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Financial Management MW

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Title: Financial Management MW


1
Financial Management (MW)
  • Office of the Chief Financial Officer
  • Gwen Sykes
  • November 9, 2005

2
Background
  • This management control issue was introduced in
    2001 as a significant area of concern because the
    core accounting system was not operational and it
    remained open until May 2003 when it was
    designated as an Other Weakness based on the
    new Internal Control rating schema.
  • In October 2003, the OCFO had made significant
    progress toward improving the Agencys financial
    statements, budget and execution documents, and
    other accounting reports. At that time, the
    deficiency was reduced to a Management Challenge.
  • In May 2004, it was elevated to a Material
    Weakness because the scope of the Core Financial
    Management System had the potential to impact the
    entire Agency.

2
3
Issue
  • Since implementation of the Core Financial
    Management System, challenges in system
    processing, configuration, and capabilities have
    surfaced that have resulted in data anomalies
    (data integrity) and instances of non-compliance
    with prescribed federal accounting policies and
    procedures. OCFO was a decentralized
    organization that lacked sufficient numbers of
    adequately trained staff guided by one set of
    NASA-wide policies and procedures.
  • Root cause
  • Conversion from 10 disparate legacy financial
    systems supported by over 120 subsidiary systems,
    along with over a decade of historical data, to a
    single integrated financial management system
    highlighted long-standing data and process issues
  • System processing issues in early stages of
    production operation resulted in data integrity
    problems, impacting external financial reporting
  • Introduction of new system and processes has
    presented a tremendous learning curve for users
    which pre-implementation training did not fully
    address
  • Migration to a single agency-wide core financial
    management system requires a single set of
    financial management policies and procedures
  • Reduced staffing levels has deteriorated ability
    to maintain sufficient numbers of adequately
    trained resources to address post implementation
    challenges from the new financial system
    implementation and other systemic financial
    management challenges

3
4
Issue (continued)
  • Corrective action taken to date
  • Reconciled our differences with FBWT to within
    22 million as of 8/30/2005.
  • Developed a uniform automated tool to assist all
    Centers in reconciling FBWT that will be
    operational to start FY 2006.
  • Significant progress made on hiring OCFO staff.
  • Issued Monitoring Controls document for Centers
    compliance on a monthly basis.

4
5
Recommendation
  • Recommend that the current deficiency (MW-2004-1)
    be closed and a new Material Weakness be opened
    with the following description
  • The implementation of the IFMP Core Financial
    system during FY 2003 represented a major
    transformation in NASAs financial management
    systems and processes. Challenges from this major
    change were anticipated, however, it has taken
    much longer than expected to stabilize our
    overall financial management environment. Since
    the completion of the rollout of the new system,
    challenges in system processing, configuration,
    and capabilities have surfaced that have resulted
    in data anomalies (data integrity) and instances
    of non-compliance with prescribed federal
    accounting policies and procedures. Further, the
    OCFO was a decentralized organization that lacked
    sufficient numbers of adequately trained staff
    guided by one set of NASA-wide policies and
    procedures.

5
6
Contractor-Held Property (MW)
  • Office of the Chief Financial Officer
  • Gwen Sykes
  • November 9, 2005

7
Background
  • This deficiency was introduced in February 2003
    as a Material Weakness with planned actions to
    include monthly reporting by contractors
    publication of a Federal Management Regulation
    for Property, Plant, and Equipment and
    initiation of contractor and accountant training.
  • In October of 2003, the deficiency was reduced to
    an Other Weakness when the OCFO completed the
    tasks of defining assets in space and issuing
    revised policy.
  • In October 2004, the deficiency was re-designated
    as a Material Weakness when the IG questioned the
    accuracy and reliability of property related
    accounting data.

2
8
Issue
  • NASA needs to improve its management controls for
    the financial reporting of property, plant and
    equipment, and materials including Theme Assets
    (formerly Assets-in-Space), contractor-held
    property, spare parts and assets under
    construction. Lack of proper management controls
    can result in inconsistent financial recording
    practices that can misstate asset values and
    period expenses.
  • Root cause
  • 1) NASAs policies and procedures not fully in
    conformance with federal requirements
  • 2) Inconsistent application of existing policies
    and procedures
  • Corrective action taken to date
  • Establishment of Financial Integration Team,
    subgroup on PPE composed of the Deputy Chief
    Financial Officer, Associate Administrator for
    Infrastructure and Administration, and Director
    of Procurement.
  • Presentation to and support received from the
    Senior Advisory Group on the overall plan to
    improve NASA's PPE internal controls and
    financial reporting.
  • Established PPE Compensating Controls Group
    comprised of HQs and Center representatives.
  • Prepared draft Theme Assets capitalization policy
    paper and submitted to OIG and external auditors
    for review and comment.

