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76–235PDF 2012

MISMANAGEMENT OF FUNDS AT 

THE NATIONAL WEATHER SERVICE 

AND THE IMPACT ON THE FUTURE OF 

WEATHER FORECASTING 

HEARING 

BEFORE THE

SUBCOMMITTEE ON INVESTIGATIONS AND 

OVERSIGHT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

WEDNESDAY, SEPTEMBER 12, 2012 

Serial No. 112–103 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. RALPH M. HALL, Texas, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

SANDY ADAMS, Florida 

BENJAMIN QUAYLE, Arizona 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 

JERRY F. COSTELLO, Illinois 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

JERRY MCNERNEY, California 

TERRI A. SEWELL, Alabama 

FREDERICA S. WILSON, Florida 

HANSEN CLARKE, Michigan 

SUZANNE BONAMICI, Oregon 

VACANCY 

VACANCY 

VACANCY 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT

HON. PAUL C. BROUN, Georgia, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

SANDY ADAMS, Florida 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

RALPH M. HALL, Texas 

PAUL D. TONKO, New York 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

JERRY MCNERNEY, California 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

Wednesday, September 12, 2012 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Sandy Adams, Vice-Chair, Subcommittee on 

Investigations and Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives ............................................................... 11 

Written Statement ............................................................................................ 12 

Statement by Representative Paul D. Tonko, Ranking Minority Member, Subcommittee on Investigations and Oversight, Committee on Science, Space, 

and Technology, U.S. House of Representatives ............................................... 13 

Written Statement ............................................................................................ 15 

Witnesses: 

PANEL I 

Dr. Kathryn D. Sullivan, Assistant Secretary of Commerce for Environmental 

Observation and Prediction and Deputy Administrator for the National 

Oceanic and Atmospheric Administration, U.S. Department of Commerce 

Oral Statement ................................................................................................. 17 

Written Statement ............................................................................................ 20 

Inspector General Todd J. Zinser, U.S. Department of Commerce, Office of 

Inspector General 

Oral Statement ................................................................................................. 26 

Written Statement ............................................................................................ 28 

PANEL II 

Dr. William B. Gail, Chief Technology Officer, Global Weather Corporation, 

Committee on the Assessment of the National Weather Service’s Modernization Program, National Research Council of the National Academies 

Oral Statement ................................................................................................. 52 

Written Statement ............................................................................................ 55 

INVITED – Ms. Maureen Wylie, Chief, Resource and Operations Management, National Oceanic and Atmospheric Administration, U.S. Department 

of Commerce 

Mr. Richard Hirn, General Counsel and Legislative Director, National Weather Service Employees Organization 

Oral Statement ................................................................................................. 64 

Written Statement ............................................................................................ 66 

Appendix I: Answers to Post-Hearing Questions 

Dr. Kathryn D. Sullivan, Assistant Secretary of Commerce for Environmental 

Observation and Prediction and Deputy Administrator for the National 

Oceanic and Atmospheric Administration, U.S. Department of Commerce .... 80 
Page

IV 

INVITED – Ms. Maureen Wylie, Chief, Resource and Operations Management, National Oceanic and Atmospheric Administration, U.S. Department 

of Commerce ......................................................................................................... 84 

Inspector General Todd J. Zinser, U.S. Department of Commerce, Office of 

Inspector General ................................................................................................. 89 

Dr. William B. Gail, Chief Technology Officer, Global Weather Corporation, 

Committee on the Assessment of the National Weather Service’s Modernization Program, National Research Council of the National Academies .. 98 

Mr. Richard Hirn, General Counsel and Legislative Director, National Weather Service Employees Organization .................................................................... 100 

Appendix II: Additional Material for the Record 

Department of Commerce Acting Secretary, Ms. Rebecca Blank, May 24, 

2012 memorandum submitted by Dr. Kathryn D. Sullivan ............................. 114 

Under Secretary of Commerce for Oceans and Atmosphere, Dr. Lubchenco, 

May 24, 2012 memorandum submitted by Dr. Kathryn D. Sullivan ............... 126 

Joint NOAA DOC investigative report’s Executive Summary (redacted) ........... 132 
(1) 

MISMANAGEMENT OF FUNDS 

AT THE NATIONAL WEATHER SERVICE AND 

THE IMPACT ON THE FUTURE OF 

WEATHER FORECASTING 

WEDNESDAY, SEPTEMBER 12, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT, 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 3:33 p.m., in Room 

2318 of the Rayburn House Office Building, Hon. Sandy Adams 

[Chairwoman of the Subcommittee] presiding. 
2 

Subcommittees on Investigations & Oversight Hearing 

Mismanagement of Funds at the National Weather Service and the 

Impact on the Future of Weather Forecasting 

Panel I 

Wednesday, September 12,2012 

2:00 p.m. to 4:00 p.m. 

2318 Rayburn House Office Building 

Witnesses 

Dr. Kathryn D. Sullivan, Assistant Secretary of Commerce for Environmental Observation and 

Prediction and Deputy Administrator for the National Oceanic and Atmospheric Administration, 

U.S. Department of Commerce 

Inspector General Todd J. Zinser, U.S. Department of Commerce, Office ofInspector General 

INVITED - Ms. Maureen Wylie, Chief, Resource and Operations Management, and former 

Chief Financial Officer, National Oceanic and Atmospheric Administration, U.S. Department of 

Commerce 

Panel II 

Dr. William B. Gail, Chief Technology Officer, Global Weather Corporation, and Member, 

Committee on the Assessment of the National Weather Service's Modernization Program, 

National Research Council of the National Academies 

Mr. Richard Him, General Counsel and Legislative Director, National Weather Service 

Employees Organization 
3 

U.S. House of Representatives 

Committee on Science, Space, and Technology 

Subcommittee on Investigations & Oversight 

HEARING CHARTER 

"Mismanagement of Funds at the National Weather Service and the Impact on the Future of 

Weather Forecasting" 

PURPOSE 

Wednesday, September 12, 2012 

2:00 p.m. - 4:00 p.m. 

2318 Rayburn House Office Building 

On September 12,2012 at 2:00 p.m., the Investigations and Oversight Subcommittee will hold a 

hearing to provide Subcommittee Members the opportunity to understand the events that led to 

unauthorized reprogramming of funds within the National Weather Service (NWS). A 2011 

National Oceanic and Atmospheric Administration (NOAA) report and a 2012joint NOAA and 

Department of Commerce (DOC) investigative report provide the basis for memos issued by 

NOAA and DOC that acknowledge "a financial unit that, for at least the past two fiscal years, 

operated outside the bounds of acceptable financial management."! Of particular concern, these 

memos detail that NWS employees engaged in the transfer of potentially millions ofNWS funds 

without Congressional authorization or notification. These actions raise concerns about the 

fidelity of budget requests, financial oversight, and possible Anti-Deficiency Act (ADA) 

violations. 

The hearing will examine how NOAA, DOC, and the DOC Office ofInspector General (OlG) 

plan to prevent similar incidents in the future, as well as address the breakdown in 

communication that led to earlier complaints being ignored. The hearing will also examine the 

context in which these events transpired. The Committee will hear about historical funding 

challenges at the NWS, as well as the importance of science and technology investments to 

ensure that the U.S. produces first class forecasting. 

BACKGROUND 

The National Weather Service is one of five line offices within NOAA, which in turn is one of 

the largest bureaus within the Department of Commerce. The mission of NWS is to "provide 

weather, water, and climate data, forecasts and warnings for the protection of life and property 

and enhancement of the national economy.,,2 NWS data and products "form a national 

I DOC Deputy Secretarial Decision Memorandum, "Decisions Regarding Recommendations Contained in Report 

Entitled 'Internal Inquiry into Alleged Mismanagement of Funds Within the National Weather Service,'" May 24, 

2012, available at: http://www.noaa.gov/foiainoaa_useful_websites/052412 _ blank_decisionYlemo.pdf (hereinafter 

DOC Memo). 

2 NWS website, available at: http://www.weather.gov/about. 

Page 11 
4 

information database and infrastructure which can be used by other governmental agencies, the 

private sector, the public, and the global community.,,3 

Earlier this year, NOAA and DOC each issued a decision memorandum addressing allegations of 

mismanagement at NWS.4 The basis for these two memos are a preliminary review of these 

allegations completed in November 20 II, which in tum set the foundation for a subsequent 

NOAA and DOC-led investigation, culminating in a report in May titled, "Internal Inquiry into 

Alleged Mismanagement of Funds Within the National Weather Service" (Investigative Report). 

Citing Privacy Act concerns, NOAA has restricted circulation of the Investigative Report; 

however, the two decision memos from NOAA and DOC are available to the public. 

According to the DOC memo, issued by Dr. Rebecca Blank, Deputy Secretary of Commerce: 

"In recognition of the seriousness of the allegations and preliminary findings as well as 

the potential impact such conduct could have on a program of critical importance to the 

Nation, Under Secretary Lubchenco and I took immediate action to establish an . 

investigative team led by senior executives from NOAA and the Department's Office of 

Budget ("Investigative Team") to review the preliminary findings and expand upon the 

work ofthe internal review."s 

Additionally, according to the NOAA memo, issued by Dr. Jane Lubchenco, Under Secretary of 

Commerce for Oceans and Atmosphere, in the five months it took to conduct the investigation 

this year: 

"[TJhe Investigative Team conducted thirty interviews of over twenty Department of 

Commerce employees, completed an extensive review ofNWS financial records, and 

reviewed a large number of documents including emails, financial information, 

memoranda, and other material provided by witnesses in support of their testimony. 

Throughout the investigative process the Team consulted with the Office ofthe Inspector 

General regarding the conduct of the investigation, including whom to interview and 

what lines of questioning to pursue. The investigation focused on FY 2010 and FY 2011 

because that was the time period referenced in the complaints received. ,,6 

Dr. Lubchenco's memo further elaborates on the findings of the Investigative Report. 

Specifically, she explains that the Investigative Team determined that "NWS employees engaged 

in reprogramming ofNWS funds without Congressional notification during the years in 

question.,,7 The Investigative Team also found there to be a "failure of management and 

oversight by NWS leadership. In addition, the Team found significant problems with budget and 

financial controls at the National Weather Service and that Departmental financial and 

3 NWS website, Mission Statement, available at: http://www.nws.noaa.gov/mission.php. 

4 DOC Memo, supra, note I; and DOC Under Secretarial Decision Memorandum, "Corrective Actions reo Internal 

Inquiry into Alleged Mismanagement of Funds Within the National Weather Service," May 24, 2012, available at: 

http://www.noaagov/foialnoaa_useful_ websites/052412 Jubchenco _decision _ memo.pdf (hereinafier NOAA 

Memo). 

5 DOC Memo, supra, note I. 

6 NOAA Memo, supra, note 4. 

7 Ibid. 

Page I 2 
5 

management controls were ineffective at detecting or preventing this inappropriate 

reprogramming."g 

DOCOIG 

The OIG referred complaints about the problems at NWS to NOAA and DOC. During the 

course of the NOAAIDOC investigation, OIG staff was available to assist the agency and 

provide guidance, with the understanding that at the conclusion of the investigation, the OIG 

would conduct a 'sufficiency review,' which would determine if the investigation was conducted 

appropriately. The IG will provide the Committee with his preliminary analysis of the 

NOAAIDOC report, and explain what additional steps his office will take to address his 

concerns. 

Summary Level Transfers (SLTs) 

The mechanism used to transfer funds involved a common accounting tool - Summary Level 

Transfers (SL Ts) - that were manipulated and used inappropriately. Typically, SL Ts are used to 

correct minor accounting mistakes such as billing errors. The NOAA decision memo explains 

that SL Ts were used "improperly to facilitate the inappropriate transfer of funds. In this case, 

SL Ts were used to switch accounting codes assigned to ~ast expenses from one account to 

another, a purpose for which they were never intended." 

The NWS used these accounting anomalies because there were insufficient funds to pay for 

various overhead costs such as common service expenses like rent and utilities, and management 

and administration (M&A) expenses. A recent GAO report found that NOAA line offices "have 

no or limited documentation of their policies and procedures for the M&A services they provide. 

This lack of documentation limits the availability of information on M&A services for agency 

officials and congressional decision makers and may hamper financial management and 

management decision making."lo 

According to the decision memo from Dr. Lubchenco, in FY 2010 and FY 2011, NWS 

employees "did not assess NWS programs evenly or in appropriate amounts to cover NWS 

common services. This left a shortfall in the Management and Administration account.,,11 

Structural Deficit 

These annual shortfalls ultimately led to a 'structural deficit' that appeared to grow each year. 

The term structural deficit (variations include funding or budget deficit or shortfall) is a term the 

Committee encountered frequently during its review of the financial mismanagement issue at 

NWS, but one that is not clearly defined in the Investigative Report, nor is there consensus 

among NOAA staff on the definition and amount. It is nevertheless worth noting that in 2006, 

, Ibid. 

9 Ibid. 

10 GAO Report. "NOAA Needs to Better Document its Policies and Procedures for Providing Management and 

Administration Services," January 2011, available at: http://www.gao.gov/assets/320/315343.pdf. 

II NOAA Memo, supra, note 4. 

Page I 3 
6 

DOC requested additional funds from Congress in the amount of $12.7 million,12 and earlier this 

year, shortly after breaking the news about the problems at NWS, the DOC sent Congress a 

request to be allowed to "repurpose $35.5 million.,,13 

Congress has typically fully funded the NWS based on the request from the Administration. 

Since FY 2007, Congress has exceeded the Administration's request for NWS in all but two 

years, including FY 20 II, as a result of a Continuing Resolution (CR). The fact that the amount 

requested appears to be insufficient is a different - and more serious - issue altogether as it not 

only provides Congress with inaccurate information regarding the true needs of the NWS, but it 

also appears to be the main cause of the reprogramming issue at NWS. 

National Weather Service' 

($ in thousands) 

Fiscal Year President's Request Appropriation 

2007 881,866 851,577 

2008 903,492 911,406 

2009 930,691 958,889 

2010 963,880 999,845 

2011 1,003,193 976,481 

2012 987,978 991,874 

2013 972,193 

Source: NOAA Budget Office, NOAA Budget Summary (Blue Book), Fiscal Years 2008- 2013 . 

• Includes both Operations, Research, & Facilities (ORF), and Procurement, Acquisition & Construction (PAC) 

accounts. 

No Personal Gain 

Despite the inappropriate use offunds at NWS, both the NOAA and DOC decision memos 

indicate that these actions were not taken for any individual financial benefit. Initial reviews 

indicate that NWS personnel attempted to meet agency mission requirements while costs 

increased and budget remained stagnant. While the Investigative Team stated it "did not find 

any evidence that any NWS employee committed fraud or received personal financial gain 

12 Written testimony of Richard Him, General Counsel and Legislative Director, National Weather Service 

Employees Organization, submitted for the House Science, Space, and Technology Subcommittee on Investigations 

and Oversight hearing titled, "Mismanagement of Funds at the National Weather Service and the Impact on the 

Future of Weather Forecasting," September 12, 2012. 

IJ Lisa Rein and Jason Samenow, "Senators Tell Weather Service Congress Won't Authorize Plan to Shift Money." 

The Washington Post, May 29, 2012, available at: http://www.washingtonpost.com/politics/senators-tell-weatherservice-congress-wont -authorize-plan-to-shift-money/20 12/05/29/gJQAgv VSOU _story .hlml. 

Page 14 
7 

through their actions,,,}4 it did acknowledge that, "[tJhis fact does not excuse, or reduce the 

seriousness of the employees' actions.,,15 

ISSUES 

Structural Deficit 

As previously mentioned, while the term structural deficit or budget shortfall seems 

commonplace, NOAA does not officially acknowledge its existence. One of the findings of the 

Investigative Report, as described in the NOAA decision memo is: 

"[The NWS employees that were interviewed] believe there is a "structural deficit" with 

the NWS budget. This, along with apparent shortfalls in the NWS OAA [Office of the 

Assistant Administrator] account, created a motive for [the NWS employee's] actions. 

Accordingly, it is imperative to determine if such a structural deficit exists and, if so, the 

causes and extent of that shortfall." 16 

The accompanying 'Administrator Decision #10' states: 

"1 instruct the Acting NWS eFO to examine each program office to determine if [the 

government employee's] belief that a "structural deficit" existed is supported by evidence 

and if so, to determine the causes and extent of that shortfall. I expect a time line and 

plan of action to complete this review no later than July 1.,,17 

However, according to comments by the President of the National Weather Service Employees 

Organization (NWSEO): 

"It is long-held knowledge that NWS had been operating at a structural deficit -- in fact 

the Obama transition team was briefed on it in 2009," Sobien [President of NWSEOJ 

said. "It sounds like this came as a surprise, but given there's been a deficit for over a 

decade, where did they think the money would come from?" J8 

Further, a witness on the second panel has been quoted as saying that he "briefed both Monica 

Medina, who became deputy undersecretary of NOAA, and Sally Yozell, a senior policy advisor 

to Lubchenco, on this [structural deficits] matter on Dec. 3, 2008, as part of Presidential 

transition process.,,19 

National Research Council (NRC) of the National Academies 

14 NOAA Memo, supra, note 4. 

15 Ibid. 

16 Ibid. 

17 Ibid. 

18 Charles S. Clark, "NOAA Takes Remedial Steps After National Weather Service Chiefs Departure," National 

Journal, May 29, 2012, available at: http://www.nationaljournal.comfcongress/noaa-takes-remedial-steps-afternational-weather-service-chief-s-departure-20120529. 

!9 Eric Berger, "The National Weather Service may have been diverting funds for years: Here's why," Houston 

Chronicle, May 30, 2012, available at: http://blog.chron.com/sciguy/2012/05/the-national-weather-service-mayhave-been-diverting-funds-for-years-heres-why. 

Page I 5 
8 

Last month, the NRC issued the second of two reports that took a comprehensive look at the 

Modernization and Associated Restructuring (MAR) of the NWS during the 1980s and 1990s. 

The first report, titled "The National Weather Service Modernization and Associated 

Restructuring: A Retrospective Assessment" was published earlier this year, and essentially 

concluded that "the MAR was a success: 'weather services have great value to the Nation and the 

MAR was well worth the investment.",2o The second report titled, "Weather Services For The 

Nation: Becoming Second to None," contains "advice for the NWS on how best to plan, deploy, 

and oversee future improvements, based on lessons learned from the MAR.,,2! 

The NWS' ability to keep up with advances in science and technology will be critical to the 

agency's ability to produce world class forecasting. As the NRC stated in its August report, 

"[A]s scientific and technological progress continues, critical components within the NWS are 

lagging behind the state of the science. ,,22 Moreover, the same report states that as the: 

"pace of scientific and technological advancement in the atmospheric and hydrological 

sciences continues to accelerate ... enormous amounts of data generated by new surface 

networks, radars, satellites, and numerical models need to be rapidly distilled into 

actionable information in order to create and communicate effective public forecasts and 

wamings.,,23 

Keeping those findings in mind, it is disconcerting to note that "programs like the Advanced 

Weather Interactive Processing System Program and the Weather Radio Improvement Project 

were used to pay for NWS expenses within L WF [Local Warnings and Forecasts account]. And 

separate funds within L WF were in tum freed up to pay for shortfalls in other NWS 

operations.',24 A WIPS is a "technologically advanced information processing, display, and 

telecommunications system that is the cornerstone ofthe National Weather Service 

modernization and restructuring.,,25 

Anti-Deficiency Act Violations 

From Dr. Lubchenco's decision memo: 

"The Investigative Team found that NWS employees engaged in the reprogramming of 

NWS funds without Congressional notification during the years in question. These 

actions may be a violation of the Anti-Deficiency Act.,,26 

Under the Anti-Deficiency Act, federal employees may not: 

'0 Weather Services for the Nation: Becoming Second to None," National Research Council of the National 

Academies, August 2012, available at: http://www.nap.edu!openbook.php?record_id~13429&page~R7. 

" Ibid. 22 Ibid. 

23 Ibid. 

24 NOAA Memo, supra, note 4. 

" NWS website, Field Systems Operations Center Test and Evaluation Branch (OPS24), available at: 

http://www.nws.noaa.gov/ops2/ops24/awips.htm. 

26 NOAA Memo, supra, note 4. 

Page I 6 
9 

"make or authorize an expenditure or obligation exceeding an amount available in an 

appropriation or fund for the expenditure or obligation; involve either government in a 

contract or obligation for the payment of money before an appropriation is made unless 

authorized by law.,,27 

The Committee expects to be kept apprised of any ADA developments including any 

administrative andlor penal actions that may result from a determination of an ADA violation. 

However, at this point, DOC has not yet made a determination on an ADA violation, nor has it 

provided the Committee with a time frame on when we can expect that decision. 

• Of the budget reallocation on NWS programs and services: The regular and repeated 

practice of siphoning money from accounts could impact the program's ability to perform 

and provide required services. Dr. Lubchenco states in her decision memo that, "I have 

been assured that none of the local forecasts and warnings life-and property-saving 

services provided by NWS on a daily basis - was jeopardized by the misconduct.,,28 

While these actions may not have impacted current forecasts and warnings, it remains to 

be seen how future forecasting ability will be impacted by the reallocation of funding 

from future investments for near-term shortfalls. 

Of the insufficient transparency and oversight: Dr. Lubchenco states in her decision 

memo that, "The NWS operated with an unacceptable lack of transparency relating to 

budgeting and without mechanisms for staff to air their concerns about budget 

formulation and execution within NWS, creating an environment of mistrusC29 Dr. 

Lubchenco also states that, "In addition to the reprogramming violations, the 

investigation also found that these actions went unchecked in large part due to various 

management issues. It is clear that this issue would have been discovered and corrected 

earlier had senior leadership within the NWS exercised appropriate oversight,,,30 The 

Committee plans to monitor how NOAA and DOC address these issues oftransparency 

and oversight. 

• Comprehensive review by an outside firm: On June 21, 2012, Dr, Lubchenco testified 

before the House Appropriations Subcommittee on Commerce, Justice, Science, and 

Related Agencies that, "I have initiated the process of contracting with an outside firm to 

determine the full amount of expenses improperly reprogrammed during fiscal years 

2010, 2011, and possibly prior years,,,31 It is unclear when this review will start and end, 

" 31 U.s.C. Chapter 13 § 1341(a)(1)(A) and (B), available at: http://uscode.house.gov/downloadlpls/3ICI3.txt. 

28 NOAA Memo, supra, note 4. 

,9 Ibid. 

