General (IG) which was 
initiated by the Integrity Committee (IC) of the President's Council on 
Integrity and Efficiency (PCIE) and the Executive Council on Integrity 
and Efficiency (ECIE). IC members have reviewed and discussed the 
portion of the GAO Draft Report that concerns this other investigation. 
Herein, I respond on behalf of the IC as its Chair. 

First, the IC notes that the contents of the report regarding the NASA 
IG were developed as part of another, separate GAO audit. Although the 
IC working group staff fully cooperated in the separate audit, the IC 
was not involved in the GAO review that is the subject of the Draft 
Report. Therefore, all information provided was not in direct relation 
to the subject report. [See comment 1] 

Based upon our review of the report, the IC does not concur with the 
GAO's recommendation which states: 

In order to strengthen the appearance of independence on the NASA IG we 
recommend that the Integrity Committee ... follow up on the conclusions 
in its report and make appropriate recommendations on actions needed to 
resolve its investigative finding that the NASA IG has an appearance of 
a lack of independence. 

Charged by Executive Order (EO) 12933, the IC may receive, review, and 
refer for investigation allegations of wrongdoing against IGs and 
certain members of their staff, to the extent permitted by law and in 
accordance with the EO. The IC has adopted internal operating 
procedures to accomplish these responsibilities. The decisions 
regarding actions that may be taken in response to an IC investigative 
finding or recommendation lie with the Chair of the PCIE. Henceforth, 
the IC cannot concur with the aforementioned recommendation as it is 
goes beyond the authority vested in the IC's operating procedures. The 
IC has no power to compel any particular action. The GAO would be 
better served to present this recommendation to the PCIE Chairperson. 

In addition, it should be noted in the investigation of the NASA IG, 
the IC determined the actions taken by NASA regarding the appearance of 
a lack of independence findings were insufficient. The IC recommended 
to the PCIE Chairperson a range of further actions to consider, up to 
and including removal from office. Subsequently, the PCIE Chairperson 
found the actions taken by NASA to be sufficient. Therefore, the matter 
was closed by the IC as they have no authority to implement further 
action. 

Thank you for the opportunity to comment on the report. 

Sincerely, 

Signed by: 

Kenneth W. Kaiser
Chair, Integrity Committee: 

1 - Honorable Clay Johnson, III, Chairman: 
President's & Executive Councils on Integrity and Efficiency: 
c/o United States Office of Management and Budget: 
17th Street & Pennsylvania Avenue, N.W. Room 113: 
Washington, D.C. 20503 

The following is GAO's comment on the Integrity Committee's letter 
dated October 10, 2008. 

GAO Comment: 

Comment 1. 

As the Integrity Committee stated, the information related to its 
activities in this report was obtained in connection with our separate 
ongoing audit of the activities and operations of the Integrity 
Committee. 

[End of section] 

Appendix IV: Comments from the Inspector General, National Aeronautics 
and Space Administration: 

Note: GAO comments supplementing those in the report text appear at the 
end of this appendix. 

National Aeronautics and Space Administration: 
Office of Inspector General: 
Washington, DC 20546-0001 

October 14, 2008: 

Jeanette M. Franzel: 
Director: 
Financial Management and Assurance: 
U.S. Government Accountability Office: 
Washington, DC 20548: 

Re: NASA Office of Inspector General's Response to the Government 
Accountability Office Draft Report "Actions Needed to Improve Audit 
Coverage of NASA": The Report Is Not Balanced or Objective. 

Dear Ms. Franzel: 

The NASA Office of Inspector General (OIG) disagrees with the 
conclusions and recommendations of the Government Accountability 
Office's (GAO) draft report titled "Actions Needed to Improve Audit 
Coverage of NASA" because they are based on selective and incomplete 
data and flawed characterizations of the work, processes, and 
accomplishments of NASA 0IG.[Footnote 16] 

To reach its conclusion that an issue concerning the Inspector 
General's independence is unresolved and still pending, the draft 
report mischaracterizes the findings of the President's Council on 
Integrity and Efficiency (PCIE) Integrity Committee (the IC) and 
ignores the documented final disposition of the matter on April 18, 
2007. The germane decisional documents, not referenced in the draft 
report, clearly reflect that the matter was fully investigated, 
reviewed, resolved, and closed. In sum, the draft report misleads the 
reader through selective inclusion and exclusion of evidence to suggest 
that a closed matter is still open, a conclusion that is demonstrably 
wrong. 

With regard to observations about the NASA OIG products and staff, 
especially in relation to the Office of Audits, the draft report 
mischaracterizes the content of OIG audits; it alters its methodology 
to exclude evidence inconsistent with the negative conclusions it 
presents; and it simply ignores the excellent work of the NASA OIG 
staff, which has been repeatedly recognized by the PCIE, Congress, 
United States Attorneys, and, in fact, the GAO. Rather than meet the 
audit's objective to identify "audit and investigative accomplishments 
reported by the NASA OIG," GAO chose to focus its efforts on 
marginalizing the importance of OIG work and ignoring the SIG's 
contributions to improving NASA programs and operations. 

The GAO staff responsible for the draft failed to consult NASA OIG's 
senior leadership on the important issues on which the draft report 
opines. The Inspector General, the official accountable and responsible 
for the strategic direction of the Office, was not interviewed by the 
GAO staff. None of the issue area directors or audit staff were 
interviewed. In fact, the totality of interviews conducted with OIG 
staff lasted less than 5 hours and, for the most part, covered topics 
that, ultimately, were not addressed in the draft report at all. The 
GAO staff also did not consult with NASA management-those with the 
direct responsibility for the effective execution of the NASA mission. 
Had they done so, GAO would have developed a genuine understanding of 
the OIG's many contributions, especially as to those areas at the root 
of efficient, economical, and effective management of NASA programs and 
operations: safety, acquisition management, financial management, 
information technology management, and management of internal controls 
over identified Agency weaknesses. 

We are particularly surprised at the draft report's conclusion of 
weakness in the NASA OIG's audit coverage, given the OIG's strict 
compliance with the requirement in the Inspector General Act to "give 
particular regard to the activities of the Comptroller General of the 
United States with a view toward avoiding duplication and insuring 
coordination and cooperation." Each year for the past 6 years, the NASA 
OIG's audit plans have been discussed with, commented on, and otherwise 
coordinated with the GAO staff responsible for conducting NASA 
oversight. The notion of this draft report that the OIG's audit 
coverage needs material improvement is not in accord with any view 
expressed to the NASA OIG by GAO's NASA experts in the past 6 years. 
[See comment 1] 

As a consequence of the GAO's flawed methodology, the draft report 
contains conclusions and recommendations that do not reflect an 
accurate, independent, or objective review of NASA OIG's operations and 
activities. 

The draft report is erroneous in asserting that concerns about 
appearance of lack of independence are unresolved[Footnote 17]: 

The draft report's conclusion-that the IC finding on appearance of lack 
of independence was unresolved and warrants further attention-is based 
on a mischaracterization of the IC's finding and an omission of the 
decision documents which demonstrate, without any ambiguity, that the 
matter was fully resolved and closed with a determination to take no 
action. While the draft report completely disregards what clearly 
occurred as a factual matter in this case, it also ignores the legal 
requirements in Executive Order (EO) 12993 for determinations relating 
to Inspectors General. 

The draft report refers to the "investigative finding that the NASA IG 
has [emphasis added] an appearance of lack of independence." Here, 
creating a fiction that there is an unresolved issue, the draft report 
misstates the finding of the IC, which was substantially more limited. 
The IC did not find that the NASA Inspector General "has" an appearance 
of lack of independence. The IC's finding as regards appearances were 
historical and concerned the creation of an appearance of a lack of 
independence in connection with one matter arising in 2002 and another 
in 2004.[Footnote 18] There was nothing the IC concluded to suggest an 
ongoing appearance issue. 

Furthermore, to support its incorrect assertion of lack of resolution, 
the draft report incorrectly suggests that the IC made a recommendation 
to the PCIE Chair and that the recommendation was not addressed. In 
reality, however, there was no IC recommendation. Nonetheless, the 
question of whether any action should be taken as to appearance 
concerns raised in the IC's report was fully considered by the Chair of 
the PCIE. After consideration, the PCIE Chair deemed "no action" was 
appropriate, and that determination was fully documented. However, that 
documentation is neither acknowledged nor referenced anywhere in the 
draft report. 

As background, EO 12993 requires the IC to assess an investigation and, 
if deemed appropriate, send forward a report "with Integrity Committee 
recommendations, to the Chairperson of the PCIE/ECIE for resolution." 
As regards the investigation of the NASA Inspector General, the IC 
forwarded its January 22, 2007, report to the Chair, but without making 
any recommendations. As there was no IC recommendation, there is 
nothing unresolved. 

To support its incorrect assertion that somehow the matter was left 
"unresolved," the draft report selectively references a March 20, 2007, 
letter from the IC Chair to the PCIE Chair expressing dissatisfaction 
with a proposal by the NASA Administrator.[Footnote 19] Based on this, 
the draft report implies that the IC made a recommendation and that it 
was unresolved. The March 20 letter cited in the draft report is taken 
out of context, as it is only the beginning of the relevant 
correspondence, the rest of which the draft report ignores, but is 
described below in Table 1. 

Table 1. Documents GAO Ignored in Its Draft Report: 

Date: March 29, 2007	
Document: Letter from the PCIE Chair to IC Chair clearly establishing 
that the IC had made no recommendation. 

Date: March 29, 2007	
Document: Letter from the IC Chair to PCIE Chair confirming that the IC 
had made no recommendation. 

Date: March 29, 2007;	
Document: Letter from the NASA Administrator to PCIE Chair stating that 
he did not believe that additional corrective measures were necessary 
with regard to the appearance of a lack of independence. 

Date: April 18, 2007;	
Document: Letter from the PCIE Chair to IC Chair reflecting his 
decision to take no action on the appearance issue. 

Date: April 26, 2007;	
Document: Letter from the IC Chair to the NASA IG reflecting the 
decision to take no action on the appearance issue and closing the 
matter. 

[End of table] 

The March 20 letter prompted a telephone call from the PCIE Chair to 
the IC Chair, the substance of which was confirmed by a March 29 letter 
from the PCIE Chair to the IC Chair and acknowledged by the IC Chair by 
letter on that same date. This correspondence confirmed that the IC had 
made no recommendation (see Figure 1). 

Figure 1. Letter from the IC Chair to PCIE Chair: 

Deputy Director For Management: 
Executive Office Of The President: 
Office Of Management And Budget: 
Washington, DC 20503: 

March 29, 2007: 
James H. Burnes, Jr.
Chairman, Integrity Committee: 
President's Council on Integrity and Efficiency: 
935 Pennsylvania Ave NW, Room 3973: 
Washington, DC 20535-0001: 

Dear Mr. Humus: 

On March 20, 2007, you sent me a letter on behalf of the Integrity 
Committee with regard to the NASA Inspector General, Robert E. Cobb. 

After receiving the letter, I called you for some clarifications, which 
I now want to confirm. 

