AUGUST 10, 2011

AUDIT REPORT

REPORT NO. IG-11-023 (ASSIGNMENT NO. A-11-002-00)

OFFICE OF AUDITS

NASA’S PAYMENTS FOR ACADEMIC TRAINING 

AND DEGREES

OFFICE OF INSPECTOR GENERAL

National Aeronautics and 

Space Administration
REPORT NO. IG-11-023

Final report released by:

Paul K. Martin

Inspector General

Acronyms

DCAA Defense Contract Audit Agency

DCMA Defense Contract Management Agency

FAR Federal Acquisition Regulation

GAGAS Generally Accepted Government Auditing Standards

NPD NASA Policy Directive

NSSC NASA Shared Services Center

OHCM Office of Human Capital Management

SATERN System for Administration, Training, and Educational Resources for NASA
AUGUST 10, 2011

REPORT NO. IG-11-023

OVERVIEW

NASA’S PAYMENTS FOR ACADEMIC TRAINING 

AND DEGREES

The Issue

NASA offers its employees a variety of training and educational opportunities to 

complement work experiences and achieve better organizational and individual 

performance. Given the size of NASA’s workforce – over 18,500 civil service 

employees – this training poses a significant organizational cost: NASA officials estimate 

that between fiscal years 2006 and 2010 the Agency spent approximately $250 million on 

employee training. A subset of this total expenditure was for academic training at 

colleges and universities. Specifically, between July 2006 and September 2010, NASA 

spent approximately $17 million to pay for more than 10,120 academic courses for 2,460 

NASA employees. 

Federal law prohibits NASA from funding academic degrees for civil service personnel 

except through planned, systemic, and coordinated employee development programs that 

contribute significantly to meeting an identified training need, resolving an identified 

staffing problem, or accomplishing the Agency’s strategic goals. In light of these 

restrictions, NASA established academic degree programs designed to encourage the 

acquisition of new knowledge in support of the Agency’s mission and strategic goals and 

to provide eligible employees with the opportunity to obtain an undergraduate or graduate 

degree that will help build competencies toward an identified training or staffing need 

related to the Agency’s mission. Outside of these programs, NASA employees may 

attend individual college courses that improve individual and organizational performance,

relate to the employee’s current duties or anticipated duties, and assist in achieving the 

Agency’s mission and performance goals. 

The Workforce Management and Development Division in the Headquarters Office of 

Human Capital Management is responsible for general oversight of NASA’s training, 

leadership, and organizational development programs, including NASA’s academic 

training programs. While the Division allocates Agency-wide training funds, it has little 

oversight of Center-specific training budgets or programs. By design, Center Training 

Offices are responsible for program execution at their respective locations, handling 

everything from training budget requests to expenditures. Moreover, Center directorates 

can apportion program funds for directorate employees to attend academic courses. 

Although Center Training Offices have final approval authority of academic training

Center-wide, they generally rely on the employee’s supervisor to ensure classes are 
OVERVIEW

ii REPORT NO. IG-11-023

related to the employee’s duties and, in most cases, do not question the use of directorate 

funds.

NASA also pays for academic training for contractor employees as negotiated in a 

company’s contract with NASA. Academic training costs are included in a contractor’s 

overhead account as part of employee fringe benefits. The Federal Acquisition 

Regulation (FAR) states that in order to be an allowable expense, the cost of training and 

education must be related to the field in which the employee is working or may 

reasonably be expected to work. Procedures governing the use of contract funds for 

contractor employee training are addressed by company policy.

In this audit, we examined NASA’s controls over its academic training program. In 

particular, we reviewed whether funds spent on academic training appear to be

reasonable, whether approved courses relate to employees’ duties and the Agency’s

mission, and whether controls are in place to ensure effective management of academic 

training expenditures. Details of the audit scope and methodology are in Appendix A.

Results

Some NASA employees are circumventing the Agency’s established procedures to obtain 

payment for academic degrees outside of formal degree programs. The Agency’s 

decentralized management structure, coupled with a lack of strong internal controls 

surrounding NASA’s payment for employees’ undergraduate and graduate degrees, has 

increased the potential for abuse. Consequently, NASA’s management of its academic 

training program needs significant improvement. 

Employee training at NASA is decentralized with each Center autonomously designing 

and implementing the training program, including formal undergraduate and advanced 

degree programs, that best fits its needs. The decentralized nature of the training creates 

challenges for NASA in ensuring that the Agency is not improperly paying course 

expenses for employees who are not enrolled in the Agency’s academic degree training 

programs, tracking expenditures for academic training, and ensuring that training funds 

are used judiciously. 

We found that NASA has not established adequate internal controls to address these 

challenges. As a result, from July 2006 through September 2010, NASA paid $1.44 

million for 57 employees to pursue academic degrees outside of NASA’s established 

degree programs – all without service commitments to the Agency for the degree.

1

 1 A service commitment is an agreement that an employee will continue working at NASA for a specified 

period of time after completion of a training course or program. If the employee fails to fulfill the 

requirements of the agreement, the Agency has a right to recover the training costs. Under NASA’s 

formal academic degree programs, employees generally commit to remaining at NASA for 1 year after 

receiving tuition reimbursement for an undergraduate degree and 3 years after receiving reimbursement 

for a masters or doctorate degree. 

Moreover, we found that NASA is not able to quantify the total amount it spends on 
OVERVIEW

REPORT NO. IG-11-023 iii

academic training for its civil service employees. In addition, because NASA does not 

limit tuition rates or annual spending per employee, employees have no incentive to seek 

training from less expensive public institutions as opposed to more expensive private or 

for-profit schools. We also found that NASA policy does not address the issue of 

payment for college credits awarded based on employees’ life experience. Further, the 

Agency could not consistently provide evidence of course completion and the 

documentation that was provided was not consistently reliable. Finally, NASA provides 

no oversight of academic training provided to its contractor employees. 

NASA’s Academic Training Program Lacks Appropriate Internal Controls. NASA 

employees are circumventing the Agency’s formal programs to obtain payment for 

academic degrees. Specifically, during this audit we found that NASA spent

$1.44 million on 57 employees at four NASA Centers and Headquarters who are 

pursuing degrees outside of NASA’s established degree programs and are therefore not

subject to the stringent application requirements of the established programs, including

degree plan approval. In addition, these employees lack a service commitment to the 

Agency in exchange for tuition reimbursement, as required in NASA’s formal degree 

programs. Eighteen of these employees each received over $30,000 in academic training 

and one employee received over $60,000 – all without a continued service commitment

to NASA. Because it is unclear what benefit NASA received for its $1.44 million 

investment in these employees, we question the Agency’s expenditure of these funds. 

Moreover, because this $1.44 million represents tuition payments for only a sample of 

employees at the four Centers and Headquarters where we conducted detailed audit work, 

we believe an examination across all NASA Centers likely would result in substantially 

higher questioned costs. 

Because NASA’s academic training program is so decentralized, NASA is unable to 

identify the total amount it spends on academic training for its civil service employees. 

In addition, the Agency has not structured its academic training program to encourage 

cost savings. Specifically, NASA does not cap tuition rates or establish annual spending 

limits per employee. Accordingly, employees have little incentive to attend less 

expensive schools. We found that 11 of the top 20 universities NASA employees 

attended were private or for-profit institutions that are on average 3.6 times and 1.6 times,

respectively, more expensive than public universities. In addition, the Agency has not 

consistently leveraged its buying power to obtain discounts on tuition at frequently 

attended institutions. 

Furthermore, we identified internal control weaknesses that allowed NASA to reimburse 

employees for academic training even though the Agency did not have evidence of 

course completion. Based on our statistical projections, we estimate that NASA paid 

$892,490 in tuition costs without proper supporting documentation. Finally, NASA 

accepts documentation such as Internet screen captures and unofficial transcripts as 

evidence of course completion – documentation that can easily be manipulated. 

NASA Has Limited Oversight of Academic Training Provided to Contractor 

Employees. We reviewed three NASA contractors who combined spent more than 
OVERVIEW

iv REPORT NO. IG-11-023

$24 million on academic training courses for their employees between fiscal years 2006 

and 2010. NASA reimburses contractors for these costs as part of the employee benefits 

included in the overhead rate charged by the contractor. To be allowable, these costs 

must comply with the FAR requirements that training relate to the field in which the 

employee is working or may reasonably be expected to work and that the cost must not 

exceed that which would be incurred by a prudent person in the conduct of competitive 

business.

