IG-02-017

AUDIT 

REPORT MANAGEMENT OF RESEARCH GRANTS AND 

COOPERATIVE AGREEMENTS 

June 4, 2002

 National Aeronautics and 

Space Administration

OFFICE OF INSPECTOR GENERAL
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Acronyms 

CFO Chief Financial Officer 

FMM Financial Management Manual 

NPG NASA Procedures and Guidelines 

SF Standard Form
 June 4, 2002

W 

TO: Distribution 

FROM: HQ/W/Assistant Inspector General for Audits 

SUBJECT: Final Report on Management of Research Grants and 

Cooperative Agreements 

Assignment Number A-00-042-00 

Report Number IG-02-017 

Enclosed please find the subject final report. Please refer to the Executive Summary for 

the overall audit results. Our evaluation of your response has been incorporated into the 

body of the report. We consider management’s proposed, corrective actions responsive 

for all the recommendations. The recommendations will remain open for reporting 

purposes until corrective actions are completed. Please notify us when actions have been 

completed on the recommendations, including the extent of testing performed to ensure 

corrective actions are effective. The final report distribution is in Appendix E. 

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

concerning the report, please contact Mr. Chester A. Sipsock, Program Director, 

Financial Audits, Management and Oversight, at (216) 433-8960, or Lynette A. Westfall, 

Audit-in-Charge, at (216) 433-8964. 

 

Alan J. Lamoreaux 

Enclosure 

Distribution: 

HQ/AS/Chief Scientist 

HQ/B/Acting Chief Financial Officer 

HQ/H/Assistant Administrator for Procurement 

GRC/0100/Director, John H. Glenn Research Center at Lewis Field 

MSFC/DAO1/Director, George C. Marshall Space Flight Center 
cc: 

HQ/B/Comptroller 

HQ/BF/Director, Financial Management Division 

HQ/G/General Counsel 

HQ/HC/Director, Analysis Division 

HQ/HK/Director, Contract Management Division 

HQ/JM/Director, Management Assessment Division 

HQ/M/Associate Administrator for Space Flight 

HQ/R/Associate Administrator for Aerospace Technology 

HQ/S/Associate Administrator for Space Science 

HQ/U/Associate Administrator for Biological and Physical Research 

HQ/Y/Associate Administrator for Earth Science 

GSFC/100/Director, Goddard Space Flight Center 
Contents 

Executive Summary, i 

Introduction, 1 

Findings and Recommendations, 2

Finding A. Use of Peer Reviews in Awarding Unsolicited 

Research Grants, 2 

Finding B. Documenting Peer Review and Civil Rights 

Requirements, 5 

Finding C. Grantee Financial Reporting, 10

Appendix A – Objectives, Scope, and Methodology, 16 

Appendix B – Research Grants and Cooperative Agreements 

Not Peer Reviewed, 19 

Appendix C – Prior Audit Coverage, 20 

Appendix D – Management’s Response, 22 

Appendix E – Report Distribution, 27
NASA Office of Inspector General 

IG-02-017 June 4, 2002 

 A-00-042-00 

Management of Research Grants and Cooperative Agreements 

Executive Summary 

Background. In carrying out its scientific mission, NASA awards grants1

 and 

cooperative agreements,2

 hereafter collectedly referred to as grants, to universities and 

non-profit entities for funding basic and applied research.3 One of NASA’s goals is to 

select and award research in a manner that ensures both broad participation and a high 

degree of quality.4

 NASA promotes this goal primarily through a process that combines 

full and open competition5 and peer reviews.6 

Under the auspices of a university or a non-profit entity, researchers submit solicited 

proposals7

 to NASA in response to the broad announcements for research proposals. 

NASA is required to perform peer reviews for the solicited proposals and competitively 

awards grants for those proposals.8

 In some cases, researchers submit unsolicited 

 

1

NASA Procedures and Guidelines (NPG) 5800.1, “Grant and Cooperative Agreement Handbook,” 

(hereafter referred to as the Grant Handbook) states that a research grant shall be used to accomplish a 

NASA objective through stimulating the acquisition of knowledge of the subject under study or attempting 

to determine the potential of scientific discoveries or improvements in technology, materials, processes, 

methods, devices, or techniques and advance the state of the art. The grantee will generally conduct the 

research without assistance from NASA and will provide a final product, usually a report. 

2

The Grant Handbook states that a cooperative agreement shall be used when the principal purpose is to 

transfer something of value to the grantee to accomplish a public purpose of support or stimulation 

authorized by Federal statute, where substantial involvement is anticipated between NASA and the grantee. 

3

NASA conducts research in Earth science, space science, life and microgravity sciences and applications, 

and aeronautics and space transportation technology. 4

The results of this research can become the impetus for change in Federal policies, regulations, and 

programs. Thus, the Congress and the public rely on Federal agencies to fund and conduct research that 

produces high-quality results. 

5

Federal Acquisition Regulation, Subchapter B, Part 6, states that under full and open competition all 

responsible sources are permitted to compete. 

6

One or more qualified members of the scientific and technical community, who are independent from the 

research proposal, objectively reviews the proposals to ensure the merit, quality, and integrity of proposed 

research. 

7

A solicited proposal is a written proposal submitted by researchers in response to NASA’s formal or 

informal announcement or solicitation for research. 

8

The NASA Office of Inspector General is conducting an inspection, G-02-010, entitled, “Review of JPL 

[Jet Propulsion Laboratory] Peer Review Evaluation Process.” The objective of this inspection is to 

determine whether the JPL peer review process is consistent with NASA and other Government peer 

review standards for scientific research and development programs. 
proposals9

 for research that is not in response to a specific announcement. A grant 

resulting from an unsolicited proposal is not competitively awarded. NASA evaluates 

unsolicited proposals by performing either a peer review or a technical/merit review.10 A 

technical/merit review, however, may lack the objectivity and fairness that are the 

trademarks of the peer review process11 and may not provide the same level of assurance 

that the research is the highest quality and best choice compared to other research being 

considered. 

At the end of fiscal year 2000, NASA had 7,961 active grants valued at about $4.8 

billion. The three Centers12 included in our audit accounted for 76 percent or 6,065 of 

the active grants and 73 percent or about $3.5 billion (as of September 30, 2000) of the 

total dollar value. 

Objectives. The audit objectives were to determine whether NASA appropriately 

performed peer reviews before awarding research grants and cooperative agreements and 

complied with key requirements for the solicitation, award, and financial management of 

research grants and cooperative agreements. Appendix A contains the details on the 

audit objectives, scope, and methodology. 