First, I asked for clarification of whether the Integrity Committee 
concluded that Mr. Cobb had broken any laws or acted illegally. You 
reported that he had not. Instead, the conclusions of the Integrity 
Committee related to management and appearance concerns. 

Second, I asked for clarification as to whether all of the members of 
the Integrity Committee shared a common view about what would be the 
appropriate way to address the concerns raised about Mr. Cobb, and you 
indicated that there had been a range of views. 

Third, I asked for clarification as to whether the Integrity Committee 
was now itself recommending removal as a disciplinary action against 
Mr. Cobb, and you told me that no such recommendation was being made by 
the Integrity Committee. 

I also noted that the original report does not appear to make an actual 
recommendation about steps to be taken in light of the Integrity 
Committee report's findings about Mr. Cobb's actions, and you confirmed 
that I had read that correctly. 

Please confirm that I have accurately summarized our conversation on 
these points. 

Sincerely, 

Signed by: 

Clay Johnson: 
Chairman
President's Council on Integrity and Efficiency: 

[End of figure] 

This letter was followed by yet more correspondence, with the PCIE 
Chair ultimately sending a letter reflecting the Chair's determination 
that no action was warranted, or would be taken, against the NASA 
Inspector General as regards the appearance matter. In reflection upon 
the IC's March 20 letter, the NASA Administrator in a letter dated 
March 29 reiterated his recommendation to the PCIE Chair on the 
appearance issue by stating: 

With respect to the `appearance of a lack of impartiality concern,' IG 
Cobb and I have a professional, arm's length relationship and I do not 
believe that additional corrective measures are necessary in that 
regard [emphasis added]. In the two years that I have observed IG Cobb, 
I have seen a high quality work product from the OIG reflective of a 
staff and its leadership dedicated to carrying out the mission 
entrusted by law to the IG. IG Cobb is technically sound, highly 
conscientious, fully engaged in his work, and he brings rigorous 
analysis to the OIG work product. 

On April 18, 2007, the PCIE Chair wrote to the IC on the final 
disposition of the matter, and on April 26, 2007, the IC Chair wrote to 
the NASA Inspector General: 

On April 18, 2007, the IC received a response letter from the PCIE 
Chair indicating that he had accepted the recommendations from NASA 
Administrator Griffin as the appropriate and final disposition of the 
matter. Accordingly, the IC review is complete and the case is 
considered closed[Footnote 20] [emphasis added]. 

Accordingly, the record clearly reflects that the matter was fully 
investigated, reviewed, resolved, and closed. The draft report ignores 
all of this to reach a result that is clearly incorrect. 

The draft report's review of NASA OIG audit coverage and other matters 
is not thorough or balanced: 

The draft report's conclusion that the NASA OIG's "audit coverage of 
NASA is limited in scope" is not based on a thorough and objective 
assessment of the OIG's work, its products, and accomplishments. Rather 
than provide a balanced assessment of the OIG's strengths and 
weaknesses, GAO chose to focus its efforts on marginalizing the 
importance of the OIG's work and ignoring the OIG's contributions to 
improving Agency programs and operations.[Footnote 21] For example, 
there is neither mention of the OIG's extensive contributions in 
identifying systemic problems in information technology (IT) security, 
financial management, or safety nor any mention of helping the Agency 
identify and implement needed corrective actions.[Footnote 22] Instead, 
the GAO mischaracterizes the OIG's audit work; its analysis of return 
on investment is distorted and misguided; its conclusions on strategic 
planning are unsupported (and not based on thorough work); and the 
examination of OIG budgets and staffing is not only superficial but 
fails to reflect the real budgetary challenge facing the 0IG. Had the 
GAO staff consulted with the Inspector General or the Deputy Inspector 
General on overall strategy and policy direction in the OIG or 
interviewed the issue area directors or audit staff, it may have 
avoided such fundamental errors in its assessment. 

The GAO draft report supports its notions of the limited scope of NASA 
audits with essentially three points: 

* the NASA OIG's audit coverage has not included audits with 
recommendations to improve the economy, efficiency, and effectiveness 
of NASA programs; 

* NASA OIG audits do not make recommendations for systemic improvements 
in NASA program management; and; 

* the OIG's compliance audits were limited in scope because they did 
not examine possible systemic issues causing noncompliance and needing 
correction. 

These assertions are unsupported and unsupportable. Even a cursory 
review of the attached listing of OIG audit products for the past 3 
years (Enclosure), all of which are readily available on the NASA OIG 
Web site, shows that the office has addressed economy, efficiency, and 
effectiveness issues. In addition, these audits, which were the result 
of a systematic planning process, identify the systemic issues causing 
noncompliance and make recommendations identifying needed systemic 
improvements in program management that will lead to greater economy, 
efficiency, and effectiveness in NASA's execution of its mission. [See 
comment 2] 

The GAO draft report states, "NASA OIG audits have been done to the 
exclusion of audits with recommendations that address the economy, 
efficiency, and effectiveness of NASA's programs and operations." [See 
comment 3] This statement is false. So, for example, the draft report 
does not consider the NASA OIG's award-winning audit addressing NASA's 
plan for Space Shuttle transition as a product that considers economy, 
efficiency, and effectiveness. The OIG found, in conducting this audit, 
that NASA managers will be challenged to provide "efficient and 
effective" transition without a plan that addresses a series of 
elements, including work breakdown structures, cost estimating, metrics 
for measuring progress, milestone reviews, communication plans, asset-
end state requirements and security provisions for Shuttle property, a 
centralized data management system, and clearly defined 
responsibilities in a governance structure. Management agreed to revise 
its transition plan to address the OIG's concerns and did, in fact, 
revise its plan to address the concerns. The draft report classifies 
our resulting audit report, and many similar reports, as a "compliance 
audit." The notion that this audit, addressing in great detail the 
planning for evolution between two of the most expensive programs in 
NASA history, does not address economy, efficiency, and effectiveness 
is incomprehensible. 

Examples of NASA OIG audits that address economy, efficiency, and 
effectiveness, as well as systemic improvements in program management 
abound. The following examples are from the year 2007 alone and do not 
include the extensive auditing associated with NASA's financial 
statements and information technology (IT) security: [See comment 2] 

* Our audit of the system upgrade of NASA's billion dollar Integrated 
Enterprise Management System's Core Financial Module concluded that 
requirements were unsettled, the test plan of the upgrade was 
inadequate, and the implementation of the plan undisciplined; 
recommendations addressed the upgrade project and improved approaches 
to future IEMP projects. 

* Our audit of the Management of NASA's aircraft operations focused on 
"whether the size and structure or NASA's aircraft operations ... were 
adequate to support the Agency's requirements [and] to ... ensure the 
effectiveness of aircraft operations and safety programs" and whether 
"NASA provided adequate oversight." 

* Our audit of Space Shuttle Program accounting systems to track costs, 
undertaken in light of GAO's identification of the Agency's inability 
to provide its managers with timely data, found specific limitations in 
the program's tracking of costs and made recommendations to fix them. 

* The Hurricane Katrina audit focused on "determining whether NASA 
established the necessary internal controls to manage Hurricane Katrina 
recovery and reconstruction efforts, and evaluating NASA's estimation 
and execution of Hurricane Katrina funds and processes used to ensure 
that those funds were used for their intended purposes." 

* Our report entitled "Effective Inspection Program Key to Improving 
Laboratory Safety at Glenn Research Center" closely examined 
"effectiveness," especially as regards safety. Acting on our 
recommendations, Glenn enhanced the effectiveness, economy, and 
efficiency of the Laboratory Safety Inspection program by reducing the 
risk of injury to personnel and damage to assets and facilities. 

* The audit of NASA's A-76 Studies for Mission Management and Program 
Support Aircraft addressed economy and efficiency issues. As a direct 
result of our work, the Agency determined that it could reduce 
operations and maintenance costs for aircraft services by $1.25 million 
over 5 years by using a private sector provider in lieu of NASA-owned 
aircraft for mission-required flights at two Centers. 

* Our review of the Glenn's Research Center's Altitude Combustion Stand 
Facility, concluded that the decision to construct the facility was not 
an effective use of resources and recommended that NASA consider 
halting construction pending an assessment of whether the facility 
supports a valid mission need. 

* Our audit of NASA's management of its internal control process found 
that process to be inadequate and made several recommendations to 
improve the process; working closely with us, NASA revamped its 
processes to assure robust consideration and corrective measures to 
address internal control weaknesses and to provide greater support for 
the Administrator's annual statement of assurance. 

GAO's assertion that OIG audits do not make recommendations for 
systemic improvements in program management ignores documented evidence 
of the OIG's influence on change within the Agency. Our Strategic Plan 
Results Reports, which are on the NASA OIG Web site, track the number 
of implemented audit recommendations resulting in programmatic, policy, 
regulatory, and other changes in Agency programs and operations. For 
fiscal year (FY) 2006 and FY 2007, we reported 152 and 150 implemented 
recommendations that resulted in change (see Figure 2). Of these 
recommendations, 126 (82 percent) and 81 (54 percent) resulted in 
programmatic or policy changes in FY 2006 and FY 2007 respectively. We 
note that action in response to recommendations is an important element 
in GAO's consideration of the effectiveness of its own audit work in 
respect to the audited agency or functionality. NASA is implementing 
OIG recommendations because Agency leaders view them as helpful in 
making systemic improvements to NASA programs and operations. [See 
comment 4] 

GAO's view that NASA OIG recommendations addressing compliance do not 
contribute to program economy, efficiency, or effectiveness is 
troublesome in the context of the important safety and operational 
issues facing an agency where compliance with requirements and 
protocols can make the difference between mission success and failure. 
In these and other areas, compliance directly impacts program economy, 
efficiency, and effectiveness-to include safety. 

Figure 2: Implemented Recommendations: 

Office of Audits - Tangible Results: Recommendations Resulting in 
Change, FY 2006: 

Programmatic: 
Number of Recommendations: 107. 

Policy: 
Number of Recommendations: 19. 

Regulatory: 
Number of Recommendations: 1. 

Other: 
Number of Recommendations: 25. 

Office of Audits - Results: Recommendations Resulting in Change, FY 
2007: 

Programmatic: 
Number of Recommendations: 50. 

Policy: 
Number of Recommendations: 31. 

Regulatory: 
Number of Recommendations: 4. 

Other: 
Number of Recommendations: 65. 

[End of figure] 

GAO's view that NASA OIG recommendations addressing compliance do not 
contribute to program economy, efficiency, or effectiveness is 
troublesome in the context of the important safety and operational 
issues facing an agency where compliance with requirements and 
protocols can make the difference between mission success and failure. 
In these and other areas, compliance directly impacts program economy, 
efficiency, and effectiveness-to include safety. 

While safety had long been a priority in the NASA OIG Office of Audits 
prior to 2003, the tragic loss of the Space Shuttle Columbia and her 
crew on February 1, 2003, resulted in a substantial commitment of audit 
resources toward assuring NASA's compliance with its own requirements. 

