GAO-04-648R NASA Compliance With Cost Limits 

United States General Accounting Office

Washington, DC 20548 

April 2, 2004 

The Honorable John McCain 

Chairman 

The Honorable Ernest Hollings 

Ranking Minority Member 

Committee on Commerce, Science, 

 and Transportation 

United States Senate 

The Honorable Sherwood L. Boehlert 

Chairman 

The Honorable Ralph Hall 

Ranking Minority member 

Committee on Science 

House of Representatives 

Subject: NASA: Compliance with Cost Limits

Section 202 of the National Aeronautics and Space Administration (NASA) 

Authorization Act of 2000 (P.L. 106-391) requires that GAO verify NASA’s accounting 

for amounts obligated against established limits for the space station and 

related space shuttle support. Under the act, obligations are limited to $25 billion for 

the space station and $17.7 billion for shuttle support. In the past, we reportedthat 

NASA was unable to provide detailed support for the amounts it had reported as 

obligated against the limits. Thus, we could not verify the amounts NASA reported to 

Congress in its fiscal year 2002 through 2004 budget requests. 

NASA’s did not report obligations to date against the space station and shuttle cost 

limits as part of its fiscal year 2005 budget request. Therefore, there was nothing for 

us to audit this year and we were unable to perform the audit called for by section 

202 of the act. As a result, we have no basis for verifying NASA’s charges against the 

limits. We have provided a copy of the slides to NASA officials and they agreed with 

our conclusion. 

As discussed with your staff, the enclosed slides summarize current and past 

reporting issues on these legislative restrictions. If you or your staff have any 
Page 2 GAO-04-648R NASA Compliance With Cost Limits 

questions about the slides, please contact me at (202) 512-9505 or by e-mail at 

kutzg@gao.gov or Diane Handley, Assistant Director, at (404) 679-1986 or by e-mail at 

handleyd@gao.gov. 

Gregory D. Kutz 

Director, Financial Management and Assurance 

Enclosures 
International Space Sta

Shuttle Support Cost 

Briefing to Staff of the Senate C

Commerce, Science, and Transp

House Committee on Sc

April 2, 2004
Briefing Contents

• Legislative Requirements• Objective• Summary of Past and Current Reporti• Issues Impacting Cost Limits Going Fo• Related Audit Issues• Conclusion
NASA Authorization Act of 20Requirements

The act establishes general limitations on the associated with the International Space Statishuttle launches in connection with ISS asse

• ISS obligations limited to $25 billion.•

Shuttle launch obligations limited to $1

As part of the annual budget request to Congrequired to update the Congress o

n its progr

•

Accounting f

or the a

mounts obligated a

shuttle limitations to date.

•

Arrange for GAO to verify the accountinbudget submission.
Objective

• To provide updated information regard

ability to account for amounts charged and shuttle spending limits included in the National Aeronautics and Space AAuthorization Act of 2000 (P. L. 106-39
Summary of Past and Curren

• NASA Fiscal Year 2002 Budget:

•

NASA’s first report to the Con

gress 

under the act.

•

NASA reported that:

• It had received about $15.8 

billion of budget authority through fiscal year 2000 related to the ISS limit.

• It had charged $1.5 billion 

against the shuttle limit through fiscal year 20

0

0 (calcul

ated 

based o

n $38

0 million per 

launch, the maximum all

owe

d

by the act).

• GAO August 2

•

We found th

provide detaamounts obagainst the 

( See U. S. G

Office, NASStation and GAO-01-10August 31, 
Summary of Past and Curren(Continued)

• NASA Fiscal Year 2003 Budget:

•

NASA reported $17.9 billion budget 

authority received for the ISS limit through fiscal year 2001. NASA did not report amounts obligated f

or the 

shuttle limit through fiscal yea

r

2001. How

ever, it did report that the 

32 planned shuttle missions required to ass

emble the ISS were 

value

d at $12.2 billion b

ased on 

$380 million per launch.

• GAO April 20

•

No change report. 

(See U. S. 

Office, NACost LimitGAO-02-5April 10, 2
Summary of Past and Curren(Continued)

• NASA Fiscal Year 2004 Budge

t:

•

NASA reported $19.8 billion budget 

authority receive

d for the ISS limit 

through fiscal year 2002 and did not report a

mounts o

bligated for the shuttle.

• NASA Fiscal Year 2005 Budge

t: 

•

NASA did not comply with therequirements of section 202 of the National Aeronautics and Space Administration Authorization Act of 2000.

•

NASA did not report amounts obligated against the cost limits as part of its fiscal year 2005 budget request to Con

gress.

• GAO Briefing 

•

No change report. (S

• GAO Results 

•

No basis fcharged a

•

No change report. (Se
Issues Impacting Cost Limits Forward •

Grounding o

f the U.S. shuttle fleet and unc

the timing for returning the shuttle to flight wcompletion of the ISS and increase cost.

•

Factors increasing cost include:

•

Unplanned maintenance and storage 

components at Kennedy Space Cenfor launch.

•

Unplanned testing and recertification 

station’s components.

•

Costs for extending contracts for the 

critical skills longer than planned to cdevelopment and assembly of the st
Issues Impacting Cost Limits Forward•

Upon returning to flight, the shuttle will be d

assembling the ISS and is to be retired upothat work. However, u

ntil the shuttle return 

known, it will be difficult f

or NASA to provid

estimates of the increase in costs and the scompletion date.
Related Audit Issues•

As part of our ongoing audit of NASA’s efforts t

financial ma

nagement system, we reported tha

currently do

e

s not p

r

o

vide reliable and timely co

pro

gram management and external reporting p

ones set fort

h in the National Aeronautics and S

Authori

zation Act of 2000. (U. S. General Acco

Business Modernization: NASA’s Integ

rated Fi

Management Program Does Not Fully Address Reporting Issues, GA

O

-04-15

1, Washington, D

2003).
Related Audit Issues (Contin•

NASA’s independent audit

ors (Pricewat

erhouse

disclaimed an opinion on NASA’s fiscal year 20stateme

nts b

ecause the agency could not p

r

o

v

docume

ntatio

n to sup

p

o

rt the financial stateme

independent auditors reported that NASA’s finasyste

m was 

n

ot in compliance with the requirem

Financial Management Impro

v

e

ment Act (FFM

• In January 2004, NASA Inspect

or General repo

ISS and the 

n

ew integ

rated financial m

anagem

the 

m

ost serious management and performan

c

NASA. 
ConclusionNASA did not comply with the requiremen

of the National Aeronautics and Space AAuthorization Act of 2000 (P. L. 106-391)

• NASA did not report amounts obliga

cost limits as part of its fiscal year 2request to Congress.