Results of Audit. NASA appropriately performed peer reviews on 100 percent of the 

solicited proposals for the sampled grants prior to award as required by NASA policy.13 

However, NASA does not similarly require a peer review for unsolicited proposals for 

grants prior to award. Thus, while 25 (61 percent) of the 41 unsolicited proposals that we 

sampled were peer reviewed before being awarded, the remaining 16 (39 percent) 

received only technical/merit reviews. Using peer reviews Agencywide for all research 

proposals would help ensure that unsolicited research proposals are awarded objectively 

and fairly (see Finding A). 

Generally, NASA complied with the key requirements for the solicitation and award of 

grants. However, NASA should improve controls for documenting (1) in the grant files 

that a peer review was performed and (2) that the grantees were in compliance with civil 

rights requirements.14 Without proper documentation, the grant files do not provide a 

 

9

An unsolicited proposal is a written proposal submitted by researchers to NASA for the purpose of 

supporting research and is not in response to a formal Agency announcement to solicit research proposals. 10Usually one person within the program office that has the most knowledge of the proposed research 

performs a review of the feasibility of the proposed work and the applicability to Agency goals and costs. 

The reviewer usually serves as the technical monitor if the proposal is awarded. 11The goals of a peer review are to: determine the quality, relevance, and value of the proposed work; 

identify research work most likely to succeed; investigate relative merits of similar work proposed by 

competing groups; and demonstrate that the Agency achieves balance and fairness in making its scientific

and technical decisions by involving the scientific community in the selection process. 12We performed work at three NASA Centers – the John H. Glenn Research Center at Lewis Field (Glenn), 

Goddard Space Flight Center (Goddard), and George C. Marshall Space Flight Center (Marshall). 13NASA performed peer reviews on 83 solicited and 25 unsolicited proposals we sampled. 14Grantees are required to annually certify that they are in compliance with Federal civil rights statutes. 

The civil rights requirements protect constitutional rights in public facilities and public education and 

ii
reasonable justification for the grant award and NASA cannot ensure that awards are in 

compliance with Federal civil rights requirements (see Finding B). 

In the past, NASA had experienced problems in receiving grantee financial reports in a 

timely manner.15 This problem continues; 79 (89 percent) of 89 sampled grantees16 that 

were required to submit financial reports experienced some type of reporting problem. 

NASA should have suspended advance funding for 52 (58 percent) sampled grantees in 

accordance with Agency policy; however, NASA suspended advance funding for only 5 

of the grantees. Without timely financial information from the grantee, NASA does not 

have reliable information for decisionmaking and cannot accurately record financial data 

in a timely manner (see Finding C). 

Recommendations. NASA should obtain peer reviews for all unsolicited proposals prior 

to award, unless the Chief Scientist approves a written waiver in advance of award. 

NASA should also make its existing policies on documentation of the grant files more 

specific and consistent with Federal and NASA requirements on maintaining peer review 

documentation in the grant file. Marshall and Glenn should establish a process to ensure 

compliance with civil rights requirements. Lastly, NASA should improve the timeliness 

of the grantees’ financial reporting and revise the Grant Handbook to reflect the Financial 

Management Manual (FMM) requirements. 

Management's Response. NASA concurred with the recommendations to implement 

and document a process at Marshall and Glenn for ensuring civil rights compliance and 

improve the timely receipt of grantee’s financial reporting. Although NASA agreed to 

revise NASA policy to require that all solicited and unsolicited proposals be peer 

reviewed, management reserved the right to coordinate its actions with the newly 

appointed Chief Scientist, who has not yet reviewed the issues. NASA agreed that the 

grant file should clearly show that a peer review was performed and agreed to review and 

revise applicable guidance to ensure a common policy throughout NASA. Finally, 

NASA concurred with the recommendation that the Grant Handbook and the FMM 

should be consistent in addressing the remedial actions for late grantee reporting. 

However, rather than revise the Grant Handbook to reflect the existing FMM policy, 

management agreed instead to conduct a detailed review of the Grant Handbook and the 

FMM policy to determine how these two documents should best be made consistent. 

 

prohibit discrimination in the private and Federal workplace on the basis of race, color, national origin, 

age, sex, religion, or handicap. 15Appendix C provides details of prior reports on this problem area. 16NASA requires that a grantee submit only one financial report for all active grants. Within our sample, 

NASA awarded 124 grants to 89 different grantees. 

iii
Evaluation of Management's Response. We consider NASA’s comments and planned 

actions responsive to resolve each recommendation. If the peer review documentation 

will be maintained outside the grant file, the grant file should clearly indicate whether a 

peer review was performed and provide a cross-reference to where that documentation 

can be located within the Agency. In relation to late grantee financial reporting, we 

request that management provide the Office of Inspector General with the results of its 

analysis of the Grant Handbook and the FMM policy in making a final determination on 

the consistency issue related to these two documents. 

iv
Introduction 

To help ensure the quality and integrity of research, the science community traditionally 

has relied on independent reviews of research proposals by peers. Peer reviews consist 

of an evaluation by one or more persons who are members of the scientific and technical 

community and are considered qualified to provide an independent, objective assessment 

of the merits of the proposed work. Peer reviewers provide their individual evaluations 

and comments to NASA, which develops an overall rating that it uses in determining 

which research will be funded. The goals of a peer review are to: determine the quality, 

relevance, and value of the proposed work; identify research work most likely to succeed; 

investigate relative merits of similar work proposed by competing groups; and 

demonstrate that the Agency achieves balance and fairness in making its scientific and 

technical decisions by involving the scientific community in the selection process. 

Unsolicited proposals are subject to either a peer review or a technical/merit review. An 

individual within the technical office responsible for the work performs the 

technical/merit review. The technical/merit review usually assesses the feasibility of the 

proposed work and the applicability to Agency goals and costs. Such reviews, however, 

may lack the objectivity and fairness that are the trademark of the peer review process 

and may not provide the same level of assurance that the research is the highest quality 

and best choice compared to other research being considered. 

After the NASA technical or program office selects the grantee, the Center’s grants 

office, within the procurement office, awards and administers the grant and maintains the 

grant file, and the technical office monitors progress. The Agency requires grantees to 

submit financial reports to the Center’s Financial Management Office, which uses the 

data to monitor the grantee’s financial transactions, process payments, and update NASA 

accounting and financial records. 
Findings and Recommendations 

Finding A. Use of Peer Reviews in Awarding Unsolicited Research 

Grants 

NASA did not always perform peer reviews on unsolicited proposals for research grants 

because NASA did not have a requirement that all unsolicited proposals be peer reviewed 

prior to awarding grants. For example, 16 (39 percent) of the 41 unsolicited proposals 

we reviewed had not been peer reviewed. By formalizing the peer review requirement 

for unsolicited proposals Agencywide, NASA would help ensure the objectivity and 

fairness associated with the peer review process when evaluating unsolicited research 

proposals. 