We identified the top 20 institutions attended by employees of two of the three selected 

NASA contractors and determined that, similar to NASA civilian employees, these 

contractor employees are attending private and for-profit institutions more often than 

public institutions. As discussed previously, the cost of attending a private or for-profit 

university is significantly higher than that of a public university.2

NASA does not review information about contractor academic training to verify if the 

costs are reasonable or if the courses taken relate to the field in which the employees are 

working or may reasonably be expected to work. Instead, NASA contracting officers 

rely on annual audits performed by the Defense Contract Audit Agency (DCAA) to 

determine whether contractors comply with FAR requirements. However, DCAA audits 

do not test all costs on a consistent basis and specific to this review do not compare the 

costs of courses at a private or for-profit institution to the costs for the same courses at a 

public university. 

 

Finally, we noted that two of the three NASA contractors we reviewed reimbursed 

employees for academic credits earned for prior life or work experience. We question 

whether spending taxpayer money for these credits meets the requirements of the FAR

that funds are spent for training related to the field in which the employee is working or 

may be reasonably expected to work. While we noted that NASA contractors have paid 

for these types of credits, we did not identify NASA civil service personnel earning 

college credit for prior life or work experience. However, NASA policy is silent on 

payment of these credits and at least 2 of the top 20 universities attended by NASA 

employees offer these types of credits. 

Management Action

NASA should strengthen the policies, procedures, and internal controls for its academic 

training program. Specifically, NASA should only pay for academic courses for college 

degrees to employees who have been accepted into the Agency’s established academic 

degree programs. In addition, NASA should ensure that academic training expenses are 

adequately justified and tracked. 

 2 However, unlike NASA’s rules for its civil service employees, each of the three contractors we examined 

limits the amount of tuition reimbursement available to its employees to a set sum either by calendar year 

or per credit hour in their corporate policy.
OVERVIEW

REPORT NO. IG-11-023 v

To ensure that academic training funds are spent appropriately and that eligible 

employees receive degrees only through the established academic degree training 

programs, we recommended that the NASA Assistant Administrator for Human Capital 

Management:

• Require that, prior to granting final approval of academic training, Center 

Training Offices assess the appropriateness of all academic training requests to

ensure that employees obtain academic degrees only through established 

academic training programs;

• Establish a centralized mechanism for tracking the Agency’s academic training 

expenditures;

• Limit payment of academic tuition per credit hour, implement a cap on the total 

amount that may be reimbursed to an employee during any given year, and 

establish a formal approval process for consideration of exceptions; and

• Develop a mechanism to leverage the size of NASA’s civil service and contractor 

workforce to negotiate discounted tuition rates at private or for-profit universities.

To strengthen internal controls over academic training, we recommended that the NASA 

Assistant Administrator for Human Capital Management update NASA policy to:

• Establish the Agency’s position on the payment of college credits for life or work 

experience and the criteria for such payment; and

• Require employees to submit official transcripts to document successful course 

completion.

In response to a draft of our report, the Acting Assistant Administrator for Human Capital 

Management concurred with four of our recommendations, partially concurred with a 

fifth, and non-concurred with the sixth recommendation. The Acting Assistant

Administrator said NASA will implement a detailed action plan no later than December 

31, 2011, to address our recommendations and update NASA policy by April 30, 2012. 

The Acting Assistant Administrator also provided technical comments on the draft, which 

we incorporated as appropriate.

To ensure that academic training funds are spent judiciously, that eligible employees 

receive degrees only through the established academic degree training programs, and to 

strengthen internal controls over academic training, the Acting Assistant Administrator 

stated that the Office of Human Capital Management (OHCM) agreed to: establish a 

more comprehensive policy that will incorporate all academic training requests into the 

Agency academic training approval process; coordinate with the NASA Shared Services 

Center and the Office of the Chief Financial Officer to determine the most efficient 

method for tracking academic training expenditures; and coordinate with the Center 

Training Offices to negotiate discounted tuition rates for civil service employees. The 
OVERVIEW

vi REPORT NO. IG-11-023

OHCM said it will also consider our recommendation to develop an Agency position on 

payment for academic credits based on prior work or life experience and incorporate 

changes in NASA’s Employee and Organizational Development policy as appropriate. 

We consider the Acting Assistant Administrator’s proposed actions to these 

recommendations responsive and will close these recommendations upon completion and 

verification of the proposed corrective actions.

The Acting Assistant Administrator partially concurred with our recommendation to 

require employees to submit official transcripts as proof of satisfactory course 

completion, agreeing to require official transcripts for formal degree programs, while 

continuing to accept unofficial transcripts that contain the employee’s name, name of the 

educational institution, course name, course dates, and grade received for courses taken 

outside formal degree programs. Although we believe that requiring official transcripts 

for all academic courses would be the best practice, we find the proposed action 

responsive to the intent of our recommendation and will close the recommendation upon 

completion and verification of the proposed corrective actions. However, because we 

found that the Agency has not consistently ensured that unofficial transcripts contain all 

required information, we urge the Agency to take steps to ensure full compliance with 

this policy.

The Acting Assistant Administrator took exception to limiting payments per credit hour 

and instituting caps on reimbursement amounts, stating that “the overriding factor in 

selecting academic institutions should be relevant technical excellence, not cost per credit 

hour.” We consider management’s comments unresponsive to this recommendation. 

Therefore, this recommendation is unresolved and will be resolved when the Agency 

agrees to institute caps on the cost of tuition assistance or a similar control that addresses 

our concern. While we acknowledge that technical excellence should be a factor in 

selecting a college or university, we do not agree that technical excellence is only 

attainable at the highest cost institutions. Moreover, financial caps on employee tuition 

reimbursement are common in the Government and private industry, including among 

NASA contractors who also employ work forces with a high level of technical expertise.

3

 

 3 For example, the Department of Defense caps cost per credit hour at $250 and maximum funding per 

employee at $4,500 per year.
AUGUST 10, 2011

REPORT NO. IG-11-023

CONTENTS

INTRODUCTION

Background _________________________________________ 1

Objective ___________________________________________ 4

RESULTS

NASA Lacks Appropriate Controls over Its Academic Training___ 5

NASA Has Limited Oversight of Academic Training Provided to 

Contactor Employees ______________________________ 18

APPENDIX A

Scope and Methodology_______________________________ 21

Review of Internal Controls ____________________________ 23

Prior Coverage ______________________________________ 23

APPENDIX B

Sampling Methodology and Projection of Results ___________ 24

APPENDIX C

Schedule of Questioned Costs __________________________ 25

APPENDIX D

Samples of Grade Submissions Accepted by NASA __________ 26

APPENDIX E

Management Comments ______________________________ 28

APPENDIX F

Report Distribution___________________________________ 31

AUGUST 10, 2011

REPORT NO. IG-11-023 1

INTRODUCTION

Background

NASA offers its employees a variety of training and educational opportunities to 

complement work experiences and achieve better organizational and individual 

performance. Given the size of NASA’s workforce – over 18,500 civil service 

employees – this training poses a significant organizational cost. NASA officials 

estimate that between fiscal years 2006 and 2010, NASA spent approximately 

$250 million on employee training. A subset of this total expenditure was for academic 

training at colleges and universities. Specifically, between July 2006 and September 

2010, NASA spent approximately $17 million for 2,460 civil service employees to attend 

more than 10,120 academic courses at an average cost of $6,860 per employee.

NASA pays for academic training at colleges and universities for its employees to 

enhance individual capabilities and competencies; build and retain a skilled and effective 

workforce; improve organizational performance; and maintain scientific, professional, 

technical, and managerial proficiency.4 NASA defines academic training as a course 

taken at a nationally recognized and accredited educational institution of higher learning 

for academic credit. Employees may take individual courses related to their NASA 

duties or may, at NASA’s expense, enroll in a slate of courses to earn an academic 

degree. NASA may pay for or reimburse an employee for courses taken in pursuit of a

degree if the degree will contribute significantly to meeting an Agency training need or 

resolving a staffing problem. Federal law prohibits NASA from paying for academic 

degrees except through planned, systemic, and coordinated employee development 

programs linked to accomplishing the Agency’s strategic goals.

5

Consistent with Federal law, NASA has established academic degree training programs 

that allow employees to pursue undergraduate or advanced degrees in NASA missionrelated fields such as aeronautical engineering and astronomy. NASA’s graduate degree 

programs are designed to provide employees the opportunity to pursue approved 

programs of study related to their job functions, needed competencies, and the Agency’s 

strategic goals. Similarly, the undergraduate degree programs are designed to develop 

the expertise required to accomplish strategic goals and objectives of the various NASA 

Centers and to provide an internal source of qualified candidates for occupations in which 

a shortage exists – specifically, where a Center has identified a continuing future need –

and an academic degree is a prerequisite for the position. However, NASA guidance 

 

 4 Training and development in the Federal Government is generally governed by the Government 

Employees Training Act, 5 U.S.C. Chapter 41. Regulations are contained in 5 C.F.R Part 410. NASA 

Policy Directive 3410.2F, “Employee and Organizational Development,” April 9, 2009, contains 

additional NASA-specific guidance. 

