National Aeronautics and Space Administration: Significant Actions Needed to Address Long-standing Financial Management Problems

Congress asked GAO to testify on the status of the National Aeronautics and Space Administration's (NASA) financial management reform efforts. NASA faces major challenges that if not addressed, will weaken its ability to manage its highly complex programs. NASA has been on GAO's high-risk list since 1990 because of its failure to effectively oversee its contracts and contractors, due in part to the agency's lack of accurate and reliable information on contract spending. GAO's statement focused on (1) how NASA's history of clean audit opinions served to mask the true extent of the agency's financial management difficulties; (2) the results of NASA's fiscal year 2003 financial statement audit, which are a departure from the fiscal year 2002 results; (3) NASA's effort to implement an integrated financial management system; and (4) the challenges NASA faces in reforming its financial management organization. Although GAO does not make specific recommendations in this statement, GAO previously made several recommendations to improve NASA's acquisition and implementation strategy for its financial management system. While NASA ultimately agreed to implement all of the recommendations, it disagreed with most of the findings--stating that its acquisition and implementation strategy had already addressed GAO's concerns.