 Peer Reviews of Research Proposals 

NASA policy on peer review is in the “Science in Air and Space: NASA’s Science 

Policy Guide.” 17 The NASA Science Policy Guide defines a peer review as an 

evaluation by persons independent from the work, within and outside NASA, who are 

members of the scientific and technical community and are considered qualified to 

provide an independent, objective assessment of the merits of the research being 

proposed. NASA’s “Guidance for the Preparation and Submission of Unsolicited 

Proposals” states that some proposals are reviewed entirely in-house, others are evaluated 

by a combination of in-house personnel and selected external reviewers, while still others 

are subject to a full external peer review either by mail or through assembled panels. In 

addition, the Grant Handbook, section 1260.11, states that technical evaluation of 

proposals will be conducted by the technical/program office and may be based on peer 

reviews.18

The importance that NASA places on competitively awarding and peer reviewing grants 

is emphasized by the performance target19 that NASA has included in its annual 

Performance Plan to the Congress for 1999, 2000, and 2001. The target requires the 

Office of Space Science, Office of Biological and Physical Research, and Office of Earth 

Science, three of the Agency’s five Enterprises,20 to competitively award 80 percent or 

 

17NASA’s Chief Scientist issued the Guide in July 1996. 18The White House Office of Science and Technology Policy has directed agencies to “. . . Significantly

enhance the utilization of merit review with peer evaluation and competitive selection in Federal R&D 

[Research and Development] projects.” 

19Performance target is the term NASA uses in the Performance Plan for those measures or metrics that 

were established to accomplish (and measure) the individual goals and objectives. Target, as used in this 

report, generally equates to the terms “measure” or “indicator” as used in the Government Performance and 

Results Act. 20NASA established five strategic Enterprises to function as primary business areas for implementing 

NASA’s mission and serving its customers. The other two Enterprises are the Office of Space Flight and 

Office of Aerospace Technology. 

2
more of the research dollars based on peer reviews.21 However, the target does not 

include other offices such as the Office of Space Flight and the Office of Aerospace 

Technology, which also award research grants. 

NASA does not have Agencywide requirements that address the peer review of 

unsolicited proposals. However, at least three Enterprises have recognized the 

importance of performing peer reviews for unsolicited research proposals. For example, 

the Office of Earth Science has a written policy that requires a peer review of all 

proposed research, solicited and unsolicited. Also, the NASA Chief Scientist stated that 

the Office of Biological and Physical Research and the Office of Space Science have 

adopted informal policies requiring that all research proposals, both solicited and 

unsolicited, be subjected to a peer review. 

Status of Peer Reviews 

To evaluate the extent to which peer reviews were performed, we reviewed 124 research 

grants from the 4,97022 total active grants categorized as research at Goddard, Marshall, 

and Glenn (see Appendix A). Our analysis showed that 83 (67 percent) of the 124 

research grants were based on solicited proposals and were peer reviewed as required by 

NASA policy. Of the 41 unsolicited proposals awarded, 16 (39 percent) were not peer 

reviewed (see Appendix B). Further, 7 (44 percent) of the 16 grants were awarded by 2 

Enterprises that had internal requirements to peer review all unsolicited proposals. 

All 16 unsolicited proposals received a technical/merit review by internal NASA 

personnel within the responsible program office. In most cases, someone within the 

selecting office who worked with the subject matter covered by the proposal performed 

the technical/merit reviews. While this familiarity with the subject matter is beneficial, 

the fact that the reviewer can also serve as the technical monitor23 or be involved in the 

grant work can create the appearance of an organizational conflict of interest or can 

create an appearance of preferential treatment in awarding the grant. To improve the 

selection process for unsolicited proposals, we believe that peer reviews should be 

performed whenever possible. 

Factors Limiting Peer Reviews 

The primary reason for the lack of peer reviews for the 16 unsolicited proposals was that 

NASA has no Agencywide requirement that such proposals receive peer reviews prior to 

award. Lacking this requirement, some NASA Enterprises chose not to perform peer 

reviews. For example, eight proposals not peer reviewed involved the Office of 

Aerospace Technology, and one proposal involved the Office of Space Flight. Neither 

 

21Under the Government Performance and Results Act, NASA must have an annual performance plan 

containing planned performance objectives and targets to achieve its strategic goals and mission. NASA’s 

Performance Report for 1999 and 2000 showed that this target was met. However, we did not evaluate the 

target or the reported performance for those fiscal years to validate that NASA met the target. 22This was the number of active grants as of March 30, 2000. 23A technical monitor reviews the technical requirements and progress of the grant.

3
Enterprise had a formal policy to peer review unsolicited research proposals. Six 

proposals involved the Office of Earth Science, which had a written policy requiring that 

peer reviews be performed for all unsolicited proposals. However, the required peer 

reviews were not performed because the Goddard program personnel administering the 

grants either were not aware of the Enterprise’s internal requirement or decided that a 

peer review did not apply to the particular proposal. Finally, one proposal not peer 

reviewed involved the Office of Space Science, which had an informal policy to peer 

review all unsolicited proposals. 

NASA’s Chief Scientist stated that peer reviews should be more broadly applied 

throughout NASA, not only to science areas but also to technology and applications 

research. The Chief Scientist plans to revise the Science Policy to more broadly 

implement peer reviews. We support and encourage such action because it is in NASA’s 

best interests to peer review all solicited and unsolicited proposals. 

Conclusion 

Although NASA appropriately peer reviewed all solicited grant proposals, it did not 

require that all unsolicited proposals be peer reviewed. To help ensure objectivity and 

fairness in the grants process, NASA should revise its current policy to require peer 

reviews of all grant proposals, both solicited and unsolicited. 

Recommendation for Corrective Action 

1. The NASA Chief Scientist should revise the NASA Science Policy Guide to require 

that all solicited and unsolicited research proposals be peer reviewed prior to 

award, unless a written justification or waiver is approved by the Chief Scientist. 

Management's Response. Partially concur. The NASA Chief Scientist will revise the 

NASA Science Policy Guide in regard to the use of peer reviews for both solicited and 

unsolicited research proposals. It is anticipated that the revision to the Guide will 

reference potential exceptions, such as the types of proposals for which peer review is 

generally not considered appropriate. The revision will also delineate a waiver process, 

including delegation of waiver responsibilities. The estimated date for completion of this 

revision is March 31, 2003. In light of NASA’s recent appointment for the position of 

Chief Scientist, NASA’s response is conditional upon the new Chief Scientist’s review of 

the issues. 

Evaluation of Management's Response. Management's planned actions are responsive 

to the recommendation. An Agencywide policy should mandate peer reviews to evaluate 

all grant proposals, no matter which NASA office or Center awards the grant. 

Additionally, the policy should clearly state the criteria for a waiver accomplished in 

advance and ensure that waivers are the limited exception to the policy. The 

recommendation is resolved but will remain undispositioned and open until the corrective 

actions are completed. 