The physical and organizational causes of the accident were found by 
the Columbia Accident Investigation Board (CAIB) to have been founded 
in NASA's failure to follow its own requirements. [See comment 5] The 
accident was caused by a breach on the leading edge of the left wing 
after a piece of foam separated from the external tank and struck that 
leading edge during ascent of the Shuttle. The CAIB found that "NASA 
has not followed its own rules and requirements on foam-shedding.... 
the debris impact requirements have not been met on any mission" (CAIB 
Final Report, Vol. 1, Finding 6.1-1, page 130). In its Organizational 
Cause Statement, the CAIB found "cultural traits and organizational 
practices detrimental to safety and reliability were allowed to 
develop, including: reliance on past success as a substitute for sound 
engineering practices (such as testing to understand why systems were 
not performing in accordance with requirement/specifications)..., and 
the evolution of an informal chain of command and decision-making 
processes that operated outside the organization's rules" (CAIB Final 
Report, Vol. 1, page 177). In the report, the Board recommends that 
NASA make both organizational and cultural changes. As the report 
states: 

Within NASA, the cultural impediments to safe and effective Shuttle 
operations are real and substantial, as documented extensively in this 
report. The Board's view is that cultural problems are unlikely to be 
corrected without top-level leadership. Such leadership will have to 
rid the system of practices and patterns that have been validated 
simply because they have been around so long. 

The Agency and the NASA OIG put a renewed focus on ensuring compliance 
based on the findings and recommendations of the CAIB and the Return to 
Flight Task Group. 

In Conference Report 108-199, the conferees expressed support and 
provided an extra $1 million for NASA OIG efforts to monitor Agency 
compliance with recommendations of the CAIB and to work closely with 
the Return to Flight Task Group. In response, the OIG, to include both 
the Office of Audits and the Office of Investigations, devoted 
considerable resources to assessing the Agency's progress toward the 
organizational and cultural changes recommended by the Board, and our 
products have contributed to improving the economy, efficiency, and 
effectiveness of the Shuttle Program, other Agency programs and 
projects, and to the overall operation of the Agency. Of course, none 
of this is viewed by the draft report as advancing the economy, 
efficiency, or effectiveness of Agency operations.[Footnote 23] 

GAO ignores the substantial external recognition of the OIG's 
accomplishments. Ironically, other GAO products and congressional 
committees have cited the OIG's accomplishments as noteworthy. In 
addition, over the last few years the PCIE recognized numerous OIG work 
products as meriting community-wide awards. 

* In March 2007, a GAO Director for Acquisition and Sourcing Management 
testified before the Subcommittee on Space, Aeronautics, and Related 
Sciences, Committee on Commerce, Science and Transportation, U.S. 
Senate, on issues surrounding the Space Shuttle transition program. In 
that testimony, he cited the findings and recommendations in our audit 
report on Space Shuttle transition as good examples of the improvements 
needed to enhance NASA's transition plan. 

* In March 2007 and again in November 2007, a GAO Director for 
Financial Management Assurance testified before the Subcommittee on 
Federal Financial Management, Government Information, Federal Services, 
and International Security, Committee on Homeland Security and 
Government Affairs, U.S. Senate, stating that the "NASA OIG found 
various weaknesses in NASA's acquisition and contracting management 
processes such as a lack of a reliable financial management system to 
track contract spending, inadequate control over government property 
held by contractors, and procurement abuses by NASA employees and 
contractors." 

* In House Report 108-792, accompanying HR 4818 (P.L. 108-447), the 
conferees directed the NASA Inspector General to issue a list of 
contracting trouble areas with recommendations to address these areas; 
after the OIG did so, in Senate Report 109-88, the Committee on 
Appropriations commended the NASA Inspector General's diligence in 
addressing issues of fraud and abuse and directed the OIG to continue 
its efforts to review NASA's contract procedures and conventions to 
determine if there are ways to reform the process and reduce the costs 
of NASA programs and activities. 

* In October 2006, OIG audit and investigative personnel received a 
PCIE award for excellence for interdisciplinary and intra-agency 
teamwork for their efforts in uncovering a complex fraud scheme at NASA 
and the Social Security Administration. 

* In October 2007, the Office of Audits received a PCIE award for 
excellence in recognition of the report, "NASA's Plan for Space Shuttle 
Transition Could Be Improved by Following Project Guidelines." 

* In October 2008, the Office of Audits will receive three PCIE awards 
for excellence for: 

- evaluation of NASA's management and execution of the National 
Aviation Operations Monitoring Service Project; 

- outstanding teamwork and exceptional performance in efforts to 
evaluate and make recommendations to improve the integrity of the 
Standing Review Board established to conduct independent assessments of 
the Orion Crew Exploration Vehicle Project and, 

- exceptional analysis and recommendations made to improve NASA's 
identification, management, and retention of official electronic mail. 

The above mentioned awards and recognition exclude the very substantial 
number of awards to the NASA OIG for the work of its special agents and 
staff of the Office of Investigations from the PCIE, United States 
Attorneys, and others for investigative excellence. Most of this 
recognition relates to results from criminal investigations advancing 
NASA's interests, but some recognition relates to administrative 
investigations. An example of an administrative investigation that has 
received recognition, including being quoted in congressional report 
language, is the "Investigative Summary Regarding Allegations that NASA 
Suppressed Climate Change and Denied Media Access to Dr. James E. 
Hansen, a NASA Scientist," issued June 2, 2008, which we issued in 
response to a congressional inquiry to the NASA OIG. The summary report 
reflects a comprehensive study, characteristic of NASA OIG work 
products, addressing important issues. This report is available at 
[hyperlink, http://oig.nasa.gov/investigations/OI_STI_Summary.pdf]. GAO 
apparently thought all of this irrelevant to its audit objective to 
identify "audit and investigative accomplishments reported by the NASA 
0IG." [See comment 5] 

Return on Investment: 

The draft report's erroneous conclusion that "NASA OIG monetary 
accomplishments are limited" distorts the OIG's work and its products 
and accomplishments. Further, the level of monetary accomplishments do 
not in any way establish whether NASA OIG's audits address economy, 
effectiveness, and efficiency. And, finally, the draft report fails to 
consider the strategic approach taken by the NASA OIG in audit 
planning, which, as it relates to return on investment, incorporates 
the audit work of the DCAA, the results of which are reported in the 
NASA OIG Semiannual Report and which work is ignored and not referenced 
in the draft report. [See comment 6] 

But the NASA OIG does not shy away from legitimate comparison; for 
example, when it comes to actual money returned to an Agency and 
applied to Agency contracts and operations, the NASA OIG stands out. 
The NASA OIG Office of Investigations alone was responsible for the 
actual recovery to NASA programs of $168,000,000 between FY 2002 and FY 
2007, reflecting an almost dollar-for-dollar actual return on 
investment to NASA from OIG work. These are real dollars rather than 
speculative "questioned costs" and "funds to be put to better use" that 
the draft report incorrectly cites as "return on investment." The draft 
report's reported "returns" are more speculative than real as they 
depend heavily on prospective Agency action to accept and implement 
recommendations and on having the consequences of implementation match 
auditors' projections.[Footnote 24] 

The draft report limits its comparison of NASA OIG's monetary 
accomplishments against those of other PCIE OIGs to 1 fiscal year. This 
resulted in a distortion of the NASA OIG's accomplishments and is 
particularly troublesome given that GAO deviated from the overall scope 
of its audit work for this analysis. For all of the other analyses 
throughout its draft report, GAO uses a scope of 2 years or 5 years to 
assess the activities of the NASA OIG. Had GAO used the same 2-year 
period (FY 2006 and FY 2007) that it did to assess audit coverage, it 
would have reached a different conclusion about the relative ranking of 
the NASA OIG in comparison to other offices. 

Specifically, the draft report's choice to use monetary recoveries for 
only FY 2007 as a comparative example of return on investment is a 
gross distortion of the overall monies recovered by NASA OIG over a 
sustained period. At the exit conference in September 2008, GAO staff 
described as "anomalous" the NASA OIG's 3-year, award-winning
investigation of Boeing (which included Office of Audits support). This 
investigation resulted in the largest recovery in history involving a 
defense contractor. We were particularly troubled by GAO's efforts to 
discount and minimize that statistical accomplishment for FY 2006 ($615 
million recovered, of which $ 106.7 million was directly returned to 
NASA). Had GAO stayed with their original 2-year scope period of FY 
2006 and FY 2007, the average recovery for those 2 years would have 
been $330,885,133 for just the Office of Investigations. Had GAO stayed 
with their 5-year period of study (FY 2003 - FY 2007), the average per-
year recoveries just for the Office of Investigations would have been 
$163,193,550. [See comment 7] 

Finally, we note that investigative and audit activity, by its nature, 
is often cyclical when it comes to monetary recoveries. So GAO's choice 
to select 1 particular year as representative of the accomplishments of 
the organization is misleading and an inappropriate methodology that 
leads to an inaccurate conclusion. GAO's affirmative departure from 
their 2- and 5-year assessment periods and its selection of FY 2007 as 
the representative year, seriously calls into question the methodology 
used by GAO and the conclusions reached in the study.[Footnote 25] 

Since the draft report links monetary results to audit coverage, its 
analysis is woefully incomplete as its fails to take into account the 
monetary accomplishments obtained as a result of audit and 
investigative activities related to NASA's contractors and grantees by 
the Defense Contract Audit Agency (DCAA), whose work is coordinated, 
planned, and conducted pursuant to a memorandum of understanding dated 
January 14, 1988, with the NASA OIG. DCAA conducts incurred costs, cost 
accounting standards, defective pricing claims, forward pricing 
proposals, and operations audits for NASA on a reimbursable basis. 
These audits result in significant monetary accomplishments involving 
hundreds of millions of dollars annually in questioned costs and funds 
to be put to better use. For example, for the semiannual reporting 
period that ended on March 30, 2008, DCAA issued 459 audit reports on 
contractors doing business with NASA that included $14,967,000 in 
questioned costs and $229,259,000 in recommendations for putting funds 
to better use. The extent of the work by DCAA is a factor that the OIG 
incorporated into audit planning since its inception and is a root 
cause of why contract audits have not been a focus of OIG audit 
planning and execution. 

Although we report the DCAA monetary benefits separately in our 
Semiannual Reports to Congress, other OIGs against whom the NASA OIG 
was compared in the draft report's monetary recovery chart, such as the 
Department of Agriculture and the Department of Homeland Security, 
include DCAA audit reports issued with questioned costs and 
recommendations that funds be put to better use in their overall 
monetary benefit statistics. Therefore, the DCAA reports increase the 
returns of agencies against whom the NASA OIG is compared but are not 
used to increase the returns of the NASA OIG. Table 2 shows the 
monetary accomplishments of the DCAA over the last 5 fiscal years that 
GAO did not take into account when concluding that "NASA OIG monetary 
accomplishments are limited." 

Table 2. DCAA Audit Results for FY 2003 through FY 2007: 

FY: 2003; 
Questioned Costs: $86,504,000; 
Recommendations that Funds Be Put to Better Use: $154,406,000. 

FY: 2004; 
Questioned Costs: $116,890,000; 
Recommendations that Funds Be Put to Better Use: $100,648,000. 

FY: 2005; 
Questioned Costs: $54,943,000; 
Recommendations that Funds Be Put to Better Use: $65,248,000. 