5 5 U.S.C. §4107.
INTRODUCTION

2 REPORT NO. IG-11-023

does not detail how the Centers should establish or document a staffing shortage in a 

particular area. 

To participate in one of NASA’s established formal degree programs that pay for

undergraduate and graduate courses, the employee is required to formally apply for 

acceptance and have specific coursework approved on an annual basis by their respective 

Center’s Training Office. Furthermore, participants are required to achieve minimum 

grade requirements, maintain acceptable standing with the college or university and 

NASA for the duration of enrollment in the program, and also commit to a period of 

continued service with the Agency after completion of their coursework. The number of 

employees accepted into a formal degree program varies by Center and is contingent on 

the Center training budget. In addition, the types of degree programs offered varies based 

on Center priorities. For example, Goddard Space Flight Center identified a need to 

increase the pool of qualified candidates in its procurement workforce, whereas Kennedy 

Space Center funds academic degrees in aerospace technology. NASA employees who 

do not participate in a formal degree program may request to attend academic training on 

a course-by-course basis, but each course must relate to the employee’s current or 

anticipated duties and generally be approved by their immediate supervisor, directorate 

Training Coordinator, and the Center Training Office.

Moreover, whether as part of a formal degree program or on a course-by-course basis,

NASA is not permitted to pay for training for the sole purpose of providing an employee 

an opportunity to obtain an academic degree or to qualify for a particular position for 

which the academic degree is a basic requirement. In other words, NASA cannot spend 

taxpayer’s funds to send employees to college solely to make them better educated or to 

enable them to qualify for a better paying position within NASA.

NASA funds academic training through annual budget allocations to each Center. In 

turn, each Center distributes a portion of those funds to the Center Training Office for 

allocation and use. This funding supports all Center training, including the formal

academic degree programs and academic classes taken on a course-by-course basis. 

Center directorates may supplement this funding with their own operating funds at their 

discretion.

The Office of Human Capital Management at NASA Headquarters is responsible for 

general oversight of NASA’s training programs. However, day-to-day authority over the 

programs rests with the individual NASA Centers under the assumption that Center 

officials are in the best position to know what competencies they require. Accordingly, 

each Center and Headquarters has a Training Office responsible for determining and 

allocating training budgets, developing training programs, and approving requests for 

attendance at external training. 
INTRODUCTION

REPORT NO. IG-11-023 3

Examples of several established academic training opportunities offered by NASA are 

described below:

• Goddard Space Flight Center sponsors the Part-Time Graduate Study Program 

and the Undergraduate Study Program through which employees may pursue 

academic study that enhances their ability to make significant contributions to the 

Center. Goddard also sponsors the Procurement Operations Division 

Undergraduate Degree Program. This program offers employees an opportunity 

to pursue undergraduate degrees in contracting and procurement fields to increase 

the pool of qualified candidates for the procurement workforce. 

• NASA Headquarters sponsors the Graduate Study Program and the Continuing 

Education Program. The Graduate Study Program is designed to provide 

employees an opportunity to pursue approved graduate study programs on a parttime basis while performing their official duties. The Continuing Education 

Program provides funding for eligible employees to attend approved college 

courses that relate to a specific career goal. 

• Kennedy Space Center sponsors the Kennedy Undergraduate Studies Program 

under which eligible employees pursue academic degrees in the field of 

Aerospace Technology. Additionally, the Kennedy Graduate Fellowship Program 

enables eligible employees to be reimbursed for masters and doctoral courses that 

help accomplish the Center’s strategic goals and objectives. 

The NASA Shared Services Center (NSSC) is responsible for processing, procuring, and 

collecting employee training data, including data related to academic training courses. 

This data is submitted, tracked, and recorded in an electronic training application known

as the System for Administration, Training, and Educational Resources for NASA, or 

SATERN. Employees initiate the training approval process by entering a request in 

SATERN. The employee’s supervisor, the directorate Training Coordinator, and the 

Center Training Office must approve all academic training requests. NSSC obligates 

funds and submits payment for the training after verifying that all required information 

and approvals have been submitted. Upon completion of the academic course, employees 

are required to provide a copy of their grade. If the grade does not meet NASA’s 

minimum requirements, NASA may pursue reimbursement of the funds from the 

employee.

NASA also pays for academic training for contractor employees if such training is part of 

the company’s contract with NASA. Academic training costs are included in a 

contractor’s overhead account as part of employee fringe benefits. The overhead account 

includes not only academic training but also other employee benefits such as medical 

benefits, life insurance, state and federal taxes, childcare, retirement, and stock options.

The Federal Acquisition Regulation (FAR) governs whether particular costs are 

allowable in Government contracts. With respect to a contractor paying for academic 

training for employees, the FAR provides that the cost of training and education related 
INTRODUCTION

4 REPORT NO. IG-11-023

to the field in which the employee is working or may reasonably be expected to work are 

allowable.6 Additionally, the FAR specifies that a cost is reasonable if, in its nature and 

amount, it does not exceed that which a prudent person in the conduct of competitive 

business would incur.

7

Objective

The objective of our audit was to examine NASA’s controls over its academic training 

program. In particular, we reviewed whether costs are reasonable, if courses relate to 

employees’ duties and the Agency mission, and if controls are in place to ensure effective 

management of academic training expenditures. To conduct our audit, we reviewed 

relevant documentation and interviewed staff at NASA Headquarters, the NSSC, and four 

NASA Centers. See Appendix A for details of the audit’s scope and methodology, our 

review of internal controls, and a list of prior audit coverage. 

 6 FAR pt. 31.205-44, Training and Education Costs. 

7 FAR pt. 31.201-3, Determining Reasonableness. 
RESULTS

REPORT NO. IG-11-023 5

NASA LACKS APPROPRIATE CONTROLS OVER ITS 

ACADEMIC TRAINING 

NASA lacks the internal controls necessary to properly monitor and execute its 

academic training program. As a result, NASA paid $1.44 million for 57 employees 

at Headquarters and the four Centers we tested to obtain academic degrees outside of 

its established program that requires formal application and approval. At least one of 

these employees had applied for acceptance into a formal degree program and was 

rejected. Because these employees bypassed NASA’s formal degree programs, they 

were not required to sign continued service agreements with the Agency and 

therefore had no obligation to continue to work for NASA despite the Agency’s 

substantial investment in their educations. Moreover, without a formal review and 

approval of their academic plans, NASA may be funding a course of study for these 

employees that is not aligned with the Agency’s priorities. We also found that,

unlike other Federal agencies, NASA generally does not limit the amount of money 

it will pay for each employee’s academic training or the amount it will reimburse per 

academic credit. Nor does NASA policy address payment for credits based on life or 

work experience. We also found instances in which NASA paid for employee 

academic training without adequate documentation of course completion. In 

addition, NASA could not identify the total amount it spent providing academic 

training to civil service employees. Finally, although Center training officials 

approve all training requests, they do not have authority over the use of directorate 

funding or insight into the appropriateness of particular training requests. 

Consequently, NASA’s academic training program is vulnerable to abuse.

NASA Employees Are Circumventing Established Programs to 

Obtain Academic Degrees

NASA is paying for employees to obtain academic degrees outside of the Agency’s 

established academic degree programs. We identified 57 employees at Headquarters and 

the four Centers we visited – Goddard, Johnson, Kennedy, and Langley – who are 

pursuing or have obtained academic degrees outside of NASA’s established degree 

programs at a cost to the Agency of $1.44 million (see Figure 1). For 18 of those 57

employees, NASA paid over $30,000 per employee for academic courses, while one 

employee received over $60,000.

Under Federal law and NASA policy, the Agency may pay for or reimburse employees 

for the cost of an academic degree only as part of an Agency employee development 

program linked to accomplishing the strategic goals of the Agency. Moreover, the course 

of study must contribute significantly to meeting an identified Agency training need or 
RESULTS

6 REPORT NO. IG-11-023

resolve a staffing problem.

8

Figure 1. Expenditures for the 57 NASA Employees Pursuing Degrees Outside of 

Established Programs at Headquarters and the Four Centers Reviewed

Furthermore, the Agency cannot use taxpayer’s funds for the 

sole purpose of providing an employee an opportunity to obtain an academic degree or 

qualify for appointment to a particular position. Headquarters and each of the four 

Centers we visited have established formal academic degree programs for employees to 

obtain advanced degrees. In addition, Goddard and Kennedy have implemented 

academic degree programs for employees to pursue undergraduate degrees. 