4
Finding B. Documenting Peer Review and Civil Rights Requirements 

Grant files did not contain sufficient information necessary to independently verify that 

grants were peer reviewed. For example, none of the grant files for 108 sampled grants 

that were peer reviewed had adequate documentation to describe the peer review process 

used and the results. Although we selectively verified that the program office files 

contained peer review documentation, this documentation was not included in the grant 

files. In addition, the Glenn and Marshall financial management offices have no 

documented assurance of civil rights compliance24 for 13 (37 percent) of 35 grants 

sampled. These conditions occurred because the Grant Handbook did not specify peer 

review documentation required by the grant officer, and the Centers did not have a 

process to ensure implementation of Grant Handbook requirements. Without proper 

documentation, the grant files do not justify the grant awards and do not ensure that 

awards are in compliance with Federal civil rights requirements. 

Peer Review Documentation 

Documentation Requirements. Two NASA policies address documenting peer reviews, 

the Grant Handbook and NASA Procedures and Guidelines (NPG) 1441.1C, “NASA 

Records Retention Schedule 7, Program Formulation Records.” Grant officers follow 

policy in the Grant Handbook to process grants. Section 1260.11 of the Handbook 

requires the program office’s selecting official to furnish any peer review information 

requested by the grant officer for grants that are competitively selected and awarded. 

The Handbook, however, does not specify the documentation that should be obtained for 

the grant file. For grants that are noncompetitively selected, the Handbook also requires 

the selecting official to provide a written “Justification for Acceptance of an Unsolicited 

Proposal” for the grant officer’s review and approval. However, the Handbook does not 

address how the completed peer review should be described in the written justification or 

the specific peer review documentation that should support the grant selection. 

NPG 1441.1C describes maintaining records for storage. The NPG specifies the 

documents and records that should be maintained, by whom, and where, and the retention 

period. Section 7 of the NPG covers research and peer review records and requires that 

internal and external peer review reports and accepted proposal evaluations be filed in the 

related grant file. However, the policy does not describe a peer review report, and we did 

not find such a report in the program office’s peer review files or in the grant office files 

that we reviewed. 

 

24The grantees can submit NASA Form 1206, “Assurance of Compliance with the National Aeronautics 

and Space Administration Regulations Pursuant to Nondiscrimination in Federally Assisted Programs,” as 

documentation of compliance with the civil rights requirements. 

5
Because NASA’s guidance was not specific, we established the following as criteria in 

performing our review to represent the types of documentation needed, at a minimum, to 

adequately describe the peer review process: 

• Information (such as names, titles, and organizations and signed statements of

non-conflict of interest) to show that the peer review panel was qualified and 

independent. 

• Information on each reviewer’s rating/evaluation of the proposal’s technical merit 

and potential to succeed. Individual ratings should support that the overall 

rating/evaluation was reasonable and consistent. 

• A copy of the final, overall rating/evaluation supporting the selection including a 

statement that justifies the rating. 

Status of Grant File Documentation. None of the grant files for the 108 sampled grants 

that were peer reviewed contained the peer review documentation required by NPG 

1441.1C or the type of documentation we considered adequate support for the award. 

Some grant files for grants that were peer reviewed did not contain any documentation of 

the review. Other grant files contained documentation that only referenced that peer 

reviews were accomplished. For example, we found award letters to the grantees stating 

that the proposal was peer reviewed and selected to be funded by NASA. Still other files 

contained a brief peer review summary that indicated the overall peer review numerical 

rating and concluded that the proposal should be funded. This information and other 

documentation in the grant file did not provide enough detail to provide an understanding 

of how the peer review was done and to verify that it was an adequate basis for selecting 

and funding the grant. We selectively verified that the program office files contained 

peer review documentation; however, this documentation was not included in the grant 

files. 

Reasons for Documentation Problems. The primary reason the grant files did not have 

adequate peer review documentation is that the Grant Handbook does not contain clear 

guidance on the specific peer review documentation that should be in the grant file. 

Also, the Handbook does not explain why it is important to have peer review 

documentation in the grant file and how it should be used. Finally, the Handbook does 

not reference NPG 1441.1C requirements related to retention of grant files and peer 

review documentation. 

Need for Good Documentation. The lack of clear guidance in the Grant Handbook and 

the incomplete peer review documentation in the grant files prevent them from being 

used and relied on as the official source of support and justification for the award. 

Reviewers of the grant files cannot reasonably determine whether peer reviews were 

performed or the adequacy of the review and the award decision. We believe the grant 

file should serve not only as the source of information for administering the grant but 

also as the official source of information relating to proposal review and grant selection. 

6
Civil Rights Certification 

Glenn and Marshall did not have documented assurance of civil rights compliance for the 

grants that we sampled. For example, neither the grant files nor the grants offices had a 

valid civil rights certification25 for 9 (45 percent) of the 20 grants we reviewed at Glenn 

and for 4 (27 percent) of the 1526 grants at Marshall. Because the two Centers did not 

have a process in place to ensure compliance with Federal and NASA civil rights 

requirements, Glenn and Marshall may not be in compliance with those requirements. 

Federal and Agency Requirements. As a condition of receiving NASA funding, 

grantees must certify in writing that they meet several Federal requirements, one of 

which is compliance with civil rights and related laws. Title VI of the Civil Rights Act of

1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation 

Act of 1973, and the Age Discrimination Act of 1975 require that grantees involved in 

Federal assistance programs should not discriminate. NASA implemented these Federal 

regulations in Title 14 of the Code of Federal Regulations, parts 1250 through 1253. 

Title 14 requires that (1) no person shall be excluded from participation in, be denied the 

benefits of, or be subjected to discrimination under any program or activity receiving 

NASA financial assistance; (2) NASA officials shall specify the form of assurances 

required; and (3) NASA officials shall specify and designate the type of civil rights 

information that the grantee is to maintain and submit to NASA. In addition, the Grant 

Handbook, section 1260.10, requires the grant officer to ensure that documentation on all 

necessary certifications has been obtained prior to awarding a grant and that the grantee 

submit an annual certification showing compliance with the civil rights regulations. 

Best Practice. Goddard grant files had civil rights certifications for all the grants we 

reviewed. The Goddard grants office implemented a process to obtain, review, verify, 

and centrally maintain the civil rights certifications. 

The Goddard process requires the grant officer to: 

• 

• 

• 

• 

 

send notification letters to the grantees to submit the annual certification, 

file the annual certifications in a central location, 

verify that an updated civil rights certification is on file before awarding a 

grant, and 

complete and file a checklist that indicates the civil rights requirements were 

met. 

Effect on NASA. Without an adequate process to document that the civil rights 

requirements are met, Glenn and Marshall cannot ensure that they are in compliance with 

Federal and NASA requirements. Therefore, NASA may be unnecessarily at risk from

potential noncompliance or adverse publicity. 

25See footnote 14. 26We sampled 16 grants at Marshall but found that 1 grant was not for research and omitted it from our 

review. 