30 Ibid. 

Jl Testimony oflane Lubchenco, Under Secretary of Commerce for Oceans and Atmosphere and NOAA 

Administrator, before the Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies, on 

June 21, 2012, available at: http://appropriations.house.gov/uploadedfiles/06.21.12_cjs_,_noaa_-janeJubchenco_, 

_testimony.pdf. 

Page I 7 
10 

or whether the agency will solicit input from the OIG. The Committee will monitor 

developments on these issues. 

• Disciplinary Actions: For privacy reasons, the Committee has not been briefed on 

personnel actions taken or being considered by NOM and or DOC, other than placing 

one individual on administrative leave. In her decision memo, Dr. Blank states, "Under 

Secretary Lubchenco has assured me that appropriate disciplinary action is being taken 

regarding those involved.,,32 The Committee will hold the agency accountable for 

ensuring those actions take place and expects to be kept apprised of any such action. 

WITNESSES 

Panel I: • Dr. Kathryn D. Sullivan, Assistant Secretary of Commerce for Environmental 

Observation and Prediction and Deputy Administrator for the National Oceanic and 

Atmospheric Administration, U.S. Department of Commerce 

• Inspector General Todd J. Zinser, U.S. Department of Commerce, Office ofInspector 

General 

• INVITED - Ms. Maureen Wylie, Chief, Resource and Operations Management, and 

former Chief Financial Officer, National Oceanic and Atmospheric Administration, U.S. 

Department of Commerce 

Panel II: 

• Dr. William B. Gail, Chief Technology Officer, Global Weather Corporation, and 

Member, Committee on the Assessment of the National Weather Service's 

Modernization Program, National Research Council of the National Academies. 

• Mr. Richard Hirn, General Counsel and Legislative Director, National Weather Service 

Employees Organization 

" DOC Memo, supra, note L 

Page 18 
11 

Vice-Chairwoman ADAMS. The Subcommittee on Investigations 

and Oversight will come to order. 

Good afternoon. Welcome to today’s hearing entitled ‘‘Mismanagement of Funds at the National Weather Service and the 

Impact on the Future of Weather Forecasting.’’ Today’s hearing will 

consist of two panels. You will find in the front of you packets containing written testimony, biographies, and truth-in-testimony disclosures for both of today’s witness panels. 

I recognize myself for five minutes for an opening statement. 

As Vice Chair of the Investigations and Oversight Subcommittee, 

it is my pleasure to chair the hearing in Dr. Broun’s place. 

We are here today to better understand what led to the mismanagement of funds at the National Weather Service. Our first 

panel will provide insight into how that mismanagement occurred, 

why there was insufficient oversight by department leaders, how 

the investigation was conducted, and the decisions and corrective 

actions that NOAA and the Department of Commerce will make 

going forward. 

Our second panel will provide context for how we got in this situation in the first place. We will hear from the National Weather 

Service Employees Organization about the stresses on labor funding and staffing, as well as the National Academies of Science 

about their recent report on how to plan, deploy, and oversee future improvements at the Weather Service, specifically the need to 

integrate advances in science and technology. 

Congress’ appreciation of the value of the National Weather 

Service is evidenced by its financial commitment to it. Since 2007, 

Congress has exceeded the Administration’s request for the National Weather Service in all but two years, including 2011 when 

this Congress had to move a CR six months into the fiscal year. 

So when Congress is informed that the Weather Service has been 

experiencing a budget shortfall for several years, we are understandably concerned. Keeping Congress in the dark while there is 

a storm brewing at the Agency is at best irresponsible, and at 

worst dishonest. 

We have also been informed that no ‘‘NWS employee committed 

fraud or received personal financial gain through their actions.’’ 

Yes, I am glad that no one stole money for personal gain, but make 

no mistake; Congress’ trust—my trust—has been violated. Money 

designated for programs like the Advanced Weather Interactive 

Processing System and Weather Radio Improvement Projects, important investments in future capabilities, were used to pay for 

other near-term expenses. Why did the Agency decide to ‘‘rob Peter 

to pay Paul,’’ rather than appropriately prioritizing in the first 

place? Perhaps the clues lie in the May 24, 2012, decision memo 

issued by Administrator Lubchenco when she states, ‘‘the NWS operated with an unacceptable lack of transparency relating to budgeting and without mechanisms for staff to air their concerns about 

budget formulation and execution within NWS, creating an environment of mistrust.’’ 

Then there is the question of NWS oversight, or lack thereof. The 

same memo also states that the investigative team that reviewed 

the financial mismanagement issues found ‘‘failure of management 

and oversight by NWS leadership.’’ In addition, the team found sig-
12 

nificant problems with budget and financial controls at the National Weather Service and that department financial and management controls were ineffective at detecting or preventing this inappropriate reprogramming.’’ 

Yet, despite this admission, NOAA and the Department of Commerce refused to provide an important witness for today’s hearing. 

NOAA’s Chief of Resources, Operations, and Management (CROM), 

and former CFO during the events in question, would have been 

able to provide a historical context for the funding issues the 

Weather Service faced, a description of the impediments of transparency she experienced as CFO, and a detailed understanding of 

what NOAA needs to do going forward to fully understand what 

happened and how it can be prevented in the future. The Committee was willing to work with NOAA, even going as far as allowing the Agency to only submit one piece of written testimony, but 

NOAA still refused. 

While I appreciate Dr. Sullivan’s willingness to appear before the 

Committee, denying the Committee’s request to hear from the person who was the Agency’s principal financial manager during a 

time in which millions of dollars of resources were secretly 

misallocated is simply unacceptable. This should be embarrassing 

for an administration that repeatedly declares itself ‘‘the most 

transparent in history.’’ 

The Committee has also requested a number of documents from 

NOAA, some of which were originally requested months ago. Unfortunately, NOAA has not provided a number of resources that 

should be readily available. When an agency refuses to provide a 

witness, as well as requested documents, it makes it difficult for us 

to conduct a thorough oversight. It also makes it difficult for us not 

to ask: what are you hiding? 

The Committee will continue to track this issue as NOAA and 

the Department of Commerce attempt to identify the exact costs 

and impacts of these transfers, as well as how they plan to prevent 

it from happening in the future. Unfortunately, as the Commerce 

IG will mention in his testimony, allegations of similar behavior 

are still coming in, even as recently as last month. 

Now, as a former law enforcement officer, I understand that allegations have to be investigated thoroughly, but the simple fact that 

these complaints are still coming in tells me that NOAA and the 

Department still have a problem on their hands. 

I look forward to all our witness testimonies and thank them for 

appearing today. 

The Chair now recognizes Mr. Tonko for his opening statement. 

[The prepared statement of Mrs. Adams follows:] 

PREPARED STATEMENT OF SUBCOMMITTEE VICE-CHAIRWOMAN SANDY ADAMS

Good afternoon and welcome to today’s hearing. As Vice-Chair of the Investigations and Oversight Subcommittee, it is my pleasure to chair the hearing in Dr. 

Broun’s place. 

We are here today to better understand what led to the mismanagement of funds 

at the National Weather Service. Our first panel will provide insight into how that 

mismanagement occurred, why there was insufficient oversight by department leaders, how the investigation was conducted and the decisions and corrective actions 

that NOAA and the Department of Commerce will make going forward. 

Our second panel will provide context for how we got in this situation in the first 

place. We will hear from the National Weather Service Employees Organization 
13 

about the stresses on labor funding and staffing, as well as the National Academies 

of Science about their recent report on how to plan, deploy, and oversee future improvements at the Weather Service, specifically the need to integrate advances in 

science and technology. 

Congress’ appreciation of the value of the National Weather Service is evidenced 

by its financial commitment to it. Since 2007, Congress has exceeded the Administration’s request for the National Weather Service in all but two years, including 

2011 when this Congress had to move a CR six months into the fiscal year. So when 

Congress is informed that the Weather Service has been experiencing a budget 

shortfall for several years, we are understandably concerned. Keeping Congress in 

the dark while there’s a storm brewing at the agency is at best irresponsible, and 

at worst dishonest. 

We have also been informed that no ‘‘NWS employee committed fraud or received 

personal financial gain through their actions.’’ Yes, I’m glad that no one stole money 

for personal gain, but make no mistake, Congress’ trust—my trust—has been violated. Money designated for programs like the Advanced Weather Interactive Processing System and Weather Radio Improvement Project, important investments in 

future capabilities, were used to pay for other near-term expenses. Why did the 

agency decide to ‘rob Peter to pay Paul,’ rather than appropriately prioritizing in 

the first place? Perhaps the clue lies in the May 24, 2012 decision memo issued by 

Administrator Lubchenco when she states: 

‘‘NThe NWS operated with an unacceptable lack of transparency relating to budgeting and without mechanisms for staff to air their concerns about budget formulation and execution within NWS, creating an environment of mistrust.’’ 

Then there’s the question of NWS oversight, or lack thereof. The same memo also 

states that the Investigative Team that reviewed the financial mismanagement 

issues found: 

‘‘failure of management and oversight by NWS leadership. In addition, the Team 

found significant problems with budget and financial controls at the National 

Weather Service and that Departmental financial and management controls were 

ineffective at detecting or preventing this inappropriate reprogramming.’’ 

Yet, despite this admission, NOAA and the Department of Commerce refused to 

provide an important witness for today’s hearing. NOAA’s Chief of Resources, Operations, and Management (CROM), and former CFO during the events in question, 

would have been able to provide a historical context for the funding issues the 

Weather Service faced, a description of the impediments to transparency she experienced as CFO, and a detailed understanding of what NOAA needs to do going forward to fully understand what happened, and how it can be prevented in the future. 

The Committee was willing to work with NOAA, even going as far as allowing the 

agency to only submit one piece of written testimony, but NOAA still refused. While 

I appreciate Dr. Sullivan’s willingness to appear before the Committee, denying the 

Committee’s request to hear from the person who was the agency’s principal financial manager during a time in which millions of dollars of resources were secretly 

misallocated is simply unacceptable. This should be embarrassing for an administration that repeatedly declares itself ‘‘the most transparent in history.’’ 

The Committee has also requested a number of documents from NOAA—some of 

which were originally requested months ago. Unfortunately, NOAA has not provided 

a number of resources that should be readily available. When an agency refuses to 

provide a witness as well as requested documents, it makes it difficult for us to conduct thorough oversight. It also makes it difficult for us not to ask: what are you 

hiding? 

The Committee will continue to track this issue as NOAA and the Department 

of Commerce attempt to identify the exact costs and impacts of these transfers, as 

well as how they plan to prevent it from happening in the future. Unfortunately, 

as the Commerce IG will mention in his testimony, allegations of similar behavior 

are still coming in—even as recently as last month. Now, as a former law enforcement officer, I understand that allegations have to be investigated thoroughly, but 

the simple fact that these complaints are still coming in tells me that NOAA and 

the Department still have a problem on their hands. 

I look forward to all of our witnesses testimony, and thank them for appearing 

today. 

Mr. TONKO. Thank you, Madam Chair. 

I start with several statements of the obvious. The National 

Weather Service, or NWS, is a vital public safety organization and 
14 

the public greatly values the organization and its work. Congress 

authorizes and appropriates funds to federal agencies for specific 

purposes and has been supportive of the NWS and its mission. 

In light of this, the financial misconduct at the National Weather 

Service is shocking. There are well established and widely understood processes for NWS to use if top management believes that 

funds must be reprogrammed. At their heart, these—those processes involve consulting with Congress. If you move money around 

without any accountability, as the former Chief Financial Officer at 

NWS did, you are violating the Anti-Deficiency Act, a statute that 

clearly sets limits and penalties for spending money not authorized 

or appropriated by Congress. The power of the purse is enshrined 

for Congress in the Constitution and for any senior official to ignore the law and the Constitution is a deeply troubling event. 

There are important investigative questions about what happened and why in the NWS, but the committee majority has expressed its preference not to release the investigative report produced by NOAA management to the public. The Committee has not 

engaged in its own investigation to test the findings in that report 

to reach our own conclusions. This Subcommittee has much more 

work to do before any of these questions could be answered. Instead, much of this hearing will be about the path forward for 

NWS and NOAA in ensuring that a future CFO cannot engage in 

systematic financial deception. That is fine as far as it goes. 

I think the proposals put forward by the Agency make sense. 

However, I am not sure we agree with this hearing’s focus or scope. 

While there is no question that wrongdoing occurred at NOAA, just 

as troubling to me is the failure by the Inspector General’s office 

at the Department of Commerce to take aggressive steps to investigate this matter. The IG is the cop on the beat, so to speak, at 

federal agencies. Congress empowers IGs with broad authority to 

investigate the inner workings of their agency, provides funding for 

investigative staff, and has established whistleblower protections 

for federal employees to try to encourage a culture where accountability is rewarded. 

The IG offices are vital partners in Congress’ oversight responsibility. In this instance, the cop appears to have been taking a break 

and the partnership failed. Inspector General Zinser has included 

in his testimony an accounting of the allegations his office received 

regarding financial irregularities at NWS and the disposition of 

those allegations. After receiving multiple tips, the IG’s office recognized the potential problem. But the response to allegations of 

high-level financial shenanigans seems to have been to send those 

allegations back to the Agency to ask them to check on their own 

misconduct. It seems counterintuitive to me that the best way to 

ferret out problems is to ask potential wrongdoers to investigate 

their own wrongdoing. 

Even the one preliminary investigation that was triggered by the 

hotline tips coming into the IG’s office reveals something a little 

odd. That tip appears to have come in during October of 2010. 

However, Mr. Zinser was unaware that his office had received the 

allegations, that his staff had launched a preliminary investigation, 

or that his staff believed an Anti-Deficiency Act violation had occurred until November of 2011, one year later. By the time Mr. 
15 

Zinser had seen his staff’s memo, NOAA had already conducted its 

own preliminary investigation and had begun to take steps to remove the CFO from his post. And when it came time to launch a 

full investigation, the IG allowed the Agency to conduct its own investigation. The IG’s office was limited to offering investigative advice and questions to the team that NOAA put together. These procedures bear no resemblance to the conduct of an independent investigative office. 

Since the scandal broke, the IG has instituted a new system 

where allegations are aggregated each week and forwarded to a 

senior level review team led by the IG himself. That is certainly 

a positive step but for five years his office did not do this. One has 

to wonder whether other anonymous tips were ignored or sent back 

to the perpetrators with the recommendation that they investigate 

themselves. 

Finally, the IG has a mandate to inform Congress in a timely 

fashion of important agency misconduct and mismanagement. Yet 

to my knowledge, the IG did not inform this committee or the Appropriations Committee that they had uncovered evidence of this 

apparent violation of law. This represents a real failing to follow 

the intent that the IG communicate with Congress about significant misconduct at their agency. There is no partnership where 

there is no communication. This is unacceptable. 

Madam Chair, I hope you agree that this committee deserves answers to our questions about what went wrong in the IG shop as 

we rely on that office to be our eyes and our ears for wrongdoing. 

Congress has a responsibility to the taxpayer to not allow—to not 

only allocate budgets to the agencies but to ensure that allocated 

funds are spent wisely and in accordance with the law. I am concerned that the Department of Commerce OIG has failed to carry 

out the mission of his office and I expect his full cooperation in 

helping us understand what they did, good and bad, and that he 

stand accountable for those actions. 

And with that, I yield back. 

[The prepared statement of Mr. Tonko follows:] 

PREPARED STATEMENT OF SUBCOMMITTEE RANKING MEMBER PAUL D. TONKO

Thank you, Madame Chair. 

I start with several statements of the obvious: The National Weather Service 

(NWS) is a vital, public safety organization, and the public greatly values the organization and its work. Congress authorizes and appropriates funds to federal agencies for specific purposes and has been supportive of the NWS and its mission. In 

light of this, the financial misconduct at the National Weather Service is shocking. 

There are well established and widely understood processes for NWS to use if top 

management feels that funds must be reprogrammed. At their heart, those processes involve consulting with Congress. If you move money around without any accountability, as the former Chief Financial Officer (CFO) at NWS did, you are violating the Anti-Deficiency Act-a statute that sets clear limits and penalties for 

spending money not authorized or appropriated by Congress. The power of the purse 

is enshrined for Congress in the Constitution and for any senior official to ignore 

the law and the Constitution is a deeply troubling event. 

We will not be able to delve deeply into the details of this incident at today’s hearing or answer many outstanding questions. Why were these funds being moved 

without a reprogramming request? Which accounts received additional funding and 

which accounts were short-changed? Why did whistleblowers have to complain repeatedly to the Agency and the Inspector General’s Office before anyone noticed that 

something was amiss in the NWS budget? 
16 

The Committee Majority have expressed their preference not to release the investigative report produced by NOAA management to the public. The Committee has 

not engaged in its own investigation to test the findings in that report to reach our 

own conclusions. This Subcommittee has much more work to do before any of these 

questions could be answered. 

Instead, much of this hearing will be about the path forward for NWS and NOAA 

in ensuring that a future CFO cannot engage in systematic financial deception. That 

is fine as far as it goes. I think the proposals put forward by the Agency make 

sense. However, I am not sure we agree with this hearing’s focus or scope. While 

there is no question that wrong-doing occurred at NOAA, just as troubling to me 

is the failure by the Inspector General’s office at the Department of Commerce to 

take aggressive steps to investigate this matter. 

The IG is the cop on the beat at federal agencies. Congress empowers IG’s with 

broad authority to investigate the inner workings of their agency, provides funding 

for investigative staff, and has established whistleblower protections for Federal employees to try to encourage a culture where accountability is rewarded. The IG offices are vital partners in Congress’s oversight responsibility. In this instance, the 

cop appears to have been taking a break, and the partnership failed. 

Inspector General Zinser has included in his testimony an accounting of the allegations his office received regarding financial irregularities at NWS and the disposition of those allegations. After receiving multiple tips, the IG’s office recognized the 

potential problem. But, the response to allegations of high-level financial shenanigans seems to have been to send those allegations back to the agency to ask them 

to check on their own misconduct. It seems counter-intuitive to me that the best 

way to ferret out problems is to ask a potential wrong-doer to investigate their own 

wrong-doing. 

Even the one preliminary investigation that was triggered by the hotline tips coming into the IG’s office reveals something a little odd. That tip appears to have come 

in October of 2010. However, Mr. Zinser was unaware that his office had received 

the allegation, that his staff had launched a preliminary investigation, or that his 

staff believed an Anti-Deficiency Act violation had occurred until November of 

2011—one year later. 

By the time Mr. Zinser had seen his staff’s memo, NOAA had already conducted 

their own preliminary investigation and had begun to take steps to remove the CFO 

from his post. And when it came time to launch a full investigation, the IG allowed 

the agency to conduct its own investigation. The IG’s office was limited to offering 

investigative advice and questions to the team that NOAA put together. These procedures bear no resemblance to the conduct of an independent investigative office. 

Since the scandal broke, the IG has instituted a new system where allegations 

are aggregated each week and forwarded to a senior level review team led by the 

IG himself. That is certainly a positive step. 

But for five years, his office did not do this and one has to wonder whether other 

anonymous tips were ignored or sent back to the perpetrators with a recommendation that they investigate themselves. 

Finally, the IG has a mandate to inform Congress in a timely fashion of important 

agency misconduct and mismanagement. Mr. Zinser has expressed to Committee 

staff that he believes there was sufficient evidence in the preliminary investigative 

memo done by his staff in November of 2011 that an Anti-Deficiency Act violation 

had occurred. Yet, to my knowledge the IG did not inform this Committee or the 

Appropriations Committee that they had uncovered evidence of this apparent violation of law. 

His explanation was that he believed that the Agency was going to inform Congress, but there was no follow up to confirm this. In fact, this Committee, which 

has black letter jurisdiction over the National Weather Service, did not learn of the 

situation until April of 2012. This represents a real failing to follow the intent that 

the IG communicate with Congress about significant misconduct at their agency. 

There is no partnership where there is no communication. This is unacceptable. 

I understand that this IG had a lot on his plate with oversight of the recovery 

act and politically-charged requests for investigations into topics such as climate 

science. Being the Inspector General at the Department of Commerce has been a 

notoriously difficult post. However, it is clear that in the five years that this IG has 

been on the job he did not put in place information and decision-making processes 

to guarantee that credible, important allegations receive high level attention and 

timely action. If the first complaint from Spring of 2010 had been acted on quickly 

by the IG, as it should have been, we might have kept this situation from spinning 

so far out of control. 

Madame Chair, I hope you agree that this Committee deserves answers to our 

questions about what went wrong in the IG’s shop, as we rely on that office to be 
17 

our eyes and ears for wrong-doing. Congress has a responsibility to the taxpayer to 

not only allocate budgets to the agencies, but to ensure the allocated funds are spent 

wisely and in accordance with the law. I am concerned that the Department of Commerce IG has failed to carry out the mission of the office, and I expect his full cooperation in helping us understand what they did—good and bad—and that he 

stand accountable for those actions. 

Vice-Chairwoman ADAMS. Thank you, Mr. Tonko. 

If there are Members who wish to submit additional opening 

statements, your statements will be added to the record at this 

point. 

Now, I am going to introduce our first panel. 

At this time, I would like to introduce our first panel of witnesses. Our first witness is Dr. Kathryn Sullivan, the Assistant 

Secretary of Commerce for Environmental Observation and Prediction, and the Deputy Administrator for the National Oceanic 

and Atmospheric Administration at the United States Department 

of Commerce. Our second witness will be Inspector General Todd 

Zinser of the United States Department of Commerce Office of Inspector General. 

As our witnesses should know, spoken testimony is limited to 

five minutes each, after which the Members of the Committee will 

have five minutes each to ask questions. Your written testimony 

will be included in the record of the hearing. It is the practice of 

the Subcommittee on Investigations and Oversight to receive testimony under oath. Do either of you have—or do any of you have any 

objection to taking an oath? 

Dr. SULLIVAN. No objection. 

Mr. ZINSER. No objection. 

Vice-Chairwoman ADAMS. Let the record reflect that all witnesses were willing to take an oath. 

You may also be represented by counsel. Do any of you have 

counsel here with you today? 

Dr. SULLIVAN. I do not. 

Mr. ZINSER. No. 

Vice-Chairwoman ADAMS. Let the record reflect none of the witnesses have had counsel. 

If you would now please stand and raise your right hand. 

Do you solemnly swear or affirm to tell the truth, the whole 

truth, nothing but the truth, so help you God? 

Dr. SULLIVAN. I do. 

Mr. ZINSER. I do. 

Vice-Chairwoman ADAMS. Let the record reflect that all witnesses participating have taken the oath. 

Thank you. 

I now recognize our first witness, Dr. Kathryn Sullivan. 

