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."
JUMPING BAIL: The democracy advocate said made the decision after ‘considering the situation in Hong Kong, my personal safety, my physical and mental health’ Hong Kong pro-democracy activist Agnes Chow (周庭), who was jailed over her role in massive 2019 protests, on Sunday said she had moved to Canada and would not return to meet her bail conditions. Chow was one of the best-known young faces of the 2012, 2014 and 2019 protest movements against Beijing’s increasingly authoritarian rule in Hong Kong. She spent about seven months behind bars for her role in a protest outside Hong Kong police headquarters in 2019, when huge crowds rallied week after week in the most serious challenge to China’s rule since Hong Kong’s 1997 handover. On Sunday
TAKING STOCK: It was not yet clear how damaging the espionage, dating to 1981, has been, as authorities are still assessing the situation, the State Department said A former US ambassador to Bolivia has been arrested and charged with spying for Cuba over a 40-year span, the US Department of Justice announced on Monday, detailing a shock betrayal by a suspect who called the US “the enemy.” US Attorney General Merrick Garland laid out the allegations against Victor Manuel Rocha, a onetime member of the White House’s National Security Council now accused of using his positions within the government to support Cuba’s “clandestine intelligence-gathering mission” against the US. The charges against Rocha, 73, expose “one of the highest-reaching and longest-lasting infiltrations of the United States government by a foreign
DARK WARNINGS: If Trump survives his court trials, neither the Supreme Court nor the US Constitution could stop him from becoming president for life, a ‘Post’ column said Former US president Donald Trump on Tuesday declined to rule out abusing power if he returns to the White House after Fox News host Sean Hannity asked him to respond to growing criticism of his rhetoric. The Republican presidential front-runner has talked about targeting his rivals — referring to them as “vermin” — and vowed to seek retribution if he wins a second term for what he argues are politically motivated prosecutions against him. As Trump has dominated the Republican presidential primary, US President Joe Biden has stepped up his own warnings, contending that Trump is “determined to destroy American democracy.” “Under no
ELECTION INTERFERENCE: Meta did not publicly link the account network to the Chinese government, but said it is based in China and sought to inflate divisions within the US Someone in China created thousands of fake social media accounts designed to appear to be from Americans and used them to spread polarizing political content in an apparent effort to divide the US ahead of next year’s presidential elections, Meta said on Thursday. The network of about 4,800 fake accounts was attempting to build an audience when it was identified and eliminated by the tech company, which owns Facebook and Instagram. The accounts sported fake photos, names and locations as a way to appear like everyday American Facebook users weighing in on political issues. Instead of spreading fake content as other networks