7
Recommendations for Corrective Action 

2. The Assistant Administrator for Procurement should revise the Grant Handbook 

to: 

• 

• 

• 

 

provide clear guidance on the specific peer review documentation the 

grant officer should request from the program office for each grant, 

require that peer review documentation be filed in the respective grant 

file, and 

reference NPG 1441.1C as a related policy. 

Management's Response. Partially concur. The Assistant Administrator for 

Procurement agrees that the NASA Grant and Cooperative Agreement Handbook should 

provide clear guidance regarding documentation to be contained in each grant file with 

respect to peer review. NASA agrees that the Grant Handbook, NPG 1441.1C, and 

operational practices need to be consistent. The Office of Procurement will review these 

areas, develop a common policy and approach, and revise the applicable guidance. 

Appropriate guidance will also be issued to the Center grant offices and programmatic 

community. An estimated date for completion of these actions is January 31, 2003. 

Evaluation of Management's Response. NASA's planned actions are responsive to the 

recommendation. We reaffirm that sufficient documentation needs to be contained in the 

grant file to adequately demonstrate that a peer review was performed and the overall 

peer review result. Corrective actions should include ensuring that the grant file clearly 

indicates whether a peer review was performed and provides a cross-reference to where 

that documentation can be located within the Agency. The recommendation is resolved 

but will remain undispositioned and open until corrective actions are completed. 

3. The Director, Glenn Research Center should establish a process to ensure that 

the Centers properly document compliance with the Grant Handbook’s civil 

rights requirements.

4. The Director, Marshall Space Flight Center should establish a process to ensure 

that the Centers properly document compliance with the Grant Handbook’s 

civil rights requirements. 

Management's Response. Concur. NASA Grant Notice 00-03, dated October 26, 2001, 

clarified and simplified the procedure for obtaining civil rights documentation. It 

requires that each funding application contain assurances on NASA Form 1206,27 or 

specifically identify and make reference to an assurance that the recipient's programs and 

activities comply with civil rights and nondiscrimination statutes specified in the Federal 

27See footnote 24. 

8
regulations. The assurances provided on NASA Form 1206 shall suffice for all proposals 

of an applicant, if they remain current and accurate. An applicant may incorporate these 

assurances by reference in subsequent applications to NASA. 

The Centers have established processes to ensure compliance with this policy, as revised. 

No further action is required at this time. 

Evaluation of Management's Response. Management's actions are responsive to the 

recommendations. We reviewed the Grant Notice and both Centers’ written processes 

for ensuring compliance with civil right regulations and are satisfied that corrective 

actions are responsive to the recommendations. The recommendations are resolved and 

closed. 

9
Finding C. Grantee Financial Reporting 

Grantees did not provide timely financial reporting, and NASA did not take appropriate 

action to suspend the grantee advanced funding. For example, for the fiscal year ended 

September 30, 2000, 52 (58 percent) of the 89 grantees included in our review at 

Goddard, Marshall, and Glenn submitted 2 or more late Standard Forms (SF’s) 272, 

“Federal Cash Transactions Report,”28 and as a result, should have had their advance 

financing temporarily suspended. However, NASA took remedial actions for only five 

grantees. Failure to actively enforce the reporting requirements and take effective 

remedial action has been a recurring problem since at least 1996 and is due to inadequate 

Agency controls and insufficient management of the financial reporting process. 

Consequently, NASA had not adequately monitored financial aspects of the grants or 

maintained Agency financial records in a timely and accurate manner. 

 

Agency Policies and Procedures 

The NASA Financial Management Manual (FMM) specifies the financial reporting 

requirements for the SF 272. Both the FMM, section 9280-2, and the NASA Grant 

Handbook, section 1260, require the grantee29 to submit an SF 272 report to the Financial 

Management Office of the NASA Center that issued the grant. The grantee must submit 

the SF 272 report within 15 working days following the end of each Federal fiscal 

quarter. In addition, grantees are required to submit an SF 272 report as a condition of 

receiving advance payments.30 

The Grant Handbook Section 1260 and the FMM provide guidance for addressing 

untimely SF 272 reports from grantees. Section 1260.76(e) states that NASA may 

suspend or terminate advance payments for grantees that do not comply with reporting 

requirements. Under section 1260.162(a), NASA may wholly or in part suspend or 

terminate the current award. Further, NASA may withhold future awards to the grantee 

pending correction of the reporting deficiency. FMM Section 9280-9 directs the 

applicable Financial Management Office to temporarily suspend advance financing when 

two successive quarterly reports are late or when two reports are late within a fiscal year. 

Section 9011-6b of the FMM states that the Center’s Deputy Chief Financial Officer for 

Finance is responsible for application of the provisions of the FMM, under the functional 

direction of the NASA Headquarters’ Financial Management Division Director. In 

addition, FMM Section 9061-5A states that the Deputy Chief Financial Officer for 

Finance shall track the timeliness of receipt of SF 272 reports and should notify the grant 

 

28NASA requires the grantees to submit quarterly SF 272 reports to document the funds advanced by

NASA to the grantee, actual grantee expenditures, and planned fund advances. 

29Grants with commercial entities are based on incurred costs; therefore, a commercial entity is not

required to submit an SF 272 report. 30This requirement is contained in Office of Management and Budget Circular A-110, “Uniform

Administrative Requirements for Grants and Cooperative Agreements with Institutions of Higher 

Education, Hospitals, and Other Non-Profit Organizations,” and the Grant Handbook. 

10
officer of habitual lateness or impending suspension. NASA uses the Department of 

Health and Human Services’31 Payment Management System to suspend or terminate the 

advance payments. 

Timeliness of SF 272 Reports 

We evaluated reports that grantees submitted over a period of four consecutive quarters 

(reporting periods) in fiscal year 2000. Fifty-two (58 percent) of the 89 grantees 

submitted 2 or more SF 272 reports late, and NASA should have suspended their 

advanced financing. NASA took such action for only five grantees.32 In addition, 79 (89 

percent) of the grantees submitted untimely SF 272 reports during at least 1 of the 4 

reporting periods. The table below shows the results of sampled SF 272 reports for the 

89 grantees we examined at the 3 Centers. 

Grantees’ Submission of SF 272 Reports*

 

for the Fiscal Year Ended September 30, 2000 

Center 

Grantees 

Reporting 

Timely All 

4 Quarters 

Late 1 of 

4 Quarters 

 Late 2 or 

more Quarters

Suspended for 

Late Reporting 

Glenn 9 1 4 4 0

Marshall 12 1 1 10 0

Goddard 68 8 22 38 5

Total 89 10 27 52 5

*

We reviewed a total of 336 SF 272 reports submitted during 4 consecutive reporting periods for 

the 89 grantees. 