TESTIMONY OF DR. KATHRYN D. SULLIVAN, 

ASSISTANT SECRETARY OF COMMERCE 

FOR ENVIRONMENTAL OBSERVATION AND PREDICTION 

AND DEPUTY ADMINISTRATOR FOR THE NATIONAL 

OCEANIC AND ATMOSPHERIC ADMINISTRATION, 

U.S. DEPARTMENT OF COMMERCE 

Dr. SULLIVAN. Thank you, Vice Chair Adams, Ranking Member 

Tonko, Mr. McNerney, Members of the Committee. I want to start 

by thanking you for your support of NOAA and specifically for the 
18 

National Weather Service throughout the years. I know you join 

me in admiring the men and women of the Weather Service who, 

day in and out, provide the accurate timely warnings and forecasts 

that protect lives and livelihoods across our Nation. 

Unfortunately, I am here today to testify on misconduct and 

budget formulation execution within the Service. Before going further, I do want to stress a vital point. While the conduct was wrong 

and breached the trust between NOAA and this Congress, at no 

point did it compromise performance of our core forecast and warning mission. 

We first learned of the alleged misconduct in late November 

2011. NOAA Administrator Dr. Jane Lubchenco notified then-Deputy Secretary Dr. Blank and directed several immediate remedial 

actions. We put a government employee on administrative leave, 

we assigned the Chief Financial Officer from NOAA Fisheries to 

serve as the acting Weather Service CFO. Dr. Blank and Dr. 

Lubchenco launched an internal investigation led by myself as the 

senior NOAA official and a counterpart from the Commerce Department’s CFO office. We also informed the Department of Commerce Inspector General of our intended investigation and he 

agreed that an internal inquiry was the proper course of action. Finally, we notified the House and Senate Committees on Appropriations of both the allegations and our investigation. 

As we reported upon conclusion of the investigation in May, we 

found that the Weather Service reprogrammed funds in fiscal years 

2010 and 2011 without appropriate Congressional notification. The 

mechanisms used were complex and undetectable by existing financial controls. We also found a significant lack of transparency and 

ineffective oversight of budget execution within the Weather Service. Importantly, as noted, we found no evidence of fraud or personal financial gain by any employee. 

We found further that the Weather Service had not actually operated in the red or as a whole with overspending its funds in a 

given year to accomplish its core mission. It did become clear, however, that the Service did not have the right sums of money in the 

right accounts to support labor and operating costs. 

On May 25 of this year, Acting Secretary Blank and Dr. 

Lubchenco each issued a memorandum directing a set of corrective 

actions. These have been underway since that date. Dr. Lubchenco 

ordered 12 corrective actions all designed to strengthen financial 

controls and increase transparency within the Service, as well as 

to ensure no similar issues exist elsewhere in the Agency. We directed changes in the Weather Service supervisory structure to 

strengthen oversight of the CFO by both the Weather Service Deputy AA and the NOAA CFO. We are creating a well documented 

and transparent process to ensure that Weather Service budget formulation and execution are properly aligned and within the limits 

of appropriated funds. We strengthened the NOAA CFO’s supervision over summary level transfers, one of the mechanisms used 

to executive the expense transfers inappropriately in this case. 

Lastly, we have awarded a contract to conduct an independent financial review and analysis of the National Weather Service books 

going back to fiscal year 2006. 
19 

In May, we worked with appropriators of both chambers to repro- gram $36 million, the sum needed to sustain current levels of performance and our core forecast warning services and avert the necessity of employee furloughs. This involved moving funds out of research and spare parts inventories and delaying some programs 

that support improvements for future years. The cuts were not 

easy but few options remained open to us that late in the fiscal 

year. The exceptional performance of the Weather Service during 

Hurricane Isaac confirms that these have not negatively affected 

our current warnings and forecast performance. 

We are fully cognizant that it is imperative and incumbent upon 

us to restore sound financial management in the National Weather 

Service. We are committed to doing that and to keeping this committee informed of our progress. But even amid this immediate 

challenge, we must be looking toward the future and taking actions 

that ensure the long-term vitality and effectiveness of the National 

Weather Service. The National Academy study that the Congress 

requested is already guiding our thinking in this regard. We share 

the Academy’s sense that the Service must, ‘‘evolve its role and 

how it operates, making it more agile and efficient,’’ and we look 

forward to the follow-on operations study directed by the CJS FY12 

conference report due in April 2013. 

We hope that in the coming months our dialogue with the Congress, our employees, and our stakeholders can focus on the future, 

on how we all can work together to create that more agile and efficient organization, a National Weather Service for the 21st century 

that is, as the Academy says, second to none. 

Thank you again for this opportunity to testify on this very important matter. I welcome your questions. 

[The prepared statement of Dr. Sullivan follows:] 
20 

WRITTEN STATEMENT OF 

KATHRYN SULLIVAN, Ph.D. 

ASSISTANT SECRETARY OF COMMERCE 

FOR ENVIRONMENTAL OBSERVATION AND PREDICTION 

AND DEPUTY ADMINISTRATOR 

NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION 

U.S. DEPARTMENT OF COMMERCE 

ON THE 

MISMANAGEMENT OF FUNDS AT THE NATIONAL WEATHER SERVICE AND 

THE IMPACT ON THE FUTURE OF WEATHER FORECASTING 

BEFORE THE 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT 

U.S. HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2012 

Chairman Broun, Ranking Member Tonko, and members of the Committee, thank you for your 

leadership and the continued support you have shown the Department of Commerce's National 

Oceanic and Atmospheric Administration (NOAA). I am here to discuss the budget situation 

facing NOAA's National Weather Service (NWS) and the way forward. 

Introduction 

The National Weather Service (NWS) is one of five line offices within the National Oceanic and 

Atmospheric Administration (NOAA) within the Department of Commerce (DOC) that work 

together to achieve NOAA's missions. NWS' core mission is to provide weather, water, and 

climate data, forecasts, and warnings for the protection oflife and property and the enhancement 

of the national economy. I have come today to testify on our investigation and actions in 

response to inappropriate and potentially unlawful conduct during budget execution at the NWS. 

I do so knowing full well how much our Nation counts on NOAA's National Weather Service to 

be a trusted source of critical, life-saving information. I consider NOAA's responsibility to 

maintain this trust to be one of our most important missions. 

NWS is the official Federal source for the Nation's weather information. The private sector, 

military and civilian agencies, media, and academia rely on a range of services NOAA provides. 

For example, NOAA scientists use supercomputers at the NWS National Centers for 

Environmental Prediction to produce quality-controlled numerical forecasts. The Nation also 

relies on the Federal observing and information infrastructure, especially NOAA's network of 

observing systems: Doppler weather radar, radiosonde profiles, and the National Environmental 

Satellite, Data, and Information Service's (NESDIS) satellite data, to name just a few 

components. This infrastructure fonns the foundation of the Nation's multi-billion dollar private 

weather industry. 

1 
21 

The NWS mission is tightly aligned with that of emergency management, and is linked closely to 

the Federal Emergency Management Administration (FEMA), the United States Geological 

Survey (USGS), the United States Army Corps of Engineers, and the National Airspace System. 

NWS forecast and warning capabilities are Primary Mission Essential Functions (PMEF) vital to 

the Nation's continuity of operations. The growing population and geographic development of 

the country have contributed to escalating impacts due to weather-related natural disasters, both 

in terms of lives lost and of economic effects. Last year's record weather-related disasters caused 

an estimated $46 billion in economic losses in the United States. In response, NWS launched a 

nationwide initiative to increase the effectiveness of our warnings and to provide better decisionsupport services to local communities to ensure they are prepared for, and respond to weatherrelated events. This initiative is called Weather-Ready Nation. Keeping the National Weather 

Service effective, resilient, and modem is a shared goal of ours and Congress' and is in this 

Nation's best interest. Any misconduct at NWS is of grave concern to us and - I fully understand 

- to this committee and the rest of Congress as well. 

Historically, the NWS has achieved a record of sustained performance, meeting and exceeding 

most Government Performance and Results Act performance measures and ranking third in 20 II 

among all federal agencies in an independent survey by the American Customer Satisfaction 

Index, with a customer satisfaction rating of 84. American citizens have long trusted the National 

Weather Service, and maintaining that trust is imperative. 

Financial Investigation 

Background 

On November 29th, 2011, NOAA's Deputy Under Secretary for Operations inforn1ed NOAA 

Administrator, Dr. Jane Lubchenco, that a preliminary review of allegations concerning financial 

mismanagement within the NWS had uncovered evidence of potential violations of 

appropriations law. Because of the seriousness of these allegations, Dr. Lubchenco immediately 

infonned the Deputy Secretary of Commerce, Dr. Rebecca Blank, of the preliminary findings, 

placed a NWS employee on indefinite administrative leave, and moved our NOAA Fisheries 

Chief Financial Officer (CFO) to act as the NWS CFO. At this time the Office of the Secretary 

and NOAA staff informed Appropriations Committees that an employee was placed on 

administrative leave, that we were planning an investigation, and that we had concerns about the 

FY 2012 budget. Dr. Blank and Dr. Jane Lubchenco immediately initiated an investigation. I was 

the senior executive from NOAA charged with leading the investigation along with a senior 

executive from the Department's Office of the Chief Financial Officer. Our charge was to review 

the preliminary findings and expand upon the work of the initial review. From the outset of the 

investigation, clear instructions were given that we were to determine if improper actions were 

taken by individuals within the NWS CFO's office and NWS leadership, and if so how best to 

correct these improprieties. 

From December 2011 to April 2012, the Investigative Team conducted thirty interviews of 

twenty one Department of Commerce employees, completed an extensive review ofNWS 

financial records, and reviewed a large number of documents including emails, financial 

information, memoranda, and other material provided by witnesses in support of their testimony. 

Throughout the investigative process the Team consulted with the Department of Commerce 

2 
22 

Office of the Inspector General regarding the conduct of the investigation, including whom to 

interview and what lines of questioning to pursue. The investigation focused primarily on fiscal 

years (FY) 2010 and 2011, because this was the time period referenced in the complaints 

received. 

Findings 

On May 11,2012, I, in my role as a leader of the Investigative Team, provided Dr. Lubchenco 

and Dr. Blank with our report, including our findings and recommendations. Importantly, we did 

not find evidence that NWS officials' improper actions put life or property at risk or jeopardized 

the delivery of timely and reliable weather forecasts and warnings. However, we found that 

NWS employees engaged in the reprogramming ofNWS funds without Congressional 

notification during FY 2010 and 20 II. Although still under legal review, these actions may be in 

violation of the Anti-Deficiency Act. The Team also found a failure of management and 

oversight by NWS leadership, and significant deficiencies in budget and financial controls within 

NWS, NOAA, and DOC. 

The Team found no evidence that NWS employees committed fraud or received personal 

financial gain through their actions. However, this fact does not alleviate the seriousness of the 

findings. 

The Team found that several anonymous complaints alleging improper financial activity within 

the NWS were received by the Department of Commerce OIG and senior officials inside NOAA 

and DOC from early 20 I 0 until the July 2011 OIG referral that initiated the first preliminary 

investigation. Unfortunately, these early warning signs were not effectively acted upon. 

NWS employees used complex financial mechanisms to conduct the unauthorized 

reprogramming of funds, and I will provide you with a brief synopsis of the Investigative Team's 

results. 

As an initial matter, the Investigative Team found that the NWS did not assess its programs 

equitably, transparently, or sufficiently to cover common services which was contrary to 

methods used among other line offices at NOAA. This left a shortfall in the Weather Service 

Management and Administration account, which the NWS CFO's Office had to address in 

execution during the course of the fiscal year. In response to this shortfall, and other operational 

needs, NWS employees switched accounting codes on past expenses between programs and 

accounts in violation of appropriations law. 

NWS used a financial vehicle called a Summary Level Transfer, or SL T, which, under normal 

circumstances, allows for the correction of accounting errors. In this case, NWS employees used 

SLTs to switch accounting codes on past expenses paid out of the Local Warnings and Forecasts 

budget, or "L WF" to codes for other programs. Thus, previously obligated funds within the L WF 

were freed to use for other purposes, and applied to other activities. As a result, funds 

appropriated for programs like the Advanced Weather Interactive Processing System (A WIPS), 

the Weather Surveillance Radar 1988 Doppler (WSR88D) program, and the Weather Radio 

Improvement Program (WRIP) were used to cover L WF expenses; L WF expenses are primarily 

labor costs. Newly freed funds within the L WF were in tum used to pay for shortfalls in NWS 

base operations. 

3 
23 

The investigation found that these actions went unchecked in large part due to insufficient 

oversight over the NWS CFO's Office and a lack of appropriate budget controls over the SL T 

process. The lack of oversight was exacerbated by the fact that the NWS operated with an 

unacceptable lack of transparency regarding financial issues, and without avenues by which staff 

could air concerns about budget formulation and execution within NWS. Moreover, financial 

controls in place at the Department, NOAA, and the NWS were not designed to, and therefore 

could not detect the financial mismanagement that occurred here. In addition, the Team found 

that there was insufficient training for NWS budget personnel and NWS leadership on 

reprogramming and appropriations law. 

The Investigative Team found that the government employee who directed the inappropriate 

actions was attempting to protect parts of the NWS budget that he or she believed were 

chronically underfunded, despite the fact that during budget formulation, NWS leadership 

assured NOAA and Department of Commerce leadership that overall funding was sufficient and 

that funding was appropriately allocated among NWS accounts. 

In the time allotted for the investigation, we could not determine the full amount of expenses 

improperly reprogrammed during FY 2010 and 2011. Dr. Lubchenco and I know this Committee 

wants the answer to this question, and I assure you no one wants this answer more than we do. 

We awarded a contract on the 17'h of August to Grant Thornton to conduct a full financial review 

and analysis that we hope can determine the full amount of expenses improperly reprogrammed 

during fiscal years 2010, 201 1, and possibly prior years. What I can tell you is that for FY 2012 

we worked with the Appropriation committees to reprogram $36 million to protect NWS core 

mission functions. 

Response Actions 

Financial mismanagement at the NWS is a serious matter. The improper and irresponsible 

actions described in the report are wholly unacceptable and require swift corrective action. To 

this end, on May 25,2012, Dr. Blank and Dr. Lubchenco released decision memos detailing the 

report's findings and corrective actions NOAA and the Department of Commerce are taking in 

response to those findings. On that day, we provided these decision memos to this Committee, as 

well as the House Committee on Appropriations, the Senate Committee on Appropriations, and 

NOAA's other authorizing Committees, and I have attached them again as addenda to this 

testimony. 

The decision memos detail the 25 corrective actions that Dr. Blank and Dr. Lubchenco have 

ordered. The first corrective action we directed was the submission to both the House Committee 

on Appropriations and the Senate Committee on Appropriations of a $36 million FY 2012 

reprogramming. Our dual goals in this reprogramming request were to ensure continuity in core 

NWS operations and to prevent the possibility of the furlough ofNWS employees. We worked 

with our appropriations committees over the month of June and are currently moving ahead with 

this reprogramming. The request takes $29.9 million from NWS programs, $4.1 million from 

some non-NWS NOAA programs, and $1.5 million from prior year de-obligations. This action 

sustains current levels of weather forecasts and warning services to the Nation. The reductions 

are largely targeted toward research, postponing procurements of spare parts, deferring 

enhancements to weather systems, and accelerating reductions proposed in the FY 2013 budget. 

4 
24 

The proposed reductions underwent a rigorous review and reflect the best options available at the 

time given that it was already the third quarter of the fiscal year. 

Beyond the reprogramming, the decision memos include actions that are specific to NWS, 

NOAA, or the entire Department. The NOAA-specific actions include a change in the 

supervisory structure of the NWS that strengthens oversight of the NWS CFO position by 

including the Deputy Assistant Administrator for Weather Services and the NOAA CFO in the 

performance review process; the creation of a well-documented process that includes explicit 

time for programmatic decisions to align NWS budget formulation and execution with available 

funds, an equitable assessment ofNWS programs for common services, an expansion of NOAA 

CFO's office supervision of summary level transfers, and the initiation of an outside financial 

analysis. We are currently on schedule to meet our goals for these actions. 

Dr. Lubchenco has been personally engaged in implementing the corrective action plan. Deputy 

Under Secretary for Operations, Dr. David Titley, and I have been put in charge of carrying out 

the corrective actions Dr. Blank and Dr. Lubchenco ordered for NOAA and providing them with 

regular updates. All of NOAA leadership is committed to working with Congress to ensure that 

processes are in place to restore proper oversight over the Weather Service budget, and that 

appropriate disciplinary action is taken. 

Moving Forward 

As we work to implement the corrective actions to ensure proper oversight, we also want to 

begin a discussion with you on the path forward for the NWS. The science and technology of 

weather observing, forecasting, and communications have changed dramatically since the current 

NWS Operations Model was developed in the late 1980s and continue to evolve rapidly. It is 

imperative that NWS is able to keep pace with these advances and able to change with the 

evolving needs of our society. An effective, resilient, and modern NWS is needed to better 

deliver services responsive to population growth, growing infrastructure threats, and an 

increasingly interdependent economy. Rapid scientific and technological advancements are 

providing potential solutions that will enable NOAA to better meet our country's needs. 

Our dialogue with you needs to move to a strategic vision of what our Nation needs from the 

NWS in the 21 sl century and how we enable the NWS to evolve accordingly and to provide for 

those needs in the most efficient and cost effective manner. Future NWS budgets need to focus 

on a broader, end-to-end and comprehensive strategy for weather services. Congress, the 

Administration, and key stakeholders - emergency managers, private sector, academia, and the 

public - need to be active participants in the dialogue as the strategy for the future ofNWS is 

developed. 

Important components of this dialogue are the two independent studies, directed by Congress, to 

review NWS. The first is the National Academy of Sciences (NAS) study of the NWS 

Modernization and Associated Restructuring (MAR) that Congress directed in the FY 2010 

report language. The first phase of this study provided the first official history of the MAR, 

including lessons learned. The fundamental message delivered by the NAS is that the NWS 

should not be placed in a position where another wholesale fe-engineering effort like MAR is 

5 
25 

needed. The second phase, completed last month, reviewed the NWS Strategic Plan i and 

Roadmap2. 

In NOAA's FY 2012 Appropriations conference report language (P.L. 112-55), Congress 

recognized the need for a follow-on study to examine the structure of the NWS and directed a 

second study, using the following language: 

"NOAA shall enter into a contract with an independent organization with experience in 

assessing Federal agencies for the purposes of evaluating efficiencies that can be made to 

NWS operations ... This review shall not be undertaken until the National Academy of 

Sciences completes its review of the NWS modernization, which will include 

recommendations on the NWS workforce and composition and how NWS can improve 

current partnerships with Federal and non-Federal partners and incorporate new 

technologies for improved services. The findings and recommendations of the National 

Academy of Sciences review should inform this new independent assessment." 

The Request for Proposals for the follow on study was released on June 14, 2012 and we expect 

a contract award for this independent study by September 28, 2012. 

Results of this study, expected in April of2013, will help inform future budgets and planning. 

We hope to have a continuous, rich dialogue with Congress as we move forward and use the 

results of the reports to begin charting the future course of the NWS. 

Recent events have highlighted the need for the Nation's Weather Service to be agile and quick 

to meet rapidly changing stakeholder needs and accelerating advances in science and technology, 

while also being resilient and cost-effective in the face of changing budgets. We believe the 

future ofNWS must be marked by more continuous innovation and change. It is our hope that 

your assistance and the advice of external review and guidance from the NAS and others will 

provide the necessary information to effect the changes needed to position the NWS for the 

future. I look forward to continuing this discussion with all of you in the coming months. 

Conclusion 

We are committed to working with Congress to ensure that processes are in place to restore 

proper oversight over the Weather Service budget, and to begin a discussion on the future 

direction ofNWS. Thank you for the opportunity to discuss this important issue with you, and I 

will be happy to answer any questions. 

1 http::.\"~'\' nws- noaa l!l\V:corn.\.veatberreadynation files,s!rate"ic plan pdf 

2 hup -.\\",,"\\".n\\'s noaa.!!o\/:('om\\'t~atherread\'natlOn files NWS \'i8N Roadmap pdf 

6 
26 

Vice-Chairwoman ADAMS. Thank you. And I now recognize our 

second witness for the panel, Inspector General Todd Zinser, for 

five minutes. 

TESTIMONY OF INSPECTOR GENERAL TODD J. ZINSER, 

U.S. DEPARTMENT OF COMMERCE, 

OFFICE OF INSPECTOR GENERAL 

Mr. ZINSER. Madam Chair, Ranking Member Tonko, Members of 

the Subcommittee, good afternoon. 

The invitation from Chairman Broun asked us to specifically address four areas. One, identify how and when we received the allegations relating to financial misconduct at the National Weather 

Service. During the period June 2010 to August 2012, we received 

numerous complaints through our hotline and from GAO via their 

FraudNet. Eight concerned allegations of improper reprogramming, 

and four concerned allegations about a former employee of the National Weather Service Office of Chief Financial Officer, who was 

brought back as a contractor. That person is now a former contractor, thanks to the National Weather Service staff who contacted 

our hotline and Dr. Sullivan’s prompt management action. 

Two, explain our role in and provide a preliminary analysis of 

the joint NOAA departmental investigative report following 

NOAA’s internal inquiry. I first became aware of allegations of improper reprogramming at the National Weather Service in November 2011, when the head of our audit staff sent a memorandum to 

the National Weather Service Chief Financial Officer and several 

other NOAA and Departmental officials which basically said that 

we thought they had a $10 million improper reprogramming issue 

concerning AWIPS funding and that they should get an opinion 

from the Department’s Office of General Counsel. In our conversations with the National Weather Service CFO’s office during our review, they insisted that they had not engaged in improper reprogramming. We disagreed and said they needed to get the lawyers involved. A copy of our memorandum is attached to our written statement. 

At about the same time, in a November 2011 conversation with 

the former NOAA Deputy Undersecretary, I learned that NOAA 

was finishing up a review of similar reprogramming allegations 

that had been referred to them by my OIG hotline staff. That review reached the same conclusion that we did that there was improper reprogramming occurring. The issue was elevated very 

quickly to the Deputy Secretary and Undersecretary. There was interest in additional fact-finding, especially about the extent of executive responsibility and knowing the extent of the reprogramming, 

so initially NOAA, then the Department and NOAA jointly, undertook further fact-finding between November 2011 and May 2012, 

when the NOAA review report was issued and corrective actions ordered. 

Three, explain the rationale for conducting a sufficiency review 

of the investigation rather than an independent OIG investigation. 

