IG-02-016

AUDIT 

REPORT GODDARD SPACE FLIGHT CENTER’S 

COMPLIANCE WITH EXPORT LAWS AND 

REGULATIONS

May 14, 2002

 National Aeronautics and 

Space Administration

 OFFICE OF INSPECTOR GENERAL
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Audits at (202) 358-1232, or visit www.hq.nasa.gov/office/oig/hq/issuedaudits.html.

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Acronyms 

CTO Center Transportation Officer 

ECP Export Control Program

GAO General Accounting Office 

NPD NASA Policy Directive
May 14, 2002 

W 

TO: I/Assistant Administrator for External Relations 

 100/Director, Goddard Space Flight Center 

 SJ/Director, NASA Management Office, Jet Propulsion Laboratory 

FROM: W/Assistant Inspector General for Audits 

SUBJECT: Final Report on Goddard Space Flight Center’s Compliance with Export 

Laws and Regulations 

Assignment Number A-01-048-00 

Report Number IG-02-016 

Enclosed please find the subject final report. Our evaluation of your response has been 

incorporated into the body of the report. The corrective action completed on 

recommendation 5 is responsive, and the recommendation is considered closed for 

reporting purposes. The corrective actions planned for recommendations 1 through 4 and 

6 were also responsive. Please provide estimated completion dates for the corrective 

actions, and notify us when actions have been completed on those recommendations, 

including the extent of testing performed to ensure corrective actions are effective. The 

final report distribution is in Appendix D. 

We appreciate the courtesies extended to the audit staff. If you have questions 

concerning the report, please contact Ms. Sandy Massey, Program Director, Safety and 

Technology Audits, at (321) 867-4057, or Mr. Karl Allen, Program Manager, at (202) 

358-2595. 

[original signed by] 

Alan J. Lamoreaux 

Enclosure 
2 

cc: 

AI/Associate Deputy Administrator 

B/Acting Chief Financial Officer 

B/Comptroller 

BF/Director, Financial Management Division 

G/General Counsel 

S/Associate Administrator for Space Science 

Y/Associate Administrator for Earth Science 

ID/Director, Assessments and Technology Division 

ID/NASA Export Administrator 

JM/Director, Management Assessment Division 
NASA Office of Inspector General 

IG-02-016 May 14, 2002 

 A-01-048-00

Goddard Space Flight Center’s 

Compliance with Export 

Laws and Regulations 

Introduction 

The NASA Office of Inspector General has completed an audit of NASA’s compliance 

with export laws and regulations at Goddard Space Flight Center (Goddard) and the Jet 

Propulsion Laboratory. We performed the audit in response to language in Public Law 

106-391, “NASA Authorization Act of 2000,” October 30, 2000, which authorizes 

Agency appropriations for fiscal years 2000-2002. The Act requires the NASA Inspector 

General to conduct annual audits of the Agency’s exports1

 of technologies and transfers 

of scientific and technical information and to assess the extent to which NASA is 

carrying out its activities in compliance with Federal export control laws. 

We reviewed exports by Goddard and the Jet Propulsion Laboratory because NASA 

obtained the majority of its recent export licenses at those locations. Specifically, 

Goddard and the Jet Propulsion Laboratory had a total of 40 (72 percent) out of the 56 

export licenses NASA obtained from January 1997 through June 2001. 

Our office and the General Accounting Office (GAO) previously performed audits of the 

NASA Export Control Program (ECP). We issued three reports from 1999 through 2000, 

and the GAO issued one report in 1999. Each report is summarized in Appendix B. 

The objective of this audit was to determine whether NASA exported controlled 

technology in accordance with applicable export laws and regulations and established 

Agency export guidance. Specifically, we determined whether NASA exports of items 

containing controlled technologies: 

• were covered by applicable export licenses and 

• were within the scope of export licenses. 

Appendix A contains further details on the audit objectives, scope, and methodology. 

 

1

 NASA’s Office of External Affairs defines exports as transfers of anything to a foreign person anywhere 

or anytime or a transfer to a U.S. person that will be subsequently transferred to a foreign person. 
Results in Brief 

The exports we reviewed for Goddard and the Jet Propulsion Laboratory were covered by 

applicable export licenses and were within the scope of the licenses as required by export 

control laws and regulations. In addition, NASA’s Office of External Relations 

established an ECP policy to assist the Centers in managing the ECP and to preclude 

NASA officials and contractors from effecting exports that could conflict with U.S. 

export laws and regulations. NASA is in the process of finalizing Agency procedures 

and guidelines to implement ECP policy. 