FY: 2006; 
Questioned Costs: $36,309,000; 
Recommendations that Funds Be Put to Better Use: $616,671,000. 

FY: 2007; 
Questioned Costs: $140,388,000; 
Recommendations that Funds Be Put to Better Use: $1,153,272,000. 

The GAO's use of "return on investment" as the sole comparative ranking 
category for an OIG in the context of its draft report is especially 
troubling. OIGs-especially ones that must be attuned to their Agencies' 
or Departments' safety and compliance programs due to the inherently 
dangerous missions undertaken-must be judged by their effectiveness in 
accomplishing all of the missions articulated in the Inspector General 
Act of 1978, to include its ability to promote effectiveness in the 
administration of NASA programs. To judge the NASA OIG on monetary 
recoveries (as is the case with this draft report), invites 
reprioritization away from whistleblower complaints and safety issues-
where the monetary return is potentially great but too speculative to 
report.[Footnote 26] The NASA OIG remains committed to all the missions 
articulated in the Inspector General Act. 

Audit Approaches and Strategic and Annual Planning: 

The draft report attributes its findings on audit scope to "audit plans 
without goals and objectives" and to NASA OIG management officials 
"often acting as a clearinghouse for allegations received by the OIG 
and provide auditors with assignments to address limited scope 
procurement issues and areas that involve violation of NASA 
regulations." The first concern is not supported by the facts, and the 
second reflects an obsolete view of the audit function, rejected by GAO 
itself, which is that audit staff should not be utilized to react to 
whistleblower or other complaints on critical issues of immediate 
concern such as safety issues or abuses of acquisition process during 
the pendency of a procurement because these "encroach on the ability of 
the OIG to assign staff needed for other audits." Interestingly, the 
draft report itself is not a product of strategic audit planning, but 
is in direct response to a congressional request. [See comment 8] 

In the context of the Space Shuttle Columbia accident, the notion at 
NASA of a "silent safety culture" where those with complaints were not 
able to have their concerns listened to, and the focus by Congress and 
others on whistleblower issues, with specific emphasis on NASA, the 
NASA OIG undertook a number of initiatives that are not recognized in 
the draft report. One of these was to consider every complaint to the 
NASA OIG at an executive level and to prioritize resources to address 
complaints that merited further action. The suggestion of the draft 
report that the NASA OIG is, in effect, too responsive to 
whistleblowers in serving as a "clearing house for allegations" because 
this "encroaches" on audit work is imprudent. 

The draft report's conclusion that "a reevaluation of audit planning 
and methods within NASA's OIG is needed ...," does not reflect an 
understanding of the OIG's comprehensive strategic and annual planning 
processes. This is not surprising given that the GAO audit team did not 
interview the OIG leadership about our strategic planning processes and 
efforts to improve audit planning. 

NASA OIG leadership devoted considerable effort to developing a 
strategic plan to provide a framework and guiding principles for 
carrying out the work of the office. We also developed a comprehensive 
set of data points that allow us to assess trends in the effectiveness 
of our work and the utilization of resources on an annual basis. 
[Footnote 27] The Inspector General and Deputy Inspector General 
discuss these results with the senior executive leaders of each OIG 
office at least once per year to identify areas for greater emphasis 
within their areas of responsibility. 

We are particularly surprised at the draft report's conclusion of 
weakness in the NASA OIG's audit coverage given the OIG's strict 
compliance with the requirement in the Inspector General Act to "give 
particular regard the activities of the Comptroller General of the 
United States with a view toward avoiding duplication and insuring 
coordination and cooperation." Each year for the past 6 years, the NASA 
OIG's audit plans were discussed with, commented on, and otherwise 
coordinated with GAO's Director for Acquisition and Sourcing Management 
and staff responsible for conducting NASA oversight. The notion of this 
draft report that the OIG's audit coverage needs material improvement 
is not in accord with any expressed view of GAO's NASA experts in the 
past 6 years. 

For example, consistent with our past practice, we met with GAO 
representatives on January 25, 2008, to discuss our 2008 Audit Plan in 
an effort to avoid duplication of effort, improve coordination, and 
increase oversight of NASA's major programs and operations. As recently 
as September 3, 2008, senior audit management met with GAO 
representatives to discuss ongoing 2008 assignments and planned GAO and 
OIG assignments for FY 2009. Our meetings with GAO resulted in 
suggestions, which we incorporated into our planned audit assignments 
and objectives as appropriate. Moreover, during our audit planning 
efforts, we also work with Office of Management and Budget staff, staff 
from relevant congressional committees, outside experts, and NASA 
senior management to identify areas of NASA's programs and operations 
that warrant audit oversight. 

Our 5-year Strategic Audit Plan, dated May 10, 2007, provides a basis 
for ensuring comprehensive coverage for Agency programs and projects in 
NASA's major missions including Science and Aeronautics and the 
transition from the Space Shuttle to the next generation space 
vehicles. The plan includes strategic questions, sub-questions, and 
specific audit objectives that provide comprehensive audit coverage for 
each topic area over a 5-year period. Some examples of the topics 
addressed by the plan follow: 

* Determine whether NASA's Mars Scout Missions are meeting robotics 
objectives for future human exploration. 

* Assessment of the cost and benefits of the Venture Innovation program 
recommended by 2007 decadal survey. 

* Assess how NASA is ensuring that the new space vehicles and support 
systems provide maximum utility. 

* Determine whether NASA's aeronautics research aligns with Government 
wide research objectives. 

* Determine whether the Agency can effectively link cost resources to 
performance for reimbursable projects to include collecting amounts 
owed by other agencies. 

* Determine the effect of enhanced use leasing on NASA's management of 
its facilities and assess its impact on base operations costs. 

* Assess the impact of NASA's education and technology development on 
its ability to hire and retain qualified personnel. 

Our FY 2007 Audit Plan included the following assignments: 

* Determine the effectiveness of NASA processes for evaluating programs 
or projects for cancellation, termination, or delays of Science 
Projects. 

* Review NASA's acquisition of the Orion Crew Capsule. 

* Determine whether NASA's aeronautics research budgets will create 
gaps in research or technology development for the overall Next 
Generation Air Transportation System. 

* Evaluate the effectiveness of NASA's process for reviewing mishaps 
and close calls as a means for improving safety and preventing future 
occurrences of similar events. 

* Determine whether NASA has developed and implemented training to 
ensure that all e-mail users are aware of and understand the process by 
which to identify, designate, and store official e-mails. 

* Determine whether NASA's internal control processes used to identify 
assessable units, conduct risk assessments and report deficiencies are 
adequate and supportable. 

* Determine whether award fee amounts for Jet Propulsion Laboratory 
were appropriate. 

Despite our disagreements with GAO on the state of our planning 
processes, we recognize that there is always room for improvement. 
However, we do not agree with GAO that the PCIE Audit Committee is the 
appropriate source to help us improve our audit planning processes. 
That Committee focuses on advancing auditing standards, financial 
audits, peer reviews, training, and high-risk areas, none of which are 
cited as issues by the draft report. Therefore, to address the intent 
of that GAO recommendation, we will continue to assure ourselves of a 
robust strategic planning process that stresses communication with 
stakeholders such as relevant congressional committees, Office of 
Management and Budget NASA advisory boards, and NASA officials. And, of 
course, we will continue to coordinate, as we have in the past, our 
audit planning with the GAO. We will also benchmark with other OIGs to 
assure ourselves that our audits addressing program effectiveness, 
economy, and efficiency continue to fulfill the OIG mission. 

NASA OIG Budgets and Staffing: 

The GAO draft report's conclusion that "the OIG's budgets and staffing 
levels have not been adversely affected, when compared to both the NASA 
budgets and staffing and to the budgets of other OIGs," ignores the 
real budget issues facing NASA OIG and fails to take into account that 
a major part of the increases in NASA OIG budgets is attributed to the 
reallocation from NASA's budget to the OIG's of funds to pay for the 
financial audit of the Agency.[Footnote 28] [See comment 9] 

The impact of reductions to proposed increases to NASA OIG's FY 2007 
and FY 2008 budgets has left us operating with an essentially flat 
budget for 3 fiscal years. Given that about 93 percent of our budget 
goes to salaries and the contract for auditing the Agency's financial 
statements, we have limited discretionary spending to absorb these 
reductions.[Footnote 29] As a result, at the end of FY 2008, we reduced 
our on-board staffing by 15, from 201 to 186, to pay cost-of-living 
allowances and maintain travel, training, and other expenditures 
necessary to accomplishing our mission. We anticipate further staff 
reductions as a result of a continuing resolution, in lieu of a FY 2009 
approved budget, and to be prepared for any budget eventuality when a 
FY 2009 budget is approved. The draft report would be correct if it had 
said that the staff losses resulting from the underfunding of the OIG 
is impacting the NASA OIG's productivity. 

The draft report superficially addresses the rate of attrition at the 
NASA OIG and suggests this attrition has negatively impacted the 
ability of the OIG to maintain "experienced audit personnel." It then 
notes "9 of the 10 highest level audit managers leaving the OIG in the 
past five year period." Omitted by the draft report is the fact that 
after a major reorganization in 2003, the senior audit staff who 
subsequently departed were no longer "highest level managers" and that 
many (4) of these individuals retired accepting "buy-outs," which OIG 
used to rebalance the skill mix in the Office of Audits. These managers 
were largely responsible for an audit organization in 2002 that had 
more than 500 outstanding, unimplemented recommendations to NASA, 
reflecting a dysfunction in accomplishing the OIG mission of promoting 
the economy and efficiency of NASA. 

Most important, NASA OIG has ensured that it is staffed with leaders 
and managers who have considerable experience within the accountability 
community. The Assistant Inspector General for Auditing has 29 years of 
Government auditing experience, and the six Program Directors and the 
Deputy Assistant Inspector General for Auditing have an average of 13 
years (median of 12 years) experience in the audit community. Their 
experience is broad and includes time with GAO, various PCIE OIGs, and 
public accounting firms. Two of the newest Directors are recently 
retired officers of the Navy and Marine Corps with extensive Inspector 
General experience, bringing more than 50 years of collective 
leadership and accountability experience to the DIG. The 13 Project 
Managers currently employed have been with NASA OIG an average of 12 
years (median of 17 years); 7 Managers have tenure of 16 years or more. 
Throughout the period covered, the leadership and experience base has 
continuously provided the guidance necessary to integrate new employees 
while enhancing the quality of the work. Recurrent recognition by the 
Agency and external peer groups attest to the exceptional value and 
quality of Office of Audits' reports. 

Also notable is the experience and stability of the NASA OIG career 
senior executive service (SES) staff. Since the current Inspector 
General was confirmed in April of 2002, two career SES staff have left 
NASA OIG, the last in June 2005. The current 5 members of the career 
SES have a total of more than 56 years of experience with the NASA OIG 
(and a total of more than 150 years of Government service). In addition 
to the experience of the Assistant Inspector General for Audits, the 
Deputy Inspector General has, aside from his experience in his current 
position, 28 years experience as a Government auditor, 24 of which were 
spent at the GAO, allowing him to provide invaluable leadership to NASA 
OIG in audit as well its other activities. 