Generally, when we refer a hotline matter to the Department or 

one of its Gureaus for resolution, we ask for an answer. Once we 

receive the answer, we then conduct what we call a sufficiency review. We do not have the resources to look into every allegation we 
27 

receive through the hotline, so this is a common method used by 

IG offices across the government to leverage our resources with 

those of the agencies to resolve management and administrative 

matters. 

In this case, it was my view that the Department and NOAA 

were in the best position to carry out the follow-up fact-finding for 

a few reasons. At the end of the day, the determination as to 

whether the reprogramming actions were proper or improper was 

going to be made by the Department and OMB and the basic facts 

were already known. We had already reported our observations in 

our November 2011 memorandum and it was now up to the Department and NOAA to address these observations with their 

budget, accounting, and legal staffs. That put my office in a better 

position to evaluate the Department and NOAA’s actions and response. We are in the process of doing that right now. 

Four, discuss what follow-up activity OIG has planned. Both our 

audit and investigative staff are engaged in follow-up work. These 

activities are discussed in further detail in my written statement. 

Among other things, our audit staff is tracking progress on the 20 

or so corrective actions that were directed by Acting Secretary 

Blank and Undersecretary Lubchenco. Our audit staff is also going 

to try to get a better handle on the reported structural deficit and 

budget shortfall referenced in the May 2012 report that is said to 

underlie improper programming. We would also like to get a better 

understanding of the impact, if any, of the reprogramming actions 

on the National Weather Service programs, especially AWIPS. 

Our investigators are conducting follow-up interviews about how 

far back this may go and which other officials may have been 

aware of the structural deficit, the shortfall, and the reprogramming activities. The investigative work is also in response to hotline complaints received after the May 2012 internal report was 

issued. We will keep both Congress and the Department informed 

of our work. 

This concludes my statement, Madam Chair. I would be happy 

to answer questions that you or other Members of the Subcommittee may have. 

[The prepared statement of Mr. Zinser follows:] 
28 

Testimony of 

The Honorable Todd J. Zinser 

I nspector General 

u.s. Department of Commerce 

before the 

House Committee on Science, Space and Technology 

Subcommittee on Investigations and Oversight 

Mismanagement of Funds at the National Weather Service 

and the Impact on the Future of Weather Forecasting 

September 12, 20 12 
29 

Madam Chair, Ranking Member Tonko, and Members of the Subcommittee: 

I appreciate the opportunity to testify today about the Department of Commerce's response to 

National Oceanic and Atmospheric Administration (NOAA) National Weather Service's 

(NWS') mismanagement of budgetary resources. Our testimony will address three areas: 

I. Numerous whistleblower complaints, dating back to 20 I 0, many of which have since 

been validated by multiple reviews of NWS financial mismanagement; 

2. Separate Departmental and NOAA internal inquiries, resulting in both the 

Department and NOAA undertaking significant corrective action; and 

3. Recent and current Office of Inspector General (OIG) follow-up reviews, to 

measure the sufficiency of the internal inquiries and the resulting corrective actions. 

I. Whistleblower Complaints 

Between June 20 I 0 and August 2012, OIG received eight complaints concerning unauthorized 

reprogramming at NWS. In addition, beginning in January 2012, OIG received a series of four 

complaints alleging contracting improprieties in the NWS Office of the Chief Financial Officer 

(OCFO), concerning the employment of a consultant who had formerly been a senior OCFO 

official. We have summarized these complaints chronologically (see below): 

• GAO hotline referral (received June 17, 20 I O)--OIG received a mailed letter 

from GAO's FraudNet, dated May 25,2010, forwarding an anonymous complaint that 

NWS OCFO moved appropriated funds from "program to program" to pay for 

underfunded and underestimated costs. This anonymous complaint listed NOAA's 

Deputy Under Secretary for Operations, along with OIG and other parties, as being 

sent copies of the complaint. OIG, having received only the GAO referral, did not take 

action at the time, filing the complaint for future reference. We later learned that (a) 

NOAA had previously received this identical complaint. in April 2010 or earlier; (b) 

NOAA had assigned it to NWS OCFO; and (c) in April 2010, NWS OCFO had drafted 

a response to NOAA's Deputy Under Secretary for Operations addressing the 

allegations. We are not aware of NWS OCFO ever having finalized its response. 

OIG hotline cOlTlplaint (received October 31, 201 O)-OIG received a second 

anonymous complaint through an online form, which alleged that NWS was 

inappropriately reprogramming appropriated funds for the Advanced Weather 

Interactive Processing System (AWIPS) to pay for other activities. OIG commenced a 

review of the complaint; on November 18, 20 I I, we issued a memorandum to the 

NWS OCFO and other senior NOAA and Department offiCials, concluding that $10 

million in AWIPS funds were shifted to other accounts without a reprogramming 

request. (See section III of this testimony for further details.) 

• OIG hotline complaint (received June 14, 20 II )-OIG received another 

anonymous online complaint. stating that "rumors abound" that NWS OCFO staff were 

"spending many hours building a cover story" about financial mismanagement. OIG sent 

this complaint to NOAA for internal inquiry, the results of which were reported in 

NOAA's November 2011 preliminary report. AWIPS Funding Investigation Report: 

2 
30 

Response to OIG Referral Number PPC-C/-II-0442-H. This 17 -page report (excluding 

appendixes) found that, over the 2 years examined-fiscal years (FYs) 2010 and 2011-

NWS OCFO (a) engaged in a strategy to address NWS budget shortfalls through the 

reallocation of program funding and (b) because shortfalls were not addressed at the 

start of the fiscal year, created a need during the year to continually reallocate funds. 

The report concluded that these actions "created an environment of uncertainty, and 

lack of transparency that relies on ad hoc budget manipulations during the fiscal year to 

ensure solvency," in violation of the FYs 20 I 0 and 20 II appropriations acts. 

• OIG hotline complaint (received November I, 20 II }-An NWS employee 

emailed OIG's hotline alleging an NWS OCFO redirection of FY 2012 Next Generation 

Weather Radar System (NEXRAD) Operations and Maintenance funds to pay for its 

Product Improvement Program. OIG sent this complaint to NOAA and requested that 

the agency consider it along with the June 14 allegations. 

• OIG hotline complaints (received beginning January II, 20 12}-Beginning on 

this date, OIG received a series of four anonymous complaints, involving a former 

senior employee in NWS OCFO, that are the subject of an ongoing OIG investigation. 

The complaints alleged contract improprieties related to the hiring of this former 

employee as a consultant for NWS OCFO, including improper payment of lodging. One 

complaint alleged the consultant attempted to use undue influence in an effort to get a 

family member a contract position at NWS. Specifically, this complaint alleged that 

funding sources for their programs would be provided if they agreed to hire the relative. 

While our investigation is ongoing, we have determined that NOAA provided the 

contractor housing valued at more than $52,000 and spent more than $336,000 in 

wages for this consultant's services over a period of one and a half years. We promptly 

notified NOAA of our preliminary findings concerning the consultant's efforts to secure 

a job for the family member; NOAA took swift action to terminate the consultant's 

employment with the agency. 

• OIG hotline complaint (received February 4, 20 12}-OIG received an email 

from an NWS employee who alleged that the agency overspent available funds by more 

than $100 million over the past several fiscal years. OIG sent this complaint to the 

NOANDepartment team conducting the internal inquiry, requesting its inclusion with 

the existing inquiry. 

• GAO hotline referral (received April 16, 20 12}-OIG received a second GAO 

Fraudnet complaint, alleging that NWS OCFO was not the only NOAA office that knew 

of, and was responsible for, the improper reprogramming of funds. The complainant 

alleged that NWS and NOAA OCFO also had knowledge of the unauthorized 

reprogramming of funds. OIG sent this complaint to the NOANDepartment team 

conducting the internal inquiry, requesting its inclusion with the existing inquiry. 

• OIG hotline complaint (received June II, 20 12}-After the Department and 

NOAA jointly issued the internal inquiry report responding to the reprogramming 

allegations, OIG received another anonymous complaint. It contained allegations that, 

despite the investigation, the unauthorized reprogramming of funds at NWS had 

continued unabated. Th~ complainant suggested that the unauthorized reprogramming 

3 
31 

has been taking place since 2004, when NWS failed in its attempt to restructure as a 

way to mitigate budget shortfalls. OIG is currently investigating these allegations. 

• 010 hotline complaint (received August 18, 20 12)--01G received another 

complaint from a senior NWS employee, who raised concerns about how NWS 

continues to handle its financial challenges, including the lack of sufficient oversight and 

appropriate measures to mitigate funding shortfalls. The complainant reported being 

told specifically to use funds from what the complainant described as "admittedly" not 

the "right pocket." We are currently assessing this complaint in conjunction with our 

ongoing review (see section III of this testimony for further details). 

II. Departmental and NOAA Internal Inquiries 

The Department's Internal Inquiry Report (May II, 2012) 

On May I I, 2012, the Department of Commerce issued its Internal Inquiry into Alleged 

Mismanagement of Funds Within the National Weather Service. The Department initiated this 

executive-level inquiry, jointly with the National Oceanic and Atmospheric Administration 

(NOAA), following the agency's preliminary inquiry into OIG hotline and other complaints 

regarding suspected improper reallocation of expenses within NWS. NOAA's preliminary 

inquiry concluded that the NWS OCFO may have engaged in the unauthorized reprogramming 

of its program funds in FY s 20 I 0 and 20 I I, in violation of the appropriations acts for those 

years. The Department carried out its follow-up inquiry to examine the reported issues in 

greater depth and validate NOAA's initial findings. 

As stated in its May II, 2012 report. the Department and NOAA jointly: 

• Conducted more than 30 interviews of over 20 witnesses; 

• Performed financial analyses; 

• Consulted with OIG, NOAA OCFO, and the Department's Office of General Counsel 

(OGC); and 

• Examined large numbers of documents, e-mails, memoranda, and spreadsheets related to 

the allegations. 

In addition to the unauthorized reprogramming of NWS funds in FY s 20 10 and 20 I I, the 

Department found that significant management, leadership, budget, and financial control 

problems led to an environment where such activity could occur, including what the 

Department terms "summary level transfers" (SL T) to reallocate expenses. The Department 

uses SL Ts to provide financial officers flexibility for reassigning accounting codes on past 

expenses, for reasons including fixing account code errors. For the reprogramming, NWS used 

SL Ts to change accounting codes on expenses previously paid out of the NWS Local Warnings 

and Forecasts (LWF) base budget to those of other activities, thereby freeing up flexible LWF 

funds for almost any purpose. The full range of Departmental findings includes: 

• The improper use of SL T accounting to facilitate the inappropriate reallocation of 

expenses; 

4 
32 

• An inappropriate assessment of required NWS program office payments for common 

services; 

• NWS OCFO staff ultimately participating in the unlawful reprogramming of funds. despite 

their objections; 

• Failed oversight of and an environment of mistrust at NWS OCFO; 

• A lack of timely responsive action from NOM. the Department, and OIG; 

• Possible improprieties in the reallocation of expenses; and 

• Financial and management controls that were ineffective at preventing an unlawful 

reprogramming of funds. 

Since the release of the May I I. 2012. report. the Department and NOM have proceeded 

with several directives. reviews. and studies focused on Departmental and NWS budget. 

training. and reporting structure issues. Acting Secretary Rebecca Blank and Under Secretary of 

Commerce for Oceans and Atmosphere Jane Lubchenco issued separate decision memoranda 

on May 24. 2012. with specific actions for correcting the conditions leading to the report's 

findings. These decision memoranda require Departmental action on 20 distinct activities. 

including audits. organizational reporting adjustments. and changes to budget formulation and 

execution processes. 

Deputy (Acting) Secretary Response to the Internal Inquiry Report (May 24,2012) 

On May 24.2012. the Deputy Secretary (now Acting Secretary) provided 8 directives requiring: 

I. An implementation plan for each of the decisions contained In Under Secretary 

Lubchenco's memo. with a timetable and milestones; 

2. A comprehensive review of all Department SL Ts; 

3. Examination of the Department's budget formulation and reporting structure; 

4. Financial. reprogramming. Anti-Deficiency Act (ADA). and appropriations law training 

for Department staff; 

5. Budget and appropriations law training for Departmental senior executives and political 

appointees; 

6. Complaint handling training for Departmental senior executives and political appointees; 

7. A review of Departmental budget allocations for common services; and 

8. A review of the Department's line office reporting structure 

NOAA Response to the Internal Inquiry Report (May 24,2012) 

Also on May 24. 2012. the Under Secretary of Commerce for Oceans and Atmosphere issued a 

memorandum summarizing the findings and 14 recommendations made by the inquiry team. and 

provided the following additional 12 administrator decisions to: 

I. Deliver FY 2012 NWS reprogramming request to Congress; 

5 
33 

2. Fully fund NWS headquarters operations, assess NWS common services, and deliver 

training for NOAA staff on common services assessments; 

3. Add the NOAA CFO to the line office budget reporting structure; 

4. Expand NOAA CFO responsibility for reviewing SL Ts; 

5. Ensure input from NWS program officials on budget decisions; 

6. Document NWS budget formulation and execution process and include regular 

briefings; 

7. Ensure NOAA financial skills assessment and training; 

8. Initiate NWS financial and program audit and address structural deficit; 

9. Investigate whether an NWS ADA violation occurred and meet with Congress on 

reprogramming; 

10. Conduct an independent financial audit and address NWS structural deficit and shortfall; 

II. Review and recommend changes to NOAA complaint handling; and 

12. Review NOAA's line office oversight and reporting structure. 

On August 3 I, 2012, OIG received a Departmental report that intends to fulfill one of its 

corrective actions. We expect that soon we will receive notice of other outcomes of the 

Department's and NOAA's corrective actions, many of which had deadlines in July-August 

2012. As of September 7, we have not yet concluded our review of these results. 

Among the corrective actions is a determination of whether NWS committed a violation of the 

ADA. The ADA requires the head of an executive agency to report any known violation of that 

law to the President and the Congress. It is our understanding that a determination is pending 

with the Department. In cases where a violation was knowing and willful, the Department of 

Justice (DOJ) will review the matter. DOJ has stated that it will await the Department's 

determination before proceeding with further review. 

III. OIG Follow-Up Reviews 

Memorandum to NWS CFO (November 18, 20 II) 

Concurrent with NOAA's preliminary inquiry, our office commenced a review of NWS 

reprogramming issues in December 20 I O. In discussions with our staff, NOAA budget officials 

asserted that there was not a reprogramming issue and maintained that NWS' actions were 

proper. Notwithstanding, our team identified continued concerns regarding the reprogramming 

issues. As a result, OIG issued a November 18, 20 I I, memorandum to the NWS CFO (with 

copies going to the NOAA CFO and two Department budget officials) requesting a formal 

review and response by NOAA and Department budget officials on the appropriateness of 

these actions. (See appendix for the full memorandum.) 

We found that NWS had not submitted any reprogramming requests for the AWIPS 

program-for which Congress stipulated virtually full funding within its FY 2010 appropriation 

for the Department. However, in March 20 I I, we met with officials responsible for managing 

6 
34 

the AWIPS program, who reported that a significant diversion (over $10 million) of AWIPSappropriated funding occurred during FY 20 I O. AWIPS management also reported that they did 

not know the destination or ultimate use of the redirected funds. 

Finally, our memorandum further detailed our April 19, 20 II, meeting with NWS budget 

officials, who outlined how over $10 million in AWIPS funding had been shifted to other 

accounts, primarily to cover NWS overhead. Based on this meeting and our review of related 

documentation, we made a preliminary determination that the primary reason for the shift was 

to fund an NWS budget shortfall-and that this shifting of funds from the AWIPS program to 

other uses by NWS would likely require Congressional approval (as stipulated in section 505 of 

Public Law 111-1 17, the Consolidated Appropriations Act of 20 I 0). 

We concluded the memorandum by requesting that NWS confirm with Department officials 

that the AWIPS funding shift did not violate any applicable appropriations law or regulation, as 

was asserted to OIG. We did not receive a response from NOAA or the Department but 

were provided a copy of NOAA's November 28, 2011, report on its preliminary inquiry into 

these issues. 

Current O/G Work 

Upon the Department's conducting of its internal inquiry, the Senate Committee on 

Appropriations asked us to review the reprogramming request. We provided our observations 

to the staff of the Senate Committee on Appropriations; the House and Senate appropriations 

committees subsequently approved the reprogramming request. 

Our focus has shifted from reviewing the reprogramming request to evaluating the 

Department's progress in taking corrective action. Upon receiving the Department's May I I, 

2012, internal inquiry report concerning these issues, we assessed the report's conditions and 

findings and how the Department evaluated them. 

O/G Review. Our preliminary review of the Department's actions has included: 

• Receiving the Department's supporting documentation related to the May II internal 

inquiry report; 

Communicating with House and Senate appropriations staff about the NWS 

reprogramming request; 

• Discussing NWS reprogramming with financial statement auditors; 

• Meeting with NWS budget officials to discuss reprogramming, budget details, budget 

shortfalls, and OIG access to working papers; 

• Receiving a statement of work on a NOAA-contracted audit of structural deficit and 

shortfalls. 

7 
35 

Our objective in reviewing the Department's May 2012 responses to its internal inquiry results 

is to determine the adequacy of actions taken by the Department and NOAA in addressing the 

related budget reprogramming issues. The scope of our review includes: 

• The Department's audit of budgetary SL Ts; 

• NOAA's audit of structural deficit and budget shortfalls, 

• The FY 2013 operational budget, including fully-funded headquarters operations; 

• NOAA's updated budget reporting structure; 

• NOAA's updated procedures for common services budget allocations: 

• NOAA's updated procedures for OCFO-Ievel SL T review; and 

• NWS' updated budget formulation and execution processes. 

Our follow-up review is consistent with our emphasis that the Department and its management 

should be responsible for first addressing management issues of compromised controls when 

they arise. Generally, when OIG receives a hotline complaint that is administrative in nature 

and most appropriately addressed by Departmental or agency management, we refer the 

complaint to the Department or agency for inquiry and any appropriate corrective action. This 

is common practice across the government. Often, our referrals require a response from the 

Department or agency. The Department's responses, such as the one issued by the 

Department and NOAA in May 2012, underscore the Department's responsibility in addressing 

mismanagement issues. 

Investigative Inquiries, Finally, OIG investigators are currently carrying out two NWS-related 

inquiries received since the conclusion of the Department's inquiry. One complaint, received in 

June 2012, alleged that (a) NWS' unauthorized reprogramming of appropriated funds also 

occurred prior to 2010 and (b) senior NWS and NOAA officials were aware of this practice. 

Accordingly, OIG is currently investigating these issues to determine whether this improper 

activity began prior to FY 20 I 0 (the earliest timeframe examined in the Department's May 2012 

report), as well as to identify senior officials who may have been aware of this activity and when 

they became aware of it. The second complaint, which we received in August 2012, alleged that 

NWS reprogramming of appropriated funds is still occurring at NWS; we are assessing this 

information as part of our ongoing review of this matter. Additionally, we have an open 

investigation involving allegations of the improper hiring of, and providing of lodging at no cost 

to, a r tired NWS senior executive in the NWS OCFO. 

This concludes my prepared statement, and I will be pleased to respond to any questions you 

or other Subcommittee members may have. 

8 
36 

Appendix 

Memorandum to NWS CFO (November 18, 20 II) 

November 18,2011 

MEMORANDUM FOR: 

FROM: 

SUBJECT: 

RobertJ, Byrd 

UNITED STATES DEPARTMENT OF COMMERCE 

Office of InspectOr Ge_1 

VI/ashingttm, O,C, 20230 

Chief Financial Officer 

National Weather Service 

~ 0 Eilert: Ann C, Eilers ~ pu... \ __ 

Principal Assistant Inspector General for Audit and Evaluation 

Allegation Concerning Redirection of Appropriated Funds for the 

Advanced 'Weather Interactive Processing System 

In late 20 I 0, the Office ofInspector General (010) received an allegation that substantial funds 

had been shifted from the Advanced Weather Interactive Processing System (A WlPS) program 

to other National Weather Service C'lWS) activities. Section 505(a)(8) ofPublic Law ilI·ll?, 

Consolidated Appropriations Act 0[2010, requires agencies to notify the House and Senate 

Appropriation Committees when reprogramming funds in excess of $500,000 or 10 percent 

(whichever is less) between programs, projects, or activiiies. 

OIG staff conducted a, limited review of the allegation. As part of our review, we researched 

basic criteria and departmental guidance governing the movement of appropriated funds, 

including 

• Public Law 111-117, Consolidated Appropriations Act of 20 10; Conference. Report; and 

various committee reports concerning 20) {) appropriations 

• the Government Accountability Officc' s Principles vf Federal Apprvpriations Law 

• the Department ofCommercc's Budgel. Perfvrmance and Prvgram Analysis Handbook 

We also compared NWS' fiscal year (FY) 2010 operating plan and budget to its appropriations 

for that year. The operatingpJan and budget request for FY 2010 totaled $39.346 million for 

A ,,,.,IPS operations and maintenance, and $24.364 million for A WlPS aequisitions. Both amount 

included increases over the prior year. The FY 2010 erl1\Cted budget, or appropriated amounts, 

for the two separate A WIPS appropriations related to operations and acquisitions totaled 

S39.346 million and $24.0 million, respectively. Thus, Congress stipUlated virtually full funding 

for the A WIPS program within its FY 20) 0 appropriation for the Department of Corurnerce, 

basc.d on requests and justifications presented by the National Oceanic and Atmospheric 

Administration (NOAA) for its NWS programs and acquisitions. 

9 
37 

To verify recent reprogramming requests submitted by NWS, we met in January 2011 'with the 

Department official responsible for reviewing A WIPS reprogramming requests. I We found that 

l\TWS did not submit any reprogramming requests for A WIPS during FY 2010. However, in 

March 2011 we met with officials responsible for managing the A WIPS program and confirmed 

that a significant diversion (over Sl 0 million) of A "''IPS.appropriated funding occUJTe{j during 

FY 2010. A WIPS management did not know the destination or ultimate use of the redirected 

funds. In order to trace the movement of the funds, we consulted with you. 

During our meeting, you presented a broad overview ofNWS and A WIPS budgets, along with a 

general discussion and documentation of where and how the A ""'IPS funding shifted. In brief, 

NWS experienced a serious funding shortfall during FY 2010, and funding for the AWIPS 

program was used to compensate. You stated that this redirection of fands, which was 

permanent, did not require reprogramming and indicated that a relationship existed between the 

final use of the shifted funds and the A WIPS program. However, we could not establisb sucb a 

relationship based on the documents we reviewed during that discussion. You responded to our . 

concerns by arranging another meeting to discuss the A WIPS funding in more detail with your 

budget execution staff. 

