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."
FEELING THREATENED: The first military commission under Kim Jong-un’s leadership to last longer than a day is a sign of a growing escalatory doctrine, an analyst said North Korea discussed assigning additional duties to its frontline army units at a key military meeting, state media said yesterday, suggesting that the country might deploy battlefield nuclear weapons targeting South Korea along the rivals’ tense border. The discussion comes as South Korean officials said North Korea has finished preparations for its first nuclear test in five years, as part of possible efforts to build a warhead to be mounted on short-range weapons capable of hitting targets in South Korea. During an ongoing meeting of the Central Military Commission of the ruling Workers’ Party on Wednesday, North Korean leader Kim Jong-un and
TRADE TALK: Xiao Qian said that Australia had fired the ‘first shot’ in deteriorating trade relations with China, but improvements were possible if Canberra takes action China’s new ambassador to Australia chided protesters who heckled him yesterday during a speech about the future of relations between the two countries. Xiao Qian (肖千), who has only been in the role since January, had just begun his speech at the University of Technology Sydney when the first protesters interjected, calling for freedom for Xinjiang, Tibet and Hong Kong. The ambassador was repeatedly interrupted by sign-wielding protesters, some criticizing China’s treatment of the Uighur people as well as the university for inviting Xiao to speak. “People who are coming again and again to interrupt the process, that’s not expression of freedom of
China’s COVID-19 outbreak is shifting to its south coast, with a flareup in Shenzhen triggering mass testing and a lockdown of some neighborhoods, while Macau — an hour’s drive away — is racing to stop its first outbreak in eight months. The new cases come as China’s two most important cities, Beijing and Shanghai, look to be subduing the virus after months of strict curbs and repeated testing. Shanghai yesterday reported nine local cases, while Beijing reported five. Nationwide, China yesterday reported 34 new COVID-19 infections. Yet new clusters continue to emerge, prompting action from local officials. Borders are increasingly under pressure, with
New Zealand stargazers were left puzzled and awed by strange, spiraling light formations in the night sky on Sunday night. At about 7:25pm, Alasdair Burns, a stargazing guide on Stewart Island, also called Rakiura, received a text from a friend saying to go outside and look at the sky. He went out and saw a huge, blue spiral of light amid the darkness. “It looked like an enormous spiral galaxy, just hanging there in the sky,” Burns said. “Quite an eerie feeling.” “We quickly banged on the doors of all our neighbors to get them out as well. And so there were