Financial management personnel initiated the remedial action for the five grants for 

which NASA suspended advance financing but did not notify the grant officer of the 

suspension. As a result of this lack of coordination, there was no documentation of the 

suspension in the official grant file that could have been used in decisionmaking on 

future awards. 

Late receipt of the SF 272 reports has been a recurring problem within NASA since at 

least 1996, when an independent public accounting firm reported this problem during its 

audit of NASA’s financial statements (see Appendix C). Additionally, we determined 

 

31NASA uses the Department of Health and Human Services automated system for issuing and tracking 

advance payments. 32Once a decision to suspend or terminate advance financing is made, the grantee must use its own funds 

for its research and then submit to NASA for reimbursement. 

11
during a 1998 audit33 that 847 (49 percent)34 of 1,724 quarterly SF 272 reports sent to 3 

NASA Centers and NASA Headquarters were late. As a result of that audit, NASA 

amended its FMM in September 1998 to provide for mandatory suspension of advance 

funding when two successive quarterly SF 272 reports are late or when two reports are 

late within a fiscal year. 

Our current audit demonstrated that NASA is not yet actively enforcing timely reporting 

and did not take effective remedial action to eliminate late reporting. The lack of 

remedial action can be attributed to inadequate controls and management of the 

payments. Neither the Centers’ Deputy Chief Financial Officers for Finance nor the 

Financial Management Offices collected quarterly information on late submissions for 

use in monitoring the timeliness of SF 272 reports and did not notify the grant officers of 

untimely reporting so that additional corrective measures could be taken. One Center 

financial management official viewed the actions necessary to implement a suspension as 

an administrative burden because in many cases, the grantee would have to be reinstated 

shortly after suspension. 

To facilitate the communication between the Financial Management Office and the grant 

officer, the language in the Grant Handbook should be consistent with the FMM 

requirements concerning the initiation or suspension of advance financing due to 

untimely SF 272 reporting. NASA changed the FMM in September 1998 to define what 

constituted untimely SF 272 reporting and clearly provided that the Financial 

Management Office was to initiate the suspension or termination of advance funding 

when SF 272 reporting problems occurred. The Grant Handbook, however, does not 

provide for mandatory suspension or termination of advance funding, leaves the decision 

of remedial action to the discretion of a grant officer, and does not specify which NASA 

office will take action against late financial reporting. Placing the responsibility for 

suspensions with the Financial Management Office (1) recognizes that the financial data 

contained in the SF 272 report affects not only the grant, but also NASA’s financial 

accounts and financial statements and (2) follows the flow of financial information from

the grantee to the Financial Management Office, which is best suited to identify serious 

and habitual reporting problems and to institute immediate remedial action. Therefore, 

the Grant Handbook should be revised to make the Financial Management Office 

responsible for suspension or termination of advance funding. 

Importance of Timely Financial Reporting 

Without timely SF 272 reports, NASA is not in compliance with the FMM, cannot 

accurately and in a timely manner record financial data, and does not have reliable 

 

33On August 6, 1998, we issued audit report IG-98-019, “Aeronautics Program Grant Financial

Transactions,” which discussed late reporting at NASA Headquarters, Langley Research Center, Ames 

Research Center, and Glenn. See Appendix C for further details. 34The 1,724 SF 272 reports submitted by grantees were funded through letter of credit agreements from

January 1996 to June 1997 at NASA Headquarters, Langley Research Center, Ames Research Center, and 

Glenn. 

12
information for decisionmaking. Specifically, NASA is not following the FMM in 

relation to recording cost accruals35 for advance-funded grants. Additionally, the late 

SF 272 reports negatively affect budgetary and accounting reports. Lastly, NASA's 

financial management and program offices did not properly manage noncompliant 

grantees or the program’s budget. Management attention and corrective actions are 

needed to fully address and correct this problem area that has existed since at least 1996. 

Recommendations for Corrective Action 

5. The Acting Chief Financial Officer should implement the management controls 

needed to improve the timeliness of SF 272 reporting and follow-up at each 

Center. At a minimum, the controls should: 

• 

 

Require the Center’s Deputy Chief Financial Officer for Finance to collect 

and analyze quarterly information on late SF 272 financial report 

submissions and use this data to enforce the timeliness reporting 

requirements and penalties contained in the FMM. 

• Require coordination between the Financial Management Office and the 

grant officer when remedial measures are taken against a grantee. The 

Financial Management Office should inform the grant officer in a timely 

manner of any suspension action so that the grant officer can act accordingly 

in administering the grant and in determining future grant awards. 

• Emphasize and reinforce FMM policy and penalties related to untimely 

reporting. 

• Evaluate the Center’s corrective actions taken when reports are late, and 

follow up as appropriate. 

Management's Response. Concur. The Chief Financial Officer (CFO) agreed to 

implement management controls in order to improve the timeliness of SF 272 reporting 

and Center follow-up. 

To ensure a more consistent and synergistic management approach in this area, the CFO 

intends to coordinate efforts with the Assistant Administrator for Procurement. The 

Office of the CFO and the Office of Procurement will work together to develop a 

measured and cooperative approach toward SF 272 delinquencies, including: 

• organizing the process for identifying delinquencies; 

• escalating noncompliance notices to responsible parties within the universities; 

• coordinating administrative remedies within the Agency; and 

35The FMM Section 9020 defines accrual accounting as a method of accounting in which revenues and 

expenses are identified with specific periods of time and are recorded as incurred without regard to the date

of receipt or payment of cash. 

13
• communicating changes in Agency processes to the university community. 

The FMM and the Grant Handbook will be revised to reflect this cooperative approach. 

The CFO and the Associate Administrator will also distribute a letter to the Centers 

emphasizing the importance of this area and communicating the revisions to the FMM 

and/or the Grant Handbook. An estimated date for completion of these actions is 

December 31, 2002. 

 

One element of appropriate management controls for tracking of SF 272 reporting may 

prove to be the use of automated tools, such as the database recently developed and 

implemented by Goddard. The Goddard tool generates email notices to grant recipients, 

with a progressive series of follow-ups, leading to a suspension of advance payments. 

The series of email messages clearly state the importance of timely submission of the 

reports and the consequences of noncompliance. The Office of the CFO will monitor 

Goddard’s use of this tool and, if this approach is determined to be effective, will ensure 

that the tool is shared with the other Centers. The Office of Procurement will participate 

in a review of such financial tools. Such tools could immediately email a copy of each 

SF 272 report delinquency notice to the grant officer, thus accomplishing coordination 

between the financial and procurement offices. An estimated date for assessing the 

Goddard tool and disseminating applicable guidance is December 31, 2002. 