In our April 2011 meeting with the NWS Direetor ortlle Budget Execution Accountability 

Office, accompanied by ilie Deputy CPO for NWS, your office made an effort to outline how 

over' $10 million in A VI>'JPS funding was shifted to other accounts, primarily NWS overhead. 

Based on our understanding of the presentations by your office and our review of related 

documentation, we made II preliminary determination that the primary reason for the shift was 10 

fund the NWS shortfall, and that this shifting of funds from the A WIPS program to other uses by 

NWS would likely require congressional approval. Congress continues to underscore its 

expectation that each department and agency adhere 10 the procedures provided in the abovecited section 505; the following excerpt from Senate Report 111·229, dated July 2010, 

emphasizes congressional concerns about reprogramming; 

The Committee also expects that any items that are subject to interpretation will 

be reported. The Committee is concerned that, in some instances, the departmenls 

or agencie~ funded v.rithin this appropriations ect are not adhering to the 

Committee's reprogramming guidelines that are dearly set forth in this report and 

in section 505 of the accompanying bill. The Committee expects that each 

department and agency funded in the bill wi1I follow these notification policies 

precisely and will not reallocate resources or reorganize activities prior to 

submitting the required notifications to the Comrnittee.2 

OIG staff concluded that further review of the A WIPS funding allegation was beyond the scope 

of our inquiry and would require more detailed audit work. However, we offered your staff the 

I After review by the Department. the requests are suhmitted to the Office of Management and Budget for the 

requirt'<i approval before transmission to COlIgrw;ional committees for final approval. 

1 Excerpted from Senate Report 111.229: Departments a/Commerce andJustice. Science, andRelatedAgencles 

Appn>priation~ Bill 20] J {Online]. htl!!:I!!IJ(lma~.loq;o\'iclli-binlcPQuerym<ttenorl"'5r229&dbnllID""'1! 1& 

(accessed July 8, lOll). The full text of the report's section 00 reprogrammings, reorganizations, Iilld relocations is 

provided as IlIl attachment to this memorandum. 

10 
38 

opportunity to confirm V.1th the Department official responsible for reprogramming :requests that 

the A WIPS funding sbift did not violate any applicable appropriations law or regulation, 

Your stai'fhas not informed us of the results of a meeting with the Department on this issue, 

Therefore, we ask that you advise us whether your office has notified the Department's budget 

office of the nature and extent of the movement of A WlPS funding and, if so, the results of your 

discussions, 

We would appreciate your prompt attention to this rtJlItter, If you have any questions, please do 

nol hesitate to contact me at (202) 482·2754, 

Attachment 

cc: Maureen Wytie, Chief Financial Officer, NOM 

Michlllll Phelps, Director, Office of Budget 

David Socolof, Chief, Technology and Environment Programs Division, Office of 

Budget 

II 
39 

Attachment: 

Excerpt [rom Senate Report 111-229: Dt;partme'lts of Commerce and Jnstic!t Science, and 

Related Agencies Appropriation.f Bjll2011 

REPROGRAMMINGS, REORGA. ~IZATIONS, At,,» RELOCATIONS 

Section 505 contained in the 'General Provisions' of title V provides procedures for the 

reprogramming of fund.~. To reprogram is to change the use offunds from the specific purposes 

provided for in the act and the accompanying report or, in the absenc.e of direction from the 

Committee on Appropriations, from the specific purposes provided fOf in the administration's 

budget request. Each title of the bill has aL'lC traditionally included separate provisions that 

define permi$sible transfers of resources between appropriation accounts. These transfer 

authority provisions are also pursuant to section 505, and were initiated in the early 19905 to 

provide additiona1 .f1cxibility to the agencies under the subeommittee's jurisdiction. 

The Committee expects each department and agency to closely follow the reprogramming 

procedurcs listed in section 505, which are the same as provisions that applied in statute during 

fiscal year 2010. These procedures apply to funds provided under this act, or provided under 

previous appropriations acts that remain available for obligation or expenditure in fiseaJ year 

2011, or provided from any accounts in the Treasury available to the agencies funded by this act, 

Section 505 requires that the Committee on Appropriations be notified by letter, at least 15 days 

prior to reprogramming of funds, whether permanent or temporary, in excess of $500,000 or 10 

percent, whicheve,r is less, between programs, projects or activities. This provision is also 

applicable in cases where severa] activities are involved with each receiving less than $500,000. 

In addition, the Committee is to be notified ofreprogranuning actions which are less than these 

amounts jf such actions would have the effect of: committing the agency to significant funding 

requirements in future years; increasing funds Of personnel by any means for any project or 

activity for which funds have becn previously denied or restricted by Congress; creating new 

programs, offices, agencies or cornrnissions or SUbstantially augmenting existing programs, 

offices, agencies or commissions; relocating offices Of employees; Qf reorganizing offices, 

Ptograms, or activities. 

The Committee a1so expects that lll1y items that are subject to interpretation will be reported. The 

Committee is concerncd that, in some instances, the departments or agencies funded within this 

appropriations act an: not adheri.ng \0 the Committee's reprogramming guidelines that are clearly 

set forth in this report and in section 505 of the accompanying bill. The Committee expects that 

each department and agency funded in the bill will follow these notification policies precisely 

and wilJ not rea.llocate resources or reorglll1ize activities prior to submitting the required 

notifications to the Committee. 

The reprogramming process is based on comity between the Appropriations Committee and the 

executive branch. The Commerce, Justice, science, and related agencies appropriations bill 

provides specific program guidance throughout this report and tables accompanying the bill. The 

process is intended to provide flexibility to meet changing circumstances and emergency 

requirements of agencies, if there is agreement between the executive branch and the Congress 

4 

12 
40 

that such 1\. change is warranted. Reprogramming procedures provide a means to agree on 

adjustments, if necessary, during II fiscal year, and to ensure that the Committee is kept apprised 

of instances where nonappropriated resources are lL~ed to meet program requirements, such as 

fee colleclions and unobligated balances that were not considered in the development of the 

appropriations legislation. 

In the absence of comity and respect for the prerogatives of the Appropriations Committees and 

Congress in general, the Committee will havc no choice but to include specific program 

limitations and details legislatively. Under these circumstances, programs, projects, and activities 

become absolutes and the executive branch shall lose the ability to propose ehanges in the use of 

appropriated funds through the reprogramming process between programs, projects, and 

activities without seeking some form of legislative action. 

The Committee expects the executive branch departments to manage its programs, projects and 

activities within the levels appropriated. Reprogramming or transfer requests shall be submitted 

only in the case of an unforeseen emergency or situation that could not have been anticipated 

when formulating the budget request lor the current fiscal year. 

OIG-12-036-T 

13 
41 

Vice-Chairwoman ADAMS. I thank the panel for their testimony. 

Reminding Members that committee rules limit questioning to five 

minutes, the Chair will at this point open the round of questioning. 

The Chair recognizes herself for five minutes. 

Dr. Sullivan, you state in your testimony that you did not find 

evidence that NWS officials improper action put life or property at 

risk or jeopardized the delivery of timely or reliable weather forecast and warnings. You also state that as part of the fiscal year 

2012 reprogramming, NOAA will take funds out of NWS accounts 

that will lead to postponing procurements of spare parts and deferring enhancements to weather systems, among others. 

How can you be sure that the future of NWS operations won’t 

be impacted by these transfers? We have basically been eating our 

seed core by taking money from programs like AWIPS and WRIP. 

What does this mean to the future of NWS’ ability to deliver timely 

and reliable weather forecasting warnings? And will the fiscal year 

2013 budget request be modified to reflect the current shortfall or 

can we expect to revisit a scenario next year again where NWS either runs out of money or has to come back to Congress with more 

reprogramming requests? 

Dr. SULLIVAN. Thank you for your question. We are—we share 

your concern that we are taking from programs that underwrite 

the long-term future of the Weather Service to balance this out and 

make sure we support the current forecast. Across government, 

senior managers are wrestling with very much the same challenge, 

short-term urgent matters, longer-term investments under the 

tight fiscal constraints that we are all facing. We don’t have a simple silver-bullet answer, Madam Vice Chair. I would say in making 

the specific choices that we did make both for the fiscal year 2012 

reprogramming and for the adjustments that we have proposed to 

fiscal year 2013, we looked carefully at performance metrics in our 

key forecast warning areas. We looked at rates of progress of those 

procurement programs. We made difficult, painful choices to slow 

rate of progress towards the future—not halt it but slow it—and 

be sure that we sustain the performance that is so vital every day 

to the American public. 

Vice-Chairwoman ADAMS. So are you saying that you don’t believe that this will impact AWIPS or WRIP? 

Dr. SULLIVAN. We have restructured the Weather Radio Improvement Program only partly due to the reprogramming actions I have 

testified about today. There was separately and independent from 

that a very significant performance issue with the contractor that 

first was awarded that worked some years ago. And thirdly, the development of AWIPS as it came along through the years and technology advanced showed the opportunity to accomplish the WRIP 

upgrade through the AWIPS system itself rather than by a separate stand-alone proprietary approach. So we have modified the approach to that program. The capability will come into the Service. 

On AWIPS a couple of things are happening simultaneously. We 

are fielding an advanced AWIPS system called AWIPS II. We have 

worked carefully to be sure that the adjustments that we have 

made in our budget do not affect the phased deployment of AWIPS 

II. Above and beyond that, there are subsequent downstream enhancements that we have been working to prepare and software 
42 

further algorithms. Those enhancements are what we have had to 

slow to make these adjustments. 

Vice-Chairwoman ADAMS. Thank you. You know, I just—I am— 

why—Mr. Zinser, why didn’t the IG’s office assume responsibility 

for the investigation of NWS given how high up the allegations go? 

Wouldn’t it have made more sense to handle it at the IG level rather than provide a supporting role to the Bureau in the Department’s investigation? I mean I think that is—you touched on it in 

your testimony. I would like a little bit more as to why. 

Mr. ZINSER. Yes, Madam Chair. The fact that the initial complaint had been reviewed by our audit staff and by an internal 

team at NOAA that resulted in their November 2011 report, taking 

those two things together established the basic facts. We both concluded that there was improper reprogramming going on. The additional fact-finding that the Acting Secretary was interested in dealt 

with whether proper accountability had been identified among the 

executive ranks. My concern was that, at the end of the day, a determination of whether the reprogramming was improper, whether 

it constituted an Anti-deficiency Act violation, that was all going to 

be determined by the Department’s Office of General Counsel and 

OMB. 

And at the same time, what I told the Acting Secretary was that 

I thought that they could go ahead with the additional fact-finding, 

but I had two concerns. One concern was that, if there was any evidence that there was money going to somebody personally, that we 

would step in. The second concern was that if the people whom 

they had to interview were of such high rank that the interviewing 

team felt uncomfortable interviewing them, that we would do that. 

And, in fact, we have done that and we continue to interview people and re-interview people whom the initial fact-finding team have 

already talked to. That is going to be part of our follow-up review. 

So what I told the staff when we briefed them—your staff—was 

that there is a lot of work left to be done, but right now, we have 

a good set of documents NOAA pulled together and a lot of statements that have been made by various witnesses and we are in a 

much better position to do the follow-up work that I think needs 

to be done. 

Vice-Chairwoman ADAMS. Thank you. My time is expired. 

And I now recognize Mr. Tonko for five minutes. 

Mr. TONKO. Thank you, Madam Chair. 

Mr. Zinser, I think you have taken good steps to fix the way your 

office handles hotline complaints, but would you agree or disagree 

that the system—the old system was inadequate? 

Mr. ZINSER. I definitely agree and I think there are other factors 

involved, but there were some process improvements that were required that we put in place, yes, sir. 

Mr. TONKO. And to that original system for handling complaints, 

that basically led your office to ignore important warnings about 

the Weather Service, and I worry about what else you may have 

missed. Have you done a risk assessment of what was missed perhaps? 

Mr. ZINSER. Yes, sir. While I am not in agreement that we ignored the National Weather Service, I don’t think we—— 

Mr. TONKO. Well, you received whistleblower complaints—— 
43 

Mr. ZINSER. Yes. 

Mr. TONKO. —and nothing happened of that. Why would there 

not have been some sort of immediate response? 

Mr. ZINSER. Well, the person who was managing my hotline operation at the time no longer works for me so I can’t go back and ask 

him. And other factors that existed at the time—I don’t want to 

sound like I am making excuses—but that was a period of time 

when the decennial census was operating our hotline was absolutely flooded, sir. But in any event, the risk assessment that we 

did do—what happened with the first GAO FraudNet, what that 

staff member did was what we call ‘‘zero-filed’’ it. They catalogued 

it; and set it aside. So zero-files are things that you are not going 

to take action on right away. You are going to file it and if additional complaints come in on the same subject, you have some history of the complaint. I would not have handled it that way, but 

my staff did. 

Now, we went back and looked at all the other complaints that 

we zero-filed, and what I was told is that, out of 500 or so, there 

were maybe 10 that weren’t very well documented. I don’t know 

that we would have acted any differently, but we really couldn’t tell 

the rationale for why they were zero-filed. But we have done a risk 

assessment and we have put in place a number of process improvements, and we have provided training to the Department. We have 

issued a guide on how to conduct these types of administrative reviews. We have also established a community of interest in the Department of anybody who works on hotlines. I am reporting on 

these on a quarterly basis to the Acting Secretary as part of our 

balanced scorecard. So we have strengthened, I feel, our whole 

process. 

Mr. TONKO. So as you evaluate what might have been missed, 

can I ask that we receive a copy of the evaluation of what was 

missed? 

Mr. ZINSER. Sure. Absolutely. 

Mr. TONKO. And Dr. Sullivan, we hear of the failure of this system—of an IG system regardless of the human behavior or failure, 

it took that to draw attention to what should be a very obvious situation, a whistleblower or a team of whistleblowers doing their 

thing. Is it credible that no one at NWS or NOAA knew of financial 

misconduct? It seems that there were numerous complaints. And 

can you convince me that the CFO at NWS was really the only senior person who knew what was going on? I mean it is a major move 

of money. Am I to believe that it was just whistleblowers and then 

a failed IG response that we required when in fact the management of that situation should have been on top of it? 

Dr. SULLIVAN. I would say, Mr. Tonko, our inquiry team, based 

on the witness statements that we took, really did find a very—an 

unfortunate and quite ineffective management climate at the senior levels of the Weather Service. 

Mr. TONKO. I am told this goes back to 2006? 

Dr. SULLIVAN. We have heard that anecdotally. Within the scope 

of our investigation, we couldn’t verify that. That is why we have 

commissioned an independent evaluation by Grant Thornton to 

look back to fiscal year 2006 and try to confirm that. There certainly were lots of what the Assistant Administrator of the Weath-
44 

er Service called ‘‘griping,’’ what he says in his statement he construed as ‘‘normal carping’’ of program managers who disliked the 

pressures that their budgets were on. 

Again, if you look at the details of the report we found a budget 

formulation process, you know, that fails to bring forward in crisp 

and actionable fashion questions that clearly needed to be addressed more squarely. If we don’t have sufficient funding to advance a program at a certain rate, what do we do about that? Meetings were held, PowerPoint charts were given, but in the instant 

cited—and I think it was 2010 in our report—with all of that chatter and chitchat within the Service itself, leadership at the Weather Service level did not bring together, force together, crystallize 

specific issues, specific risks, specific responses. They did not do 

that within the Weather Service and certainly did not bring any 

such justification or risk or warning forward to NOAA leadership. 

That is the only instance of such conduct I can speak to personally. It happened—we uncovered it and looked into it during our 

investigation. There may have been others previously before I arrived on station. I can’t speak to those. But the one we did look 

at in our inquiry certainly says to me questions that needed answers, solid answers, well developed budget justification and risk 

answers were not being handled that way at the time within the 

Weather Service and were certainly not coming forward. 

Mr. TONKO. Thank you. 

Vice-Chairwoman ADAMS. Thank you. 

And I now recognize Mr. Hultgren for five minutes. 

Mr. HULTGREN. Thank you, Madam Chair. 

Thank you for both being here. I apologize for being a little bit 

late, had a couple other meetings going on at the same time but 

I do appreciate your testimony. 

I do want to ask a couple questions. I am not sure if this was 

covered in your oral testimony or not but wanted just to clarify it. 

First of all, Dr. Sullivan, I wondered just on time line when we 

could expect the Department to conclude its review to determine if 

Anti-Deficiency Act violations had occurred? 

Dr. SULLIVAN. Thank you, Mr. Hultgren. 

It is my understanding that the preliminary determination has 

been concluded and the matter is in the process of being referred 

forward to appropriate—through appropriate channels to OMB 

and—sorry—Justice I presume. I confess to not being completely 

clear on the procedural details for that process and that report and 

write-up should go forward perhaps as soon as the end of this 

week. 

Mr. HULTGREN. Okay. So you think we would start seeing those, 

then, in the next couple of weeks? Is that your thought or—— 

Dr. SULLIVAN. Again, I am not conversant with the procedural 

details that move these matters from a preliminary determination 

all the way through and bring them to the Congress’ attention. But 

my understanding is there is a preliminary determination. I believe 

it is an affirmative one and that the package is moving forward. 

Mr. HULTGREN. Okay. Also, Dr. Sullivan, there are several deadlines for action identified in the NOAA and DOC decision memos 

and then we had—many of them had deadlines that have already 
45 

passed. How many of those action items were completed by the listed deadline and what are they? 

Dr. SULLIVAN. The far majority of them, Mr. Hultgren—and I can 

give you a detailed listing of those—I am sorry I can’t recount them 

to you one by one. You appreciate there is quite a number. We 

have been holding biweekly meetings on the progress of those actions at very senior levels. Both the Undersecretary and the acting 

Secretary were briefed at the 90-day point on progress to date. 

There were many of the very early actions confirmed to be completed. There were none that I recall that were not underway or 

at an expected point of progress by that 90-day point with I think 

one exception whereas the team investigated the actions needed to 

fulfill the order that was given. They found the scope was more 

complex than realized and requested permission to delay one milestone. But I would be happy to get you that full accounting. 

Mr. HULTGREN. If you would, that would be great. If you can get 

that to our office and maybe also the Committee, that would be terrific. 

Dr. SULLIVAN. We will be glad to do that. 

Mr. HULTGREN. Thank you. 

Mr. Zinser, just a couple questions for you. When do you anticipate completing your response to the investigative report? 

Mr. ZINSER. Sir, we really have just begun because part of that 

is to go and track the progress of the sufficiency of the corrective 

actions that have been directed and that NOAA and the Department are putting in place. We have reviewed the reprogramming 

request, for example, and spoken to the appropriators about that 

and the request was subsequently approved. And we have also received one report that Ernst & Young performed for NOAA and the 

rest of the Department on SLTs about how the controls are or are 

not in place for the SLT mechanisms that are used in the accounting of—for the budget. Beyond that, most of our work is still underway and it is hard to determine, you know, exactly how long we 

will be. Plus, we are doing some follow-up interviews, and as you 

probably are aware, you really never know where those are going 

to lead you. 

Mr. HULTGREN. With your work, do you plan on issuing some 

sort of report or other documentation of the work that reflects what 

you are doing and the investigation that is ongoing now? 

Mr. ZINSER. Yes, sir. We have opened a formal audit, made the 

announcement, and will issue an audit report upon its completion. 

But during the course of that, we would be happy to come up and 

brief the Subcommittee and keep you informed on the progress. 

Mr. HULTGREN. Okay. And obviously, we would get copies of the 

report when that is completed, is that right? 

Mr. ZINSER. Absolutely. 

Mr. HULTGREN. Good. Also, Mr. Zimmer—Zinser, I am sorry—in 

your testimony you identify a series of complaints that began January 11 of 2012 relating to an NWS employee who allegedly promised funding for programs in return for hiring the employee’s relative. Dr. Sullivan’s testimony states that the investigative team 

found no evidence that the NWS employees committed fraud or received personal gain through their action. I wonder based on your 
46 

preliminary review of the allegations, do you agree with Dr. Sullivan’s statement or do you have any position on that? 

Mr. ZINSER. Yes, I think the review that the Department and 

NOAA did focused strictly on the reprogramming issue. In that 

case, if you put aside the fact that a willful violation of the Antideficiency Act could constitute a criminal act and be considered a 

fraud, you put that aside for now, the issues that we reported and 

a series of hotline complaints dealt with are a conduct issue and 

a contracting issue inside the office of the Chief Financial Officer 

at the National Weather Service. They are not directly about the 

reprogramming. 

Mr. HULTGREN. Okay. I think that sort of answers my question. 

But so you don’t have any direct statement of whether you agree 

with Dr. Sullivan’s statement on that or not, that there is no evidence of personal gain received by these employees? 

Mr. ZINSER. I think that the issue involving the former employee 

and contractor, I think he did improperly obtain personal gain but 

not through the reprogramming effort. We didn’t find any evidence 

in the reprogramming activities that money was going into anybody’s pocket, for example. 

Mr. HULTGREN. Okay. Thank you very much. 

I yield back. 

Vice-Chairwoman ADAMS. Thank you. 

I now recognize Mr. McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chair. 

Dr. Sullivan, when did the last summary level transfer take 

place? 

Dr. SULLIVAN. Mr. McNerney, summary level transfers are commonplace, financial management mechanisms. They are designed— 

their intent is to allow accounting officials to correct codes improperly entered inadvertently, really make technical level corrections. 

So they are a common and commonly used tool both within NOAA 

and across the Department widely. They—I don’t know the precise 

answer but I suspect it is probably within some recent days for legitimate accounting code corrections. 

Mr. MCNERNEY. Well, how about improper programming? When 

was the last incident where improper programming took place? 

Dr. SULLIVAN. I don’t have specific evidence that allows me to answer that, Mr. McNerney. We put new controls and oversight 

measures into place effective August 1 that significantly change 

both the—— 

Mr. MCNERNEY. August 1 of this year? 

Dr. SULLIVAN. August 1 of this year in response to the corrective 

actions directed by Dr. Lubchenco. 

Mr. ZINSER. Sir, if I may? 

Mr. MCNERNEY. Yes. 

Mr. ZINSER. The nature of these summary level transfers and the 

way they were carried out was such that NOAA and the Department could not figure out which summary level transfers were appropriate and which ones were not appropriate. That is why it took 

them five months trying to nail down the transactions. There was 

no documentation on the transfers that were made and the notations that were made in connection with those transfers were so 

cryptic that you didn’t really understand the purpose of the trans-
47 

fers. And when Ernst & Young came in and looked at it, their first 

finding was there that there were no controls over this process. 

Mr. MCNERNEY. So, Dr. Sullivan, has the improper programming 

had any impact whatsoever either way on the polar satellite procurements? 