We did not identify any export violations. However, Goddard can improve its ECP 

management controls to ensure continued compliance with Federal export laws and 

regulations. In addition, Goddard was not in full compliance with NASA’s internal 

policies. Noncompliance could result in potential export license violations, unauthorized 

exports, and statutory penalties for export violations imposed by the Department of 

State’s Office of Defense Trade Controls or the Department of Commerce’s Bureau of 

Export Administration. Our prior audits identified ECP management control weaknesses 

related to ECP personnel training and audit performance. The ECP control weaknesses 

we identified during this audit at Goddard indicate the need for increased attention by 

NASA management. 

Background 

As a U.S. Government agency on the leading edge of space and aeronautics technological 

development and international cooperation, NASA must be a responsible exporter in its 

international activities. International activities often involve the transfer of commodities, 

software, or technologies to foreign partners by NASA and its contractors. The transfers 

are generally subject to export control laws and regulations, regardless of whether they 

occur in the United States, overseas, or in space. 

Export controls are imposed on NASA’s transfers and activities to protect the national 

security and to further U.S. foreign policy objectives. The majority of export licenses are 

governed and controlled by either the Office of Defense Trade Controls or the Bureau of 

Export Administration. The Office of Defense Trade Controls is responsible for 

controlling items identified on the U.S. Munitions List2 pursuant to the International 

Traffic in Arms Regulations. 3 The Bureau of Export Administration controls items

identified on the Commerce Control List4

 in accordance with the Export Administration 

 2

 The U.S. Munitions List identifies items designated by the President to be defense articles and services. 3

 The International Traffic in Arms Regulations provide for controlling the export and import of defense 

articles and services pursuant to the Arms Export Control Act. 4

 The Commerce Control List identifies “dual-use” items that have military/strategic and civil applications. 

2
Regulations. 5 Since January 1997, NASA has obtained a total of 38 export licenses from

the Office of Defense Trade Controls and a total of 18 export licenses from the Bureau of 

Export Administration. 

The NASA Office of External Relations is the lead liaison with the Department of 

Defense and the intelligence community, Department of State, Department of Commerce, 

Office of Science and Technology Policy, Office of the Vice President, and National 

Science and Technology Council on international policy issues. The NASA Office of 

External Relations administers the NASA ECP, provides Agencywide policy on 

international activities, and coordinates day-to-day international interaction at the 

Headquarters level in support of NASA's Enterprises.6

 

Center Directors are responsible for ensuring that international projects under their 

purview comply with U.S. export control laws and regulations and NASA Policy 

Directive (NPD) 2190.1, “NASA Export Control Program,” dated May 24, 2001. In 

accordance with the NPD, each Center Director must appoint a Center Export 

Administrator (Export Administrator) responsible for administering the ECP. 

Additionally, each Center Director must appoint a qualified individual as Center Export 

Auditor (Export Auditor) to annually review the operation of the ECP. 

Management Controls Related to the Goddard ECP

Finding. Goddard’s management controls for its ECP can be improved. Specifically, 

Goddard had not: 

• established sufficient controls over outgoing international mail to reduce the risk 

of unauthorized exports; 

• established formal training plans for personnel having export control 

responsibilities; 

• appointed key ECP officials in accordance with NPD 2190.1 and the NASA ECP 

Pamphlet (described on next page); or 

• established adequate separation of duties for key personnel with export control 

responsibilities. 

 5

 The Export Administration Regulations implement the export and re-export requirements of the Export

Administration Act of 1979. 6

 NASA’s Enterprises are Space Science, Earth Science, Biological and Physical Research, Human 

Exploration and Development of Space, and Aerospace Technology. 

3
Goddard’s ineffective ECP audits and the lack of supplemental Agency ECP procedures 

and guidelines7

 contributed to the control weaknesses. By improving its ECP controls, 

Goddard could provide greater assurance that its controlled technologies were properly 

exported and that errors and unauthorized exports would be readily detected and 

prevented. 

NASA’s ECP Policy 

NASA’s ECP policy is addressed in NPD 2190.1 and the NASA Export Control 

Pamphlet, November 1995. The NPD states that it is NASA policy to ensure that exports 

and transfers of commodities, technical data, or software to foreign persons are in 

accordance with U.S. export control laws and regulations and NASA policy. The NPD 

also defines an export as the transfer (by physical, electronic, oral, visual, or other means 

including mail) of a commodity, software, or technical data to a foreign person or a 

foreign person’s U.S. representative who is either abroad or in the United States. 

The NASA ECP Pamphlet does the following: 

• outlines the Agency's role and policy in exports to foreign partners; 

• provides for the appointment of and summarizes the authorities and 

responsibilities of Headquarters and Field Center ECP officials; 

• outlines general export control responsibilities for NASA personnel; 

• establishes ECP documentation and recordkeeping requirements, training 

requirements, and annual ECP audits; and 

• outlines the ECP audit process. 