 

NASA currently uses the Department of Health and Human Services’ Payment 

Management System to provide advance payments to recipients. This system provides 

NASA with a standard single payment process for all Centers and recipients. The Office 

of the CFO is working with the Department of Health and Human Services to expand and 

enhance application of the Payment Management System. Part of this effort involves 

utilizing the system’s electronic SF 272 reporting capability. The system will provide 

real-time information for NASA and its recipients. When implemented, the system may 

not allow recipients to make a drawdown on their letter of credit until a current SF 272 

report has been entered into the database. This may be the most effective solution to the 

matters raised by the audit report. Implementation of the electronic SF 272 reporting 

capability is estimated by December 31, 2003. In the meantime, the CFO will take the 

actions discussed above to effect improvement. 

Evaluation of Management's Response. Management's planned actions are responsive 

to the recommendation. NASA’s evaluation of the process Goddard implemented should 

include an assessment of the length of time Goddard’s follow-up process takes and 

whether Goddard’s process incorporates proactive notifications to the grantee. 

Additionally, coordination between the finance office and the grants office is essential to 

effectively monitor the grantee’s financial status. Finally, changes to NASA policy are 

necessary because the guidance in the FMM and Grant handbook differs. The 

recommendation is resolved but will remain undispositioned and open until corrective 

actions are completed. 

14
6. The Assistant Administrator for Procurement should revise the Grant Handbook 

to reflect the requirements in the NASA FMM concerning the remedial measures 

for addressing untimely SF 272 financial reporting.

Management's Response. Partially concur. The Assistant Administrator for 

Procurement agreed that the Grant Handbook and the FMM should be consistent in this 

area. However, the Assistant Administrator did not agree that the Grant Handbook 

should be revised to reflect the existing FMM policy. Instead, the Office of Procurement, 

in coordination with the CFO, will conduct a detailed review of the Grant Handbook and 

the FMM policy to determine what changes, if any, will be needed. As noted in the 

response to Recommendation 5, the Assistant Administrator for Procurement and the 

CFO will work together to develop a measured and cooperative approach toward SF 272 

reporting delinquencies. The FMM and the Grant Handbook will be revised to reflect 

this cooperative approach. An estimated date for completion of these actions is 

December 31, 2002. 

Evaluation of Management's Response. Management's planned actions are responsive 

to the recommendation. We continue to reaffirm that it is vital that NASA policy be clear 

and consistent in the area of late grantee financial reporting if this long-standing problem

is to be corrected. The recommendation is resolved but will remain undispositioned and 

open until corrective actions are completed. 

15
Appendix A. Objectives, Scope, and Methodology 

Objectives 

The audit objectives were to determine whether NASA: 

appropriately performed peer reviews before awarding research grants and 

cooperative agreements. 

• 

• complied with key requirements for the solicitation, award, and financial 

management of research grants and cooperative agreements. 

Scope and Methodology 

We initially performed survey work at the Glenn Research Center (Glenn) and NASA 

Headquarters, and as a result of our survey results, we expanded our audit work to include the 

Goddard Space Flight Center (Goddard) and the Marshall Space Flight Center (Marshall). 

We reviewed research grants and cooperative agreements, but did not include Space Act 

Agreements and awards involving international parties. Additionally, we focused on grant 

and cooperative agreement awards categorized as research in the NASA procurement system

and did not include awards for training or construction. 

To accomplish our objectives, we reviewed the Federal and NASA regulations, policies, 

and guidance relating to the solicitation, selection, award, and financial management of 

NASA-funded grants and cooperative agreements. We interviewed Headquarters and 

Center procurement, financial management, and program/project personnel, but we did 

not contact the grantees. Also, we reviewed the procurement and financial management 

files for the sampled grants and cooperative agreements. We worked closely with 

representatives of the Chief Scientist’s office to verify whether the Agency performed peer 

reviews for the unsolicited proposals. We did not review the quality of the peer reviews 

performed. 

We selected a random sample of grants and cooperative agreements at Goddard, Glenn, 

and Marshall to be tested. Our sample universe consisted of all on-site open and active 

research grants and cooperative agreements coded as being research grants in the NASA 

Procurement Management System as of March 30, 2000. Because a grant or cooperative 

agreement may cover several years, the population included some grants and cooperative 

agreements that had been awarded before 2000 but were still active. We selected 141 

grants and cooperative agreements from a total population of 4,970 grants and 

16
Appendix A 

cooperative agreements. Of the 141 grants sampled (for discussion purposes in the 

findings section of the report, we collectively refer to the grants and agreements as 

grants), 124 were for research purposes.36 Of the 124 grants, NASA awarded 83 in 

response to solicited proposals and 41 in response to unsolicited proposals. For the 124 

grants, we reviewed the SF 272 reports that were submitted by 89 different grantees.37 

We relied on the NASA Procurement Management System (computer-generated) report 

to identify the grant and cooperative agreement population. 

Using the sample, we conducted a multiple attribute sample to assess the two audit 

objectives. The following table summarizes the population and sample size by Center 

and by award type: 

Research Grants 

Population and Sample Selection 

As of March 30, 2000 

Center 

Population 

Size 

Sample 

Size 

Population Value 

(thousands) 

 Sample Value 

 (thousands) 

Goddard 

 Grants 3,648 56 $1,027,385 $ 10,269 

 Agreements 293 34 486,169 46,404 

Marshall 

 Grants 288 4 102,186 1,049 

 Agreements 79 11 1,336,297 38,353 

Glenn 

 Grants 405 10 119,469 4,022 

 Agreements 257 9 192,945 7,643 

Total 4,970 124 $3,264,451 $107,740

Audit Field Work 

We conducted detailed audit field work from November 2000 through October 2001. We

performed the audit in accordance with generally accepted government auditing 

standards. 

 

36We deleted 17 grants from the initial sample of 141 grants drawn from the NASA Procurement 

Management System because we determined that they were not for basic and applied research. Instead, 

these 17 grants were for purposes such as educational outreach, conference attendance, or miscellaneous 

services. 

37The number of grantees submitting SF 272 reports is lower than the sample number because of the 

following: 5 grantees were with commercial entities and were not required to submit the financial reports; 

Goddard’s Financial Management Office could not locate 2 grant files; we did not consider 9 grantee files 

from Glenn because the sampling criteria we used for the financial reports during the survey differed from

our detailed audit sampling criteria; and 36 grantees had multiple grants within our sample and were 

required to submit only one report.

17
Appendix A 

Management Controls Reviewed 

We reviewed the following policies and guidance, or portions thereof, related to the 

selection and administration of NASA research grants and cooperative agreements: 

• Office of Management and Budget Circular A-110 “Uniform Administrative 

Requirements for Grants and Agreements with Institutions of Higher Education, 

Hospitals, and Other Non-Profit Organizations”; 

• Federal Acquisition Regulation (FAR) and NASA FAR Supplement; 

• NASA Science Policy Guide, dated July 1996; 

• NASA Procedures and Guidelines (NPG) 5800.1, “Grant and Cooperative Agreement 

Handbook,” dated October 19, 2000; 

• Draft NPG 1080, “Guidelines for the Generate Knowledge Process for Programs and 

Projects”; 

• NPG 1441.1C, “NASA Records Retention Schedule 7, Program Formulation 

Records”; and 

• NASA Financial Management Manual. 