3
9
Recommendation
  • Recommend closing the current Material Weakness
    (MW-2004-02 - Contractor-Held Property) and
    replacing it with a deficiency that captures the
    overall scope of property related challenges.
  • Recommend responsibility for this Material
    Weakness be shared by the OCFO and Institutions
    and Management.

4
10
Full Cost Integration (OW)
  • Office of the Chief Financial Officer
  • Gwen Sykes
  • November 9, 2005

11
Background
  • In February 2003, the Associate Administrator for
    Earth Science pointed out that full cost
    accounting is a major Agency undertaking that
    should be monitored and placed on the agenda as a
    Management Challenge.
  • In February 2005, the OCFO recommended the
    initial Full Cost Accounting MC be closed based
    on actions taken by the FC Steering Committee.
    The committee chair ordered that MC-03-03 be
    removed as an exception, and instructed that Full
    Cost Integration be created as the new MC.
  • In May 2005, the significance level was elevated
    from a Management Challenge to an Other
    Weakness, due to a perceived lack of
    understanding of full cost policies and
    procedures.

2
12
Issue
  • Full Cost concepts need to be better integrated
    into NASA operations. Despite implementing a Full
    Cost accounting system and many Full Cost
    processes, NASA still lacks the level of cultural
    change needed to fully transition to Full Cost
    management.
  • Root cause
  • Insufficient stakeholder training
  • Unintended consequences and behaviors realized
    from initial full cost approaches
  • Some policies and planned processes were based on
    insufficient experience and need to be refined to
    reflect lessons learned
  • Corrective action taken to date
  • Completed Full Cost Assessment
  • Delivered recommendations to the Financial
    Integration Team on improving full cost
    implementation
  • Continuing to improve policy to resolve
    operational issues
  • Developing requirements for multiyear long-term
    plan to institutionalize full cost in NASA's
    operational culture.

3
13
Recommendation
  • Recommend this issue remain as currently assigned
    (Other Weakness).

4
14
Space Shuttle
  • Space Operations Mission Directorate
  • William H. Gerstenmaier
  • November 9, 2005

15
Background
  • Following loss of Columbia and her crew, the
    Deputy Associate Administrator for International
    Space Station and Space Shuttle Programs
    established a formal "Return-to-Flight Planning
    Team", and provided direction for the team to
    address actions required before a safe return to
    flight could be assured, and other actions
    determined necessary to comply with the formal
    recommendations of the CAIB. Options and
    recommendations from the Return-to-Flight
    Planning Team were assessed by the Space Flight
    Leadership Council, which was established for
    this purpose and was co-chaired by the Associate
    Administrator for Space Operations and the Deputy
    Chief Engineer for Independent Technical
    Authority. Return-to-flight actions were
    implemented through the normal Space Shuttle
    Program management. The Council abolished on
    June 28, 2005, and all actions are now conducted
    through the Space Shuttle Program management.
  • Progress on implementation of Return to Flight
    actions is documented in the "Implementation Plan
    for Space Shuttle Return to Flight and Beyond"
    issued periodically.

2
16
Issue
  • Technical Deficiencies
  • Modeling was not as accurate when the Shuttle
    system was originally certified in the late
    1970s Debris Transport Analysis was more art
    than science (point to point transport) and the
    analyses that was done was rarely supported with
    rigorous testing (e.g., wind tunnel testing,
    impact testing).
  • All pre-STS-107 flight history seemed to support
    the initial certification analyses.
  • Foam damage to the Orbiter failed to show
    positive correlation between liberated debris
    mass and TPS (tile) damage.
  • Post-STS-107 modeling told us where debris might
    strike the Orbiter, however, it was impact
    testing that defined critical debris (mass)
    thresholds for return to flight. This testing
    showed us how fragile the Orbiter was to
    different materials and masses. At that point,
    we knew we would have to eliminate all the
    critical debris sources, provide much improved
    debris impact monitoring, and determine to what
    extent we needed to harden the Orbiter before we
    could Return to Flight.
  • While STS-114 proved we had done a very credible
    job of eliminating critical debris, five In
    Flight Anomaly foam loss events made it clear
    additional work is required before the second RTF
    mission to increase our understanding of the
    cause of these foam debris events and taking the
    appropriate corrective actions. This work is
    currently on-going.
  • Other Deficiencies
  • The Final Report of the Columbia Accident
    Investigation Board (CAIB) identified a number of
    systemic cultural, organizational, and managerial
    issues within both the Space Shuttle Program and
    NASA as a whole that contributed to the loss of
    Columbia on February 1, 2003.