To test whether employees who either did not apply or were not accepted into formal 

degree programs were actually pursuing degrees, we judgmentally selected 40 academic 

courses taken by 37 NASA employees, such as religion and humanities courses, that did 

not appear related to NASA’s mission. We then met with Center Training Officials, 

directorate training coordinators, and the supervisors of the employees to determine 

whether the courses we identified related to the employees’ job functions and NASA’s 

mission. We determined that 3 out of 37 employees from this sample were attending 

courses unrelated to their job functions and therefore appeared to be pursuing college 

degrees outside of NASA’s established degree programs. 

Based on these results, we expanded our testing to all academic courses attended by 

NASA employees at Kennedy, Johnson, Goddard, Headquarters, and Langley between 

July 2006 and September 2010. We removed from this data set all civil service personnel 

participating in established degree programs. From this smaller group we identified all 

employees who had taken eight or more courses with a total cumulative cost of at least 

$15,000. This resulted in our identification of an additional 54 employees who were not 

participating in the formal academic degree programs offered by their Centers but were 

 8 5 U.S.C. §4107.

Langley Research Center

Kennedy Space Center

Johnson Space Center

Headquarters

Goddard Space Flight Center

$209,602.32

$761,431.97

$306,229.70

$94,960.00

$65,972.00
RESULTS

REPORT NO. IG-11-023 7

nevertheless pursuing academic degrees. We believe this figure is conservative as we 

only performed detailed testing at four NASA Centers and Headquarters. Had we 

reviewed all NASA Centers, we believe this number would be substantially higher.

We found that NASA managers were permitting employees to circumvent NASA’s 

formal degree programs by using program or directorate funds to finance individual 

classes on a course-by-course basis in pursuit of an academic degree. Center Training 

Officials told us they have historically lacked authority to question courses taken with 

program or directorate funds because they are not responsible for such funding. The 

Center-based Training Office’s only visibility over academic training paid for with 

program or directorate funds is approving training requests in SATERN on a course-bycourse basis. The Center Training Office has limited visibility of an employee’s 

complete body of academic work, and in most cases will approve academic training if the 

course is first approved by the directorate and generally appears related to the employee’s 

official duties. Moreover, Center Training Officials said they generally rely on 

employees’ supervisors to ensure that academic courses relate to employees’ official 

duties.

Several approving officials who had approved courses outside of formal degree programs 

told us they felt pressure to do so from senior management. One official readily admitted 

that there was no alignment between the academic courses the employees we identified 

had taken and the critical needs of the Center or NASA as a whole. In addition, officials 

told us that in some instances individual academic training courses were approved and 

paid for by NASA after the employees were denied entry into NASA’s established 

academic degree programs. Indeed, we identified one employee in our sample who had 

been rejected for participation in a formal degree program yet NASA paid for eight

academic courses over a 2-year period.

Center Training Officials claimed that several of the employees we identified had 

obtained their degrees as a by-product of attending multiple single courses related to their 

official duties. However, several factors lead us to believe these employees were actively 

pursuing degrees. First, as noted above, 54 of the 57 individuals we identified attended at 

least eight courses at a single institution between July 2006 and September 2010 at a cost 

to NASA of over $15,000 each. Second, some of these employees took courses like 

College Mathematics, English Composition, and Introduction to Philosophy that do not 

appear to be related to their official duties. While we understand that such classes may 

be prerequisites to a degree and therefore might be paid for by NASA as part of a formal 

degree program, we do not believe they qualify for reimbursement on a stand-alone basis. 

Similarly, NASA paid for 39 thesis project or dissertation courses for a total cost of 

$101,347 for 16 individuals who were not participating in a formal degree program. 

Again, a thesis or dissertation is a requirement of a degree program and is therefore, in 

our judgment, an indication that the employee was seeking an advanced degree. 
RESULTS

8 REPORT NO. IG-11-023

To illustrate the types of degrees employees pursued outside of formal programs, we list 

several examples and include the cost to NASA between July 2006 and September 2010:

• A secretary at Headquarters pursued a bachelor’s degree in business 

administration at Strayer University at a cost to NASA of $37,025. Unlike some 

other Centers, NASA Headquarters has no formal program under which 

Headquarters-based employees can be reimbursed for pursuing an undergraduate 

degree.

• A secretary at Johnson Space Center pursued a bachelor’s degree in business 

administration at the University of Phoenix at a cost to NASA of $13,770. Like 

NASA Headquarters, Johnson Space Center has no formal undergraduate degree 

programs.

• A management and program analyst at Kennedy Space Center obtained a master 

of science degree in software engineering from the Florida Institute of 

Technology at a cost to NASA of $18,240. 

• A program analyst at Kennedy Space Center obtained a master of arts degree in 

human resources management at Webster University at a cost to NASA of 

$15,705.

By funding academic degrees outside of its established programs, NASA is violating 

Federal law and its own requirements that such funding must be part of a planned, 

systemic, and coordinated Agency employee development program linked to 

accomplishing the Agency’s strategic goals. Moreover, NASA has no assurance that

degrees funded outside of its formal programs will contribute, as required by Federal law, 

to meeting an identified training need or resolving an identified staffing problem. 

Continued Service Agreements. A continued service agreement commits an employee 

to working for NASA for a pre-established period in exchange for Agency funded

training or education. NASA employees who attend any training course that takes more 

than 80 hours to complete are required to accept a continued service agreement. If the 

employee voluntarily leaves NASA before completing the service obligation, the 

employee must repay NASA all or some of the costs of the training. According to 

Agency policy, NASA may waive its right to recover the money if repayment would be 

against equity and good conscience or is in the public interest.

NASA generally does not require a service commitment from employees who take 

individual academic courses that take less than 80 hours. Conversely, employees in 

NASA’s formal degree programs are generally required to sign a service commitment 

obligating them to stay with the Agency for at least 1 year after obtaining an 

undergraduate degree and 3 years after obtaining a graduate degree. Employees who 

pursue academic degrees at NASA’s expense outside of NASA’s formal programs avoid 

the continued service commitment required of their counterparts in the formal programs. 
RESULTS

REPORT NO. IG-11-023 9

We identified two employees who attended 16 academic training courses outside of a 

formal program and left the Agency within 6 months of completing their last course. One 

employee at Kennedy transferred to another Federal agency after attending 10 courses at 

Embry Riddle Aeronautical University over a 2-year period at a cost of approximately 

$10,000. We compared the courses taken by this employee to the graduate degree 

programs offered by the University. Nine of the 10 courses were part of the core 

requirements for a master’s degree in aeronautical science. The remaining course was 

titled “Methods and Procedures for the Graduate Capstone Project.” Another employee 

at Johnson resigned from the Federal Government after attending six courses over a 1-

year period at Capella University at a cost to NASA of approximately $12,000. These 

courses consisted of the core requirements for a doctorate degree in leadership. Based on 

our analysis, we believe both of these employees were pursuing graduate degrees at 

NASA’s expense outside of the Agency’s formal program. Because neither employee 

signed a 3-year service commitment that is typically required of graduate degree program 

participants, we question the benefit to NASA of providing $22,000 in tuition 

reimbursements to these former employees. 

We verified with the Center Training Offices that none of the 57 employees we identified

as working toward academic degrees outside of NASA’s established degree programs 

had signed continued service agreements for the degree. Had these employees pursued 

their degrees through the established programs, a continued service agreement would 

have been required. Without a commitment by these employees to continued service or 

repayment, NASA’s $1.44 million investment is at risk. 

Because it is unclear what benefit NASA received for its $1.44 million investment in 

these employees, we question the Agency’s expenditure of these funds (see Appendix C 

for a Schedule of Questioned Costs). In addition, because this $1.44 million figure only 

represents tuition payments for a sample of employees at Headquarters and the four 

Centers where we conducted detailed audit work, we believe an examination across all 

NASA Centers likely would result in substantially higher questioned costs.

