NASA continues struggle to balance its books

Officials tell House panel of efforts to fix accounting

May 20, 2004|By Gwyneth K. Shaw | Gwyneth K. Shaw,ORLANDO SENTINEL

WASHINGTON - Nearly 2 1/2 years after NASA chief Sean O'Keefe vowed to straighten up the agency's bookkeeping, the effort continues to struggle.

"It may be years before NASA can get a clean audit," said Robert Cobb, the agency's inspector general, during a hearing yesterday of a subcommittee of the House Government Reform Committee.

A plan to unify the National Aeronautics and Space Administration's 10 field centers and its Washington headquarters under a single accounting system, a program that will cost the agency about $1 billion, has created even more short-term chaos.

Big problems emerged when PriceWaterhouseCoopers, NASA's former auditor, tried to take stock of the agency's 2003 accounts.

There were so many mistakes, as the agency tried to convert seven years of budget data into the new accounting system, that NASA had to make $565 billion worth of "adjustments" to its financial statements, without adequate documentation.

In addition, PriceWaterhouseCoopers found that NASA had made a $2 billion adjustment, without supporting documents, to its end-of-the-year account balance to make it agree with the figure recorded by the U.S. Treasury.

The General Accounting Office, in testimony provided yesterday, likened the move to changing the figures in a checkbook without figuring out why the original numbers were wrong.

Gwendolyn Brown, NASA's chief financial officer, said at the hearing that the $565 billion in adjustments were a result of quirks in the new system.

When a figure was put into the wrong category, she said, it would effectively be counted three times, including when it was removed and when it was re-entered in the correct spot.

Brown said the $2 billion change was the result of an "oversight" and that the agency is reviewing years of financial statements to find the original error.

"Basically, I'm reconciling my checkbook for the last five years," she said.

Although the new accounting system has had serious problems, Cobb and two representatives from the GAO told the committee they are confident the system will eventually work.

"The important point is going forward and not letting it happen again," said Gregory Kutz, director of financial management and assurance at the GAO.

The GAO, essentially the watchdog for Congress, has hounded NASA about its financial management for more than a decade, noting - among other things - sloppy bookkeeping with its numerous contractors and failure to properly account for rising costs on the International Space Station.

When President Bush appointed O'Keefe in late 2001, the new administrator conceded that he was "a budgeteer, not a rocketeer," but he vowed to change the agency's reputation as a black hole for tax dollars.

O'Keefe did not testify before the committee yesterday, and NASA declined to make him available for an interview.

Brown, who was confirmed by the Senate in November, said she is working hard to make the new system work.

"We're plotting a long-term approach because this is a significant challenge," she said.

NASA is fighting for a budget increase and trying to set the space program on a course back to the moon and on to Mars.

On Capitol Hill yesterday, Sen. Bill Nelson, a Florida Democrat, denounced a budget compromise as "awful" for NASA.

The agreement, which essentially sets spending ceilings for the Appropriations committees, includes a $560 million increase for NASA next year.

The agency had requested $866 million.

The Orlando Sentinel is a Tribune Publishing newspaper.

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