3
17
Issue (continued)
  • Root cause
  • The physical cause of the loss of Columbia and
    her crew was a breach in the Thermal Protection
    System on the leading edge of the wing, caused by
    a piece of insulating foam which separated from
    the left bipod ramp section of the External Tank
    at 81.7 seconds after launch, and struck the wing
    in the vicinity of the lower half of Reinforced
    Carbon-Carbon panel number 8.
  • The Final Report of the Columbia Accident
    Investigation Board (CAIB) identified a number of
    systemic cultural, organizational, and managerial
    issues within both the Space Shuttle Program and
    NASA as a whole that contributed to the loss of
    Columbia on February 1, 2003.
  • Fifteen Return-to-Flight and fourteen continuing
    to fly recommendations are in the CAIB Report.
    Four dealt explicitly with management issues, and
    many of the other recommendations have important
    organizational as well as technical implications.
  • The CAIB Report also calls on NASA to prepare a
    detailed plan for defining, establishing,
    transitioning, and implementing these
    recommendations prior to Return to Flight, with
    the understanding that the implementation of the
    fundamental management changes will continue
    beyond the first Shuttle flight after Columbia.

4
18
Issue (continued)
  • Corrective action taken to date
  • In response to the CAIB report, NASA developed
    the Implementation Plan for Space Shuttle Return
    to Flight and Beyond. The Implementation Plan is
    an evolving blueprint for safely and reliably
    returning to flight. It explains how NASA is
    complying with the recommendations of the CAIB
    and other corrective actions. These additional
    corrective actions may include other CAIB
    observations, self-imposed Shuttle program
    initiatives or input from other sources.
  • On August 17, 2005, the Return to Flight Task
    Group released its Final Report. In it, the Task
    Group unanimously closed out all but three of the
    Board's Return to Flight recommendations. The
    Task group noted NASA had made substantial
    progress relative to these recommendations, and
    emphasized that, "The ability to fully comply
    with all of the Board's recommendations does
    not imply that the Space Shuttle is unsafe." The
    first two Return to Flight missions, STS-114 and
    STS-121, will provide the data and flight
    experience needed to address the remaining open
    issues in these recommendations. This work will
    be documented in future updates to the
    Implementation Plan.

5
19
Issue (continued)
  • NASA made the decision to proceed with the launch
    of STS-114 on July 26, 2005 based on Return to
    Flight Task Group's assessment, the totality of
    improvements made to the Space Shuttle system
    during Return to Flight, and the vetting of all
    these improvements through a rigorous and
    multilayered engineering review process,
    culminating in the approved Certificate of Flight
    Readiness.
  • Post-flight analysis of STS-114 indicated that,
    except for one event, the thermal protection
    system on the External Tank performed within
    expected parameters. Most of the small foam
    shedding events that were observed with the newly
    upgraded imagery and sensor capabilities posed
    little or no threat to the Orbiter. The one
    event of concern was the loss of an approximately
    one pound piece of foam from the area of the
    External Tank's liquid hydrogen protuberance air
    load (PAL) ramp. NASA commissioned two teams
    (one lead by the Space Shuttle propulsion
    manager, the other an independent "Tiger Team"
    reporting directly to the Associate Administrator
    for Space Operations) to analyze these foam loss
    events and recommend any forward work that would
    have to be done prior to the launch of the next
    mission, STS-121.

6
20
Recommendation
  • Until successful completion of STS-121, this item
    should remain a material weakness.

7
21
Shuttle Impact on ISS Operations
  • Space Operations Mission Directorate
  • William H. Gerstenmaier
  • November 9, 2005

22
Background
  • Following the Shuttle Columbia accident, February
    2003, the ISS Partnership agreed to an interim
    operational plan that would allow continued
    crewed operation. The plan called for a
    reduction of the crew size to two, with the crew
    exchanges to be conducted on the scheduled
    semi-annual Soyuz flights. Cargo re-supply would
    be provided by Russian Progress vehicles. This
    is an interim measure until the Space Shuttle
    returns to flight.
  • The first of two Shuttle Return to Flight
    missions has been completed, STS-114, launched on
    July 26, 2005 and landed on August 9, 2005.