Dr. SULLIVAN. This reprogramming that we investigated within 

the National Weather Service I am very confident has not affected 

that. A different organization with NOAA executes those programs. 

Mr. MCNERNEY. Okay. I mean you must be sensitive to how this 

hurts the case for asking for those kinds of program funds? 

Dr. SULLIVAN. We are very sensitive to the concerns of the Committee, the Subcommittee, and the Congress at large and we share 

them, and that is why a number of Dr. Lubchenco’s corrective actions, as well as the acting Secretary’s actions charged our teams 

with looking beyond the horizon of this investigation and digging 

in to confirm that anywhere in the Department we did be sure— 

we did change controls, add controls, strengthen them to be sure 

that we had none of this happening and could have higher confidence that it could not happen across our other program areas. 

Mr. MCNERNEY. Okay, Mr. Zinser, did I hear you correctly that 

you first heard on November of 2011 about the improper reprogramming? 

Mr. ZINSER. Yes, sir. 

Mr. MCNERNEY. Well, that is a little bit contradictory of something else you said, that you allowed NOAA to conduct its own investigations because those departments were the most capable and 

the most ready to do those investigations, so that happened before 

November of 2011. 

Mr. ZINSER. Yes, sir. There are actually two efforts by NOAA and 

the Department. The first one NOAA did as a result of my staff referring a matter to them. I wasn’t briefed on that until November 

of 2011 either. It was after that, the follow-up review that was 

done by the Department and NOAA between November of 2011 

and May 2012. That is when I went through a decision process 

with the Acting Secretary about how best to handle that follow-on 

investigation or fact-finding activity. 

Mr. MCNERNEY. So you had no say, then, personally in the decision to send those investigations back to the NOAA? 

Mr. ZINSER. Well, our process wasn’t set up at that point for me 

to really get involved to that level of detail with the hotline program. 

Mr. MCNERNEY. You know, I am—there are some inconsistencies 

still. By November of 2011, it was clear that some misconduct had 

occurred by some very senior National Weather Service officials 

and that your own staff made it apparent that those were in violation of the Anti-deficiency Act. That is an Act we take pretty seriously here in the Congress and yet those allegations were sent back 

to the Department even though they involved possible criminal behavior. What does it take for the IG to declare that an investigation has to take place within your department? 

Mr. ZINSER. Yeah, let me clarify that, sir. When we have a finding and we make a recommendation, the Department does not have 

to pay attention to me. And so when we tell them we think there 

is an Anti-Deficiency Act violation—— 
48 

Mr. MCNERNEY. This is the Department? 

Mr. ZINSER. The Department of Commerce, or any department 

with an OIG, our recommendations do not have to be accepted or 

followed by the Department. And in the case of an Anti-deficiency 

Act violation, the Department itself and OMB makes the determination whether there was a violation or not. I can make my observation and I can make my recommendation, but until the Department weighs in and agrees, that is when action is taken, not 

just based on the IG’s views. 

Mr. MCNERNEY. Well, my time is expired. 

Vice-Chairwoman ADAMS. Thank you. 

And I believe we have enough time for a second round, so maybe 

some follow-up if you would like on that. 

I now recognize myself—the Chair recognizes herself for five 

minutes. 

Dr. Sullivan, as part of your testimony, you explained that of the 

36 million fiscal year 2012 reprogramming request, 29.9 million 

will be from NWS programs. Protecting lives and property is central to NOAA’s mission and NWS forecasting and warning is the 

primary line of office with that responsibility. Instead of further 

draining the resources of NWS, why doesn’t the reprogramming request come from other non-NWS NOAA funds? 

Dr. SULLIVAN. Thank you, Madam Chair. 

We made a few judgments in working on the reprogramming. 

One was that the service in which we had had the failings should 

be the primary horizon in which we look to balance properly, for 

that reason and also to be sure that we really understood what 

sums needed to be where in the Weather Service itself. Secondly, 

although the National Weather Service is a very frontline and top 

priority mission for NOAA, we are charged with quite an array of 

missions that are of great importance to the country. I don’t want 

to get into some debate about which of our children we love the 

most. It is by design an integrated ocean and atmosphere agency 

with a range of science service and stewardship responsibilities 

that touch Americans every single day. There is importance in our 

view in all of them. We attempted to make a balanced decision and 

prevent further degradation in mission areas that have suffered, 

frankly, greater budget erosion in recent years than the Weather 

Service itself has. 

Vice-Chairwoman ADAMS. By the reprogramming? 

Dr. SULLIVAN. No, by—— 

Vice-Chairwoman ADAMS. Okay. So again you are taking and reprogramming funds and you are doing it from NWS? 

Dr. SULLIVAN. That is correct. 

Vice-Chairwoman ADAMS. And so I would like to know what, if 

any, other programs could have sustained such reductions? 

Dr. SULLIVAN. That sum—that is a very large sum to take across 

other NOAA program areas. And again our first driver and view 

was that it was right to solve this problem within the Service 

where the misconduct issues had occurred. That late in the year, 

that was not altogether possible to do due to the expenditure rate 

and execution pace of the Weather Service itself and something on 

the order—if I recall the sum correctly—of $4.2 million we did turn 

outside of the Weather Service and take those cuts there. 
49 

Vice-Chairwoman ADAMS. Okay. And so when I asked you earlier 

about the reductions and everything else, and then my colleague 

asked you about the polar systems and stuff, so you are saying you 

believe that you have enough money to do what you need to do, 

even with the reprogramming? And a simple yes or no will—— 

Dr. SULLIVAN. Within the National Weather Service? 

Vice-Chairwoman ADAMS. Within NOAA, yes or no? Because you 

are going to reprogram so do you believe you have enough money? 

Dr. SULLIVAN. We can operate at that level, yes, ma’am. I don’t 

think any of us feel we are living fully up to the missions that the 

American people expect of us. 

Vice-Chairwoman ADAMS. So in saying that, I think that it is 

very concerning because we have allocated and appropriated funding and it is taxpayers’ money. And if you didn’t need it in the first 

place and you can still do your mission, it is kind of concerning, 

okay? 

The other question I have, in the fall of 2011, the Weather Service conducted an internal review of the allegations it received from 

the IG. The preliminary findings of that review led to NOAA placing an NWS employee on administrative leave and prompted a 

NOAA–Commerce senior level review that began in December of 

2011 and did not conclude until May of 2012. During that time, 

NOAA created a new position, the Chief of Resources and Operations Management (CROM) to oversee the enterprise functions 

such as finance, information technology, and administration. This 

position was filled by the then-current NOAA CFO before the conclusion of an investigation into the management of NOAA finances. 

How was NOAA sure that this—that it was not giving a promotion 

to someone who had turned a blind eye towards or that was naively 

oblivious to improper financial activity when it had not concluded 

its report at the time that they made this appointment? 

Dr. SULLIVAN. By the time that appointment was made, Madam 

Chair, we had taken—we judged sufficient witness statements to 

offer review, that the misconduct was substantially confined—totally confined within the Weather Service itself. As I said earlier, 

we had indications from a number of the witnesses and events that 

we reviewed that the Service was not bringing forward up the 

NOAA budget chain the kinds of indications—evidence, data—— 

Vice-Chairwoman ADAMS. But isn’t it the responsibility of the 

CFO’s office for establishing and ensuring the adequacy of financial 

internal controls and this person was there and then was promoted 

during your investigation? Is that not correct? 

Dr. SULLIVAN. That is the timing, yes, ma’am. 

Vice-Chairwoman ADAMS. Thank you. My time is expired. 

I now recognize Mr. Tonko. 

Mr. TONKO. Thank you, Madam Chair. 

Dr. Sullivan, I know that you have taken the situation at NWS 

very seriously. At the same time, I have to mention how outraged 

I am and shocked to learn that with relative ease people were able 

to manipulate accounts in the way that they did. I still don’t feel 

secure in what I am hearing, how that could have happened. You 

know, we talk about the funding shortages for labor that I am told 

are in the order of 10 to 15 million a year. And that is not insignificant but it does not explain the tens of millions of dollars that were 
50 

moved around that were non-labor. In fact, material provided to 

the Committee shows that the NWS was coping with a shortage of 

over 40 million in non-labor funding shortages. You know, at any 

other agency I would think funding shortfalls would lead to dropping some initiatives because there simply wouldn’t be the resources to support them. But I get the impression that NWS did 

not do that and instead tried to keep everything going by moving 

money around. Why didn’t NWS simply seek a reprogramming of 

funds to meet the financial needs or even ask for a supplemental 

appropriation to fully fund what is needed to be done? 

Dr. SULLIVAN. Mr. Tonko, I can’t speak to what the intentions or 

motives or thought processes were of people who didn’t bring such 

matters directly to me and raise them or through our CFO chain 

and raise them in a way that was open for discussion. Again, I 

think as the corporate board matters that we discuss in our investigative report make clear, the processes—budget formulation and 

review processes within the Weather Service itself clearly seem deficient to really grappling with those kinds of questions squarely 

and bringing forward crisp alternatives, risk-based alternatives, 

evidence-based alternatives for management consideration and action. 

Mr. TONKO. Well, when you do your budget request every year, 

that goes to NOAA. Am I correct? 

Dr. SULLIVAN. Each line office makes a budget request—— 

Mr. TONKO. Right. 

Dr. SULLIVAN. —that comes up and is aggregated into the NOAA 

budget, yes, sir. 

Mr. TONKO. Well, that is for the NWS. And then to the Department of Commerce? 

Dr. SULLIVAN. Correct. 

Mr. TONKO. And then finally to OMB? 

Dr. SULLIVAN. Correct. 

Mr. TONKO. Which would then end up with formulating the 

President’s request for Congress to take action. Would there be any 

reason to believe that NWS requests for funds after they have gone 

through all these offices would be inadequate to fully fund all their 

priorities? 

Dr. SULLIVAN. Again, Mr. Tonko, I can’t think of—both in my 

non-profit career and my corporate career and government career, 

I can’t think of a time in any budget formulation process where 

each manager doesn’t feel that the amount of money they really 

need to do the job they want to do the way they want to do it is 

less than is available in the total pot. It is commonplace everywhere. It is certainly commonplace in government. It is the challenge of managers at every level to make the best arguments, show 

the evidence of what they—what can they do, what can they delivery, what are the risks, if budgets don’t conform to the requests 

that they have made, and one final budget allocations are made at 

any of those levels including by the Congress to adapt and adjust 

their operation to conform with that direction. It is always a challenge but it is a common challenge everywhere through government. 
51 

Mr. TONKO. And when it came to the CFO, was there any reason 

to believe that anyone advised him that—or encouraged him that 

they should do this fungible thing and move the dollars around? 

Dr. SULLIVAN. The Weather Service CFO? Based on the materials we garnered in witness statements, I cannot recall—which 

would have been hearsay or speculation as to his motives in any 

case—but I don’t recall any of our witnesses opining on their views 

of his motives, and I have no personal contact with that individual 

which he made any statements to me, so I couldn’t speculate to 

that. 

Mr. TONKO. Can we imagine any motivation to put one’s career 

at risk or reputation or integrity on the line simply to balance an 

agency’s budget? What would possess a CFO to take such a bold 

stand? 

Dr. SULLIVAN. It defies my imagination, Mr. Tonko, and further 

understanding the critical importance of trust to the mission and 

performance and effectiveness of the National Weather Service 

overall, it defies my imagination that someone would do something 

that might even faintly go outside of the law for any reason. 

Mr. TONKO. Well, the failure at the Department and then the ignoring of the whistleblowers by the IG and the lack of quick and 

ready response by the IG are all discouraging. And I look forward 

to additional information that will be exchanged with the Committee. 

I yield back, Madam Chair. 

Vice-Chairwoman ADAMS. Thank you. And I know that the Committee is looking forward to some information also I think that you 

have been asked—your agency has been asked for a dozen or so 

materials requested months ago, including the CFO counsel and 

some program oversight briefing, so hopefully, you can get that provided to the Committee as soon as possible. 

Dr. SULLIVAN. We are working on that, Ms.—Madam Chair. 

Vice-Chairwoman ADAMS. Hopefully, it will be done fairly quickly. 

Dr. SULLIVAN. That is my hope as well, ma’am. 

Vice-Chairwoman ADAMS. I would like to thank the panel for 

their valuable testimony. The witnesses are excused and we will 

move to our second panel. 

And Dr. Sullivan, if you could ask them to please get it to us before we come back next month would be awesome. 

Dr. SULLIVAN. I will pass that request—— 

Vice-Chairwoman ADAMS. Thank you. 

Dr. SULLIVAN. —and add my urgings. Thank you very much. 

Vice-Chairwoman ADAMS. Okay. We will get started with our second panel. The first witness on our second panel is Dr. William 

Gail, the Chief Technology Officer of the Global Weather Corporation who serves on the Committee on the Assessment of the National Weather Service’s Modernization Program at the National 

Research Council of the National Academies. The final witness on 

our second panel is Mr. Richard Hirn, General Counsel and Legislative Director, National Weather Service’s Employees Organization. 

As our witnesses should know, spoken testimony is limited to 

five minutes each, after which the Members of the Committee will 
52 

have five minutes each to ask questions. Your written testimony 

will be included in the record of the hearing. It is the practice of 

the Subcommittee on Investigations and Oversight to receive testimony under oath. Do any of you have any objections to taking an 

oath? 

Mr. HIRN. No. 

Dr. GAIL. No. 

Vice-Chairwoman ADAMS. Let the record reflect that all witnesses were willing to take an oath. 

You may also be represented by counsel. Do any of you have 

counsel here with you today? 

Mr. HIRN. No. 

Dr. GAIL. No. 

Vice-Chairwoman ADAMS. Let the record reflect that none of the 

witnesses have counsel. 

If you would now please stand and raise your right hand. 

Do you solemnly swear or affirm to tell the truth, the whole 

truth, and nothing but the truth, so help you God? 

Ms. HIRN. Yes. 

Dr. GAIL. I do. 

Vice-Chairwoman ADAMS. Let the record reflect that all witnesses participating have taken the oath. 

I now recognize our first witness, Dr. Gail, to present his testimony. 

TESTIMONY OF DR. WILLIAM B. GAIL, 

CHIEF TECHNOLOGY OFFICER, 

GLOBAL WEATHER CORPORATION, COMMITTEE ON THE 

ASSESSMENT OF THE NATIONAL WEATHER SERVICE’S 

MODERNIZATION PROGRAM, NATIONAL RESEARCH COUNCIL 

OF THE NATIONAL ACADEMIES 

Dr. GAIL. Madam Chair, Committee Members and colleagues, 

thank you for inviting me to talk to you today. My name is Bill 

Gail. I am cofounder and Chief Technology Officer of Global Weather Corporation, a provider of precision weather forecasts to businesses within the energy, media, transportation, and consumer sectors. We are a successful startup in today’s economy because quality weather information is increasingly needed by businesses to 

serve customers and improve operations. 

I am speaking to you today in my role as a Member of the Committee that produced the report ‘‘Weather Services for the Nation: 

Becoming Second to None,’’ issued by the National Research Council of the National Academy of Sciences. 

The Weather Service modernization of the 1990s produced major 

improvements to our Nation’s weather observing systems and to 

the Weather Service structure. It was primarily a response to an 

internal lack of modernization over several decades. The Committee felt the Weather Service successfully learned most lessons 

from the modernization and has since continued to modernize. 

Today’s challenges are no less important but they are largely external challenges reflecting the ever-evolving user needs and technology context of our society. The first of these challenges is keeping pace with advances in science and technology that are taking 

place around the Weather Service. The second challenge is meeting 
53 

society’s expanding needs for better weather information. The third 

challenge is effectively partnering with and supporting the larger 

enterprise to achieve the greatest public benefit. Meeting these key 

challenges will require the Weather Service to evolve its role and 

how it operates. The goal is for it to become more agile and effective. Our report presents three main recommendations for accomplishing this. 

Our first recommendation is that the Weather Service should 

refocus on its core capabilities. These include creating foundational 

data sets, performing essential functions such as forecasts and 

warnings, and conducting operationally related research. All are 

needed for the Weather Service to perform its central role of protecting lives and property and for it to support the enterprise as 

a provider of additional services. In executing this recommendation, the Weather Service will need to prioritize those things only 

it can do and avoid replicating capabilities where there are viable 

alternatives. 

Our second recommendation is to update Weather Service function and structure. The current Weather Service structure reflects 

needed functions of the 1990s. Technology has changed much of the 

rationale for the present Weather Service organizational structure. 

The committee was aware that Congress has requested a separate 

external review of Weather Service function and structure, so we 

chose to limit our detailed recommendations in this area but noted 

that any such study requires significant technical input. 

Our third recommendation addressed the need to better leverage 

the larger enterprise providing weather services and systems. The 

relationship between the Weather Service and the rest of the enterprise has improved considerably since the modernization with 

praise deserved by all parties. Improved leveraging of the enterprise enhances the Weather Service’s ability to serve the Nation. 

This is especially important at a time when the Weather Service 

seeks to enhance its services subject to constrained resources. 

Better weather information can save both lives and be a growth 

engine for the economy. A recent study showed the variability in 

U.S. economic output due to weather-related supply and demand 

inefficiencies is more than three percent of GDP. In some States, 

it is over ten percent. A significant portion of this can be recovered 

as economic growth through improved weather information. I 

would like to provide two examples from my own company’s experience that illustrate the importance to our Nation of both the 

Weather Service and the Committee’s recommendations. 

The Omaha World Herald News Group, owned by Berkshire 

Hathaway, has recently acquired nearly 100 small- and mid-sized 

newspapers. Their vision is that newspaper companies are not 

dying, but rather the best source of critical local information which 

will be delivered increasingly over web and mobile. Accurate 

weather forecasts are often the most important information they 

provide to these smaller communities. 

Xcel Energy is the off-taker utility for ten percent of America’s 

wind farm capacity. Starting in 2009, Xcel privately funded research and development focused on improving the accuracy of wind 

forecasts. Operational use of this system saved $7.9 million for Xcel 

ratepayers in 2011 alone. 
54 

In both examples, commercial weather companies are helping to 

implement the vision but Weather Service foundational information 

is essential to making it possible. 

In summary, meeting today’s challenges will require changes at 

the Weather Service over as much as a decade. Our recommendations will help make the Weather Service more agile and effective. 

In a constrained resource environment, this approach makes possible benefits to the Nation beyond what the Weather Service budget alone allows. 

Thank you very much. 

[The prepared statement of Dr. Gail follows:] 
55 

Weather Services for the Nation: Becoming Second to None 

Statement of 

William B. Gail, Ph.D. 

ChiefTechnoJogy Officer, Global Weather Corporation 

and 

Member, Committee on the Assessment of the 

National Weather Service's Modernization Program 

National Research Council / National Academy of Sciences 

Congressmen, colleagues: Thank you for inviting me to talk to you today. My name is Bill Gail. 

I am co-founder and Chief Technology Officer of Global Weather Corporation, a provider of 

precision weather forecasts to businesses within the energy, media, transportation, and consumer 

sectors. We are a successful startup in today's economy because quality weather information is 

increasingly needed by business to serve customers and improve operations. My academic 

training is in physics and electrical engineering and I have two decades of experience in the 

fields of meteorology satellites, weather services, and location-aware software. 

I'm speaking to you today in my role as a member of the Committee that produced the report 

"Weather Services for the Nation: Becoming Second to None," issued by the National Research 

Council and the National Academy of Sciences. This report, released in August of2012, was the 

second report of a two-part assessment of the National Weather Service's Modernization and 

Associated Restructuring. In the first report, the Committee concluded that the Modernization 

and Associated Restructuring was a success and worth the investment. One of the most striking 

results of the Modernization has been the improvement in the probability of detecting and issuing 

warnings for severe weather events. For example, the probability of detection for flash floods 
56 

increased from about 40 percent to about 90 percent over the course of the Modernization. The 

second report presents advice for the National Weather Service (NWS) on how best to plan, 

deploy, and oversee future improvements based on lessons from the past. 

TODAY'S KEY CHALLENGES 

The Modernization of the 1990' s produced major improvements to our nation's weather 

observing systems and to the NWS structure. It was primarily the response to an internal failure 

to properly modernize over several decades. The Committee felt that the NWS successfully 

internalized most lessons from the Modernization, and has since continued to modernize. Yet 

today the challenges they face are no less important than those of the Modernization era. Rather 

than internal failures, today's challenges are largely external, reflecting the ever-evolving user 

needs and technology context of our society. These challenges include: 

• Keeping Pace. The pace of scientific and technological advancement in the atmospheric 

and hydrological sciences continues to accelerate. As an outgrowth of public and privatesector investment, technology advancements are exceeding the capacity of the NWS to 

optimally utilize these technological achievements. Furthermore, enormous amounts of 

data generated by new surface networks, radars, satellites, and numerical models need to 

be rapidly distilled into actionable information to create and communicate effective 

public forecasts and warnings. The skills required to comprehend, manage, and optimize 

this decision-making process go beyond traditional meteorological and hydrological 

curricula. Hence, the NWS workforce skill set will need to evolve appropriately. 

2 
57 

• Meeting Expanding and Evolving User Needs. Increasingly, the United States is an 

information-centric society. Meteorological and hydrological information in particular is 

central to societal security and welfare. Unlike some other industries, weather is largely 

an information-based enterprise. The public expects continuous improvement in public 

safety and property protection related to severe weather. 

• Partnering with an Increasingly Capable Enterprisel

. At the time of the Modernization, 

delivery of weather information was largely synonymous with the NWS, the broadcasting 

sector, and the private-sector suppliers of weather data and services that supported the 

broadcasting sector. Outside of this, the weather, water, and climate enterprise had 

limited capacity. Today, the enterprise has grown considerably, and now the NWS has 

many important partners. All of these entities rely on core NWS infrastructure and 

capabilities to provide customized services. Together this combination of the NWS and 

third parties serves the nation better than the NWS could on its own. 

These challenges are made more difficult by the external context, two areas of which are of 

particular importance: 

• Budget resources are uncertain and will likely be constrained for the next decade. 

• Operational performance standards against which NWS is measured, including those set 

by international weather service counterparts and private-sector entities, are increasingly 

high. 

1 The "enterprise" inclndes all entities in the public, private, non-profit, research, and academic sectors that provide 

information, services, and infrastructure in the areas of weather, water, and climate. For the purposes of this report, 

"enterprise" is often used as shorthand to refer to those enterprise elements outside NOAA that it can draw on in its 

mission. The nOD-NOAA portion of the enterprise is now of equal or greater economic size compared to the NOAA 

portion. 