The GAO draft report concludes that "the reasons for the relatively 
high rate and recent increases in employee turnover should be examined 
...," apparently assuming that attrition has not been closely examined 
by NASA OIG. Again, had the GAO staff interviewed senior OIG officials 
on steps taken to address this issue, the draft report could have 
presented a more accurate assessment of the issue and been able to 
reflect that attrition was 20 percent lower in FY 2008 than in FY 2007. 

The draft report compares the attrition rate between NASA OIG and the 
rest of NASA. However, there are significant differences between the 
largely scientific and engineering workforce of the Agency and the 
primarily auditor and investigator workforce of OIG that do not lend 
themselves to comparison. In fact, one area of high attrition at NASA 
OIG is technical staff hired and brought in to focus on critical 
technical issues of the Agency. While these professionals enjoy the 
opportunity to bring value through OIG work, they also often seek to 
practice the professions they were trained for with "hands on" 
employment not offered by OIG. 

A more appropriate comparison for the OIG workforce is the PCIE 
community. The range of attrition percentages for the Departments of 
Interior, Energy, Veterans Affairs, and Education OIGs was 10.0 to 12.3 
percent for FY 2007 and 10.0 to 14.5 percent for FY 2006. While still 
lower than the NASA OIG rates, these ranges are far different from 
NASA's 4 to 5 percent rates for the same periods. 

The draft report states that it did not review the reasons for OIG's 
employee turnover, suggesting a lack of depth to GAO's analysis and the 
accompanying observation and recommendation. Again, we note that GAO 
also did not discuss employee turnover with OIG leadership or seek any 
information on management actions to address the issue. OIG leadership 
is acutely aware of the extent of employee turnover as well as the 
causes and has undertaken a number of steps to address the issue. OIG 
leadership obtains feedback from employees in a variety of ways 
including two formal methods. The draft report did not examine this. 
OIG leadership has undertaken a number of initiatives to improve 
employee development, morale, and retention. The draft report does not 
consider these either. 

Conclusion: 

The recommendations made in GAO's draft report are not based on an 
objective or independent examination of the NASA OIG and, as a result, 
we do not concur in them. However, to the extent that the intent of the 
recommendations is to ensure audit resources are deployed in a manner 
that is most effective in carrying out the OIG mission and employee 
morale and development are accounted for so as to promote retention, we 
agree to continue our deliberate efforts to address these omnipresent 
issues. 

Specifically, we strategically deploy our audit resources to address 
the issues of greatest import to NASA and where we believe audit 
resources are likely to bring the greatest additional value to NASA 
programs and operations. The NASA OIG will continue to develop its 
strategic use of audit resources and, this year, will endeavor to 
benchmark its audit planning approach with others in the PCIE 
community. 

As regards employee retention issues, while the steps we have already 
taken are having an ameliorative impact, the Office will continue to 
provide positive support to the OIG's excellent staff by promoting a 
culture where employees personally develop in an atmosphere that values 
professionalism, integrity, and accountability. We particularly support 
our employees by recognizing the tremendous service they provide and 
the value of the excellent work they do. 

Although the recommendation concerning appearance of independence is 
not made to this Office, we reiterate that is it made without factual 
support. Moreover, it is made to the wrong authority. The 
recommendation is not addressed to the appropriate and legal authority 
with staff cognizance on taking action on matters involving Inspectors 
General, the Chair of the PCIE. 

Finally, we at the NASA OIG are particularly proud of the integrity of 
the work of the Office and the overall commitment of the staff to 
produce thorough work that is fair, objective, and independent. We 
understand the effort associated with producing such work, and we 
understand that meeting this standard is the hallmark of independent 
audits and investigations. 

Thank you for the opportunity to review and comment on this draft 
report. If you have any questions, please contact Renee Juhans at (202) 
358-1220. 

Sincerely, 

Signed by: 
Robert W. Cobb: 
Inspector General: 

Enclosure: 

Issued NASA OIG Reports: 

FY 2008: 
		
Report Number: IG-08-032; 
Title: NASA's Development of the Integrated Asset Management - PP&E 
Module to Provide Identified Benefits; 
Date: 09/25/08. 

Report Number: IG-08-031; 
Title: Federal Information Security Management Act: Fiscal Year 2008 
Report from the Office of Inspector General; 
Date: 09/18/08. 

Report Number: IG-08-030; 
Title: Cost Estimates Used to Support the FY 2008 Budget Request for 
NASA's Constellation Program Could Have Been Better Documented; 
Date: 09/18/08. 

Report Number: IG-08-029; 
Title: Final Memorandum on the Review of Rocket Segment Handling; 
Date: 09/05/08. 
	
Report Number: 	IG-08-028; 
Title: Final Memorandum Regarding Potential Overpayment to Contractor;	
Date: 08/28/08. 
	
Report Number: 	IG-08-027; 
Title: Glenn Research Center Needs to Better Define Roles and 
Responsibilities for Emergency Response; 
Date: 09/03/08. 
	
Report Number: 	IG-08-026; 
Title: OCR of PricewaterhouseCoopers, LLP, Office of Management and 
Budget Circular A-133 Audit of The University of Alabama in Huntsville 
for the FY Ended September 30, 2006; 
Date: 09/02/08. 

Report Number: 	IG-08-025; 
Title: Centers Security Program Needed Improvement; 
Date: 09/19/08. 

Report Number: 	ML-08-011; 
Title: Initial Review of Ciuni and Panichi, Inc., Audit Report on the 
Lorain County Joint Vocational School District for the Fiscal Year 
Ended June 30, 2007; 
Date: 08/07/08. 

Report Number: 	ML-08-010; 
Title: Initial Review of McGladrey & Pullen, LLP, Audit Report on the 
Friends of the North Carolina State Museum of Natural Sciences for the 
FY Ended June 30, 2007; 
Date: 08/05/08. 

Report Number: 	IG-08-024; 
Title: Audit of International Space Station Contracts Government Cost 
and Price Analyses; 
Date: 07/31/08. 
	
Report Number:	N/A; 
Title: Audit of NASA's Pre-Acquisition Planning for the Constellation 
Space Suit System; 
Date: 07/29/08. 

Report Number: IG-08-023; 
Title: QCR of Harris & Associates Audit of KSC Exchange Financial 
Statements for FY Ended September 30, 2007; 
Date: 07/28/08. 

Report Number: IG-08-022; 
Title: NASA's Compliance with Federal Export Control Laws and Risks	
Associated with the Illegal Transfer or Theft of Sensitive 
Technologies; 
Date: 07/22/08. 

Report Number: IG-08-021; 
Title: Final Memorandum on the Review of NASA's Plan to Build the A-3 
Facility for Rocket Propulsion Testing; 
Date: 07/08/08. 

Report Number: IG-08-020; 
Title: Quality Control Review of the House & Albright P.C. Audit of the 
Marshall Space Flight Center Exchange Financial Statements for Fiscal 
Year Ended September 30, 2007; 
Date: 06/13/08. 

Report Number: ML-08-009; 
Title: Initial Review of McGregor & Company, LLP Audit Report on 
Orangeburg Consolidated School District Four for the Fiscal Year Ended 
June 30, 2007; 
Date: 6/11/08. 

Report Number: ML-08-008; 
Title: Initial Review of CDPA, PC Audit Report on North Alabama Science	
Center, Inc. for the Fiscal Year Ended December 31, 2006; 
Date: 06/11/08. 

Report Number: IG-08-019; 
Title: Final Memorandum on the Audit of NASA's Management of the Test 
Operations Contract; 
Date: 05/09/08. 

Report Number: IG-08-018; 
Title: Final Memorandum on the Standing Review Board for the Orion Crew	
Exploration Vehicle Project; 
Date: 04/28/08. 

Report Number: IG-08-017; 
Title: Actions Needed to Ensure Scientific and Technical Information Is 
Adequately Reviewed at GSFC, JSC, LaRC, and MSFC Addendum: Memorandum 
with Management Comments in Response to the Final Report; 
Date: 06/02/08; Addendum: 07/16/08. 

Report Number: ML-08-007; 
Title: Initial Review of West & Company CPAs Audit Report on Clinton-
Essex-Warren-Washington Counties Board of Cooperative Education 
Services for the Fiscal Year Ended June 30, 2007; 
Date: 04/23/08. 

Report Number: ML-08-006; 
Title: Initial Review of Peter Schilz & Co, Audit Report on Earth and 
Space Research for the Fiscal Year Ended June 30, 2006; 
Date: 04/23/08. 

Report Number: ML-08-005; 
Title: Initial Review of Rogers & Company PLLC Audit Report on the KISS 
Institute for Practical Robotics Fiscal Year Ended August 31, 2006; 
Date: 04/18/08. 
	
Report Number: IG-08-016-R; 
Title: Final Memorandum on Audit of NASA's Global Precipitation 
Measurement Project; 
Date: 03/31/08. 

Report Number: IG-08-015; 
Title: OCR of Mayer, Hoffman, McCann, P.C., Office of Management and 
Budget Circular A-133 Audit of the Florida Atlantic University Research 
Corporation for FY Ended June 30, 2005; 
Date: 03/31/08. 

Report Number: IG-08-014; 
Title: Final Memorandum on the Review of the National Aviation 
Operations Monitoring Service; Addendum: Memorandum with Management 
Comments in Response to the Final Report; 
Date: 03/31/08; Addendum: 05/09/08. 

Report Number: IG-08-013; 
Title: Final Memorandum on Audit of NASA's Documentation of Readiness 
for Award Form Usage for Site-Specific Earmarks; 
Date: 03/24/08. 	 

Report Number: IG-08-012; 
Title: Final Memorandum on Glenn Research Center's Land-based Mobile 
Communication System; 
Date: 03/10/08. 

Report Number: ML-08-004; 
Title: Final Memorandum on Initial Review of Keegan, Linscott and 
Kenon, P.C. Audit Report on the Planetary Science Institute for Fiscal 
Year Ended January 31, 2006; 
Date: 03/04/08. 
	
Report Number: IG-08-011; 
Title: Status of FY 2006 Management Letter Findings and 
Recommendations, in connection with the audit of NASA's FY 2007 
Financial Statements; 
Date: 02/29/08. 

Report Number: IG-08-010; 
Title: Final Memorandum on Audit of Retention of NASA's Official 
Electronic Mail; 
Date: 02/28/08. 

Report Number: ML-08-003; 
Title: Final Memorandum on Initial Review of Derrick, Stubbs & Stith, 
LLP Audit Report on the South Carolina Association of School 
Administrators for Fiscal Year Ended June 30, 2006; 
Date: 02/27/08 

Report Number: IG-08-009; 
Title: Review of a Shuttle Training Aircraft Mishap on October 19, 
2007; 
Date: 02/15/08. 
		
Report Number: ML-08-002; 
Title: Initial Review of Putnam, Blackwell and Company, P.C. Audit 
Report on the Alabama Space Science Exhibit Commission for FY Ended 
September 24, 2006; 
Date: 02/15/08. 
	
Report Number: IG-08-008; 
Title: Final Memorandum on Management of the Wallops Exchange and 
Morale Association; 
Date: 02/21/08. 
	