2
23
Issue
  • Description of deficiency
  • The International Space Station (ISS) was
    designed with the Space Shuttle as its prime
    support for crew transport, assembly of on-orbit
    elements, utilization and operations. Additional
    crew and cargo transport is provided by Russia.
    Following the Space Shuttle Columbia accident,
    the Shuttle fleet was grounded. This has impacted
    the number of crew that can be supported onboard
    the ISS, temporarily halted assembly of the
    Station, and significantly reduced the available
    up and down mass support for Station operations
    and utilization.
  • Root cause The grounding of the STS fleet
    resulted in this impact on ISS operations.

3
24
Issue
  • Corrective action taken to date
  • Established an understanding with the ISS
    partnership to (1) rely on Russian vehicles for
    crew and cargo support until Shuttle returns to
    flight and (2) reduce the crew size from 3 to 2
    to reduce the logistics burden, given the reduced
    capability of the Russian vehicles compared to
    the Space Shuttle.
  • Successfully completed the ISS objectives for the
    STS-114 mission
  • Flew the combined Space Shuttle/ISS stack in a
    new configuration designed to minimize the threat
    of orbital debris and micrometeorite impact
    damage.
  • Transferred more than 15,000 pounds worth of
    supplies and hardware to the ISS, including food,
    water, nitrogen, lithium hydroxide canisters, and
    scientific equipment.
  • Returned more than 7,200 pounds worth of expended
    hardware and unneeded supplies from the ISS back
    to Earth. Returning this hardware allows for
    failure analysis and possible reuse of Russian
    Elektron (oxygen generation) and Kurs (for
    docking of Russian Soyuz and Progress vehicles)
    hardware, as well as U.S. components like a
    Control Moment Gyroscope (CMG), Global
    Positioning System sensor, and spacesuit.

4
25
Issue
  • Repaired and/or replaced two of the ISSs four
    CMGs (which provide attitude control for ISS),
    restoring the Station to its full capability.
  • Installed the External Stowage Platform-2, an
    external platform for storing components and
    assisting astronauts in conducting EVAs from the
    ISS, transferred the Human Research Facility-2
    rack to the U.S. Destiny module on the ISS
    (increasing the scientific capabilities of the
    Station), and deployed and retrieved the
    Materials International Space Station Experiment
    Passive Experiment Containers from the outside of
    the ISS.
  • Reboosted the orbit of the ISS and conducted a
    fly-around and completed photographic survey of
    the ISS prior to reentry.
  • Between STS-114 and STS-121, we will continue to
    rely on Russian crew and cargo services. ISS
    assembly will resume with STS-115.

5
26
Recommendation
  • Until successful completion of STS-121, this item
    should remain a management challenge.

6
27
Information Technology Security
  • Office of the Chief Information Officer
  • Scott Santiago
  • November 9, 2005

28
Background
  • The NASA OIG, through their audits of NASAs IT
    Security Program, had identified a large number
    of findings over the years that led them to
    recommend that IT Security be declared a
    Material Weakness.
  • NASA has been working since FY 2003 to correct
    the findings of those audits and to correct
    systemic problems with
  • ITS Policy and Procedural Requirements
  • ITS Compliance Execution
  • Because of the work in progress, NASA management
    has determined that IT Security be an Other
    Weakness.

2
29
Issue
  • Root Cause
  • NASA IT Security, while improving, needs more
    effective implementation, monitoring, and
    enforcement. In addition, NASAs policy and
    procedures have not kept up with OMB direction
    regarding implementation of the Federal
    Information Security Management Act (FISMA).
  • OMB continues to focus attention on IT Security,
    which requires NASA to make significant changes
    in how IT Security is managed.

3
30
Issue
  • Corrective action taken to date
  • Rewrote NASA IT Security policy and requirements
    documents to reflect NIST Guidance as directed by
    OMB, pending approval.
  • Establishing a central database of all NASA
    systems and IT Security plans status and added a
    module to CATS for tracking all IT Security
    weaknesses according to FISMA.
  • Established a certification and accreditation
    (CA) program as Directed by OMB NIST SP 800-37
    Guide for the Security Certification and
    Accreditation of Federal Information Systems.
  • Expanded the NASA ITS training program.

4
31
Issue
  • Corrective action taken to date
  • Improved Incident reporting and tracking
  • Establishing centrally-managed monitoring of the
    NASA network
  • Establishing centrally managed security services
    to correct known security weaknesses in managing
    sensitive information and to meet HSPD-12
    requirements
  • Established Agency metrics (ITS Scorecard) based
    on internal and external ITS performance
    requirements

5
32
Recommendation
  • Continue to categorize NASAs IT Security Program
    as an Other Weakness (OW) until changes are
    implemented and they begin to demonstrate the
    required results.