3 
58 

Additional important contextual issues include: the transformative pace of technological change; 

expansion of the number and type of observational data; continued concentration of 

infrastructure investment and population growth in vulnerable areas; the possibility of changing 

weather patterns arising from climate change; and ongoing evolution of international dimensions. 

RESPONDING TO THE CHALLENGES 

Meeting today's key challenges will require NWS to evolve its role and how it operates. The 

goal is for it to become more agile and effective. This report presents three main 

recommendations for accomplishing this: Prioritize Core Capabilities, Evaluate Function and 

Structure, and'Leverage the Entire Enterprise. 

Prioritize Core Capabilities 

The NWS needs to prioritize those core capabilities that only the NWS can provide so as to 

deliver the products and services upon which the public and the entire weather, water, and 

climate enterprise depend. These core capabilities include creating foundational datasets, 

performing essential functions such as issuing forecasts, watches, and warnings, and conducting 

operationally-related research. 

Recommendation: The National Weather Service (NWS) should: 

L Evaluate all aspects of its work that contribute to its foundational datasets, with the 

explicit goal of ensuring that those foundational datasets are of the highest quality 

and that improvements are driven by user needs and scientific advances. As part of 

4 
59 

this initial and ongoing evaluation effort, clear quality and performance metrics 

should be established. Such metrics would address the technical components of 

NWS operations, as well as the efficiency and effectiveness of the flow of weather 

information to end users. 

2. Ensure that a similarly high priority is given to: (a) product generation and 

dissemination; (b) the brokering and provision of da.ta services, and (c) development 

and enhancement of analysis tools for maintaining a common operating picture 

(COP). 

3. Engage the entire enterprise to develop and implement a national strategy for a 

systematic approach to research-to-operations and operations-to-research. 

In support of this recommendation, the NWS should: 

• Continue effective technology infusion programs, 

• Improve numerical weather prediction systems, 

• Develop and advance observational data metrics, 

• Lead a community effort to provide probabilistic forecasts, 

Develop hydrologic prediction metrics, and 

• Maintain an ongoing capability for development and testing of its incremental technical 

upgrades. 

Evaluate Function and Structure 

The current structure of the NWS primarily reflects the functions of the weather, water, and 

climate enterprise in the 1990s.Technology, including improvements in communications and 

5 
60 

computer forecast models, has changed much of the rationale for the present organizational 

structure of the NWS. In view of the directions outlined in NWS's Weather-Ready Nation 

Roadmap for expanding the role of forecasters and other NWS staff, it would be prudent to 

evaluate the NWS's organizational and functional structure. 

Recommendation: In light of evolving technology, and because the work of the National 

Weather Service (NWS) has major science and technology components, the NWS should 

evaluate its function and structure, seeking areas for improvement. Any examination of 

potential changes in the function and organizational structure of the NWS requires 

significant technical input and expertise, and should include metrics to evaluate the process 

of structural evolution. Such an examination would include individual NWS field offices, 

regional and national headquarters and management, as well as the National Centers and 

the weather-related parts of the National Oceanic and Atmospheric Administration 

(NOAA) such as the National Environmental Satellite, Data, and Information Service 

(NESDIS) and the Office of Oceanic and Atmospheric Research (OAR). 

In support of this recommendation, the NWS should: 

• Broaden the scope of its post-event evaluations, 

• Expand its vision ofteam structures and functions within and between forecast offices, 

• Develop performance metrics-based approaches to assessing staff skill sets, 

• Retrain service-hydrologist staff to instill an evolutionary culture. 

Leverage the Entire Enterprise 

6 
61 

The relationship between NWS and the rest of the enterprise has improved considerably since the 

Modernization, with praise deserved by all parties. The Committee views further improvement of 

NWS-enterprise interaction as a way to enhance the NWS's capability to accomplish its mission 

of serving the public. This is especially important when it is seeking to enhance its service at a 

time when the nation faces constrained resources. Leveraging the entire enterprise provides one 

means to further NWS's mission of serving the public. 

Recommendation: The National Weather Service (NWS) should broaden collaboration and 

cooperation with other parts of the weather, water, and climate enterprise. The greatest 

national good is achieved when all parts of the enterprise function optimally to serve the 

public and businesses. This process starts with the quality of core NWS capabilities but is 

realized through the effectiveness of NWS-enterprise relationships. A well-formulated 

enterprise strategy will also return direct benefit from the enterprise to the NWS, 

especially in areas of shared research, technology development, observational data sources, 

and improved end-user access to NWS-generated information. 

In support ofthis recommendation, the NWS should: 

• Seek to better understand the functioning of the secondary value-chain (defined as 

enterprise partners that provide value-added services beyond dissemination ofNWS 

weather and warnings), and 

• Strengthen its systems engineering and procurement processes for major systems. 

EXAMPLES FROM THE WEATHER ENTERPRISE 

7 
62 

Better weather information can both save lives and be a growth engine for the economy. A recent 

study showed that variability in U.S. economic output due to weather-related supply and demand 

inefficiencies is more than 3 percent of GDP. In some states, it is over 10 percent. A significant 

portion of this can be recovered as economic growth through improved weather information. I 

would like to provide two examples from my own company's experience reflecting innovative 

approaches to business growth through better use of weather information. These illustrate the 

importance to our nation of both the NWS and the Committee's recommendations. 

The Omaha World-Herald news group, owned by Berkshire Hathaway, has recently acquired 

nearly 100 small- and mid-sized newspapers. Their vision is that newspaper companies are not 

dying, but rather the best source of critical local information, which will be delivered by these 

companies increasingly over web and mobile. Accurate weather forecasts are often the most 

important information they provide to smaller communities. The move to web and mobile allows 

them to customize forecasts for each reader, creating new ways for businesses to become more 

efficient and individuals more productive. Commercial weather companies are helping them 

implement the vision, but NWS foundational information is essential to making it possible. 

Xcel Energy is the off-taker utility for 10 percent of America's wind farm capacity. Starting in 

2009, Xcel privately-funded R&D at the National Center for Atmospheric Research, focused on 

improving the accuracy of wind forecasts. The resulting forecast system has since been 

successfully transitioned to a commercial company. Its operational use saved $7.9 million for 

Xcel ratepayers in 2011 alone, but it depends critically on data from NWS. 

8 
63 

THE OUTCOME: A NATIONAL WEATHER SERVICE SECOND TO NONE 

Meeting today's challenges will require changes at the NWS over as much as a decade. 

Fortunately, the Modernization established a solid foundation as a starting point. The 

recommendations presented in our report will help the NWS address these challenges, making it 

more agile and effective. It will have the highest quality core capabilities among national 

weather services. It will have a more agiJe organizational structure and workforce that will allow 

it to directly or indirectly reach more end users, save more lives, and help more businesses. And 

it will have leveraged these capabilities through the broader enterprise. In a constrained resource 

environment, this approach makes possible benefits to the nation beyond what the NWS budget 

alone allows. 

9 
64 

Vice-Chairwoman ADAMS. Thank you. 

I now recognize our second witness for his testimony on the 

panel, Mr. Hirn, for five minutes. 

TESTIMONY OF MR. RICHARD HIRN, 

GENERAL COUNSEL AND LEGISLATIVE DIRECTOR, 

NATIONAL WEATHER SERVICE EMPLOYEES ORGANIZATION 

Mr. HIRN. Thank you, Madam Chairman, Ranking Member 

Tonko. Thank you for inviting me to present the views of the National Weather Service Employees Organization and the 3,700 

Weather Service employees we represent nationwide. 

The Weather Service budget shortfall should not have come as a 

surprise to the leadership of NOAA as it did earlier this year when 

an emergency reprogramming request was submitted. Although the 

amount and cause of the structural shortfall is an open question, 

its existence was well documented and public knowledge. In January 2005, the Director of the Weather Service delivered a 

PowerPoint presentation to the American Meteorological Society 

that showed a cumulative funding gap that began in fiscal year 

2001 and that had grown to $37 million. In February 2005, the 

Weather Service Budget Director also told the Washington Post 

that the Agency had a cumulative shortfall of 37 million that 

stemmed from chronic underfunding. 

In April 2006, DOC had to submit a reprogramming request to 

add 13 million to the local warnings and forecast baseline to ‘‘sustain operations and avoid a nationwide hiring freeze.’’ By 2008, the 

Weather Service had increased its lapsed labor rate to nearly five 

percent in order to mitigate the shortfall. In other words, the 

Weather Service intentionally delayed filling vacancies so that five 

percent of all Weather Service positions were vacant at any given 

time. 

On December 3, 2008, I and other NWSEO representatives met 

with a NOAA transition team for the incoming administration. 

Both team members with whom we met would later be appointed 

to senior leadership positions in NOAA. We presented them with 

some of the documents on the shortfall that we had been previously 

provided by Weather Service, including a spreadsheet showing that 

the Weather Service anticipated an annual shortfall of $30 million 

through fiscal year 2013. Thus, the incoming administration was 

clearly told of the substantial financial problem left them by the 

outgoing administration. 

In a recent appearance before the Commerce, Justice, and 

Science Appropriations Subcommittee, the Under Secretary testified that the Weather Service is not operating with insufficient 

funds. This assertion is refuted by nearly a decade’s worth of evidence to the contrary. 

Now, over the years, the Weather Service has erroneously attributed the structural shortfall to growing labor costs, which they say 

has outstripped increases in agency appropriations. But between 

2002 and 2012, the salary rates of most Weather Service employees 

rose 27 percent. However, during the same ten-year period, the 

amount appropriated for the local warnings and forecast base line 

item, the line item for which 90 percent of all employees’ salaries 

are paid, rose by 31 percent and overall funding for NWS oper-
65 

ations rose by 34 percent. In other words, the general salary rates 

which have not grown faster than funding for NWS operations and 

employment levels of the Weather Service have been essentially 

flat since 2005 authorized at slightly over 4,600 employees. 

Now, also in her recent testimony to the House Appropriations 

Committee, the Under Secretary stated that the Weather Service 

needs to evolve into ‘‘the most efficient and cost-effective manner 

in face of changing budgets.’’ This year, the Administration proposed to eliminate 122 personnel at local forecast offices as a first 

step, a proposal that was soundly rejected in a bipartisan fashion 

by both the House and the Senate Appropriations Committee and 

by the full House, all of whom restored funding for these critical 

positions. Staffing reductions are simply not an option for mitigating the Weather Service structural shortfall. The 122 forecast 

offices operate 24/7, and most of the time, there are just two forecasters on duty who have responsibility for protecting the lives of 

nearly three million people on average. 

Last year’s National Research Council’s retrospective assessment 

of the Weather Service modernization recognized that forecast offices are staffed only for fair weather and that staffing is at preciously low levels during severe weather. Staffing levels are continuing to remain at dangerously low levels because the Weather 

Service and the NOAA Workforce Management Office now delay 

filling vacant operational and emergency essential positions for six 

months or more leaving offices critically understaffed. 

Finally, it is important to note that although the number of federal employees have grown over the past decade, employment levels at the Weather Service have remained stagnant. In fact, there 

are approximately 15 percent fewer Weather Service employees 

and only half as many offices as there was 20 years ago. 

Thank you. 

[The prepared statement of Mr. Hirn follows:] 
66 

TESTIMONY OF 

RICHARD J. IDRN 

GENERAL COUNSEL AND LEGISLATIVE DIRECTOR 

NATIONAL WEATHER SERVICE EMPLOYEES ORGANIZATION 

before the 

COMMITTEE ON SCIENCE, SPACE AND TECHNOLOGY 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT 

U.S. HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2012 

Chainnan Broun, Ranking Member Tonko, and Members of the Subcommittee, 

thank you for inviting me to present the views of the National Weather Service 

Employees Organization and the 3,700 Weather Service employees it represents. Our 

members include the forecasters, hydrologists, technicians and other scientific and 

support personnel employed at 122 Forecast Offices, 13 River Forecast Centers, the 

various NWS national centers such as the Hurricane Prediction Center in Miami, the 

Severe Stonns Prediction Center in Nonnan, Oklahoma, and the Climate Prediction 

Center in Suitland, Maryland, and at NWS headquarters in Silver Spring, Maryland. 

The existence of a "structural shortfall" in the NWS budget is well documented. 

For well over ten years, NWSEO's President and other officers have been invited 

to participate in most of the meetings of the NWS "Corporate Board" - the agency's 

senior leadership group comprised of the Director, Deputy Director, Chief Financial 

Officer, NWS Regional Directors and Division Chiefs. During these meetings, NWSEO 

has had first-hand access to and participated in discussions about the agency's budget 

development and execution during the past decade. We have also worked with and 

testified before the House Commerce, Justice and Science Appropriations Subcommittee 

throughout the past decade on the Weather Service budget. As I will explain, the NWS 

budget shortfall should not have corne as a surprise to the leadership of NOAA as it did 

earlier this year, when an emergency reprogramming request was submitted. Although the 

amount and cause of the NWS' structural shortfall is an open question, its existence was 

common and public knowledge. 

Materials provided to NWSEO by the NWS in September 2004 reveal that the 

agency anticipated an operating shortfall of $36.4M in FY 05. Among the mitigation 

efforts that the NWS made that year was to increase "lapse labor" - which is an 

intentional delay in backfilling newly vacated positions. The structural shortfall was no 

agency secret. In a January 2005 briefing to the American Meteorological Society, NWS 
67 

Director David Johnson delivered a PowerPoint presentation that showed a cumulative 

funding gap beginning in FYOI that had grown to a $37.IM shortfall. This presentation 

predicted a growing shortfall through FYI O. An article in the January 25,2005 edition of 

the NWS Focus, a newsletter from the NWS Communication Office, discussed the 

$37.1M shortfall and the ad hoc ways the NWS was attempting to mitigate it. 

In January, 2005 the NWS submitted a one page briefing paper to the NOAA 

Executive Council titled "Structural Deficit of NOAA's National Weather Service." In 

this paper, the NWS wrote that it "has absorbed 19.0M of$56.1M structural deficit" and 

that a deficit of$37.IM remains in FY 2005." In commenting on this briefing paper, the 

Director of the NWS's National Centers for Environmental Prediction (which includes 

the National Hurricane Center and the Severe Storms Prediction Center) wrote to the 

NWS's Corporate Board that: 

One item that does not come through loud and clear is that the 

increased lapse [labor] rate are [sic] now at record levels which is having the 

effect of freezing our workforce numbers. I cannot help but believe this is 

having an impact on operations, transition issues, etc that we are not 

showing. 

In February, 2005 a source within NWS management anonymously provided 

NWSEO with an internal management analysis that concluded that under-funding of the 

NWS "will have a critical impact on its vital life-saving mission" and that "these impacts 

will be felt throughout the nation by deterioration in NWS performance measures." The 

NWS Budget Director confirmed in the Washington Post that this memo was authentic, 

that "many of the problems stem from chronic under-funding" and that the agency had a 

cumulative shortfall of $3 7M. NWSEO was told later that month that even if the 

President's increased budget request for the NWS was approved that year, "our budget 

folks estimate" a structural deficit "at $40mil." Budget materials provided to NWSEO in 

February 2005 also showed that the estimated shortfall for FY07 was $65M. 

In a November 9, 2005 analysis of the Conference Mark for FY 06, the NWS wrote 

that the mark: 

... perpetuates a cumulative deficit of $40M+ requiring extensive cutbacks 

in operating expenses, and planned program improvements, and will require 

at a minimum an organization-wide personnel hiring-freeze and will 

potentially require adverse personnel actions including directed 

2 
68 

reassignments and RIF in specific areas; all of which add risk to continuity 

of current weather and water warning and forecast services ... 

The conference mark provides no correction to the NWS structural 

deficit. The NWS is running out of mitigation options in the non-labor area 

and will need to shift its mitigation strategy to labor ... 

Accordingly, in early 2006, the NWS sought Voluntary Early Retirement Authority for the 

Office of Personnel Management, with the aim of reducing its workforce by an estimated 

50 employees. The NWS Director told agency employees that "VERA is one of many 

actions we plan in FY06 to help mitigate the current budget shortfall." The NWS 

subsequently withdrew its request for VERA authority due to political pressure. Instead, in 

April, 2006 the Department of Commerce submitted a reprogramming request of $12. 7M 

to Local Warnings and Forecast base "to sustain operations and avoid a nation-wide hiring 

freeze." 

In October 2006, the NWS developed an "integrated priority listing" for use in 

development of the agency's budget request for FY09. The number one priority listed was 

an increase of$30M in FY 09 and in each of the next four successive fiscal years to 

"restore the NWS sustained shortfall." 

By FY 2008, the NWS had increased its "lapsed labor" rate from 4% to nearly 5% 

in order to mitigate the shortfall. In other words, the NWS delayed filling all vacancies so 

that 5% of all NWS positions were vacant at any given time. This reduced the actual 

number ofNWS employees on board from the authorized level of 4,629 to 4,400. 

On December 3,2008, I and other NWSEO representatives met with the newly 

appointed NOAA Transition Team for the incoming Administration. Both team members 

would later be appointed to senior leadership positions in NOAA. We discussed a number 

of outstanding issues with the Transition Tearn, but the first issue addressed as our number 

one priority was the NWS structural shortfall. We provided them with some of the 

documents on the shortfall we had been previously provided by the NWS, including a 

spreadsheet showing that the NWS anticipated an annual shortfall of $30M through FY 13, 

and a document that says that $15M was needed in FY09 to fully fund the cost of the NWS 

workforce. I handwrote on that document "has not been included in FY09 request. Should 

be added to FYIO request." Thus, the incoming Administration was clearly told of a 

substantial financial problem left them by the outgoing Administration. 

3 
69 

Regrettably, the agency's FYI0 and FY 11 budget requests contained only a 2% 

adjustment to base, barely sufficient to cover new inflationary increases. The NWS's CFO 

presented a PowerPoint presentation to the NWS Corporate Board dated September 22, 

2010 which began "NWS' s Growing Budget Gap Could Threaten Operations - budget 

gaps have outpaced budget growth by an order of magnitude." 

A November 19, 2010 analysis prepared by the NWS CFO projected that the 

anticipated shortfall for FYI1 had grown to $61.86M . 

In her recent appearance before the Commerce, Justice and Science Appropriations 

Subcommittee, the Under Secretary testified that the NWS is not operating with 

insufficient funds. This assertion is refuted by nearly a decade's worth of evidence to the 

contrary. 

The structural shortfall cannot be attributed primarily to labor costs. 

The NWS and NOAA have unfairly attributed the structural shortfall to growing 

labor costs, which have ostensibly outstripped increases in agency appropriations. For 

example, in a November 5, 2010 memo the NWS CFO wrote: 

Congress has approved Appropriations Report language preventing 

the NWS from closing field offices or reducing filed office hours of work. 

At the same time, Congress has also under-funded NWS' s labor costs by 

not fully funding yearly pay adjustment, associated benefits, and GS step 

increases. Yearly under-funding without authority to align labor with 

available funding has created a structural shortfall that adds to an increasing 

legacy of unrecoverable debt. In FY 11, OCFO is projecting the NWS 

structural shortfall at $15M. 

This conclusion is questionable. Between 2002 and 2012, the salary of most NWS 

employees rose 26.8%. However, during the same ten year period, the amount 

appropriated for NWS "Local Waruings and Forecast" base - the budget line from which 

the salaries of 90% ofNWS employees are funded - rose by 30.6% (from $483M to 

$63IM) and overall funding for NWS ORF rose by 34% (from $672M to $901M). In 

other words, General Schedule salary rates have not grown faster than funding for NWS 

operations. And employment levels within the NWS have been essentially flat since 2005, 

authorized at slightly over 4,600 employees. 

4 
70 

An "execution outlook" prepared by the NWS for FY 2009, projected a labor 

shortfall of$10M. Even the CFO's memo of November 5,2010, estimates that the FY 11 

shortfall due to labor was estimated to be $15M - far less than what the overall "structural 

shortfall" has been reported over the years. 

In his September 22, 20 I 0 PowerPoint presentation to the NWS Corporate Board, 

the NWS CFO noted that although OMB had approved the full cumulative total of 

$2.64B in agency requests for labor funding during the five years ending 2010, OMB had 

approved only $1.89B of a total of $2.17B in non-labor funding during the same period. 

A "FY 2011 Analysis of Shortfall" prepared by the NWS's CFO on November 19, 

2010 projected a total unmitigated shortfall of $61.86M. However, of that amount, only 

$13.5M was identified as a labor shortfall or ostensibly unfunded Federal pay increases. 

NWS staffing levels are already "efficient and cost-effective" 

and cannot be reduced without further endangering the public. 

In her June 21, 2012 testimony to the House Commerce, Justice and Science 

Appropriations Subcommittee in support of the Administration's reprogramming request, 

the Under Secretary stated that the NWS needs to "evolve" in "the most efficient and 

cost-effective manner" and that it needs to be more "cost-effective in the face of changing 

budgets." This year, the Administration proposed to eliminate 122 personnel at local 

forecast offices as a first step - a proposal that was soundly rejected in a bipartisan 

fashion by both the House and Senate Appropriations Committees, who restored funding 

for these critical positions. 

Not only is the NWS field structure already "efficient and cost-effective," but 

staffing is at precariously dangerous levels. The 122 Forecast Offices operate 2417, and 

most of the time have just two forecasters on duty, who are responsible for issuing 

forecasts and severe weather warnings for an average of nearly three million people. (The 

two forecasters at the Forecast Office in Sterling, Virginia near Dulles Airport have 

responsibility for the welfare of over nine million people who live in DC, Maryland, 

Delaware and Northern Virginia. The two forecasters on duty at the Atlanta Forecast 

Office have responsibility to protect nearly 8 million people in Northern Georgia). 

Essentially, our forecast offices are only staffed for "fair weather." An internal 

NWS management study ofthe April 2011 tornado outbreak in the southeastern United 

States concluded that there was a "significant staffing deficit" at seven forecast offices 

during this high impact event. Last year's National Research Council's Retrospective 

5 
71 

Assessment of the NWS Modernization and Restructuring recognized (at 60-61) that 

staffing at the NWS forecast offices are at a precarious level: 

The quality of the NWS's warning capability corresponds with its 

capacity to muster an ample, fully trained local staff at its WFOs as severe 

weather unfolds. With its current staffing levels, there are always two 

people working on shift, 24 hours a days 7 days a week. Though this works 

fme in fair weather, it can become problematic during severe weather, 

particularly when events develop rapidly under seemingly benign 

conditions. While managers at individual WFOs generally plan ahead to add 

sufficient staff to cover forecasted dangerous weather situations, more 

innocuous weather scenarios that suddenly and unexpectedly "blow up" 

often lead to shortcomings that are directly attributed to having insufficient 

manpower. Several recent Service Assessments (e.g., NWS, 2003, 2009, 

2010) illustrate the critical role that adequately enhanced staffing (or lack 

thereof) plays in the success (or weakness) ofNWS performance during 

major events. Appropriate levels of staffing, beyond normal fair weather 

staffing, during major weather events, are critical for fulfilling the NWS's 

"protection of life" mission. 