NASA Cannot Identify the Total Cost of Providing Academic 

Training to Its Civil Service Employees 

NASA does not know how much it spends on academic training for civil service 

employees. The Workforce Management and Development Division, Office of Human 

Capital Management, NASA Headquarters is responsible for general oversight of 

NASA’s training program. However, overall training budgets are provided as part of 

each Center’s operating budget and these funds are distributed to the Center Training 

Office for allocation and use. Accordingly, the Workforce Management and 

Development Division does not centrally manage NASA’s academic training programs

and has little oversight of academic training expenses or activities from an Agency-wide 

perspective. Moreover, because individual directorates at the Centers can subsidize 

training funds with program funds, control over training funds is further decentralized. 
RESULTS

10 REPORT NO. IG-11-023

Compounding the problem, NASA does not separately track academic training 

expenditures in its financial system. Currently, only overall training expenses are 

recorded, and the Agency has no way to separate an academic training expenditure from 

other types of training. Although academic training requests (including estimated costs)

are separately tracked in SATERN, SATERN was not designed as a financial system and 

does not track actual expenditures. Accordingly, the figures attributed to academic 

training in SATERN do not necessarily reflect the amount NASA actually expended. 

After the training has taken place, NASA manually reconciles the figure reported in 

SATERN with actual expenditures. However, the lack of an automated reconciliation 

process increases the likelihood that the SATERN data is inaccurate. 

Nevertheless, NASA relies on the data in SATERN to report employee training 

information to the Office of Personnel Management. Accordingly, we used this data to 

estimate that NASA spent approximately $17 million on employee academic training 

between July 2006 and September 2010.

NASA Has Not Structured Its Academic Training Program to 

Maximize Potential Savings 

NASA neither caps tuition rates nor places an annual spending limit per employee on 

academic training. As a result, NASA employees have no incentive to seek academic

training from less expensive public educational institutions and instead often attend more 

expensive private or for-profit universities. 

The cost of academic training varies depending on a number of factors including the 

specific course of study, the type of institution attended, and whether employees are 

attending college courses as part of an established academic degree program or on a 

class-by-class basis. For example, one employee at Langley pursued a doctorate degree 

through the Center’s full-time, graduate study program at the Georgia Institute of 

Technology at a total cost to NASA of $140,000. Likewise, through the formal degree 

program at Kennedy an employee pursued a master’s of science degree at the 

Massachusetts Institute of Technology at a total cost of $74,000. Conversely, NASA 

paid $3,020 for a Dryden employee to attend a graduate level Accounting Information 

Systems course at a for-profit institution and $1,284 for a Headquarters employee to 

attend a similar course at a public institution.

As previously discussed, we determined that NASA spent approximately $17 million for 

2,460 employees to attend 10,120 academic training courses between July 2006 and 

September 2010 at an average cost of $6,860 per employee. We identified the top 20 

universities attended by NASA employees based on the amount of tuition paid and found 

that 11 of the top 20 universities attended were private or for-profit institutions (see 

Figure 2 and Table 1). 
RESULTS

REPORT NO. IG-11-023 11

Figure 2. Categories of the Top 20 Institutions, by Expenditure, Attended by 

NASA Civil Service Personnel July 2006-Septmber 2010

Table 1. Top 20 Institutions, by Expenditure, Attended by NASA Civil Service Personnel

July 2006-Septmber 2010

Institution Type

Expenditures 

FY 2006-2010

University of Alabama at Huntsville Public $708,236

Johns Hopkins University Private Not-for-Profit $666,219 

Stevens Institute of Technology Private Not-for-Profit $644,171 

Stanford University Private Not-for-Profit $593,994 

University of Maryland University College Public $593,739 

Florida Institute of Technology Private Not-for-Profit $592,210 

University of Phoenix Private For-Profit $589,866

George Washington University Private Not-for-Profit $564,617 

Georgia Institute of Technology Public $529,079

Case Western Reserve University Private Not-for-Profit $480,285 

Strayer University Private For Profit $479,620

University of Southern California Private Not-for-Profit $455,542 

University of Central Florida Public $430,586

University of Houston at Clear Lake Public $396,922

University of Maryland Public $356,192

University of Florida Public $337,106

Cleveland State University Public $247,085 

Embry-Riddle Aeronautical University Private Not-for-Profit $236,511

Massachusetts Institute of Technology Private Not-for-Profit $234,259 

Purdue University Public $209,281

Total $9,345,520

Public, 

$3,808,226 

(41%)

Private ForProfit, 

$1,069,486 

(11%)

Private NotFor-Profit, 

$4,467,808 

(48%)
RESULTS

12 REPORT NO. IG-11-023

We determined the tuition rates for graduate and undergraduate studies for each of these 

institutions for the fall 2010 or spring 2011 sessions. Using these tuition rates, we 

calculated an average rate for each university by adding their graduate and undergraduate 

rates together and dividing by two. We then grouped all of the average rates calculated 

by category (public, private for-profit, or private not-for-profit) to get an average rate per 

category and compared the three categories.9

Figure 3. Average Tuition Rate, per Credit, at the Top 20 Institutions, 

by Expenditure, Attended by NASA Civil Service Personnel

 By comparing the average rate per 

category, we determined that the average cost per credit hour for private not-for-profit 

universities and private for-profit universities were 3.6 times and 1.6 more expensive,

respectively, than public universities. Based on these calculations, for every credit hour 

paid by NASA at a private not-for-profit university or private for-profit university, the 

Agency could have paid for 3.6 or 1.6 credits, respectively, at a public university (see 

Figure 3). 

In addition, we found that the Agency funded multiple academic degrees for nine 

employees. Six of these employees pursued an undergraduate degree followed by a 

graduate degree, while the other three employees pursued both a master’s and a doctorate 

degree at a total cost of $136,284 for all nine employees. 

Other Federal agencies place limits on the tuition assistance available to employees. For 

example, the Department of Defense (DOD) caps cost per credit hour at $250 and 

maximum funding per employee at $4,500 per year. By instituting similar caps, NASA 

could provide academic training to more employees or possibly save a significant amount 

of money over time. 

 9 For example, the rates per credit hour at the University of Alabama at Huntsville are $344 

(undergraduate) and $514 (graduate). We added $344 and $514 and divided by 2 to determine an 

average per-credit tuition rate of $429 for this university.

$0 

$200 

$400 

$600 

$800 

$1,000 

$1,200 

Private Not-forProfit

Private For-Profit Public 

$1,129 

$511 

$317 
RESULTS

REPORT NO. IG-11-023 13

NASA Is Not Leveraging Its Economies of Scale to Obtain Discounts at Private or 

For-Profit Universities. NASA is not consistently seeking opportunities to obtain 

discounted tuition rates at the private and for-profit universities most frequently attended 

by its employees and contractors. Consequently, the Agency may be paying higher 

tuition rates than necessary. For example, between 2006 and 2010 NASA civil service 

personnel and employees at two of NASA’s prime contractors spent approximately $2

million to attend courses at the Florida Institute of Technology. The school currently 

offers discounts ranging from 5 to 10 percent off the cost of tuition through their “cohort” 

program. Had NASA and the contractors worked together to negotiate an agreement with 

the university, NASA and its contractors could have saved from $100,000 to $200,000 in 

tuition costs. In contrast, Goddard entered into Space Act Agreements with two forprofit universities to leverage a 5 percent discount on academic training for civil service 

personnel.10

NASA Policy Silent on Academic Credit for Life or Work 

Experience

 Because NASA does not track academic training expenditures or 

universities attended from an Agency-wide perspective, NASA is missing opportunities

to leverage tuition discounts and stretch its training dollars.

At some colleges and universities, students can receive academic credit based on their life

experiences, their professional training, or licenses or certificates they already hold. 

Some institutions will grant as many as 30 such life or work experience credit hours 

toward an undergraduate degree without testing. In such cases, employees are not 

acquiring new information, skills, or expertise but instead receive credit for skills they 

already possess. While we did not identify any NASA civil service personnel who may 

have received life or work experience credits at NASA’s expense, at least two of the 

universities most frequently attended by NASA employees offer these credits. 

NASA’s policy is silent on the issue of payment for credits for prior life or work

experience. However, NASA Headquarters training officials expressed the view that 

such credits may be cost effective by helping an employee complete his or her degree in a 

shorter timeframe. Outside of pursing an academic degree, it is unclear how earning 

these types of credits enhances employee performance or the Agency’s mission. The lack 

of policy combined with the weak internal controls that permitted 57 employees to obtain 

degrees outside of formal programs suggest that it is also possible that NASA may be 

paying for these credits outside of formal degree programs. In our judgment, NASA 

should provide clear guidance to define when the Agency will pay for such credits. 

Further, Center Training Offices should perform a thorough review of these credits to 

ensure that payment for this purpose is the best use of academic training funds.