6
33
Competition in Contracting
  • Institutions and Management
  • Office of Procurement
  • Tom Luedtke
  • November 9, 2005

34
Background
  • In FY 04, the OIG issued a report stating NASA
    continues to be challenged in promoting
    competition in contracting
  • Audits and reviews performed over a 24 month
    period found several instances where competition
    was not pursued and the lack of competition was
    not adequately justified
  • OIG stated basic management controls are needed
    to provide reasonable assurance that competition
    is maximized where practical

2
35
Issue
  • Description of deficiency
  • Per the OIG, NASA continues to be challenged in
    promoting competition in contracting, and
  • Basic management controls are needed to provide
    reasonable assurance that competition is
    maximized where practical and justifications for
    noncompetitive procurements meet regulatory
    requirements.
  • Root cause
  • Federal and NASA procurement policies require the
    use of competition to the fullest extent possible
  • Audit and reviews performed found several
    instances where competition was not pursued and
    lack of competition was not adequately justified

3
36
Issue (cont)
  • Corrective action taken to date
  • All previously opened recommendations have been
    closed
  • Office of Procurement has issued new guidance for
    establishing reasonable response time in synopses
    for commercial procurements
  • Survey teams have focused on the documentation of
    efforts made to remove or overcome any barriers
    to competition
  • Centers utilize Resource Consultants, Inc. for
    the purpose of providing Contracting Officer
    Technical Representative (COTR) certification
    training and refresher training. COTR
    certification class includes a section on
    competition in contracting

4
37
Recommendation
  • Competition in contracting should be removed from
    the list.

5
38
Access to NASA Facilities Technology
  • Office of Security and Program Protection
  • Clint Herbert, Deputy Assistant Administrator
  • November 9, 2005

39
Background
  • NASA's previous photo-ID issuing policy and
    procedures had numerous shortcomings that needed
    to be revamped in order to ensure that only
    authorized persons gain access to NASA
    facilities. Each Centers photo-ID producing
    equipment produced a differing photo-ID then that
    established under the previous NASA standards. To
    compound the issue, some former employees have
    been non-compliant in returning their badges, and
    continue to gain access to NASA facilities
    uninhibited. Current NPR establishes new
    standards for both equipment and photo-ID
    topology.

2
40
Issue
  • Description of deficiency
  • NASA's current photo-ID issuing policy and
    procedures have numerous shortcomings that must
    be revamped in order to ensure that only
    authorized persons gain access to NASA
    facilities. To compound the issue, some former
    employees have been non-compliant in returning
    their badges, and continue to gain access to NASA
    facilities uninhibited. This leaves NASA
    extremely vulnerable to security breaches by
    individuals who no longer have a need to access
    NASA facilities and by adversaries who could
    easily produce a counterfeit NASA photo-ID. NASA
    also recognizes its vulnerabilities relating to
    issuing NASA photo-IDs, accessing, and accounting
    for foreign national (FN) (non-U.S. citizens)
    visitors, contractor employees, and other FN
    assignees.
  • Root Cause
  • While NPR 1600.1 sets specific standards for
    photo-IDs, non-standardized equipment causes the
    appearance of photo-IDs (e.g., color, font,
    topography) to vary from Center to Center, making
    it impossible for any one Center to positively
    identify another Center's badge as being
    authentic. Multiple badge types at the agency
    have led to problems with managing access to NASA
    facilities technology.
  • Corrective Action Plan (CAP)
  • Standardize the NASA photo-ID generating,
    issuing, and accountability technology to ensure
    consistency and uniformity. The ultimate goal of
    the OneNASA - photo-ID system is to upgrade the
    system to current technologies, establish an
    enterprise architecture deter counterfeiting, and
    prohibit unauthorized individuals (anyone other
    than current NASA employees/contractors) from
    freely accessing NASA facilities. STATUS Systems
    procured and deployed at all Centers, IATO
    issued, generation and issuance of CS photo-IDs
    to has begun at NASA Centers and is scheduled to
    begin at HQs mid/end November. Issuance of
    contractor photo-IDs to commence shortly
    thereafter.

3
41
Recommendation
  • Remove from issues list and closeout.
  • Rationale New NPR issued, new OneNASA
    Photo-IDs being issued at all Centers.

