The Orlando Sentinel

WASHINGTON – NASA’s finances are such a jumbled mess that lawmakers fear the agency’s $100-billion moon-Mars venture might spark massive cost overruns such as those that plagued the international space station for years.

Auditors from two agencies on Thursday testified that NASA has made little progress in accounting for how it spends taxpayer money.

Their key findings:

•NASA still can’t balance its own checkbook – but its ledger is now off by tens of millions instead of billions a few years ago.

•The agency is on the verge of getting yet another failing grade on its outside audit. That would be the third time in four years it has not earned a passing grade. And government auditors since 1990 have listed NASA’s contracting system as being at high risk for waste and fraud.

•NASA relies too heavily on outside contractors for accounting numbers, leaving room for fraud and abuse and making it difficult to monitor them.

•Of 45 changes that the Government Accountability Office said NASA needed to make, only three have been fixed and 13 others are partly fixed, leaving 29 areas that still need major improvement.

“The lack of reliable, day-to-day information continues to threaten NASA’s ability to manage its programs, oversee its contractors and effectively allocate its budget across its numerous projects and programs,” said Gregory Kutz, of the GAO.

But NASA Chief Financial Officer Gwendolyn Sykes said the space agency has made significant strides since Congress and auditors began taking it to task over serious bookkeeping problems years ago. And she disagreed with their numbers, saying the agency had fixed 34 of the problems previously cited.

NASA’s failings could spell trouble for its plans to return to the moon by 2018 and begin planning manned exploration of Mars, according to the auditors. Just a few years ago, NASA’s accounting woes led to a surprise $4.5 billion cost overrun on the space station, noted GAO’s Allen Li.

“NASA consistently develops unrealistic cost and schedule estimates, which at least in part contributes to the cost growth and schedule increases in many of its programs,” Kutz said.

Kutz and Li testified before combined House panels from the Science Committee and the Government Reform Committee. Sykes and NASA Inspector General Robert Cobb also appeared.

“The testimony we’ve heard has been depressing – totally depressing,” said Rep. Dana Rohrabacher, R-Calif. “It seems NASA has been unable to overcome the challenges of good financial record keeping.”

But Sykes said NASA has, in fact, addressed a number of serious concerns.

In the last few years, she said, the agency moved to one accounting system. Now, instead of 11 incompatible systems, NASA is working with only one set of numbers.

Sykes said she didn’t have the manpower or resources she needed until recently. But a new program – NASA’s third attempt – is continuing to make improvements.

Kutz said NASA still doesn’t have a plan to fully address its budgetary woes and will take years once a system is in place.

“I don’t know if you’re ever going to get your hands around this,” said Rep. Sheila Jackson-Lee, D-Texas.

Sykes said NASA has worked hard to reconcile its financial statements with the federal treasury. Two years ago, she said, NASA was off by $1.743 billion.

By September of this year, NASA was off by less than $47 million.

Rep. Ken Calvert, R-Calif., asked Sykes whether she would sign a pledge similar to the one required of private sector companies. That mandated pledge is part of a new federal law that fines financial chiefs if they vouch for numbers that turn out to be misstated.

“At this point, no sir,” she replied.

Cobb said NASA’s next annual outside audit, due next month, will show continued problems.

“If you can’t show through an audit trail how you arrived at the numbers on your balance sheet, that is a significant internal control failure,” Cobb said.

Calvert said he wants to make sure the moon-Mars program doesn’t turn out like the Pentagon’s F-22 plane, which faced repeated cost overruns.

“We’re turning up the heat a little bit here today,” he said.

—

(c) 2005, The Orlando Sentinel (Fla.).

Visit the Sentinel on the World Wide Web at http://www.orlandosentinel.com/.

Distributed by Knight Ridder/Tribune Information Services.

AP-NY-10-27-05 2005EDT

Copy the Story Link