 10 NASA uses Space Act Agreements with people and organizations in the private and public sector to 

advance NASA program objectives. The Agreements establish a set of legally enforceable promises 

between NASA and the other party.
RESULTS

14 REPORT NO. IG-11-023

Grades Were Not Consistently Supported by Appropriate 

Documentation

NASA policy states that the Agency will only pay for academic coursework that is 

successfully completed. For undergraduate courses this means a grade of “C” or better 

and for graduate courses a grade of “B” or better.11

We reviewed 97 randomly selected training requests to determine whether employees had 

met NASA’s requirements for grade reporting. Of the 97 records we tested, NASA was 

able to provide supporting grade submissions for 90 courses. However, NASA was 

unable to provide evidence of grade submissions to support the other seven requests, even 

though the Agency paid a total of $8,555 for six of the seven courses.

Employees are expected to repay the 

Agency if they do not obtain a passing grade or fail to complete the course. To show 

successful course completion, employees are required to submit a copy of their transcript, 

report card, or Internet screen capture of the online grade record within 20 days of course 

completion. 

12

Moreover, for the 90 cases in which grades had been submitted, we question the 

reliability of some of the evidence accepted by NASA. The majority of the 90 

submissions consisted of Internet screen captures from university websites, many of 

which did not include identifying information such as employee name or university 

attended. By accepting such unofficial records, NASA risks paying for courses that were 

not successfully completed. For example, in 2009 the OIG obtained a criminal 

conviction of a NASA contractor employee who altered a grade document in order to 

obtain payment for classes she had not successfully completed. See Appendix D for 

examples of grade submissions accepted by NASA.

Based on our 

statistical projections, we estimate that during the timeframe of our audit, NASA paid 

$892,490 in tuition costs without proper documentation of course completion. (See

Appendix B for the Sampling Methodology and Projection of Results and Appendix C 

for a Schedule of Questioned Costs.) 

 11 NASA Policy Directive 3410.2F, “Employee and Organizational Development,” April 9, 2009.

12 NASA was unable to determine whether it had paid for the seventh course.
RESULTS

REPORT NO. IG-11-023 15

Recommendations, Management’s Response, and Evaluation of 

Management’s Response

We recommended that the NASA Assistant Administrator for Human Capital Management:

Recommendation 1. Require that, prior to granting final approval of academic training,

Center Training Offices assess the appropriateness of all academic training requests to

ensure that employees obtain academic degrees only through established academic training 

programs.

Management’s Response. The Acting Assistant Administrator for Human Capital 

Management concurred with our recommendation and stated that the Office of Human 

Capital Management (OHCM) will coordinate with the Center Training Offices to 

establish a more comprehensive policy which will incorporate all academic training 

requests into the Agency academic training approval process and help ensure that 

academic training is in alignment with Agency mission objectives.

Evaluation of Management’s Response. Management’s proposed actions are 

responsive to the intent of the recommendation; therefore, the recommendation is 

resolved and will be closed upon completion and verification of the proposed action.

Recommendation 2. Establish a centralized mechanism for tracking the Agency’s 

academic training expenditures.

Management’s Response. The Acting Assistant Administrator concurred, stating that 

OHCM will coordinate with the NASA Shared Services Center and the Office of the 

Chief Financial Officer to determine the most efficient method for tracking academic 

training expenditures. 

Evaluation of Management’s Response. Management’s proposed actions are 

responsive to the intent of the recommendation; therefore, the recommendation is 

resolved and will be closed upon completion and verification of the proposed actions.

Recommendation 3. Limit payment of academic tuition per credit hour, implement a cap 

on the total amount an employee may receive for academic training during any given year, 

and establish a formal approval process for consideration of exceptions.

Management’s Response. The Acting Assistant Administrator did not concur with our 

recommendation, stating that “the overriding factor in selecting academic institutions 

should be relevant technical excellence, not cost per credit hour.” However, the Acting 

Administrator also stated that OHCM will utilize the policy changes made in response to 

Recommendation 1 to ensure that NASA is procuring academic training that best meets 

the needs of the Agency and that, when reviewing academic training requests, Center 

Training Offices will consider school quality, best value for the Government, and 

whether courses are available at a lower-cost institution. In addition, OHCM said it will 
RESULTS

16 REPORT NO. IG-11-023

benchmark other Government agencies and private companies to determine best practices 

in this area.

Evaluation of Management’s Response. We consider management’s comments 

unresponsive to this recommendation. Therefore, this recommendation is unresolved and 

will be resolved when the Agency agrees to institute caps on the cost of tuition assistance

or a similar control that addresses our concern. While we acknowledge that technical 

excellence should be a factor in selecting a college or university, we do not agree that 

technical excellence is only attainable at the highest cost institutions. Moreover, while

applying the policy changes referenced in management’s response to Recommendation 1 

should help ensure that academic courses are aligned with NASA’s mission, the proposed 

action does not address the cost of these courses.

Instituting financial caps on employee tuition reimbursement is common in the 

Government and private industry. As part of our audit, we benchmarked tuition 

reimbursement practices at the Department of Defense, which caps cost per credit hour at 

$250 and maximum funding per employee at $4,500 per year. We also reviewed the 

practices of three large businesses with NASA contracts totaling over $1 billion. Each of 

these private companies provides space-related services and products to NASA that 

require high levels of technical expertise. Yet each of these businesses limits the amount 

it will reimburse employees for academic training either by calendar year or by credit

hour. By instituting similar caps, NASA could provide academic training to more 

employees or possibly save a significant amount of money over time.

Recommendation 4. Develop a mechanism to leverage the size of NASA’s civil service 

and contractor workforce to negotiate discounted tuition rates at private or for-profit 

universities.

Management’s Response. The Acting Assistant Administrator concurred, stating that

OHCM will coordinate with the Center Training Offices to negotiate discounted tuition 

rates for civil servant employees. However, he noted that in the past such negotiations 

have sometimes been unsuccessful because Centers could not meet the guaranteed 

minimum number of enrollments the institutions required. 

Evaluation of Management’s Response. Management’s proposed actions are 

responsive to the intent of the recommendation; therefore, the recommendation is 

resolved and will be closed upon completion and verification of the proposed actions. 

We believe that the decentralized nature of NASA’s academic training program, 

including the lack of centralized reporting on total expenditures or institutions attended, 

may have contributed to the difficulty the Agency has experienced in past attempts to 

negotiate discounts. Implementing Recommendation 2 should provide the Agency with 

the information necessary to overcome some of these obstacles. In addition, we suggest 

that NASA involve the NSSC in this process, as the negotiation of discounts for 

employee training is one of the services NSSC provides to NASA.

Recommendation 5. Establish the Agency’s position on the payment of college credits 

earned for life or work experience and the criteria for such payment.
RESULTS

REPORT NO. IG-11-023 17

Management’s Response. The Acting Assistant Administrator concurred and stated that 

OHCM will examine the issue and incorporate any necessary changes into NASA policy.

Evaluation of Management’s Response. Management’s proposed actions are 

responsive to the intent of the recommendation; therefore, the recommendation is 

resolved and will be closed upon completion and verification of the proposed actions.

Recommendation 6. Require employees to submit official transcripts to document 

successful course completion.

Management’s Response. The Acting Assistant Administrator partially concurred, 

stating that although OHCM agrees with the intent of this recommendation, it does not 

believe the “expense and extra logistics” of obtaining an official transcript should be 

required for all courses. The Acting Administrator proposes that an official transcript 

only be required at the culmination of a degree program and that for individual courses 

the Agency continue to require unofficial transcripts and/or grade reports that include the 

employee’s name, name of the educational institution, course name, course dates, and 

grade received. 

Evaluation of Management’s Response. The Acting Assistant Administrator partially 

concurred with this recommendation, and instead proposed requiring official transcripts 

only for degree programs. Although we believe that requiring official transcripts for all 

academic courses would be the best practice, we consider the Agency’s proposed action 

to be responsive to our recommendation provided that the Agency also takes steps to 

ensure compliance with its existing policy that unofficial transcripts and/or grade reports 

be provided prior to payment and include the employee’s name, name of the educational 

institution, course name, course dates, and grade received. As noted in the report, we 

found instances in which payment was made by the Agency in the absence of complete 

information. Nevertheless, the recommendation is resolved and we will close the 

recommendation upon completion and verification of this corrective action. 
RESULTS

18 REPORT NO. IG-11-023

NASA HAS LIMITED OVERSIGHT OF ACADEMIC 

TRAINING PROVIDED TO CONTRACTOR 

EMPLOYEES

NASA funds academic training for contractor employees if the cost is negotiated as 

part of the company’s contract with NASA. However, we found NASA provides no 

oversight of academic training provided to its contractor employees. The FAR

provides that the “cost of training and education that are related to the field in which 

the employee is working or may reasonably be expected to work are allowable,” but 

NASA contracting officers have no knowledge of the types of academic training 

attended by contractor employees or their associated costs. 