Report Number: IG-08-007; 
Title: QCR of Faw Casson Company LLP's Audit of Wallop Exchange and 
Moral Association Financial Statements for FY Ended 09-30-2006; 
Date: 02/15/08. 

Report Number: IG-08-006; 
Title: Final Memorandum on NASA's Management of the Flight Project for 
the Geostationary Operational Environmental Satellite Series-R Program; 
12/19/07. 

Report Number: IG-08-005; 
Title: Final Memorandum on NASA's Accounting for Capitalized Real 
Property Designated as Inactive; 
Date: 12/11/07. 

Report Number: IG-08-004; 
Title: Final Memorandum on NASA's Accounting for Real Property Leased 
to Other Entities; 
Date: 12/11/07. 

Report Number: IG-08-003; 
Title: Review of NASA's Budget Year 2008 Capital Asset Plan and 
Business Case; 
Date: 1/30/08. 

Report Number: IG-08-002; 
Title: Information Technology Findings and Recommendations; 
Date: 11/26/07. 

Report Number: IG-08-001; 
Title: Audit of the National Aeronautics and Space Administration's 
Fiscal Year 2007 Financial Statements; 
Date: 11/15/07. 

Report Number: ML-08-001; 
Title: Initial Review of Gelman, Rosenberg, & Freedman Audit Report on 
the Foundation for Earth Science Information Partners for FY Ended 09-
30-2005; 
Date: 10/10/07. 

FY 2007: 

Report Number: IG-07-035; 
Title: Final Audit Report on Assessment of NASA's Certification and 
Accreditation process; 
Date: 09/26/07. 

Report Number: IG-07-034; 
Title: Federal Information Security Management Act Fiscal Year 2007 
Report from the Office of Inspector General; 
Date: 09/28/07. 

Report Number: IG-07-033; 
Title: Final Memorandum on the Audit of Requirements for Testing 
Facilities at Plum Brook Station; 
Date: 09/28/07. 

Report Number: IG-07-032; 
Title: Effective Inspection Program Key to Improving Laboratory Safety 
at Glenn Research Center; 
Date: 09/24/07. 

Report Number: IG-07-031; 
Title: Final Report System Integration Testing of the Systems 
Applications and Products Version Update Project Needed Improvement; 
Addendum: Memorandum with Management Comments in Response to the Final 
Report;	
Date: 09/28/07; Addendum: 01/14/08. 

Report Number: IG-07-030; 
Title: Final Report of Audit of Marshall Space Flight Center's 
Administration of Government Property Held Off-Site by Contractors; 
Addendum: Memorandum with Management Comments in Response to the Final 
Report; 
Date: 09/28/07; Addendum: 12/06/07. 

Report Number: IG-07-029-R; 
Title: Final Memorandum on Audit of NASA Education and Training Grants 
(Redacted); 
Date: 09/18/07. 

Report Number: IG-07-28; 	
Title: Audit of NASA's Management and Funding of Fiscal Year 2006	
Congressional Earmarks; 
Date: 08/09/07. 

Report Number: IG-07-027; 
Title: Final Memorandum on Observations on the Review and Approval of 
Glenn 109/28/07 Research Center's Relocation of the Cryogenic 
Components Laboratory Facility; Addendum: Memorandum with Management 
Comments in Response to the Final Report; 
Date: 09/28/07; Addendum: 11/30/07. 

Report Number: IG-07-026; 
Title: Final Memorandum on the Audit of Space Shuttle Program Costs; 
Date: 09/19/07. 

Report Number: IG-07-025; 
Title: Final Memorandum on Audit of NASA's Compliance with Federal 
Internal Control Reporting_Requirements; 
Date: 08/14/07. 

Report Number: IG-07-024; 
Title: Final Memorandum on NASA's Implementation of the Privacy 
Provisions of the Electronic Government Act; 
Date: 08/28/07. 

Report Number: IG-07-023; 
Title: NASA's Reporting of Performance Measure Data for the Federal 
Information Security Management Act (FISMA) Needed Improvement at Four 
Centers and NASA Headquarters; 
Date: 09/06/07. 

Report Number: IG-07-022; 	
Title: Internal Controls over NASA's Transit Subsidy Program at 
Headquarters and Goddard Space Flight Center Needed Improvement; 
Date: 07/20/07. 

Report Number: IG-07-021; 	
Title: Quality Control Review of [a Company's] Audit of Goddard 
Employees' Welfare Association Financial Statements for Fiscal Year 
Ended September 30, 2006; 
Date: 08/28/07. 
	
Report Number: ML-07-010; 
Title: Letter to Congress on NASA's Export Controls; 
Date: 07/20/07. 

Report Number: IG-07-020; 	
Title: Quality Control Review of Macias Gini & O'Connell LLP Audits of 
Ames Exchange Financial Statements for FYs Ended September 30, 2005, 
and September 30, 2006; 
Date: 07/06/07. 

Report Number: IG-07-019; 	
Title: NASA Could Improve Controls and Lower the Costs of the 
Intergovernmental Personnel Act Mobility Program; 
Date: 07/18/07. 

Report Number: IG-07-018; 
Title: Final Memorandum on the Audit of Federal Emergency Management; 
Agency Mission Assignments for Hurricane Katrina Disaster Relief; 
Date: 07/05/07. 

Report Number: IG-07-017; 
Title: Final Memorandum on Audit of NASA's Workers' Compensation 
Program for the Office of Inspector General; 
Date: 06/19/07. 

Report Number: Q-06-005-00; 
Title: Final Memorandum on Post-Closure Follow-Up Review for Audit 
Recommendations Closed During FYs 2001-2005; 
Date: 05/29/07. 

Report Number: IG-07-016; 	
Title: Final Memorandum on the Audit of the Management of Aircraft 
Operations; 
Date: 05/17/07. 

Report Number: IG-07-015; 	
Title: NASA Mission Management and Program Support Aircraft A-76 
Studies; 
Date: 05/17/07. 

Report Number: IG-07-014; 	
Title: Controls over the Detection, Response, and Reporting of Network 
Security Incidents Needed Improvement at the Four NASA Centers 
Reviewed; 
Date: 06/19/07. 

Report Number: IG-07-013; 
Title: Final Memorandum on Marshall Space Flight Center's Approach to 
Establishing Product Data Management and Mechanical Computer-Aided
Design Software Tools as Standard Center-Wide; Addendum: Memorandum 
with Management Comments in Response to the Final Report; 
Date: 07/24/07; Addendum: 02/19/08. 

Report Number: ML-07-006: 
Title: Final Memorandum Addressing Unnecessary Subcontract Costs and 
Other Deficiencies in GSFC's Multiple Award Schedule Procurement 
Process; Addendum: Memorandum with Management Comments in Response to 
the Final; 
Date: 03/30/07; Addendum: 09/05/07. 

Report Number: IG-07-012; 
Title: Internal Controls to Detect and Prevent Unauthorized and 
Potentially; Fraudulent Purchase Card Transactions at Four NASA Centers 
Needed Improvement; 
Date: 03/29/07. 	 

Report Number: IG-07-010; 
Title: QCR of Argy, Wiltse & Robinson, P.C., OMB A-133 Audits of the 
National Institute of Aerospace Associates for Fiscal Year Ended 
September 30, 2004; 
Date: 12/06/06. 
	
Report Number: ML-07-005; 
Title: Final Memorandum on Follow-Up Review of the Management of the 
Headquarters Exchange; Addendum: Memorandum with Management Comments; 	
Date: 03/13/07; Addendum: 06/22/07. 

Report Number: IG-07-005; 
Title: NASA's Plan for Space Shuttle Transition Could Be Improved by 
Following Project Management Guidelines; Addendum: Memorandum with 
Management Comments in Response to the Final Report; 
Date: 1/29/07; Addendum: 5/10/07. 

Report Number: IG-07-004; 
Title: Audit of the National Aeronautics and Space Administration's 
Fiscal Year 2006 Financial Statements; 
Date: 11/09/06. 
	
Report Number: ML-07-004; 
Title: Final Memorandum on the Review of T-0 Access Stair Trucks 
Located at (Dresden Flight Research Center; 
Date: 01/09/07. 
	
Report Number: IG-07-003; 
Title: Governance of the SAP Version Update Project Needs Improvement; 
Date: 11/21/06. 
	
Report Number: ML-07-003; Final Report of Desk Review of Langan & 
Title: Associates OMB Circular No. A-1133 Audits of the Dwight D. 
Eisenhower World Affairs Institute; 
Date: 12/18/06. 

Report Number: IG-07-002; 
Title: NASA Implemented the Project Management Information Improvement	
(PMI2) Initiative but Crosswalk and Training Need to be Completed; 
Date: 11/20/06. 
	
Report Number: IG-07-001; 
Title: OCR of KPMG LLP and the DCAA OMB Circular A-133 Audits of the 
Smithsonian Institution for Fiscal Year Ended September 30, 2004; 
Date: 01/17/07. 
	
Report Number: ML-07-001; 
Title: Final Memorandum on Observations on the Review and Approval of 
Glenn Research Center's Relocation of the Altitude Combustion Stand 
Facility; Addendum: Memorandum with Management Comments; 
Date: 11/02/06; Addendum: 02/20/07. 

FY 2006: 
		
Report Number: ML-06-013; 
Title: NASA's Compliance with Office of Management and Budget 
Memorandum M-06-16, "Protection of Sensitive Agency Information"; 
Date: 09/22/06. 

Report Number: IG-06-021; 
Title: Federal Information Security Management Act: Fiscal Year 2006 
Report from the Office of Inspector General Report; 
Date: 09/28/06. 

Report Number: ML-06-011; 
Title: Audit of NASA's Use of Defense Contract Audit Agency (DCAA) 
Services in Managing NASA Contracts; 
Date: 09/25/06. 

Report Number: IG-06-020; 
Title: NASA Can Improve Its Mitigation of Risks Associated with 
International Agreements with Japan for Science Projects; 
Date: 09/12/06. 

Report Number: ML-06-009; 
Title: Final Memorandum on the Audit of the Management of Hurricane 
Katrina	Disaster Relief Efforts; 
Date: 08/29/06. 

Report Number: IG-06-019; 
Title: Quality Control Review of Goodman & Company's Audit of Langley 
Exchange Financial Statements for Fiscal Year Ended September 30, 2005; 
Date: 08/29/06. 

Report Number: IG-06-018; 
Title: Final Memorandum on the Audit of the OIG Office of 
Investigations Confidential Fund for Fiscal Year 2005; 
Date: 09/05/06. 

Report Number: IG-06-017; 
Title: NASA's Information Technology Capital Planning and Investment 
Control; 
Date: 09/14/06. 

Report Number: IG-06-016; 
Title: NASA's Implementation of the National Incident Management 
System;	
Date: 08/29/06. 

Report Number: IG-06-015; 
Title: Quality Control Review Report on Headquarters Exchange Financial 
Statements for Fiscal Years Ended in September 30, 2003, and September 
30, 2004; 
Date: 09/22/06. 