We identified management control weaknesses as identified in the findings in this report. 

18
Appendix B. Research Grants and Cooperative Agreements 

Not Peer Reviewed 

Grant

Number1

Responsible 

Headquarters Office 

Administering 

Center 

Grant 

Value 

1 NAG 3 2005 Aerospace Technology Glenn2 691,000

2 NAG 3 2207 Aerospace Technology Glenn 53,000

3 NAG 3 2235 Aerospace Technology Glenn 130,000

4 NAG 3 2236 Aerospace Technology Glenn 90,000

5 NCC 3 742 Aerospace Technology Glenn 107,000

6 NCC 3 750 Aerospace Technology Glenn 40,000

7 NCC 3 756 Aerospace Technology Glenn 235,000

8 NCC 3 788 Aerospace Technology Glenn 48,000

9 NAG 5 6351 Earth Science Goddard3 292,000

10 NAG 5 6388 Earth Science Goddard 148,000

11 NAG 5 8802 Space Flight Goddard 655,000

12 NCC 5 90 Earth Science Goddard 1,245,000

13 NCC 5 128 Earth Science Goddard 961,000

14 NCC 5 193 Earth Science Goddard 1,360,000

15 NCC 5 326 Earth Science Goddard 934,000

16 NCC 5 377 Space Science Goddard 68,000

Total $7,057,000

1

The research grants are coded “NAG,” and the cooperative agreements are coded “NCC.” 2

Glenn Research Center. 

3

Goddard Space Flight Center. 

19
Appendix C. Prior Audit Coverage 

“Aeronautics Program Grant Financial Transactions,” NASA Office of Inspector 

General Report Number IG-98-019, August 6, 1998. We reviewed the timeliness, 

accuracy, and completeness of the financial reports submitted by the grantees for research 

affiliated with the Office of Aeronautics and Space Transportation Technology. About 49 

percent of the grantees’ quarterly financial (Standard Form 272) reports were late at 

Headquarters, Langley Research Center, Ames Research Center, and Glenn Research 

Center. This caused delays in recording costs and disbursements into NASA’s financial 

records that, in turn, caused costs and disbursements to be inaccurate and untimely, and thus 

negatively impacted budgetary and accounting reports. Management used the grant’s 

financial data to plan and fund programs and projects. If financial data are not accurate and 

current, management’s ability to make informed decisions is compromised. Operating 

effectiveness is also diminished by inaccurate and untimely data. In response to our 

recommendations, NASA management revised the Financial Management Manual to be 

more specific on suspending funding to grantees when the reports are repeatedly late and to 

establish a new process in which grantees incur consequences for submitting late reports.

“Federal Research: Peer Review Practices at Federal Science Agencies Vary,” 

General Accounting Office Report Number RCED-99-99, March 17, 1999. The 

General Accounting Office report defined a peer review, described the Federal 

Government’s peer review policy and the peer review practices of 12 Federal agencies 

that conduct scientific research, described other agencies’ quality assurance reviews, and 

identified which research is not subjected to review. The report states that NASA: 

Defines peer review as scientific evaluation by an independent in-house specialist, a 

specialist outside NASA, or both, of proposals submitted in response to NASA research 

announcements, announcements of opportunity, and cooperative agreement notices. Peer 

review is also used to evaluate unsolicited proposals. Peer reviews evaluate relevance to

NASA’s objectives, intrinsic merit that includes scientific or technical merit of research

methods, the researcher's capabilities and qualifications, and cost. 

All NASA research, including research resulting from unsolicited proposals, is subject to

peer review, and peer review is conducted primarily to award funds on the basis of 

scientific merit. NASA officials said that external peer review is essential for highquality, relevant research. NASA’s Federal Acquisition Regulations Supplements dictate 

that peer review will be the method used to evaluate and select research for funding. 

NASA is developing a series of instruction on the implementation of peer review. 

Arthur Andersen LLP’s Management Letter to the Financial Statements for 1996. 

Arthur Andersen LLP found that Headquarters and the Goddard Space Flight Center did 

not receive the SF 272 reports from the grantees on a timely basis. Specifically, Agency 

procedures were not operating effectively to identify and request overdue reports. 

20
Appendix C 

This affected NASA’s ability to properly record grant expenses and to effectively 

monitor its grants. The report states that NASA should follow established procedures for 

tracking reports received from grantees and for follow-up on late reports. 

21
Appendix D. Management’s Response

22
Appendix D 

23
Appendix D 

24
Appendix D 

25
Appendix D 

26
Appendix E. Report Distribution 

NASA Headquarters 

HQ/A/Administrator 

HQ/AI/Associate Deputy Administrator 

HQ/AA/Chief of Staff 

HQ/AB/Associate Deputy Administrator for Institutions 

HQ/AS/Chief Scientist 

HQ/B/Comptroller 

HQ/B/Acting Chief Financial Officer 

HQ/BF/Director, Financial Management Division 

HQ/G/General Counsel 

HQ/HK/Director, Contract Management Division 

HQ/HS/Director, Program Operations Division 

HQ/J/Assistant Administrator for Management Systems 

HQ/JM/Director, Management Assessment Division 

HQ/L/Assistant Administrator for Legislative Affairs 

HQ/M/Associate Administrator for Space Flight 

HQ/Q/Associate Administrator for Safety and Mission Assurance 

HQ/R/Associate Administrator for Aerospace Technology 

HQ/S/Associate Administrator for Space Science 

HQ/U/Associate Administrator for Biological and Physical Research 

HQ/X/Assistant Administrator for Security Management and Safeguards 

HQ/Y/Associate Administrator for Earth Science 

NASA Centers 

ARC/D/Director, Ames Research Center 

DFRC/X/Director, Dryden Flight Research Center 

GRC/0100/Director, John H. Glenn Research Center at Lewis Field 

GSFC/100/Director, Goddard Space Flight Center 

JPL/1000/Director, Jet Propulsion Laboratory 

JSC/AA/Director, Lyndon B. Johnson Space Center 

KSC/AA/Director, John F. Kennedy Space Center 

KSC/CC/Chief Counsel, John F. Kennedy Space Center 

LaRC/106/Director, Langley Research Center 

MSFC/DA01/Director, George C. Marshall Space Flight Center 

SSC/AA00/Director, John C. Stennis Space Center 

27
Appendix E 

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 

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 

28
NASA Assistant Inspector General for Audits 

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Major Contributors to the Report 

Chester A. Sipsock, Program Director, Financial Audits, Management and Oversight 

V. Richard Dix, Program Manager 

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