4
42
Declassification Review ProcessManagement
Challenge (MC)
  • Office of Security and Program Protection
  • Clint Herbert, Deputy Assistant Administrator
  • November 9, 2005

43
Background
  • NASA had a significant backlog of permanent
    records containing classified national security
    information (CNSI) that needed to be reviewed for
    continued classification pursuant to EO 12958
    amended. NASA faces a December 2006 deadline to
    insure that all permanent records containing CNSI
    that are 25-years old or older are subjected to
    classification review. Poor records management
    practices prevented the identification of records
    subject to Section 3.3 of EO 12958 amended
    resulting in NASAs inability to identify its
    total universe to be considered for
    declassification. The identified root causes had
    significantly impeded the classification review
    programs efforts. EO 12958 as amended contains
    a sliding-window requirement for NASA to conduct
    yearly classification reviews of permanent
    records containing CNSI.

2
44
Issue
  • Deficiency Description
  • NASA has a significant backlog of permanent
    records containing classified national security
    information (CNSI) that must be reviewed for
    continued classification pursuant to EO 12958
    amended. NASA faces a December 2006 deadline to
    insure that all permanent records containing CNSI
    that are 25-years old or older are subjected to
    classification review. Poor records management
    practices prevents the identification of records
    subject to Section 3.3 of EO 12958 amended
    resulting in NASAs inability to identify its
    total universe to be considered for
    declassification. The identified root causes have
    significantly impeded the classification review
    programs efforts. EO 12958 as amended contains
    a sliding-window requirement for NASA to conduct
    yearly classification reviews of permanent
    records containing CNSI.
  • Root Causes
  • Insufficient staffing
  • Historically poor records management
  • Insufficient funding
  • Lack of Declassification Guides
  • Insufficient resident expertise to perform
    classification reviews for older programs
  • Insufficient support from senior management
    (commitment of resources)
  • Corrective Action Plan (CAP)
  • A comprehensive CAP has been developed and has
    been distributed to the OC, all Mission
    Directorates, and Center Security Offices on 2
    November 2005.

3
45
Recommendation
  • Closeout. NASA has made significant progress in
    declassification efforts and is now positioned to
    meet the December 31, 2006 deadline.

4
46
Staffing at NASA Headquarters
  • Institutions and Management
  • Jeffrey E. Sutton
  • November 9, 2005

47
Background
  • NASA Headquarters managers have reported
    difficulty in recruiting and hiring personnel
    with the experience needed to address key areas.
    During a pre-audit review, the NASA HQ policy
    staff found errors in the delegated examining
    (DE) activities that were significant enough to
    warrant withdrawing the DE authority from the HQ
    Human Resources Office. An OPM audit
    substantiated NASA's initial findings and
    identified additional errors and deficiencies in
    the DE actions. OPM also found deficiencies in
    competitive promotion actions in instances when
    the vacancy was announced under both DE and merit
    promotion procedures. As a result, the absence
    of an effective recruitment capability at HQ has
    led to significant important vacancies in the
    Office of the CFO and other HQ organizations.
    Delays in staffing the CFO Office stymies
    progress in mitigating the declared material
    weaknesses in financial management and contractor
    held property.

2
48
Issue
  • Deficiency Description
  • The absence of an effective recruitment
    capability at HQ has led to significant important
    vacancies in the Office of the CFO and other HQ
    organizations. Delays in staffing the CFO Office
    stymies progress in mitigating the declared
    material weaknesses in financial management and
    contractor held property.
  • Root Cause
  • Withdrawal of DE authority was caused by
    inadequate staffing and training of staff,
    leadership and organizational inefficiencies, and
    poor or non-existent operational procedures.
    These root causes led to improper personnel
    processing, poor customer service and violation
    of OPM regulations.
  • Corrective Action Plan (CAP)
  • The CAP focuses on establishing proper operating
    procedures creating oversight of operations
    staff creating new customer service standards
    hiring additional staff contractors provision
    of basic HR training in NASA STARS recruiting
    staffing procedures regulations reorganization
    of the HQ HR office to a consulting model
    providing more effective efficient management
    leadership.

3
49
Recommendation
  • Close this Management Challenge

4
50
Open OIG Audit Recommendations
  • Institutions and Management
  • Jeffrey E. Sutton
  • November 9, 2005

51
Background
  • By early 2000, the number of open OIG
    recommendations had become unmanageable. In
    December 1998 there were approximately 76 in
    October 2001 there were 523 open and 40
    unresolved recommendations.
  • The Operations Council placed this item on the
    list to bring visibility.
  • Significant work by both the new NASA OIG and
    management has resulted in a steady downward
    trend.
  • By October 31, 2005 there were 37 open and no
    unresolved recommendations.