Report Number: IG-06-014; 
Title: Space Shuttle Program Problem Reporting and Corrective Action 
Process at Kennedy Space Center Needs Improvement; Addendum: Memorandum 
with Management Comments in Response to the Final; 
Date: 08/30/06; Addendum: 11/21/06. 

Report Number: IG-06-013; 
Title: Subcontract Management by United Space Alliance under the Space 
Flight Operations Contract; Addendum: Memorandum with Management 
Comments in Response to the Final; 
Date: 08/28/06; Addendum: 10/11/06. 

Report Number: N/A; 
Title: Final Memorandum on NASA's Acquisition Approach Regarding 
Requirements for Certain Engineering Software Tools to Support NASA 
Programs; Addendum: Memorandum with Management Comments in Response to 
the Final; 
Date: 08/23/06; Addendum: 09/21/06. 

Report Number: N/A; 
Title: Final Memorandum NASA Educational and Training Grants; 
Date: 08/10/06. 

Report Number: N/A; 
Title: Final Memorandum on Improvements Needed in NASA's Evaluation and 
Selection Processes under NASA Research Announcements; 
Date: 07/11/06. 

Report Number: N/A; 
Review of NASA's Wind Tunnel User Fees; 
06/01/06. 

Report Number: N/A; 
Final Memorandum on the Review of Space Shuttle Cold Plates; 
04/28/06; 

Report Number: IG-06-011; 
Title: Final Memorandum on the Audit of NASA's Response to Columbia 
Accident Investigation Board Recommendations Concerning MMT Training; 
Date: 05/09/06. 

Report Number: IG-06-010-R; 
Title: NASA Should Improve Employee Awareness of Requirements for 
Identifying and Handling Sensitive But Unclassified Information 
(Redacted); 
Date: 05/09/06. 

Report Number: IG-06-009; 
Title: Antideficiency Act Violations at the National Aeronautics and 
Space Administration; 
Date: 04/10/06. 

Report Number: 0IG-06-008; 
Title: Security of [a NASA Center's Computer] Network; 
Date: 06/02/06. 

Report Number: IG-06-007; 
Title: NASA's Implementation of Patch Management Software Is 
Incomplete; 
Date: 03/17/06. 

Report Number: IG-06-006; 
Title: Final Memorandum on NASA's Policies for Protecting Technology 
Exported to Foreign Entities; 
Date: 03/14/06. 

Report Number: N/A; 
Title: Letter to Congress on NASA's Export Controls; 
Date: 02/23/06. 

Report Number: IG-06-005; 
Title: Final Quality Control Review of PricewaterhouseCoopers LLP and 
the Defense Contract Audit Agency Office of Management and Budget 
Circular A-133; 
Date: 02/23/06. 

Report Number: IG-06-004; 
Title: Information Assurance Controls on [a Center's Networked] Systems 
Need Strengthening; 
Date: 03/21/06. 

IG-06-003R; 
Integrated Enterprise Management Program Contract Oversight Needs 
Improvement; 
02/06/06. 

N/A; 
Review of NASA's Classroom of the Future Cooperative Agreement with WJ 
University; 
01/30/06. 

N/A; 
Final Memorandum on the Procurement of Organizational Development and 
Training Services at Goddard Space Flight Center; 
01/23/06. 

N/A; 
Review of the Use of Voice Over Internet Protocol at NASA; 
01/19/06. 

N/A; Early Planning for the Integrated Enterprise Management Program's 
Contract Management Module Requirements and Life-Cycle Operations; 
01/17/06; 

N/A; Letter to Congress on Contract Reform; 
12/20/05. 

N/A; Final Memorandum on the Review of Unallowable Costs Charged to 
NASA/Marshall Space Flight; 
12/20/05. 

N/A; 
NASA Lacks Procedures to Define, Recognize and Protect Meta-Data; 
12/19/06. 

IG-06-002; 
Quality Control Review of R.J. Ricciardi, CPA, OMB Circular A-133 Audit	
of the Molecular Research Institute for FY Ended June 30, 2005; 
11/21/05; 
	
IG-06-001; 
QCR of Deloitte & Touche, LLP, OMB Circular A-133 Audit of San Jose 
State University Foundation for Fiscal Year Ended June 30, 2004; 
11/18/05. 

The following are GAO's comments on the NASA Inspector General's letter 
dated October 14, 2008. 

GAO Comments: 

Comment 1. 

The meetings referred to by the IG do not result in an endorsement of 
the OIG's work plans but rather are discussions between the NASA OIG 
and GAO for purposes of coordination and cooperation. Our review of the 
NASA OIG's strategic and annual plans on this audit was in response to 
our findings regarding the need for additional oversight of NASA's 
economy and efficiency and measurable potential cost savings from OIG 
audits. We are encouraged by the NASA IG's intent to benchmark with the 
PCIE community to provide assurance that audits addressing program 
effectiveness, economy, and efficiency fulfill the OIG mission. 
Therefore, we have modified our report recommendation to have the OIG 
work closely with an objective outside party to include audits of 
NASA's economy and efficiency with potential monetary savings in 
strategic and annual plans. 

Comment 2. 

The IG's comments do not cite any specific recommendations that are 
targeted toward economy and efficiency with potential cost savings. In 
addition, we reviewed all the recommendations in the OIG's audit 
products issued during fiscal years 2006 and 2007 and found only one 
report with these types of recommendations. By providing the titles of 
OIG reports, the IG provides little if any additional information on 
whether economy and efficiency issues were addressed by the outcomes of 
the reports. Therefore, our report continues to focus on the OIG's lack 
of economy and efficiency audit results with measurable cost savings as 
well as the lack of a strategy for dealing with these types of 
objectives in the annual and strategic audit plans. 

Comment 3. 

The OIG's audit of NASA's plan for Space Shuttle transition concluded 
that NASA's transition plan did not comprehensively address all 
elements critical for a successful transition and recommended that the 
planning be enhanced and that the transition be recognized as an agency 
management challenge. Neither this report nor any other OIG report 
issued during fiscal years 2006 and 2007 had any specific 
recommendations to improve NASA's economy and efficiency with 
measurable cost savings related to this important and costly transition 
program. 

Comment 4. 

We did not include the percent of OIG recommendations implemented as 
part of our review. We evaluated the substance of the recommendations 
to determine whether they identified opportunities for improvements to 
NASA's economy and efficiency with measurable potential cost savings. 

Comment 5. 

This investigation was a coordinated effort by several offices 
including those from NASA, components of the Department of Defense, and 
academia, but was not performed by the NASA OIG. Our scope was to 
review the results of audits and investigations by the OIG and thus,we 
did not include it in our review. 

The IG also provided the title of an investigative report regarding 
allegations that NASA had suppressed climate change information as an 
example of an accomplishment. This information does not deal with the 
economy and efficiency of NASA's programs and operations and monetary 
accomplishments which is a focus of our findings and recommendations. 

Comment 6. 

We did not consider DCAA audits to be related to the NASA OIG's 
accomplishments since they are routinely provided as a service to 
NASA's contracting officers. The NASA IG points out that in our 
comparison of monetary accomplishments and the return on investment by 
30 IG offices where the IGs are appointed by the President and 
confirmed by the Senate, our presentation of monetary accomplishments 
for the Department of Agriculture OIG and the Department of Homeland 
Security OIG includes the accomplishments of DCAA. Accordingly, we have 
removed the DCAA amounts from the accomplishments reported for these 
OIGs and adjusted the total monetary accomplishments for all 30 OIGs 
for fiscal year 2007 from a $9.52 dollar return on all their budgets to 
a $9.49 return. This did not affect the status of the NASA OIG's 
monetary accomplishments, which continues to be a $0.36 dollar return 
on the OIG's budgetary resources and continues to rank 27th out of 28 
OIGs reporting such accomplishments for fiscal year 2007. 

Comment 7. 

We selected fiscal year 2007 for comparison because at the time of our 
review it was the most recent full year with comparative data among the 
OIGs, and it was the year with the largest reported dollar savings 
resulting from NASA OIG's audits. However, in response to the NASA IG's 
suggestion that we provide data on accomplishments over a 5-year 
period, we added table 4 to our report. It shows the NASA OIG's 
monetary accomplishments from fiscal years 2003 through 2007 and 
further supports our conclusion that the OIG provides limited monetary 
accomplishments from audits. 

Comment 8. 

We agree that the NASA IG should be committed to the full range of 
activities and objectives stated in the IG Act. Those objectives and 
activities include audits that result in recommendations to improve the 
economy and efficiency of NASA's programs and operations with 
measurable cost savings, as well as receiving whistleblower complaints. 

Comment 9. 

[End of section] 

Our review compared the NASA OIG's total budgetary resources to NASA's 
total budgetary resources for fiscal years 2003 through 2007 to 
determine whether the OIG's budgets were increasing or decreasing 
relative to NASA's overall budgets. As stated in our report, the OIG's 
budget as a percent of NASA's budget increased from 0.15 to 0.17 
percent during this period. The NASA IG states that $3.5 million in 
funding was shifted from NASA to the OIG to pay for financial audits 
but cites this as having no actual impact on funds available for OIG 
operations. We disagree that these funds do not contribute to the 
resources available for OIG operations. The NASA IG is subject to the 
Chief Financial Officers Act of 1990[Footnote 15] which specifies that 
the IG is responsible for the financial statement audits of the agency. 
The increase of $3.5 million provides resources in the OIG's budget for 
these mandated audits. As stated in our report, over the 5-year period 
we reviewed the OIG's budgets kept pace with or were slightly better 
than NASA's budgets as a whole. In addition, when compared to other 
OIGs for fiscal year 2007, the NASA OIG ranked 11th out of 30 agencies 
in the ratio of the OIGs' budgets to their agencies' budgets. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Jeanette M. Franzel, (202) 512-9471 or franzelj@gao.gov: 

Acknowledgments: 

In addition to the contact named above, Jackson Hufnagle, Assistant 
Director; Francis Dymond; Jacquelyn Hamilton; Jason Kirwan; and 
Clarence Whitt made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 95-452, 92 Stat. 1101 (Oct. 12, 1978) (codified, as 
amended, at 5 U.S.C. App.) 

[2] PCIE is composed principally of the presidentially appointed and 
Senate-confirmed IGs, and ECIE is composed principally of IGs appointed 
by the heads of designated federal entities defined by the IG Act. Both 
were established by executive order to coordinate and enhance the work 
of the IGs and are chaired by the Deputy Director for Management, 
Office of Management and Budget. In addition, Executive Order 12993, 
Administrative Allegations Against Inspectors General, provides an 
independent investigative mechanism to ensure that allegations against 
IGs and senior IG staff are expeditiously investigated and resolved. 
The executive order provides the authority for the Integrity Committee, 
as part of PCIE and ECIE, to address these allegations. The Integrity 
Committee is chaired by a designee of the Federal Bureau of 
Investigation. Other government members include the Special Counsel of 
the Office of Special Counsel, the Director of the Office of Government 
Ethics, and at least three IGs selected from PCIE and ECIE. 

