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
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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
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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
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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
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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
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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.

2
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).

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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.

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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
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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

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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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