To facilitate NASA exports, NPD 2190.1 and the NASA ECP Pamphlet require NASA 

Center Directors to appoint an Export Administrator who is responsible to: 

• ensure that Center activities comply with U.S. export control laws and 

regulations; 

• initiate ECP awareness and training programs; 

 7

 As a result of our audit report, “NASA Oversight of Contractor Exports of Controlled Technologies,” 

dated March 23, 2000, NASA agreed to establish procedures and guidelines for better management of the 

Agency’s ECP. NASA has not yet issued the recommended procedures and guidelines in final form. 

4
• consult with the Center’s Export Counsel8

 (Export Counsel), the Center 

Transportation Officer (CTO),9

 and Project Managers on export control matters; 

and 

• serve as the Center point of contact for the NASA Headquarters Export 

Administrator. 

NPD 2190.1 also requires that Center Directors appoint Export Auditors to perform

annual reviews of the ECP at each Center. The annual audits include reviews of ECP 

communications, training information, and guidance; verification that ECP or other 

export control training is documented; verification that required screening and licensing 

procedures are regularly followed; and verification that required documents are 

maintained and in compliance with the requirements of the Export Administration 

Regulations and the International Traffic in Arms Regulations. 

Federal Government Management Control Requirements 

The Office of Management and Budget Circular A-123, “Management Accountability 

and Control,” which references GAO’s “Standards for Internal Control in the Federal 

Government,” requires that program operations comply with applicable laws and 

regulations; appropriate authority, responsibility, and accountability be defined and 

delegated to accomplish the agency’s mission; personnel be adequately trained and 

competent to perform assigned duties; and key duties and responsibilities in authorizing, 

processing, recording, and reviewing official agency transactions be separated among 

individuals. 

ECP Management Controls 

Goddard’s ECP management controls needed improvement in the areas of outgoing 

international mail, personnel training, appointment of key officials, and separation of 

duties among key officials. 

Controls Over Outgoing International Mail. Goddard needed additional ECP controls 

for documents, software, or technical information that could be sent by international mail 

or parcel service to most foreign countries. The Export Administrator did not review 

international mail. The Center’s International Coordinator, who reports to the Associate 

Center Director, is not part of the ECP. The International Coordinator instructed 

mailroom employees to forward for her review, mail (letters and packages) addressed to 

or from countries on the International Traffic in Arms Regulations proscribed countries 

 8

 Each Center’s Chief Counsel must appoint an Export Counsel to provide the Center Export Administrator 

with legal guidance on export control matters. 9

 The NASA ECP Pamphlet requires that each CTO consult with the Center Export Administrator to ensure 

that exports and transfers of commodities, technologies, and software are accompanied by appropriate and 

accurate export control documentation. 

5
list.10 The Coordinator’s review consisted of contacting the sender to determine whether 

the contents of the mail constituted an export. However, the Export Administrator and 

the International Coordinator neither reviewed nor provided guidance for processing mail 

addressed to countries other than those on the proscribed list. 

The Export Administrator and International Coordinator acknowledged that the Center 

lacked the necessary controls to ensure that exports to countries not on the proscribed list 

by regular mail or parcel services complied with applicable laws and regulations. While 

those officials believed employee ECP awareness was an essential control in preventing 

unauthorized exports, the two Project Managers we interviewed11 were unaware of ECP 

requirements, including those related to sending international mail. Consequently, 

Goddard management had little assurance that Center personnel properly used 

international mail or parcel service for sending controlled technologies to foreign 

countries. 

The Jet Propulsion Laboratory recently developed procedures to address similar 

problems. Specifically, the procedures required Project Managers and other senders to 

attest to the contents of all outgoing international mail by completing and signing a selfcertification form to accompany the item to be mailed. Additionally, the procedures 

required the Laboratory’s Export Administrator to review the forms and approve each 

mailing. The Laboratory’s Mail Services personnel are required to return foreign mail 

that does not have the required certification form to the sender. Although the procedures 

did not preclude employees from sending international mail through off-site mail and 

parcel facilities, the procedures reduced the likelihood that the Laboratory’s mail center 

could be used to improperly send controlled technologies to foreign countries. 

Implementation of similar control procedures for Goddard’s outgoing international mail 

would help to ensure the Center’s compliance with the ECP policies and objectives and 

to prevent unauthorized exports. 

Training Plans for Personnel with ECP Responsibilities. The NASA ECP Pamphlet 

requires the Headquarters Export Administrator and Center Export Administrators to 

conduct or arrange annual training for NASA officials, to include the Export Counsel, 

Program and Project Managers, CTO’s, and other personnel involved in export issues. 

