NASA: Compliance with Cost Limits (08-APR-05, GAO-05-492R).	 
                                                                 
Section 202 of the National Aeronautics and Space Administration 
(NASA) Authorization Act of 2000, Pub. L. No. 106-391, 202, 114  
Stat. 1577, 1587 (Oct. 30, 2000) requires that GAO verify NASA's 
accounting for amounts obligated against established limits for  
the space station and related space shuttle support. Under the	 
act, obligations are limited to $25 billion for the International
Space Station's (ISS) development and $17.7 billion for shuttle  
launches in connection with the space station's assembly. In the 
past, we have advised Congressional committees that NASA was	 
unable to provide detailed support for the amounts obligated	 
against the limits. Thus, we could not verify the amounts that	 
NASA reported in its budget requests to Congress.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-492R					        
    ACCNO:   A21337						        
  TITLE:     NASA: Compliance with Cost Limits			      
     DATE:   04/08/2005 
  SUBJECT:   Accounting 					 
	     Appropriated funds 				 
	     Appropriation limitations				 
	     Budget obligations 				 
	     Financial management				 
	     Reporting requirements				 
	     Data integrity					 
	     Budget requests					 
	     NASA International Space Station Program		 

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GAO-05-492R

United States Government Accountability Office Washington, DC 20548

April 8, 2005

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Co-Chairman

Committee on Commerce, Science, and Transportation United States Senate

The Honorable Sherwood L. Boehlert
Chairman
The Honorable Bart Gordon
Ranking Minority Member
Committee on Science
House of Representatives

Subject: NASA: Compliance with Cost Limits

Section 202 of the National Aeronautics and Space Administration (NASA)
Authorization Act of 2000, Pub. L. No. 106-391, S: 202, 114 Stat. 1577,
1587 (Oct. 30, 2000) requires that GAO verify NASA's accounting for
amounts obligated against established limits for the space station and
related space shuttle support. Under the act, obligations are limited to
$25 billion for the International Space Station's (ISS) development and
$17.7 billion for shuttle launches in connection with the space station's
assembly. In the past, we have advised your committees that NASA was
unable to provide detailed support for the amounts obligated against the
limits. Thus, we could not verify the amounts that NASA reported in its
budget requests to Congress.

As part of its fiscal year 2006 budget request, NASA reported that of the
$23.7 billion that had been appropriated for ISS and related activities
from fiscal year 1994 through fiscal year 2004, approximately $23.5
billion was obligated as of September 30, 2004. NASA did not report the
amounts obligated for shuttle launch costs. Furthermore, NASA is still
unable to provide detailed support for the amounts obligated against the
limits. Thus, we could not verify the amounts NASA reported to Congress in
its budget requests for fiscal years 2002 through 2006. NASA has
acknowledged the financial reporting challenges it faces and recently
implemented a new integrated financial management system. Although NASA is
still working through some significant systems implementation issues, the
goal of the new system is to improve the availability and reliability of
NASA's financial data.

                 GAO-05-492R NASA: Compliance with Cost Limits

As discussed with your staff, the enclosed briefing slides provide a
summary of past and current issues related to NASA's compliance with the
ISS and shuttle support spending limits as well as our assessment of
NASA's financial reporting challenges going forward. We conducted our work
to develop the attached briefing slides from March through April 2005 in
accordance with U.S. generally accepted government auditing standards. We
provided a copy of the enclosed briefing slides to NASA officials, who
agreed with our observations and conclusions.

We are sending copies of this report to other interested congressional
committees as
well as to NASA's Administrator and Chief Financial Officer. We will also
make
copies available to others upon request. In addition, the report will be
available at no
charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at (202)
512-9095 or by e-mail at [email protected] or Diane Handley, Assistant
Director, at (404)
679-1986 or by e-mail at [email protected].

Gregory D. Kutz
Director, Financial Management and Assurance

Enclosure

(192161)
Page 18 GAO-05-492R NASA: Compliance with Cost Limits

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