Property Management: Lack of Accountability and Weak Internal Controls Leave NASA Equipment Vulnerable to Loss, Theft, and Misuse
GAO-07-432
Published: Jun 25, 2007. Publicly Released: Jul 25, 2007.
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Highlights
For years, GAO and others have reported that the National Aeronautics and Space Administration (NASA) does not maintain effective control over the $35 billion of property, plant, and equipment (PP&E) and materials that it reports on its financial statements. GAO's report, the first in a planned series, addresses whether NASA's control environment and internal controls over NASA-held equipment provide reasonable assurance that (1) these assets are not vulnerable to loss, theft, and misuse and (2) all equipment costs are appropriately recorded in the agency's financial statements. GAO evaluated the design of NASA's property management controls by reviewing agencywide and local policies, obtaining equipment loss reports for all NASA centers, and evaluating actions taken to hold employees accountable. To confirm its understanding of the design of NASA's property controls, GAO conducted on-site visits at two NASA centers and interviewed property management officials at the remaining seven NASA centers.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to strengthen and enforce NASA's policy on user accountability for equipment loss, including providing guidance on the minimum level of care NASA expects employees to exercise over equipment and the circumstances under which employees will be held accountable for equipment loss; requiring employees to acknowledge in writing, for all personal use equipment, their responsibility for maintaining NASA equipment including an acknowledgment of the minimum level of care NASA expects employees to exercise over equipment and the circumstances in which they will be held accountable for equipment loss; and requiring that employees be held financially accountable or subject to other disciplinary actions when equipment is lost due to user negligence. |
Closed – Implemented
NASA updated its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to include a new appendix that specifically addresses equipment user responsibilities for safeguarding government equipment. The new appendix provides guidance on the minimum precautions employees should take to safeguard government equipment and also emphasizes that employees will be held financially liable for equipment loss if they are found to be negligent. In addition, NASA's property management training video, which also provides guidance on equipment user responsibilities, is now included on NASA's internal training website.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to enforce the existing policy to prepare survey reports immediately when accountable property is lost, damaged, or destroyed. |
Closed – Implemented
NASA updated its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to strengthen its existing policy to prepare and submit survey reports within 30 days. Under a new policy, if a survey report is submitted beyond the 30-day requirement, unless granted an extension, the report is to include a memorandum signed by the division director explaining why the property survey report was submitted late. In addition, NASA's property management training video, which is now included on NASA's internal training website, also emphasizes that survey reports must be submitted within 30 days after discovery. NASA also provided documentation of several survey reports dated 2007 through 2010 as evidence that survey reports are promptly prepared.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to enforce the existing policy to fully investigate all survey reports and provide written findings to an independent Property Survey Board or Officer. |
Closed – Implemented
NASA updated its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to strengthen existing requirements for investigating survey reports. The expanded section now includes definitions and criteria for determining responsibility, culpability, proximate cause, and reporting findings related to the investigation, by an independent Property Survey Board or Officer, of property identified in a survey report. In addition, NASA also provided documentation of several survey reports dated 2007 through 2010 as evidence that survey reports are fully investigated and written reports are provided to the survey boards.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to define and enforce reasonable workload standards for property custodians. |
Closed – Not Implemented
NASA maintains that implementation of this recommendation would be difficult to achieve as workload decisions are made by division directors at each NASA center. As such, NASA has not defined and enforced reasonable workload standards for property custodians.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to establish a sound methodology for prioritizing property management control activities, such as physical inventory inspections and investigations of equipment loss, to ensure that more time and effort is spent on high-dollar and sensitive or pilferable equipment. |
Closed – Implemented
NASA updated its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to include measures that help to ensure that more time and effort is spent on high dollar and sensitive equipment. For example, the updated policy now requires a complete physical inventory of capital equipment (i.e. equipment costing $100,000 or more) at each center annually. In addition, the updated policy now requires a 20 percent random physical inventory of each center's sensitive equipment on an annual basis. If there are any items unaccounted for in the sample inventory, then a 100 percent sensitive equipment inventory is required.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to clarify property management guidance to maximize the use of NASA's central receiving function and at a minimum, require that all equipment sent through central receiving is properly tagged and entered into the property management system by warehouse personnel. |
Closed – Implemented
NASA updated its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to require that all qualified personal property processed through central receiving is tagged and entered into the property system.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to require that all packages sent through central receiving are opened and tagged accordingly--regardless of whether they are procured with a purchase card or by purchase order. |
Closed – Implemented
NASA updated its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to require that all qualified personal property processed through central receiving is tagged regardless of procurement method, unless opening the package would void the warranty. In those cases, the equipment manager will establish procedures to ensure that those items are tagged upon opening the package at the point of destination.
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| National Aeronautics and Space Administration | To strengthen NASA's control environment and internal controls, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to establish and enforce property management training requirements for all personnel involved in the use, stewardship, and management of equipment, including central receiving warehouse personnel, end users, purchase card holders, and property custodians. |
Closed – Implemented
NASA's property management training video, which provides training on the equipment user responsibility for conserving and protecting government property, was uploaded to NASA's internal training website in March 2009 and is available to all employees and onsite contractors. Also, in 2010, NASA developed a quarterly Equipment Management Newsletter that focuses on topics relevant to equipment management and accountability.
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| National Aeronautics and Space Administration | As part of NASA's ongoing system modernization effort, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to work in coordination with the Office of the Chief Financial Officer (OCFO) and the Director of NASA's Integrated Enterprise Management Program (IEMP) to adopt the standard business process supported by its software to ensure that the new system will be capable of identifying capital costs as they are incurred for all capital equipment items, starting at the budget/procurement cycle through to the processing and disbursing of funds as the equipment transaction is processed. |
Closed – Implemented
With the implementation of NASA's new property system in May 2008, NASA is now capable of identifying, tracking, and reporting capital equipment costs as they are incurred throughout the equipment transaction process.
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| National Aeronautics and Space Administration | As part of NASA's ongoing system modernization effort, NASA's Administrator should direct the Assistant Administrator for the Office of Infrastructure and Administration to work in coordination with the OCFO and the Director of NASA's IEMP to adopt the standard business process supported by its software to ensure that the new system will be capable of identifying purchases as controlled equipment when ordered, which would provide reasonable assurance that the agency's equipment records are updated upon receipt and acceptance of the property. |
Closed – Implemented
NASA revised its Equipment Management Procedural Requirements (NPR 4200.1G)--effective March 30, 2010--to provide reasonable assurance that the agency's records for controlled equipment are updated upon receipt and acceptance of the property. For example, the updated policy now requires that all controlled equipment processed through central receiving be tagged and entered into the property system upon official receipt, regardless of procurement method.
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Topics
AccountabilityAccounting proceduresEquipment inventoriesEquipment managementFederal propertyFederal property managementFinancial recordsFinancial statementsInternal controlsLossesPolicy evaluationProperty and supply managementProperty lossesRecordsRecords managementWaste, fraud, and abusePolicies and procedures