The Goddard Export Administrator had not developed a training plan for personnel with 

ECP responsibilities in accordance with the ECP Pamphlet. Some Project Managers and 

other responsible personnel were assigned to projects that had technology exports; 

however, they had not received required ECP training. Consequently, they were not 

knowledgeable of ECP requirements. Within the management control environment, 

establishing appropriate training is critical. Goddard could improve its ECP control 

 10 Proscribed countries are those that have been banned from receiving U.S. exports of controlled 

technologies. If a country appears on the proscribed countries list, it is generally U.S. policy to deny

licenses, or other approvals, associated with exports and imports of defense articles and defense services 

destined for or originating in that country. 11 We interviewed Goddard’s acting Project Managers for the Very Long Baseline Interferometer and 

Tropical Rainforest Measuring Mission projects regarding the Center’s ECP. Both projects included 

licensed exports of technology and space hardware. 

6
environment by initiating an awareness program, developing a training plan, and 

providing training for personnel involved in export processes. 

Appointment of ECP Key Personnel. NPD 2190.1 requires the Center Director to 

appoint an Export Administrator and Export Auditor and requires the Center Chief 

Counsel to appoint an Export Counsel. Goddard, however, had not formally appointed 

personnel to any of those three key positions as discussed below: 

• Export Administrator. A former employee of Goddard’s Management Operations 

Directorate appointed the Export Administrator. 

• Export Counsel. The NASA Headquarters Export Administrator and the NASA 

ECP Web site identified the Goddard Chief Counsel as the Export Counsel. 

However, the Goddard Chief Counsel had never been formally appointed. 

Furthermore, the Goddard Chief Counsel had not received any ECP training in 

more than 2 years. Another employee of the Chief Counsel’s office received 

annual training,12 consulted with Center personnel on export matters, and 

ultimately performed the majority of Goddard’s Export Counsel duties. 

• Export Auditor. The Center Director did not formally appoint the Export Auditor. 

The Export Auditor assumed the duties after receiving an informal request from

the Export Administrator. 

The GAO Standards for Internal Control in the Federal Government state, “a good 

internal control environment requires that the agency’s organizational structure clearly 

define key areas of authority and responsibility and establish appropriate lines of 

reporting.” Further, the internal control environment is affected by delegation of 

authority and responsibility. Appointments that give appearances of potential conflicts of 

interest and a lack of a segregation of duties do not contribute to a positive ECP control 

environment. Proper appointments for the Goddard Export Administrator, Export 

Counsel, and Export Auditor would help ensure compliance with the NPD and GAO 

standards and improve the overall ECP control environment. 

Separation of Duties for Export Control Personnel. Goddard did not adequately 

separate the duties of the Export Administrator, CTO, and Export Auditor to reduce the 

risk of errors and fraud in its ECP. For example, the Export Administrator also serves as 

CTO. NPD 2190.1 and the NASA ECP Pamphlet refer to the two positions as separate 

and distinct. Specifically, the NASA ECP Pamphlet states that Center Export 

Administrators will coordinate with Export Counsel, CTO’s, and Project Managers on 

export control matters affecting NASA programs. The ECP Pamphlet further requires 

CTO’s, in consultation with Export Administrators, to ensure that all exports are 

accompanied by appropriate ECP documentation. Having one individual act in both 

 12 The employee attended the Bureau of Export Administration update conference, the International Traffic 

in Arms Regulations conference, and the NASA export conference annually. 

7
capacities (Export Administrator and CTO) contravenes GAO standards and Agency 

policy on separation of duties and increases Goddard’s risk of committing an undetected 

export violation. 

The Export Auditor’s responsibilities were also not adequately separated. The Export 

Auditor’s primary duties were as Goddard’s transportation specialist who reports to the 

Goddard Export Administrator/CTO. In addition, the Export Auditor served as the 

Headquarters Transportation Officer and could have been involved in export shipments 

made by NASA Headquarters through Goddard. The dual responsibilities were a concern 

because as the Export Auditor’s supervisor, the Export Administrator/CTO could have 

improperly influenced the ECP audit results. In addition, the Export Auditor’s dual 

responsibilities placed him in a position of evaluating his own work. The two conditions 

could have resulted in subjective audits. 

The GAO internal control standards consider segregation of duties an important element 

of an effective control environment. GAO standards require that key duties and 

responsibilities be divided among different personnel to reduce the risk of error or fraud. 

Such a division of duties is necessary to ensure that no one individual controls all key 

aspects of transactions or events. Goddard’s organizational structure for the Export 

Administrator, CTO, and Export Auditor conflict with management controls outlined in 

the GAO standards, NPD 2190.1, and the NASA ECP Pamphlet and contributed to the 

Center’s weak ECP control environment. 