Oversight of Contractor Academic Training

NASA funds academic training for contractor employees by reimbursing tuition costs 

included in the contractor’s overhead account as part of employee fringe benefits. On 

NASA’s behalf, the Defense Contract Management Agency (DCMA) negotiates the 

overhead costs with audit support from the Defense Contract Audit Agency (DCAA). 

These costs must comply with the FAR to be allowable. According to the FAR, to be an 

allowable cost the training must relate to the field in which the employee is working or 

may reasonably be expected to work and must not exceed that which would be incurred 

by a prudent person in the conduct of competitive business.13

During the initial phase of the audit, we reviewed academic training at United Space 

Alliance, a large NASA contractor. In addition, we judgmentally selected two other 

NASA contractors, Alliant Techsystems and Wyle Laboratories. The value of these three 

companies’ contracts with NASA exceeds $1 billion. Each of the contractors provided us 

with their tuition assistance policy, internal audits conducted on academic training, and 

information concerning academic training attended by their employees who worked on 

NASA contracts between fiscal years 2006 and 2010. Based on our analysis of the data,

we determined that the three contractors spent a total of $24 million to provide academic 

training for their employees during this period. Specifically:

 

• United Space Alliance spent $18,754,983 for 2,109 employees to attend academic 

courses at an average cost of $8,893 per employee.14

• Alliant Techsystems spent $5,118,601 for 597 employees to attend academic 

courses at an average cost of $8,574 per employee. 

 

 13 FAR 31.205-44, Training and Education Costs and FAR 31.201-3, Determining Reasonableness. 14 United Space Alliance provides employees with a onetime cash award for completion of a degree.
RESULTS

REPORT NO. IG-11-023 19

• Wyle Laboratories spent $207,271 for 63 employees to attend academic courses at 

an average cost of $3,290 per employee. 

Similar to our examination for NASA civil service employees, we identified the top 20 

institutions attended by employees at United Space Alliance and Alliant Techsystems 

(Wyle Laboratories provided information on classes attended but not by institution). We 

determined that, like civil service personnel, these contractor employees are attending 

private and for-profit institutions at a higher rate than public institutions. For example, 

for employees of one contractor, 15 of the top 20 institutions attended were private or forprofit, while for employees of the second contractor, 12 of top 20 institutions attended 

were private or for-profit. As demonstrated with the civil service workforce, the cost of 

attending a private or for-profit institution is significantly higher than that of a public 

institution.

15

While NASA contracting officers do not review and approve the rate for overhead costs, 

they have the authority to enter into, administer, and terminate contracts and make related 

determinations and findings. NASA contracting officers are also responsible for ensuring 

performance of all necessary actions for effective contracting, ensuring compliance with 

the terms of the contract, and safeguarding the interests of the United States in its 

contractual relationships. However, we found that NASA is not reviewing contractor 

academic training costs, even on a sample basis, to determine if the costs are reasonable 

or if the courses taken relate to the field in which the employee is working. Instead, 

NASA contracting officers rely on annual “incurred cost audits” conducted by DCAA to 

determine whether contractors comply with the FAR. 

However, relying solely on DCAA audits is problematic because these audits do not test 

all contractor costs on a consistent basis and do not necessarily compare the costs of 

courses at a private or for-profit institution to the costs for the same courses at a public 

university. Further, a DCAA representative told us that DCAA has not audited academic 

training costs because, in relation to the overall employee fringe benefit account, these

costs were not significant enough to warrant a detailed review. As a result of our inquiry, 

DCAA has included academic training in its incurred cost audit of one of the contractors

we identified. DCAA has not yet released the results of its audit. 

We also determined that United Space Alliance and Alliant Techsystems reimbursed 

employees for college credit earned for prior life or work experience. From fiscal years 

2006 through 2010, United Space Alliance provided $112,079 in tuition reimbursement 

for this type of college credit. While we were unable to determine the total costs incurred 

at Alliant Techsystems, the company’s policy states that “life experiences earning credit 

and tests in lieu of courses are reimbursable, if part of an approved degree program.” As 

discussed previously, employees earning credits for life learning or experience are not 

 15 However, unlike NASA’s rules for its civil service employees, each of the three contractors we examined 

limits the amount of tuition reimbursement available to its employees to a set sum either by calendar year 

or per credit hour in their corporate policy.
RESULTS

20 REPORT NO. IG-11-023

acquiring new information, skills, or expertise, but are rather receiving college credit for 

skills they already possess. It is unclear how credits awarded for prior experience and 

without classroom attendance enhance job capabilities, improve employee performance, 

or meet the requirements of the FAR.

We are not making any recommendations in relation to contractor academic training. 

Instead, we are providing this information to NASA to make the Agency aware of the 

issues we identified during our audit. We encourage NASA to consider this information 

during future reviews of contractor activities. 
APPENDIXES

REPORT NO. IG-11-023 21

APPENDIX A

Scope and Methodology

We performed this audit from October 2010 through August 2011 in accordance with 

generally accepted government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based on 

our audit objectives.

We performed work at NASA Headquarters, the NASA Shared Services Center (NSSC), 

and four NASA Centers: Goddard Space Flight Center, Johnson Space Center, Kennedy 

Space Center, and Langley Research Center.16

In order to test NASA’s controls over the academic training, we obtained the universe of 

academic training data from July 2006 through September 2010 from SATERN. This 

universe contained all academic training taken by NASA employees and funded through 

employee reimbursement or direct payment to the institution using NASA appropriations. 

This universe of data is the basis for the testing, analysis, and summaries of NASA 

employee academic training presented in this report. We used a random sample to select 

97 training records for testing (see Appendix B for Sampling Methodology and 

Projection of Results). We obtained a copy of the original Authorization, Agreement & 

Certification of Training Form, SF-182, from NSSC and verified that the information on 

the SF-182 matched the information included in the universe of academic training during 

the timeframe of the audit. The SF-182 requires three levels of approval prior to being 

submitted to the NSSC: “Initial Approval” which is normally the first line supervisor, the 

 We interviewed NASA Chiefs, Leads, 

and Specialists within the Workforce Management and Development Division, the 

Human Resources Development Divisions, and contractor employees within the Center 

Training Offices to learn about academic training programs, processes, budgets, 

expenditures, and the controls over each. We also interviewed Directorate Training 

Coordinators and Supervisors at each of the NASA Centers to determine how the 

processes and program controls were implemented. For information related to NASA 

contractors, we interviewed NASA officials within the Office of Procurement including 

Contracting Officers and Specialists who oversee the three contracts reviewed. We also 

interviewed representatives from the Defense Contract Management Agency and the 

Defense Contract Audit Agency.

 16 The headquarters location in Washington, DC operates as a Center in terms of providing academic 

training to employees’ duty stationed at that location but also serves as the Headquarters office for 

Agency-wide training. For the purposes of this audit, we reviewed the process for providing academic 

training to Headquarters employees the same as for other NASA Centers. 
APPENDIX A

22 REPORT NO. IG-11-023

“Training Coordinator” approval, each Directorate normally has one person that performs 

this duty, and the “Training Office” approval, which is performed by the Center Training 

office. We interviewed individuals included in this approval process for each item tested.

We also traced grade submissions to SATERN to verify that grades were submitted and 

properly recorded.

To evaluate NASA’s funding of contractor academic training, we obtained a universe of 

academic training data from three NASA contractors each with a total award value over 

$1 billion. These three individual universes totaled $24 million expended on academic

training taken by contractor employees working specifically on NASA contracts for the 

period of October 2005 through September 2010. These universes are the basis for the 

testing, analysis, and summaries of NASA contractor academic training presented in this 

report.

We researched multiple college and university websites to determine their undergraduate 

and graduate tuition rates and the training curriculum for various degree programs. We 

also met with admissions officers at two institutions located near a NASA Center to 

obtain information on the admissions process and standards. 