On October 14, 2008, Public Law 110-409, the Inspector General Reform 
Act of 2008, was enacted. Among other provisions, it authorizes a new 
statutory Council of the Inspectors General on Integrity and 
Efficiency, which is to have its own Integrity Committee with powers 
similar to the PCIE and ECIE Integrity Committee, and disestablishes 
the PCIE and ECIE, effective on the earlier of the creation of the new 
Council, or 180 days after the passage of the Act. 

[3] GAO, Government Auditing Standards, July 2007 Revision, [hyperlink, 
http://www.gao.gov/products/GAO-07-731G] (Washington, D.C.: July 2007). 

[4] Amounts presented as budgetary resources in this report for any 
given fiscal year may not equal the amount made available as new 
appropriations for that year because the OMB data include other 
available amounts. 

[5] Pub. L. No. 109-155, 119 Stat. 2895 (Dec. 30, 2005). 

[6] The NASA centers are Ames Research Center, Dryden Flight Research 
Center, Glenn Research Center, Goddard Space Flight Center, Johnson 
Space Center, Kennedy Space Center, Langley Research Center, Marshall 
Space Flight Center, and Stennis Space Center. 

[7] Pub. L. No. 110-409, 122 Stat. 4302 (Oct. 14, 2008). 

[8] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-07-310] (Washington, D.C.: January 
2007). 

[9] Pub. L. No. 106-531, 114 Stat. 2537 (Nov. 22, 2000). 

[10] A financial audit provides an independent assessment of and 
reasonable assurance about whether an entity's reported financial 
condition, results, and use of resources are presented fairly in 
accordance with recognized criteria. A performance audit is an 
engagement that provides assurance or conclusions based on an 
evaluation of sufficient appropriate evidence against stated criteria, 
such as specific requirements, measures, or defined business processes. 

[11] Federal awarding agencies such as NASA have responsibilities under 
OMB Circular No. A-133, Audits of States, Local Governments, and Non- 
profit Organizations, to conduct these quality control reviews. 

[12] Pub. L. No. 107-296, § 812, 116 Stat. 2135, 2223 (Nov. 25, 2002). 

[13] The Department of Justice OIG issued its peer review report of the 
NASA OIG on January 8, 2004, and the General Services Administration 
OIG completed the subsequent peer review and reported on March 13, 
2007. 

[14] Department of Transportation OIG conducted the peer review of NASA 
OIG's investigative practice and issued its report on July 8, 2005. 

[15] Pub. L. No. 101-576, 104 Stat. 2838 (Nov. 15, 1990). 

[16] The draft report responds to the joint request of three 
Congressmen. The request asks GAO to "make recommendations as needed to 
achieve enhanced effectiveness and independence of the NASA 0IG." 

[17] The draft report refers to the three peer reviews of the NASA OIG 
conducted during the 5-year period 2003 through 2007 (a fourth review, 
of the Office of Investigations, was completed in 2008). In the two 
reviews addressing the Office of Audits, and the one review addressing 
the Office of Investigations, the peers conducting the reviews 
concluded that the NASA OIG's systems of quality control for the audit
function provided reasonable assurance of material compliance with 
professional auditing standards. The single review of the Office of 
Investigations completed in 2007 found that Office to be in full 
compliance with applicable quality standards. With respect to both 
audit and investigative activities, none of these four reviews suggest 
any impediment or noncompliance with respect to independence or 
appearance of lack of independence at the NASA OIG. It was only the 
congressionally requested, non-routine, reviews-this one by the GAO and 
the one conducted by the IC and HUD OIG-that raised questions about 
appearances. And, despite the wide scope of review of the GAO audit, it 
identified no new independence issue, apparently not finding any. 

[18] GAO's draft report cites the findings of the IC by stating that 
the IC concluded that "the NASA IG's actions, including his 
relationship with the former NASA Administrator, created an appearance 
of a lack of independence." There is no reference to any "relationship" 
with NASA's then-Administrator (who resigned in February 2005) in the 
paragraph reflecting the IC's conclusion, and there is no finding by 
the IC of any continuing appearance problem. After an investigation of 
more than a year, with $620,000 paid by the NASA OIG to the HUD OIG for 
the investigation (the real cost was actually much greater), the IC 
could cite to no instance of a lack of independence. It only cited two 
instances from years earlier, in which persons not in a position to 
know the relevant facts thought there was an appearance of lack of 
independence; in those two instances, the Inspector General's actions 
were appropriate and the IC does not conclude otherwise. The NASA 
Inspector General's testimony on June 7, 2007, at the Joint Hearing 
Between the Senate Commerce Committee's Subcommittee on Space, 
Aeronautics, and Related Sciences and the House Science and Technology 
Committee's Subcommittee on Investigations and Oversight (available at 
[hyperlink, http://oig.nasa.gov/congressional/Statement060707.pdf] and 
exhibits, thereto, available at hyperlink, 
http://oig.nasa.gov/congressional/Exhibits060707.pdf]; see, 
particularly, Exhibit B thereof) demonstrated the totally 
unsubstantiated nature of the conclusion of the IC as regards 
"appearances." The testimony, given long after the resolution of the IC 
matter, was the NASA IG's first opportunity to rebut the IC's findings. 

[19] The draft report states "the NASA Administrator is not in the most 
appropriate position to determine the actions necessary to address the 
IG's independence, especially those related to the actions of the 
Inspector General and the Administrator's office." The NASA 
Administrator was not the determining official. The determining 
official, as reflected by the correspondence and the EO, was the PCIE 
Chair. GAO stated at the exit conference with the NASA OIG, September 
12, 2008, that the PCIE Chair was not contacted in connection with the 
draft report. EO 12993 clearly provides a role for an Agency head in 
consideration of IC matters: "Where the Chairperson of the PCIE/ECIE 
determines that dissemination of the report to the head of the 
subject's employing agency or entity is appropriate," the Chair of the 
PCIE can disseminate the report to that person for views or action. The 
views of the Administrator under whose "general supervision" the 
Inspector General carries out his role under the Inspector General Act 
of 1978 were perfectly appropriate for the PCIE Chair to take into 
consideration in his resolution of the matter. 

[20] The letter from the PCIE Chair on April 18, 2007, was the document 
actually reflecting the final disposition of the matter. While the GAO 
conveyed at the exit conference that they had been provided full access 
to the IC files on this matter, the NASA OIG has never seen this 
letter; it is only known to the NASA OIG by virtue of the April 26 
notice of the closing of the matter pursuant to section (e) of EO 
12993, which states: "The Chairperson of the PCIE/ECIE shall report to 
the Integrity Committee the final disposition of the matter, including 
what action, if any, has been or is to be taken by the head of the 
subject's employing agency or entity. When the Integrity Committee 
receives notice of the final disposition, it shall advise the subject 
of the investigation that the matter referred to the Integrity 
Committee for review has been closed." 

[21] The draft report completely fails in meeting one of the audit's 
stated objectives-to address the "audit and investigative 
accomplishments reported by the NASA 0IG." 

[22] For example, on October 1, 2008, the Chairman of the House Science 
and Technology Subcommittee on Investigations and Oversight relied 
heavily on the body of the NASA OIG's extensive IT security work and 
its identification of systemic issues to query NASA on IT security 
matters. 

[23] Shuttle safety-related reports include the 2005 Summary of the 
Office of Inspector General's Reviews on Aspects of NASA's Response to 
the Columbia Accident Investigation Board Report; the 2005 report Risks 
Associated with NASA's Plan for Technical Authority and Safety and 
Mission Assurance; the 2005 Space Shuttle Orbiter Wiring Inspection; 
the 2006 Final Memorandum on the Audit of NASA's Response to Columbia 
Accident Investigation Board Recommendations Concerning MMT Training; 
the 2006 Final Memorandum on the Review of Space Shuttle Cold Plates; 
the 2006 report Space Shuttle Program Problem Reporting and Corrective 
Action Process at Kennedy Space Center Needs Improvement; the 2007 
Final Memorandum on the Review of T-0 Access Stair Trucks Located at 
Dryden Flight Research Center; the 2008 Final Memorandum on the Review 
of Rocket Segment Handling; and the 2008 Review of a Shuttle Training 
Aircraft Mishap on October 19, 2007. And, of course, as the GAO limited 
itself to products of the OIG and did not conduct interviews of audit 
staff, it is apparently completely unaware of monitoring of issues 
regarding Shuttle safety, for example, that is carried out by OIG 
technical specialists. 

[24] Moreover, comparing NASA OIG audits with the audits at agencies 
like the Social Security Administration makes little sense; just one 
recent audit at that agency found that obtaining certain information 
from 276,000 benefit applicants would save $473 million. NASA programs 
and operations are different in kind from other agencies. 

[25] The GAO report overlooked many significant cases, besides Boeing, 
where NASA OIG recovered significant amounts of money for the 
Government. While the Boeing case involved the largest ever recovery to 
NASA from an OIG investigation, the TRW case represented to the second 
largest. In this case, which was settled in June 2003, over $111 
million was recovered, of which over $11 million went directly to NASA. 
Also in that same month, Lockheed settled a matter for $7.1 million, of 
which $6.7 million was returned to NASA. In June 2005, 
PricewaterhouseCoopers paid the Government $41.9 million as a result of 
an investigation conducted by this office. In December 2005, Bearing 
Point (formerly KPMG) settled a matter investigated by this office for 
$I5 million; and in June 2006, BP Amoco paid the Government $ 10 
million, of which $1.7 million came back to NASA, to settle a matter. 

[26] According to the draft report, the office with "worse" monetary 
accomplishments than the NASA OIG is the OIG of the Nuclear Regulatory 
Commission. The logic of the draft report would support a reallocation 
of resources by that Office away from "compliance" to activities with 
monetary recoveries. What the draft report overlooks is that compliance 
with critical requirements establishes economy, effectiveness, and
efficiency of operations and program safety. 

[27] Our annual Strategic Plan Results Report includes data in a 
variety of areas. We use the data, including customer feedback, to 
measure accomplishments, the relevance and timeliness of our work, and 
the impact of recommendations on Agency programs, policies, and 
procedures. Agency officials view our work as useful and timely and 
feel our recommendations are addressing programmatic and policy issues, 
as revealed in the following examples: 

* For FY 2006, 71 percent of customers surveyed felt that our audit 
products "provided meaningful results," 90 percent felt that our audit 
products "covered areas in sufficient detail." 

* For FY 2007, 74 percent of customers surveyed felt that our audit 
products "provided meaningful results," and 83 percent of felt that our 
audit products "covered areas in sufficient detail." 

[28] For FY 2005 and thereafter, approximately $3,500,000 was shifted 
from NASA to the NASA OIG to pay for the financial audits, giving the 
appearance of a significant budget increase (more than 10% annually) to 
OIG with no actual impact to funds available for OIG operations. This 
reallocation was to assure OIG independence in the management of the 
audit of NASA's financial statements under the Chief Financial Officer 
Act of 1990. 

[29] For FY 2007 and FY 2008, OIG absorbed reductions of 3.9 percent 
($1.3 million) and 5.8 percent ($2.0 million), respectively, from the 
President's budget. While OIG's actual budget authority for those years 
rose by 0.7 and 1.2 percent, respectively, the increases were 
significantly smaller than the cost-of-living adjustment increases and 
general spending inflation. 

[End of section] 

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