Goddard’s Annual ECP Audit 

Goddard’s 2000 ECP audit did not comply with NPD 2190.1 requirements or NASA’s 

calendar year 2000 ECP audit guidance and did not identify some of the management 

control weaknesses identified in this report. Our review of Goddard’s annual ECP audits 

for 1999 and 2000 showed the following: 

• The Export Auditor was neither properly trained nor independent. 

• The Export Auditor did not maintain documentation to support the audits. 

• The audit reports did not include required data specified in the NASA ECP 

Pamphlet and Headquarters audit guidance. 

• The audit reports did not contain a summary of the audit’s results or an attestation 

of the status of the Center’s ECP, recommendations for improvement, or evidence 

of the Export Administrator’s review of the audit. 

NPD 2190.1 requires that Center Directors appoint Export Auditors who are qualified for 

the position. NASA’s calendar year 2000 guidance on performing ECP audits required 

8
Export Auditors to have International Standards Organization 900013 audit/validation 

experience or other formal audit training or experience. 

In addition, the NASA External Relation Office’s calendar year 2000 guidance for 

performing ECP audits required Export Auditors to be independent of the export control 

function. Contrary to the guidance, the Goddard Export Auditor was not appointed or 

trained and was not independent to ensure an effective ECP audit. As previously 

discussed, the Export Auditor was not independent because he reported directly to the 

Export Administrator/CTO and served as the Headquarters Transportation Officer. 

The ECP audits serve as a management tool to help ensure program integrity. An 

effective ECP audit should have identified some of the same management control 

weaknesses and noncompliance issues that we identified in our audit. The Goddard ECP 

audits consisted of merely completing the checklist included in the calendar year 2000 

audit guidance. Further, the Export Auditor only answered the checklist questions and 

reported no conditions, recommendations, or follow-up activity. Also, there was no 

evidence of review, concurrence, or nonconcurrence with the ECP audit results by the 

Export Administrator. In addition, the Export Auditor could not provide any 

documentation to support his work. Finally, the Export Auditor did not consider the ECP 

control environment to include appointments of ECP key officials and ECP training. The 

auditor’s lack of training and independence resulted in ineffective audits and contributed 

to the Center’s weakened ECP control environment. 

Agency Implementation of ECP Guidance

NASA strengthened its ECP policy by issuing NPD 2190.1 on May 24, 2001. However, 

the Agency intended for the NPD to be only a brief policy statement. Agency officials 

agreed about 2 years ago to establish ECP implementing procedures in NASA Procedures 

and Guidelines 2190. As of February 2002, the procedures and guidelines were still in 

draft form. ECP management controls at the NASA Centers should improve once the 

procedures are finalized and implemented. 

Benefits From Improved Controls 

Goddard can improve its overall ECP control environment. Strengthening the 

management controls that we identified will provide required checks and safeguards to 

better manage Goddard’s ECP initiatives. Additionally, improving the ECP control 

environment will help to prevent export violations and statutory penalties that could 

result from exports that are contrary to or inconsistent with U.S. export laws and 

regulations. 

 13 International Standards Organization 9000 is a series of standards and guidelines that define the 

minimum requirements for an effective quality system accepted internationally. 

9
Recommendations, Management’s Response, and Evaluation of 

Response 

The Director, Goddard Space Flight Center, should: 

1. Establish export controls over outgoing international mail. Goddard 

should consider implementing export controls over international mail similar 

to those at the Jet Propulsion Laboratory.

Management’s Response. Concur. Although Goddard concurred, management believes 

it can best ensure proper export control over international mail through enhanced 

educational efforts rather than routing each piece of international mail through a central 

office for export control screening. Goddard stated that the Jet Propulsion Laboratory 

Export Administrator reviews only those international mailings that do not include a selfcertification. Goddard will undertake enhanced training through its recurring ECP 

training, use of the export control module on the NASA Site for On-line Learning and 

Resources, and other means, all of which will include instruction in the screening of

international mail. In addition, the Goddard Export Administrator, in conjunction with 

the Goddard International Coordinator, will establish procedures to review all official 

foreign correspondence to proscribed countries prior to transmission to the NASA Office 

of External Relations for review and concurrence. The complete text of management's

response is in Appendix C. 

Evaluation of Management’s Response. Goddard’s planned action is responsive to the 

recommendation. The recommendation is resolved, but will remain undispositioned and 

open for reporting purposes until corrective actions are completed. Management’s 

comment that the Jet Propulsion Laboratory’s Export Administrator reviews only those 

international mailings that receive no self-certification does not conform to the 

Laboratory’s approved draft procedures, which we relied upon in our audit. Specifically, 

the draft procedures require: (1) the requester to prepare an "International Mail SelfCertification" for all unclassified foreign mail, (2) the Legislative and International 

Affairs Office to review unpublished technical data and provide an export authorization 

or denial, and (3) the Mail Services Office to verify that all foreign mail includes the selfcertification document and to provide copies of the completed documents each month to 

the Legislative and International Affairs Office. 