2
52
3
53
Recommendation
  • Continue to give this appropriate management
    attention, but no longer report it as a
    Management Challenge

4
54
Open GAO Audit Recommendations
  • Institutions and Management
  • Jeffrey E. Sutton
  • November 9, 2005

55
Background
  • As a result of an increase in GAO audit activity
    specific to NASA, highly visible and politically
    sensitive GAO audits (e.g., Mission Management
    Aircraft), and continued Congressional interest
    in the health of NASAs financial management, the
    Operations Council agreed to add the status of
    GAO audit recommendations as a Management
    Challenge in order to keep senior management
    appraised of GAO audit activity.

2
56
3
57
Recommendation
  • Continue to carry this as a Management Challenge
  • Work with the appropriate offices and management
    to address the open and unresolved
    recommendations
  • Re-institute regular meetings with the
    Administrators office to provide status of GAO
    recommendations

4
58
Mission Management Aircraft (OW)
  • Infrastructure and Administration
  • Jeffrey Sutton
  • November 9, 2005

59
Background
  • GAO audit of Agencys FY03 and FY04 Mission
    Management Aircraft (MMA) operations highlighted
    control deficiencies with respect to management
    of NASAs MMA.
  • MMA operations were also questioned in several
    prior GAO and NASA IG audit reports.

2
60
Issue
  • Inadequate documentation and periodic review of
    MMA mission requirements
  • Issued NPR 7900 Interim Change for HQ approval of
    all mission required flight designations
  • Supporting PAE review of MMA requirements
  • Insufficient HQ oversight
  • Augmenting HQ AMD staff for MMA
  • Instituted annual HQ review of Center MMA
    operations
  • Lack of integrated IT system to capture and
    report aircraft cost utilization
  • Funding NASA Aircraft Information System (NAMIS)
  • Facilitating Aircraft Cost Accounting PAT

3
61
Recommendation
  • Continue to carry this as an Other Weakness

4
62
NASA Rules Review
  • Institutions and Management
  • Jeffrey E. Sutton
  • November 9, 2005

63
Background
  • Each OIC at Headquarters was tasked to review all
    their rules and regulations, to cancel any
    documents that were no longer required, and to
    strip the remaining documents of any and all
    instructions that are advisory, ambiguous, or
    just guidance.

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64
Issue
  • Deficiency Description
  • Agency and Headquarters directives that are
    merely advisory in nature cause uncertainty about
    their application to the workforce. Any
    documents that are no longer required are to be
    cancelled or stripped of any instructions that
    are advisory, ambiguous, or just guidance.
  • Root Cause
  • Decision-making processes that operate outside
    the organization's rules (from p. 177 of CAIB
    Report)
  • Corrective Action Plan (CAP)
  • Phase 1 Complete document inventories to show
    which directives to retain and which to cancel.
    Completed 2/15/04.
  • Phase 2 Edit the retained directives as follows
    (Completed 3/12/04)
  • (1) delete requirements and supporting
    information that are no longer needed
  • (2) delete references that are not specific to
    the content of the document
  • (3) boldface requirements to clearly distinguish
    them from explanatory material or supporting
    text
  • (4) correct administrative errors.
  • Phase 3 Establish a clear document hierarchy
    apply a holistic
  • approach to NASA rules define and establish
    criteria for documenting requirements and define
    and establish processes for review and
    enforcement. Completed 3/1/05

3
65
Recommendation
  • Close this Management Challenge

4
66
Space Exploration and the Iran Nonproliferation
Act of 2000 (INA)
  • Office of Strategic Communications
  • Joe Davis
  • November 9, 2005

67
Background
  • The INA was signed into law by President Clinton
    in 2000.
  • The International Space Station (ISS) and human
    space flight activities were singled out as the
    only cooperative program and used as leverage
    because in 2000 Russia was highly dependent on US
    fundingthat is no longer the case.
  • INA Section 6 restricts USG payments, in cash or
    in kind, to certain Russian entities for work
    related to human space flight, including the ISS.
  • NASA, as part of an interagency effort, engaged
    Congress to develop a legislative solution to INA
    that would allow the Agency to purchase of goods
    and services from Russia, including essential
    Soyuz crew rescue services, to continue U.S.
    permanent presence aboard the International Space
    Station (ISS).