We reviewed Federal laws and regulations and NASA policies related to training for civil 

service personnel and contractor employees. We also reviewed the following as 

applicable to our audit objectives: 

Federal Laws, Regulations, Policies, and Guidance

Government Employees Training Act of 1958, as amended

United States Code, Title 5, Part III, Subpart C, Chapter 41, “Training”

Code of Federal Regulations, 5 C.F.R. 410, “Training”

OPM Guide for Collection and Management of Training Information, August 2008

OPM Fact Sheet on Continuing Service Agreements, September 4, 2009

Federal Acquisition Regulation 31.201-3, “Determining Reasonableness”

Federal Acquisition Regulation 31.205-44, “Training and Education Costs”

NASA Policies and Procedures

NPD 3410.2F, “Employee and Organizational Development,” April 9, 2009

NSSC-HR-SDG-0019 (Revision A), “Registration-Reimbursement for External Training 

Service Delivery Guide,” May 31, 2007

SATERN Rules and Process Guide for Administrators (Version 2.0), December 2009

NASA Workforce Planning Desk Guide Version 2, September 2008

KSC-UG-1104 (Revision C), “Kennedy Space Center Training & Organizational 

Development Information Guide,” September 1, 2010
APPENDIX A

REPORT NO. IG-11-023 23

NASA Personnel Bulletin 2007-24-DM, “Passing Grades and Recordkeeping for 

Academic Courses,” May 30, 2007

Use of Computer-Processed Data. To assess the reliability of the NASA’s academic 

training data between July 2006 through September 2010, we (1) reviewed the System for 

Administration, Training, and Educational Resources for NASA (SATERN) 

administration manual, (2) reviewed the query parameters used to extract the data 

universe of academic training from SATERN, (3) randomly selected a sample of 97 

training records to test and verify completeness and accuracy of the data, and (4) 

interviewed agency officials. We determined that the computer-based data obtained 

through the course of the audit is sufficiently reliable for the purposes of this report.

Review of Internal Controls

We reviewed and evaluated the internal controls associated with established academic 

degree training programs, individual academic course approvals, academic training 

expenditures, and grade documentation. We found internal control deficiencies as 

discussed in this report. Our recommendations, if implemented, should correct the 

weaknesses we identified.

Prior Coverage

During the last five years, the NASA Office of Inspector General has not issued any 

reports related to NASA’s tuition assistance; however, the U.S. Government 

Accountability Office (GAO) issued one report related to the subject of this report. 

Unrestricted reports can be accessed at http://www.gao.gov.

GAO 11-300, “DoD Education Benefits: Increased Oversight of Tuition Assistance 

Program is Needed,” March 1, 2011. GAO reported on DoD’s oversight of schools 

receiving tuition assistance funds and the extent to which DoD coordinates with 

accrediting agencies and the U.S. Department of Education in its oversight activities. In 

accordance with DOD policy, tuition assistance covers up to $250 per credit hour, with a 

maximum of $4,500 per year. In order to receive tuition assistance funds, DOD requires 

postsecondary institution to be accredited by an agency recognized by Education. 

Tuition assistance funds are paid directly to schools and if service members do not meet 

grade point average requirements or complete their courses, service members are 

responsible for paying back the money for these courses. 
APPENDIX B

24 REPORT NO. IG-11-023

SAMPLING METHODOLOGY AND 

PROJECTION OF RESULTS

For this audit, we used the attribute sample design with the method of selection being 

simple random sample. We selected 97 academic training requests from a universe of 

10,120 academic training courses attended by NASA civil service personnel from July 

2006 through September 2010. The value of the universe of academic training courses 

totaled $16,875,078. We performed two substantive tests to determine whether 

(1) grades were properly documented; and (2) the grade submitted met NASA’s grade 

requirements. Based on our analysis of documentary evidence, we determined that 

NASA had supporting grade submissions for 90 courses that met the grade requirements; 

however, seven grade submissions were missing. We validated that NASA paid for six 

of the seven courses totaling $8,554.50 without documentation that the employee met the 

grade requirement; NASA was unable to determine whether a $378.00 payment was 

made for the seventh course. 

Based on the results of our statistical analysis, we are 90 percent confident that between 

219 and 1,033 of the universe of academic training requests would fail both substantive 

tests, resulting in a projected dollar amount between $284,291 and $1,500,689 with a 

mean of $892,490.

17

Projections Based on 90 Percent Confidence Level

 

Timeframe Universe Sample Errors

Projected 

Lower Bound

Projected 

Mean

Projected Upper 

Bound

July 1, 2006-

September 

30, 2010 10,120 97 6 219 626 1033

July 1, 2006-

September 

30, 2010 $16,875,078.28 $171,680.75 $8,554.50 $284,291.10 $892,490.10 $1,500,689.11

 17 We performed the statistical sampling, analysis and projections using WinStat Version 1.0.
APPENDIX C

REPORT NO. IG-11-023 25

SCHEDULE OF QUESTIONED COSTS

Questioned Costs* Amount Page

Unallowable Costs:

NASA-funded employee degrees outside of 

established programs

$ 1,438,196 5-8

Unsupported Costs:

Projected tuition payments with no 

supporting documentation

$ 892,490 14

 Total Questioned Costs $ 2,330,686

* Questioned Costs are expenditures that are questioned by the OIG because of a possible violation of legal, 

regulatory or contractual requirements, are not supported by adequate documentation at the time of the 

audit, or are unauthorized or unallowable. 
APPENDIX D

26 REPORT NO. IG-11-023

SAMPLES OF GRADE SUBMISSIONS 

ACCEPTED BY NASA

NASA accepts various types of documentation as proof that an academic course was 

successfully completed. In this example, the employee submitted an e-mail from the 

university that does not list the name of the student or other information to indicate who 

took the course and received the grade. 

Source: NASA Shared Services Center.
APPENDIX D

REPORT NO. IG-11-023 27

In this example, the employee submitted an Internet screen capture from the university 

website as evidence of receiving a passing grade. Note that the employee’s name is not 

listed on the screen capture.

Source: NASA Shared Services Center.
APPENDIX E

28 REPORT NO. IG-11-023

MANAGEMENT COMMENTS
APPENDIX E

REPORT NO. IG-11-023 29
APPENDIX E

30 REPORT NO. IG-11-023
APPENDIX F

REPORT NO. IG-11-023 31

REPORT DISTRIBUTION

National Aeronautics and Space Administration

Administrator

Deputy Administrator

Chief of Staff

Assistant Administrator for Human Capital Management

Assistant Administrator for Procurement

NASA Advisory Council’s Audit, Finance, and Analysis Committee

Director Goddard Space Flight Center

Director Johnson Space Center

Director Kennedy Space Center

Director Langley Research Center

Executive Director NASA Shared Services Center 

Non-NASA Organizations and Individuals

Office of Management and Budget

Deputy Associate Director, Energy and Science Division

Branch Chief, Science and Space Programs Branch

Government Accountability Office

Director, NASA Financial Management, Office of Financial Management and 

Assurance

Director, NASA Issues, Office of Acquisition and Sourcing Management

Congressional Committees and Subcommittees, Chairman and 

Ranking Member

Senate Committee on Appropriations

Subcommittee on Commerce, Justice, Science, and Related Agencies

Senate Committee on Commerce, Science, and Transportation

Subcommittee on Science and Space

Senate Committee on Homeland Security and Governmental Affairs

House Committee on Appropriations

Subcommittee on Commerce, Justice, Science, and Related Agencies

House Committee on Oversight and Government Reform

Subcommittee on Government Organization, Efficiency, and Financial Management

House Committee on Science, Space, and Technology

Subcommittee on Investigations and Oversight

Subcommittee on Space and Aeronautics

REPORT NO. IG-11-023 33

Major Contributors to the Report:

Laura B. Nicolosi, Director, Mission Support Directorate

Julia K. Eggert, Project Manager

Scott A. Riggenbach, Lead Auditor

Linda S. Hargrove, Information Technology Specialist

Jason D. Hensley, Auditor

Elizabeth M. Richardson, Attorney
AUGUST 10, 2011

REPORT No. IG-11-023

OFFICE OF AUDITS

OFFICE OF INSPECTOR GENERAL

ADDITIONAL COPIES

Visit http://oig.nasa.gov/audits/reports/FY11/ to obtain additional copies of this report, or contact the 

Assistant Inspector General for Audits at 202-358-1232.

COMMENTS ON THIS REPORT

In order to help us improve the quality of our products, if you wish to comment on the quality or 

usefulness of this report, please send your comments to Mr. Laurence Hawkins, Audit Operations and 

Quality Assurance Director, at Laurence.B.Hawkins@nasa.gov or call 202-358-1543.

SUGGESTIONS FOR FUTURE AUDITS

To suggest ideas for or to request future audits, contact the Assistant Inspector General for Audits. 

Ideas and requests can also be mailed to:

Assistant Inspector General for Audits

NASA Headquarters

Washington, DC 20546-0001

NASA HOTLINE

To report fraud, waste, abuse, or mismanagement, contact the NASA OIG Hotline at 800-424-9183 or 

800-535-8134 (TDD). You may also write to the NASA Inspector General, P.O. Box 23089, L’Enfant 

Plaza Station, Washington, DC 20026, or use http://oig.nasa.gov/hotline.html#form. The identity of 

each writer and caller can be kept confidential, upon request, to the extent permitted by law.