2. Emphasize the ECP by formally appointing the Center Export 

Administrator and by directing the Center Chief Counsel to appoint a 

Center Export Counsel who is adequately trained to perform the ECP duties. 

Management’s Response. Concur. The Goddard Director will issue a letter formally 

appointing a qualified senior official as Center Export Administrator. On April 1, 2002, 

the Goddard Chief Counsel issued a formal letter designating himself as the Center 

Export Counsel. Goddard also noted an error in the draft report. Specifically, the former 

employee that appointed the Center Export Administrator was the Goddard Patent 

10
Counsel, an employee of the Goddard Management Operations Directorate, rather than 

the Chief Counsel’s Office as was stated in the draft report. Goddard also noted that the 

Center Export Counsel had attended the ECP training provided by the Goddard Export 

Control Administrator (see Appendix C).

Evaluation of Management’s Response. Goddard’s planned action is responsive to the 

recommendation. The recommendation is resolved, but will remain undispositioned and 

open for reporting purposes until we receive a copy of the letter appointing the Center 

Export Administrator. We revised the final report relating to the Patent Counsel and the 

Management Operations Directorate. In addition, we clarified the report to state that the 

Center Chief Counsel had not received export training in more than 2 years. Although 

we did not obtain written evidence of the Chief Counsel’s ECP training, the Goddard 

Export Control Administrator stated that the Chief Counsel attended export briefings in 

May 1999 and January 2000. 

3. Direct the Center Export Administrator to emphasize the ECP by: 

• identifying personnel involved in the export process, 

• establishing and maintaining a formal training plan for personnel 

involved in the process, and 

• providing appropriate training to employees with export control 

responsibilities. 

Management’s Response. Concur. Goddard is reviewing its organizations that are 

currently or potentially associated with international activities to identify additional 

personnel performing or appropriate to perform export control responsibilities. Goddard 

will enhance its Export Control Office Web site to include links to the Logistics 

Management Division and to other export personnel, as Goddard management identifies 

them. The Center Export Administrator will provide and document the annual export 

control training required by NPD 2190.1 and will implement a more advanced annual 

training program for all identified export control personnel (see Appendix C). 

Evaluation of Management’s Response. Goddard’s planned actions are responsive to 

the recommendation. The recommendation is resolved, but will remain undispositioned 

and open for reporting purposes until corrective actions are completed. 

4. Segregate the duties of the Center Export Administrator and the CTO. 

Management’s Response. Concur. The Goddard Director will appoint a qualified 

senior official as CEA who does not also serve as the Center Transportation Officer (see 

Appendix C). 

Evaluation of Management’s Response. Goddard’s planned action is responsive to the 

recommendation. The recommendation is resolved, but will remain undispositioned and 

open for reporting purposes until the corrective action is completed. 

11
5. Appoint a qualified and independent Export Control Auditor, and 

require the Export Control Auditor to maintain supporting audit 

documentation and to comply with NASA Headquarters guidelines for 

performing audits and reporting audit results. 

Management’s Response. Concur. The Goddard Director appointed a qualified and 

independent Export Control Auditor on March 7, 2002. The Export Control Auditor was 

provided with a comprehensive instruction and information package, originating from

NASA Headquarters, regarding duties, responsibilities, and performance guidelines (see 

Appendix C). 

Evaluation of Management’s Response. Management’s action is responsive to the 

recommendation. We consider the actions sufficient to disposition the recommendation, 

which will be closed for reporting purposes. 

6. The Assistant Administrator for External Relations should expedite issuance of 

NASA Procedures and Guidelines 2190 in final form. 

Management’s Response. Concur. The Office of External Relations is currently 

reviewing the draft NPG 2190, and entry into NASA’s Online Directives System for 

Agencywide review is anticipated in early June 2002.

Evaluation of Management’s Response. Management’s planned action is responsive to 

the recommendation. The recommendation is resolved, but will remain undispositioned 

and open for reporting purposes until NPG 2190 is finalized. 

12
Appendix A. Objectives, Scope, and Methodology 

Objectives

The overall objective of the audit was to determine whether NASA exported controlled 

technology in accordance with applicable export laws and regulations and established 

NASA export guidance. Specifically, we determined whether NASA exports of 

controlled technologies: 

• were covered by applicable export licenses and 

• were within the scope of export licenses. 