2
68
Working Towards a Solution
  • On July 12, 2005, the Administration submitted to
    Congress a proposed amendment to the INA and
    recommended that the amendment be added to NASA
    authorization legislation or another appropriate
    legislative vehicle.
  • On September 19, 2005, the Senate, by Unanimous
    Consent, passed S. 1713, allowing NASA to procure
    required goods and services from Russia to ensure
    the continued safe operation of the ISS until
    January 1, 2012.
  • On October 26, 2005, the House of
    Representatives, by voice vote, passed an amended
    version of S. 1713 which added sanctions language
    related to Syria and Iran. However, the measure
    still allows NASA to procure Russian space goods
    and services to support the assembly and
    operation of the ISS between now and January 1,
    2012.
  • The House-amended S. 1713 was received in the
    Senate on October 27, 2005. Unanimous Consent
    clearance is in process and we are awaiting final
    passage.

3
69
Recommendation
  • Recommend removal of INA action from the internal
    deficiencies list, as passage of an amendment
    securing relief is imminent.

4
70
Internal Controls on Releasing Program/Project
Cost Estimates
  • Office of the Chief Engineer
  • Keith Hudkins
  • November 9, 2005

In coordination with OCFO, PAE, Legislative
Affairs Mission Directorates
71
Action
  • Responsible Office Office of the Chief Engineer
  • Description Clarify/establish the internal
    controls for releasing estimated Cat 1 Program
    and Project life cycle cost from pre-formulation
    through the life of the program.
  • Objective Today Approve concept

Different than action in the last meeting
minutes
2
72
Concept for a Solution
  • A controlled process for releasing cost estimates
  • Add requirement for PAE and the Mission
    Directorate to agree with Program Assumptions for
    the cost estimate
  • Add requirement for a Council (SMC or PMC) to
    reconcile any differences
  • Add requirement for all Cat 1 New Starts (i.e.,
    JWST, Constellation, Shuttle Upgrade) to be
    communicated using PAE cost estimates in terms
    of assumptions, cost ranges and schedules for a
    firm commitment
  • Add requirement to keep these cost estimates and
    assumptions under configuration control

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73
Lifecycle and Cost Estimates
SRR P-NAR Cost Est Update
PDR NAR Firm Cost Commitment
PAE Cost Est.
FAD
Pre Formulation
PAE Mission Dir Assumptions
CADRe (lite)
CADRe (full up)
Note Proposed addition listed in red italics
4
74
Recommendation
  • Agree to concept

Forward Action
Work with OCFO, PAE, Mission Directorates to
implement concept in Agency Policy
5
75
Back Up Slides

6
76
Action Plan
  • We collaborated with OCFO, PAE, Legislative
    Affairs, and Mission Directorates to draft a
    process to control and communicate early
    program/project cost estimates
  • Plan to update NPR 7120.5, NASA Cost Estimation
    Handbook, and NASA Strategic Management and
    Governance Handbook as required
  • Plan to implement and monitor the process for
    early cost estimates

7
77
Background
  • Following GAO Report GAO-04-642, May 2004 NASA
    has increase improved its guidance and controls
    for cost estimates
  • Release of NASA Cost Estimation Handbook,
    December 2004
  • Inclusion of Cost Estimate requirements in
    updated NPR 7120.5C, NASA Program and Project
    Management Processes and Requirements
  • Cost Analysis Data Requirement (CADRe)
  • Concern over the cost growth for the James Webb
    Space Telescope from Pre-Phase A through
    mid-Phase B raised this issue to an ICC Action
    Item (1,072M growth)
  • Both Program and Independent Cost Estimates were
    conducted in FY04 FY05

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78
Background
  • Key Reference Material
  • 1. NASA - Lack of Disciplined Cost-Estimating
    Processes Hinders Effective Program Management,
    GAO-04-642, Report to the Committee on Science,
    House of Representatives, May 2004.
  • 2. NASA Cost Estimation Handbook, December 2004
    (available at http//www.ceh.nasa.gov/)
  • 3. Letter, Implementation of Cost Management
    Initiatives, Fred Gregory, December 23, 2004
  • 4. NPR 7120.5C, NASA Program and Project
    Management Process and Requirements, March 22,
    2005
  • 5. NASA Special Review of the James Webb Space
    Telescope, July 28, 2005

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Partial List of Participants
  • Mary Kerwin
  • David Graham
  • Arlene Moore
  • Joe Hammaker
  • John Kelly
  • Mike Blythe
  • Keith Hudkins       
  • Margaret Kieffer
  • Jo Gunderson
  • Stan Fishkind
  • Lisa Guerra
  • Rob Anderson
  • Ken Ledbetter

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