As NASA sets course for the moon and Mars, the space agency's finances are in disarray, with significant errors in its last financial statements and inadequate documentation for US$565 billion posted to its accounts, its former auditor reported.
NASA's chief for internal financial management said the problem stemmed from a rough transition from 10 different internal accounting programs to a new integrated one, but the audit firm PriceWaterhouseCoopers noted basic accounting errors and a breakdown in NASA's financial controls.
PriceWaterhouseCoopers and NASA parted ways earlier this year, according to the space agency's inspector general, Robert Cobb. PriceWaterhouseCoopers declined to comment, but a source familiar with the situation said the audit firm opted out of the contract because it was unhappy with the relationship.
In a scathing report on NASA's Sept. 30, 2003, financial statement -- which got scant attention at its release but was detailed in a cover story in the May issue of CFO Magazine -- the audit firm accused the space agency of one of the cardinal sins of the accounting world: failing to record its own costs properly.
The same report said the transition to the new accounting program triggered a series of blunders that made completing the NASA audit impossible.
There were hundreds of millions of dollars of "unreconciled" funds and a US$2 billion difference between what NASA said it had and what was actually in its accounts, which are held by the US Treasury Department, PriceWaterhouseCoopers said in its report.
"The documentation NASA provided in support of its September 30, 2003, financial statements was not adequate to support US$565 billion in adjustments to various financial statement accounts," the auditor wrote in a Jan. 20 report to Cobb, NASA's inspector general. It also noted "significant errors" in financial statements provided by NASA.
That big number -- US$565 billion, with a "B" -- was the result of posting problems, new software and a "massive cleanup" of 12 years of NASA's financial records, said Patrick Ciganer, NASA's chief for integrated financial management.
Under the new system, Ciganer said in a telephone interview, errors that were discovered in the transition could show up multiple times in the accounting process: once as an erroneous credit in one column, then as a debit to delete the error, then as a credit in the correct column. By this reckoning, a US$40 billion contract that stretched over nine years and several separate NASA centers generated US$120 billion worth of entries, and these were turned over to the auditors.
"They have weak controls and problems with their internal system and that would make them vulnerable to [financial] fraud, although we don't have that evidence yet," said Gregory Kutz, a director in the General Accounting Office, which is looking into NASA's accounting issues. A Senate hearing on the issue was set for Wednesday.
With a current annual budget of US$16.2 billion, NASA's priorities include an ambitious multi-year mission to the moon and possibly Mars, finishing construction on the International Space Station and returning the grounded shuttle fleet to flight after the 2003 Columbia disaster.
The independent investigation of the Columbia accident, in which seven astronauts died, found NASA's culture at fault. The same spirit that fueled the early boom in space exploration in the 1950s evolved into separate parts of a sprawling agency working independently rather than cooperatively.
The same independent path extends to NASA's financial accounting, Cobb said.
"You've got an environment at the agency where there are these 10 centers which pride themselves on their independence ... and it becomes very difficult in connection with any of NASA's functional management responsibilities to have people kowtow to the folks at [NASA] headquarters who have the responsibility to pull it all together," Cobb said.
Cinager said he was hopeful that NASA's culture would change, noting a new "willingness of all of the constituencies in the agency to introspectively look at how can they improve the way they are doing their specific duties."
FOX HUNT: To suppress dissent, Chinese living abroad that Xi Jinping sees as threats are told to either return to China or commit suicide, Christopher Wray said Chinese agents have been pursuing hundreds of Chinese nationals living in the US in an effort to force their return, as part of a global campaign against the country’s diaspora, known as Operation Fox Hunt, FBI Director Christopher Wray said on Tuesday. In a speech about the security threat posed by China, during which he said Beijing’s counterintelligence work was the “greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality,” Wray gave the example of one Fox Hunt target who was given a choice of going back to China or killing themselves. Fox Hunt was launched
INTERNET CURBS: People are rushing to erase their digital footprints after police given powers over online activity, although it might take years for the full effect to be felt At midnight on Tuesday, the Great Firewall of China, the vast apparatus that limits the country’s Internet, appeared to descend on Hong Kong. Unveiling expanded police powers as part of contentious new national security legislation, the Hong Kong government enabled police to censor online speech, and force Internet service providers to hand over user information and shut down platforms. Many residents, already anxious since the legislation took effect last week, rushed to erase their digital footprint of any signs of dissent or support for the past year of protests. Hong Kong Legislator Charles Mok (莫乃光), a pro-democracy member of the Legislative
‘FIGHT FOR FREEDOM’: Hong Kongers will never bow to Beijing, the advocate said, while the US’ envoy to the territory called China’s new security law a ‘tragedy’ The world must stand in solidarity with Hong Kongers after Beijing imposed sweeping national security legislation on the semi-autonomous territory, advocate Joshua Wong (黃之鋒) said yesterday, vowing to continue campaigning for democracy. Wong, one of the territory’s most prominent young advocates and a figure loathed by Beijing, was speaking outside a court where he and fellow advocates are being prosecuted for involvement in last year’s pro-democracy protests. China last week enacted sweeping security legislation for the restless territory, banning acts of subversion, secession, terrorism and collusion with foreign forces. The legislation has sent a wave of fear through the territory, and criminalized dissenting
‘SUICIDE’: Media reports said Park Won-soon went missing on Thursday after a staff member filed a sexual harassment claim against him this week Seoul mayor Park Won-soon, viewed as a potential candidate for the 2022 presidential election, was found dead of an apparent suicide hours after he was reported missing, police said, adding that he was the subject of an undisclosed investigation. In a note he is thought to have left behind on his desk, Park offered his apologies. “I thank everyone who was with me in my life. I apologize to my family for only making them suffer from pain,” according to the note that was released by his office yesterday. Park, in his letter, asked to be cremated and have his remains spread