Scope and Methodology 

We performed a detailed review of NASA’s Export Control Program (ECP) requirements 

and procedures. We examined export records and documents to include export licenses 

from the Departments of State and Commerce and Shipper’s Export Declarations. We

also interviewed export officials such as Export Administrators, Export Counsel, Export 

Auditors, and Project Managers. We reviewed exports by the Goddard Space Flight 

Center (Goddard) and the Jet Propulsion Laboratory because NASA obtained the 

majority of export licenses for those locations. The licenses we reviewed at Goddard and 

the Jet Propulsion Laboratory represented about 72 percent (40 licenses) of the 56 export 

licenses NASA obtained from January 1997 through June 2001. We did not assess the 

reliability of computer-processed data, because we did not rely on it to achieve our 

objectives. 

Management Controls Reviewed 

Government auditing standards published by the General Accounting Office (GAO) 

require auditors to obtain a sufficient understanding of internal controls to plan and 

determine the nature, timing, and tests to be performed during the audit. Internal controls 

normally assessed in audits include the control environment, safeguard of assets, 

compliance with laws and regulations, and risk assessments. We assessed internal 

management controls for the ECP using Office of Management and Budget guidelines 

and GAO standards. The primary controls are in the U.S. Department of State's 

International Traffic in Arms Regulations; the U.S. Department of Commerce's Export 

Administration Regulations; NASA Policy Directive 2190.1, "NASA Export Control 

Program,” and NASA's Export Control Pamphlet. We identified management control 

weaknesses as discussed in the finding section of this report. 

Audit Field Work 

We conducted audit field work from September through December 2001 at Goddard, the 

Jet Propulsion Laboratory, and NASA Headquarters. We performed the audit in 

accordance with generally accepted Government auditing standards. 

13
Appendix B. Prior Audit Reports 

The NASA Office of Inspector General and the General Accounting Office (GAO) have 

performed prior audits related to the export of controlled technologies. The reports are 

summarized below. (See http://www.hq.nasa.gov/office/oig/hq/issuedaudits.html for 

copies of the NASA Office of Inspector General reports.) 

 

“Contractor Exports of Controlled Technologies,” Report Number IG-00-048, 

September 19, 2000. NASA contractors, TRW Space and Electronics Group (TRW) 

and Lockheed-Martin Michoud Space Systems (Lockheed-Martin) had adequate 

export control programs to ensure exports complied with applicable laws and 

regulations. TRW and Lockheed-Martin had developed effective export control 

policies, established export control training programs, and maintained required and 

readily available export records. Another contractor, Boeing Space and 

Communications Group (Boeing), needed to improve its Export Control Program

(ECP) to prevent the potential for unauthorized or unlicensed transfers of NASA’s 

International Space Station Program controlled technologies. The auditors concluded 

that NASA lacked assurance that Boeing’s export activities on behalf of the Agency 

fully complied with applicable export laws and regulations. 

We recommended that NASA require Boeing to establish an ECP and a detailed 

company-wide export policy that complied with Export Administration Regulations 

before authorizing Boeing’s use of NASA-obtained export licenses on behalf of the 

International Space Station Program. We also recommended that the Agency require 

the International Space Station Program Office, in coordination with the Center 

Export Administrator, to periodically review Boeing’s and its subcontractors’ ECP’s 

to ensure that exports effected against NASA-obtained licenses were in accordance 

with applicable U.S. export laws and regulations. 

NASA concurred with the recommendations; however, management questioned 

whether some examples in the report were export violations. We reaffirmed that the 

reported examples could represent possible violations because of disparities in 

management’s explanations and inconsistencies in supporting documentation. 

“NASA Oversight of Contractor Exports of Controlled Technologies,” Report 

Number IG-00-018, March 23, 2000. NASA contractors were exporting controlled 

technologies to foreign entities in support of the Agency’s international activities. 

However, NASA managers of major programs at Goddard Space Flight Center, 

Johnson Space Center, and Marshall Space Flight Center were unable to readily 

identify the types and amounts of NASA-funded controlled technologies that 

contractors export. We concluded that NASA lacked assurance that contractor export 

activities complied with applicable U.S. export laws and regulations. We also 

identified potential violations by two NASA contractors that 

14
Appendix B

were exporting NASA-funded controlled technologies to foreign contractors in 

furtherance of the International Space Station and Space Shuttle External Tank 

Programs. 

We recommended that NASA require contractors to provide the following: 

• a plan for obtaining required export licenses to fulfill contract requirements, 

• a listing of export licenses the contractor obtained, and 

• a periodic report of the exports effected against those licenses. 

We also recommended that NASA revise its draft NASA Policy Directive 2190, 

“NASA Export Control Program,” to incorporate the oversight responsibilities of 

Agency officials when NASA or its contractors obtain export licenses on behalf of a 

NASA program. 

NASA concurred with the recommendations and agreed to provide additional 

guidance to assure that contracts contain export control requirements. Management 

also agreed to include responsibilities for Agency officials in its draft procedures and 

guidelines on export controls. 

“NASA Control of Export-Controlled Technologies,” Report Number 

IG-99-020, March 31, 1999. NASA had not identified all export-controlled 

technologies of its major programs and did not maintain a catalog of classifications 

for transfers of export-controlled technologies. Also, Agency oversight of and 

training for personnel in the ECP needed improvement. Specifically, the Centers’ 

annual ECP audits were not adequately performed, and NASA personnel lacked 

training in controlling and documenting export-controlled technologies. NASA did 

not have adequate control over export-controlled technologies to preclude 

unauthorized or unlicensed transfers. 

NASA concurred with the recommendations and stated it planned to develop a catalog of 

classifications for specific exports, improve training and guidance for ECP auditors, and 

enhance and strengthen training for NASA employees involved directly or indirectly with 

technology control.

The GAO performed one audit of the NASA ECP as it related to the International Space 

Station. 

“Export Controls – International Space Station Technology Transfers,” Report 

Number GAO/NSIAD-00-14, November 1999. The GAO found that NASA authorized 

the export of radiation-hardened electronic parts to Russia in 1997 without first obtaining 

a license from the State Department’s Office of Defense Trade Controls. The report 

recommended improvements in the quality of NASA internal audits. 

15
Appendix C. Management’s Response 

16
Appendix C

17
Appendix C

18
Appendix C

19
Appendix D. Report Distribution 

National Aeronautics and Space Administration (NASA) Headquarters 

A/Administrator 

AI/Associate Deputy Administrator 

AA/Chief of Staff 

AB/Associate Deputy Administrator for Institutions 

B/Acting Chief Financial Officer 

B/Comptroller 

BF/Director, Financial Management Division 

G/General Counsel 

H/Assistant Administrator for Procurement 

HK/Director, Contract Management Division 

HS/Director, Program Operations Division 

I/Assistant Administrator for External Relations 

J/Assistant Administrator for Management Systems 

JM/Director, Management Assessment Division 

L/Assistant Administrator for Legislative Affairs 

M/Associate Administrator for Space Flight 

S/Associate Administrator for Space Science 

Y/Associate Administrator for Earth Science 

NASA Centers 

Director, Goddard Space Flight Center 

 Chief Counsel, Goddard Space Flight Center 

Director, NASA Management Office, Jet Propulsion Laboratory 

Chief Counsel, John F. Kennedy Space Center 

Non-NASA Federal Organizations and Individuals 

Assistant to the President for Science and Technology Policy 

Deputy Associate Director, Energy and Science Division, Office of Management and 

 Budget 

Branch Chief, Science and Space Programs Branch, Energy and Science Division, Office 

 of Management and Budget 

Managing Director, Acquisition and Sourcing Management Team, General Accounting 

Office 

Senior Professional Staff Member, Senate Subcommittee on Science, Technology, and 

Space 

20
Appendix D 

Chairman and Ranking Minority Member – Congressional Committees and 

Subcommittees 

Senate Committee on Appropriations 

Senate Subcommittee on VA, HUD, and Independent Agencies 

Senate Committee on Commerce, Science, and Transportation 

Senate Subcommittee on Science, Technology, and Space 

Senate Committee on Governmental Affairs 

House Committee on Appropriations 

House Subcommittee on VA, HUD, and Independent Agencies 

House Committee on Government Reform

House Subcommittee on Government Efficiency, Financial Management and 

 Intergovernmental Relations 

House Subcommittee on Technology and Procurement Policy 

House Committee on Science 

House Subcommittee on Space and Aeronautics 

Congressional Member 

Honorable Pete Sessions, U.S. House of Representatives 

21
NASA Assistant Inspector General for Audits 

Reader Survey 

The NASA Office of Inspector General has a continuing interest in improving the 

usefulness of our reports. We wish to make our reports responsive to our customers’ 

interests, consistent with our statutory responsibility. Could you help us by completing 

our reader survey? For your convenience, the questionnaire can be completed 

electronically through our homepage at http://www.hq.nasa.gov/office/oig/hq/audits.html

or can be mailed to the Assistant Inspector General for Audits; NASA Headquarters, 

Code W, Washington, DC 20546-0001. 

Report Title: Final Report on Goddard Space Flight Center’s Compliance with Export 

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objectives, scope, and methodology. 

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Thank you for your cooperation in completing this survey. 
Major Contributors to the Report 

Ms. Sandy Massey, Program Director, Safety and Technology Audits 

Mr. Karl Allen, Program Manager, Safety and Technology Audits 

Mr. Oscar Lindley, Auditor-in-Charge 

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Ms. Edith Hoggard, Program Assistant