Staffmg levels are continuing at dangerous levels because of lapsed labor. NOAA 

workforce management now delays filling vacant operational and "emergency-essential" 

positions for four months or more, leaving offices critically understaffed. 

It is important to note that although the number of Federal employees has grown 

over the past decade, employment levels at the NWS have remained level. In fact, there 

are approximately 15% fewer NWS employees and half as many NWS offices than there 

were 20 years ago. 

Our views on the National Research Council's 

Weather Services for tile Nation: Becoming Second to None 

The National Research Council's recent report recommends that "in light of 

evolving technology" the NWS "evaluate its function and structure." We agree with the 

Council that "a more flexible structure does not need to be viewed as a threat to staff or 

the National Weather Service Employees Organization." In fact, NWSEO has been urging 

the NWS to innovate in light of new technology and service demands. 

6 
72 

Working with management, NWSEO has designed and the parties have recently 

implemented six new pilot projects at NWS headquarters, at the Southern Region 

headquarters, and at Forecast Offices in Tampa, New Orleans, Sterling, Virginia and 

Charleston, West Virginia. The pilot projects are developing and testing new service 

delivery models, such as integrating environmental data from other NOAA agencies into 

NWS products; providing enhanced, face-to-face decision support to state and local 

emergency management personnel; and developing new mesocale forecasting models and 

techniques that may enable the NWS to provide pinpoint, highly localized warnings of 

severe weather outbreaks hours in advance. As part of these pilot projects, the NWS 

created new positions called "Emergency Response Meteorologist." Hurricane Isaac 

provided the fIrst real-time test ofthe value of the new positions. Before and during the 

storm, these new "ER-Mets" were deployed from the new Southern Regional Operations 

Center and the Tampa and New Orleans Forecast Offices to 16 different FEMA, state and 

local Emergency Operations Centers, as well as to the Multi-agency Communications 

Center at the Republican National Convention, to supply face-to-face decision support 

service. An offIcial from the Secret Service Intelligence Division wrote to the NWS that: 

I found it very helpful to have someone on hand from the NWS to 

provide up to date information regarding the hurricane ... It was invaluable 

to have you on the scene, when we all received a tornado warning on our 

Blackberries. You were able to say that we were in fact not in any danger 

because that particular storm was to the north of us. 

These pilot projects build on the success of an aviation weather pilot project 

recently tested at New York, Chicago and Atlanta. By adding three additional forecasters 

at each location (one per shift) who were dedicated to providing additional weather 

support to the FAA, weather-related air traffIc delays were reduced by 50% immediately. 

We have agreed to alter traditional staffing models in order to conduct these pilot 

projects. But if these pilots are successful, the NWS will require more, not fewer, 

forecasters to provide these enhanced services nationwide. 

One of the office realignment options that the Council recommended evaluating 

was to regionalize the preparation of the routine public forecasts. The Council wrote (at 

55) that: 

The most important benefit from the regionalization of the public 

weather forecast tasks is to diminish the chances of the local staff being 

7 
73 

overwhelmed during severe weather outbreaks. The extra time at the local 

offices can be invested in the increasingly important role of communicating 

impact-weather decision support. More time would be available for 

training. 

The Council noted (at 59) that such a restructuring "could open up positions for new 

hiring," presumably at new regional forecast centers. However much NWSEO would 

welcome a lightening of the workload, more training time, and greater employment 

opportunities, we do not believe that regionalization of public forecast preparation is 

practical or would actually mitigate the local workload. 

Under the Council's suggestion, many products, such as marine and aviation 

forecasts, would continue to be produced at the local level. WFO forecasters do not 

forecast specific products, they forecast specific meteorological parameters. This one set 

of forecasted winds is then used by all forecast products, including marine, aviation or 

public forecasts. Therefore, having two entities forecast a parameter such as winds for 

the same area would take twice the work and lead to inconsistent forecasts. In addition, 

these forecast parameters are intertwined. For instance, forecasts of the winds will impact 

forecasts of temperatures or sky cover. 

Furthermore, more than 80 percent of the workload of creating a forecast involves 

the forecaster orienting herself to the weather and developing an awareness of weather 

conditions. The forecaster in the local office will need to do this anyway whether they are 

doing local forecasting or preparing to issue severe weather warnings and advisories. 

Very little time is spent on actually adjusting model output or post editing text products. 

The ability of forecasters to maintain situational awareness and accurately identify and 

predict severe weather can be directly correlated to the significant number of man hours 

that are spent studying observational and remote sensing data, analyzing the synoptic 

weather scenario, and comparing numerical weather prediction models from varied 

sources, which is all a part of preparing the public forecast. Any savings from 

consolidated forecasting would be minimal, and would come at a risk of inconsistent 

forecasts. 

The Council also suggested that regionalized forecasters "would easily be able to 

produce a forecast that is just as accurate as one produced locally." (at 55). But this 

unsupported assumption is contradicted earlier on the same page when the Council 

correctly notes that "[l]ocal knowledge of phenomena, terrain and infrastructure is an 

important factor in forecasting, and needs to be accounted for in any potential 

regionalization of functions." 

8 
74 

Conclusion 

Thank you for inviting the National Weather Service Employees Organization to 

participate in today's hearing. We hope the information we have provided in this 

testimony and previously assists the Subcommittee in ascertaining the true status of the 

NWS 's financial health, and what the agency needs in the future to respond to maximize 

new science and technology and to respond to increasing societal demands for time 

critical weather information. The employees of the National Weather Service appreciate 

the bipartisan support that they have always received from the Members ofthe House 

Science Committee. 

9 
75 

Vice-Chairwoman ADAMS. We thank the panel for their testimony. 

Reminding Members that committee rules limit questioning to 

five minutes, the Chair will at this point open the round of questions. The Chair recognizes herself for five minutes. 

Mr. Hirn, the term ‘‘structural deficit’’ has been used in different 

ways depending on the perspective of the speaker. Can you please 

explain what a structural deficit is from the perspective of the 

union? Is this deficit a result of insufficient planning, for yearly 

wage increases, for salary? 

Mr. HIRN. We don’t think it can be primarily attributed to insufficient salary planning because, as I have noted, the salary levels 

have gone—the salary rate—general schedule salary rates have 

gone up certainly no more than the Weather Service appropriations. And when we say structural deficit, we are just using the 

terminology that the Weather Service management through this 

previous administration and several Weather Service Directors and 

CFOs previous have used, laid out in all their charts and spreadsheets, which we have provided the Committee, listing what programs and what essential operational things are not being funded, 

what maintenance is being delayed, what procurements are not 

taking place. It has been pretty much laid out by the Weather 

Service. This is not our terminology. And those details have been 

provided to the Committee in hard copy. 

Vice-Chairwoman ADAMS. Thank you. 

Mr. Gail, will the Weather Service continue to be second to none 

if it does not continue to support investments in science and technology? 

Dr. GAIL. It is essential that these investments are supported, 

absolutely. 

Vice-Chairwoman ADAMS. And to both of you, a large portion of 

the Weather Service’s budget is devoted to labor. Mr. Hirn’s testimony indicates that forecasting centers are already running on 

skeleton crews. The Academy’s recent reports say that as scientific 

and technological progress continues, critical components within 

NWS are lagging behind the state of the science. Understanding 

current budget realities, what advice would you provide Congress 

on how to address this predicament? Mr. Hirn and then Mr. Gail— 

Dr. Gail. 

Mr. HIRN. Well, one of the—well, what we have worked—we supported what Congress did last year and that is called for an outside 

study of the Weather Service structure, its operations, and its 

needs for the future. We have worked with the National Research 

Council this year and the previous year on their study. We think 

that it has to be a nationwide dialogue to first establish what job 

the Weather Service is going to be doing, what new capabilities it 

can engage in in the future before a long-range plan can be set, but 

at a very minimum, the structural deficit may be in the realm of 

$30 million, there needs to be an adjustment in the fiscal year 2014 

budget, if not in the 2013 budget. 

Vice-Chairwoman ADAMS. Dr. Gail? 

Dr. GAIL. Yeah, we agreed that there are efficiencies that can be 

gained within the Weather Service in terms of better utilization of 

technology. Technology is evolving rapidly, and those can be used 
76 

to improve the quality of the forecast. At the same time, we said 

that the human element of the forecast is essential, and as technology evolves, humans can play different roles in performing those 

forecasts, focusing on those areas where they contribute most, focusing on use of automation in areas where automation can be 

used best. 

In addition, we said that the Weather Service has the ability 

working with the broader enterprise to create leverage in terms of 

value that is generated for the Nation using the private sector, 

using other entities that work with the Weather Service closely and 

can perform roles in providing benefits to both businesses and the 

public in terms of enhancing what the core weather service capabilities are. But it does come back to making sure that those are 

protected. 

Vice-Chairwoman ADAMS. Thank you. 

And Mr. Hirn, what was the reaction from NWS, NOAA, and/or 

DOC leadership to your efforts to inform them about the structural 

deficit and to your recommendations on how best to address it? 

Mr. HIRN. I can only say that it was ignored. Had the incoming 

administration relied on our advice or had at least taken us seriously with the information we provided them, this whole reprogramming problem—unauthorized reprogramming problem that 

we have had over the past two years would never have happened 

because the problem would have been fixed two or three years ago 

had they gone back and—the new administration in their budget 

request to Congress had fixed the structural shortfall. And we have 

every confidence that Congress would have approved it because 

we—anything that the Weather Service has asked for basically has 

been approved by—has gotten bipartisan support from Congress. 

Vice-Chairwoman ADAMS. Thank you. I yield back my—the rest 

of my time. 

And I now recognize Mr. Tonko. 

Mr. TONKO. Thank you, Madam Chair. 

Some people may think the weather can just be grabbed off the 

television or forecasts are churned out by computers. So Mr. Hirn, 

can you clarify for the Members of the Committee the role of forecasters and the work over at NWS? 

Mr. HIRN. Wow, that is a big job but I will just give—as capsule 

job—as capsule summary as I can say. Basically, twice a day, based 

on weather data gathered by weather balloons, satellites, observation centers, there are computer models—a number of computer 

models with what is called synoptic forecasts that are produced 

here in Maryland at the National Center for Environmental Prediction, goes out to the forecast offices—122 forecast offices nationwide. Those modeled forecasts are pretty large scope and need to 

be tweaked, changed, adapted to the local communities based on 

the knowledge and expertise of the local forecasters who put out 

several times a day marine, aviation, public, all kinds of forecasts 

that we rely upon directly to the public, to the press, to the private 

companies rely upon. 

And as they are doing that, as they are watching the weather, 

adopting these models, tailoring them to the local needs, they are 

also keeping the eye on the weather for developing severe weather. 

And then when severe weather develops, while they are doing 
77 

these forecasts, they also—and they often have to call in extra staff 

because no two people can do this on their own—get on the radar, 

get the reports and issue the warnings and watches of tornadoes, 

severe thunderstorms, blizzards, flash flooding that we see in the 

media. So they are doing two things at one time. They are adopting 

the model forecast for—to specify for the local communities and 

they are also keeping an eye on the weather and then teaming up 

to—when necessary to issue warnings of severe weather. 

Mr. TONKO. Thank you. The National Academies highlight the 

role of technology in empowering the NWS to do even better work 

than they do now. So Dr. Gail, do you see embracing new technology as a labor-saving exercise or is it that technology and labor 

levels don’t necessarily connect in terms of a savings or is it just 

getting even better work out of the process? Is there a labor impact 

from the investment of technology in your mind? 

Dr. GAIL. Well, the human work that is done now is a combination of highly skilled things and more routine things. And as with 

any industry, automation can step in and support on the more routine aspects of things that are done and free up that human labor 

to be applied where it is most needed in the judgment area, in the 

areas where you are trying to discern things that may not have 

been seen before, a particular set of conditions that seem somewhat 

unique. And yet the ability to create a forecast based on that 

knowledge is still critical to public safety. And so better applying 

the human judgment, the human capabilities where they can do 

the most good I think is where technology will be able to help most. 

Mr. TONKO. So it is freeing up some of the labor to do the more 

judgmental or interpretive outcomes? 

Dr. GAIL. Well, I think one of the things that is important to realize is that this is not a static situation. The demand for these 

kinds of things is increasing rapidly, both on the business side that 

I see within my company and on the public safety side as we see 

in terms of vulnerability to severe weather and things like that. So 

there is a demand that is—certainly will not be met in the future 

unless we really progress rapidly both in terms of our scientific and 

technology capability but also in terms of applying the human resources appropriately. 

Mr. TONKO. Um-hum. And Mr. Hirn, in 45 seconds can you offer 

any observations there? 

Mr. HIRN. Well, yes. To answer that, there is an increasing demand for the Weather Service to engage in what is called decision 

support services to have our forecasters work with directly face-toface local emergency management personnel during severe weather 

events. We now have forecasters go out to the—all out West to all 

the wild land fires and do forecasts on the spot, face-to-face with 

the firefighting crews to the extent that better computer models 

and technology can free up time so that our folks can be more involved in these decision support services to the emergency management communities, we really are looking forward to that. 

And in fact, it was at our request and our design that the Weather Service has now started several pilot programs around the country by adding an emergency response meteorologist to forecast offices whose primary job is more social science and interrelation 

with emergency managers to bring the product out, to make sure 
78 

people are aware of the product, the help the local communities 

and the emergency managers make better decisions based on the 

weather information. The union has been the one that designed 

those programs, convinced the Agency that they were needed, and 

we jointly designed and are experimenting with that in several 

places around the country. 

Mr. TONKO. I can tell you, having been impacted in our district— 

Congressional District with severe storms over the last year, I can 

tell you the communities and the individuals that I represent could 

strongly endorse that kind of connection. 

Thank you so much. 

Vice-Chairwoman ADAMS. I would like to thank the witnesses for 

their valuable testimony and the Members for their questions. The 

Members of the Subcommittee may have additional questions for 

witnesses and we will ask for you to respond to those in writing. 

The record will remain open for two weeks for additional comments from Members. The witnesses are excused and the hearing 

is now adjourned. 

[Whereupon, at 4:55 p.m., the Subcommittee was adjourned.] 
(79) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
80 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Dr. Kathryn D. Sullivan 

U.S. House of Representatives 

Committee on Science, Space, and Technology 

Subcommittee on Investigations & Oversight 

Ouestions for the Record 

"Mismanagement of Funds at the National Weather Service and the Impact on the Future of 

Weather Forecasting" 

Wednesday, September 12,2012 

2:00 p.m. - 4:00 p.m. 

2318 Raybum House Office Building 

Dr. Kathryn D. Sullivan 

Assistant Secretary of Commerce for Environmental Observation and Prediction, and 

Deputy Administrator for the National Oceanic and Atmospheric Administration, 

U.s. Department of Commerce 

OueStions submitted by Dr. Paul Broun. Chairman. Subcommittee on Iflvestigations & Oversight 

I) When can the Committee expect to receive the staffbriefing on all disciplinary actions 

regarding this issue, and materials (listed below) that were requested as long as six 

months ago? As you will recall from the hearing, Congresswoman Adams, ViceChairman of the Investigations and Oversight Subcommittee, requested that you deliver 

the materials to us before Congress reconvened in November. To be clear, I expect these 

documents - and a staffbriefmg - prior to November 13, 2012: ' 

• NWS CFO spend plan (requested during the initial NOAAIDOC staffbriefmg on 

May 25, 2012); 

• Reprogramming requests or any other mechanism by which additional funds were 

requested of Congress for NWS going back 10 years (requested during the July , 

13,2012 staffbriefmg); 

• All documents presented to the NWS Corporate Board by former CFO Bob Byrd 

in the September 2010 meeting (requested during the July 13, 2012 stilffbriefing); 

• Privacy Act briefing on all disciplinary actions regarding this issue (requested 

during the July 13,2012 staff briefing); 

• CFO Council minutes and summaries going back to when Bob Byrd was liired as 

NWS CFO (requested during the July 13, 2012 staffbriefmg); 

• MCR (Management Control Review) minutes (requested during the July 13, 2012 

staff briefing); 

• All records associated with A WIPS and WRIP from the CFO Council going back 

to when Bob Byrd was hired as NWS CFO (requested during the July 19,2012 

staff briefing); 

• A list of all Financial Management Centers (FMCs) in NOAA (requested during 

the July 19, 2012 staff briefing); 

• A description of how NOAA differentiates between "common services" and 

"M&A" (requested during the July 19, 2012 staff briefing); 
81 

• Program Oversight Board review presentations, templates, etc (requested during 

the July 24,2012 staff briefing). \ 

2) The NOAA and DOC May 2012 decision memos create the impression that NOAA and 

DOC have both concluded that this was an isolated issue at NWS, and that NOAA 

leadership had no way of mowing what was happening because of inadequate financial 

transparency, and insufficient supervisory control over subordinates. 

Regarding fmancial transparency, the NOAA CFO job description states: 

• "The [Finance] Office is responsible for establishing and assuring the adequacy 

of financial internal controls ... " (Emphasis added.) 

• "S/he is responsible for managing NOAA's accounting system, and developing 

overall financial management guidance." 

• "The incumbent ensures adherence to financial limitations as well as 

statutory/regulatory requirements, and manages the use of NOAA's assets." 

With regard to supervisory control over subordinates, that same job description states: 

• "It [the NOAA CFO] provides financial management and budget support to the 

Under Secretary and several NOAA Staff Offices as well as policy and 

management to the organization as a whole." (Emphasis added.) 

• "The CFO provides centralized guidance and control of financial management 

activities at all levels of operations .. . ", (Emphasis added.) 

• "Provides administrative oversight and coordinates the activities of subordinate 

organizations ... " (Emphasis added.) 

I am aware that the NOAA CFO did not write the performance plans and evaluations for 

Line Office CFOs at the time, but why wasn't there any supervision at all? How were 

these job requirements carried out in this instance? , 

3) Keeping in mind that NOAA recently asked for a $35 million reprogramming that only 

covered approximately four months of this fiscal year,'and that the IG's testimony 

references a November 18,2011 memo to the NWS OCFO concluding that $10 million 

in Advanced Weather Interactive Processing System (A WIPS) funds were shifted to 

other accounts without a reprogramming request, can you provide the Committee with an 

estimate on the amount ofNWS funds inappropriately allocated during FY 2010 and FY 

2011? 

4) While I understand that NOAA and DOC have concluded their investigation, and that 

some NWS employees retired as a result of the NWS situation, do you anticipate taking 

any further disciplinary action? 

a) When do you expect final resolution on the disciplinary review process? 

5) What additional information can you provide about the Grant Thornton financial review? 

a) Who at NOAA or DOC is the point of contact? 

b) How long will the review take? 

c) How far back will the review go? 
82 

d) Will the IG's office or GAO be involved, either during the review, or at its 

conclusion? 

6) The May 24, 2012 NOAA decision memo instructed the Chief of Resources and 

Operations Management (CROM) to initiate the process of contracting with outside 

independent flrms to conduct a fmancial audit and a program audit of the NWS. This 

flnancial audit was directed to determine whether a "structural deficit" existed at the 

National Weather Service. 

a) Do you believe it is appropriate for Ms. Maureen Wylie, as the CROM and former 

NOAA CFO, to oversee an audit of whether or not Ms. Wylie, in her previous 

position, was able to manage the development and execution of NOAA's and the 

NWS' budget? 

b) What controls are in place to prevent a conflict of interest? 

7) Regarding the charge of the Investigative Report, you state in your testimony that, "From 

the outset of the investigation, clear instructions were given that we were to determine if 

improper actions were taken by individuals within the NWS CFO's offlce and NWS 

leadership, and if so how best to correct these improprieties." 

a) Did these instructions preclude the Investigating Team from determining if 

improprieties were conducted by anyone at NOAA or DOC? If they did, why? If 

they did not, did the Team consider broadening the investigative charge? 

8) What perc~ntage of the NWS budget goes to labor costs? At any point in your 

investigation, did anyone insinuate that these labor costs were the reason for thisimproper flnancial activity? 

9) What do the terms 'structural deficit' or 'structural shortfall' mean to you, and does one 

exist at the National Weather Service? 

a) How do you respond to the claims of one of our witnesses on the second panel, 

Mr. Richard Him, that the structural deficit was common and public knowledge? 

10) One of the central reasons stated 'for the inapprbpriate transfers was that Management and 

Administration costs were not 'taxed' on programs evenly throughout the agency because 

no policy existed. This meant that some programs could be 'taxed' more for M&A than 

others. Once the money b~came part of the M&A account, it could be used however the 

managers wanted because it was essentially 'generic' at that point. This technique 

allowed managers to move money between accounts without congressional notification -

a problem GAO pointed out in January 2011. In response to GAO's report, NOAA 

indicated that it has since developed standard policies for M&A 'taxing.' 

a) When did these policies take effect? 

b) Can you briefly describe the procedures for determining the levels NOAA will 

'tax' each individual project? ) 

c) Will they be consistent? 

d) How much latitude will leadership have in changing or making exceptions to 

those levels? 

e) Please provide copies of these policies. 
83 

11) What is your reaction to information in the IG's testimony that his office has received 

two compl&ints since the issuance of the Investigative Report claiming that unauthorized 

reprogramming offunds continues unabated, and that senior NOAA and NWS officials 

were aware that this practice extends to earlier than 201 O? 

a) What is NOAA doing to address these allegations? 

12) In the fiscal year (FY) 2012 Appropriations conference report language, Congress 

recognized the need for, and directed, a follow-on study to examine the structure of the 

NWS. I recently leamed that the contract was awarded to the National Academy of 

Public Administration (NAP A), instead ofthe National Academies, which produced the 

first two reports in this series. 

a) Why did the award go to NAPA instead of the National Academies? 

b) How do 'you anticipate incorporating NAS and NAP A recommendations, 

especially if they differ or conflict with each other? 

c) Which set of recommendations will NWS be expected to follow and why? 

13) Is the NWS fully funded? In other words, does NWS have all the funds necessary to 

carry out its mission; keep its workforce fully trained; keep up-to-date with technology; 

and keep existing facilities and equipment fully m&intained? 

14) What is the current level oflapsed labor at NWS? 

a) Are any of the NWS positions being intentionally held vacant to save money at 

local forecast offices that are classified as "emergency essential?" If so, why 

aren't they being filled as soon as they become vacant? . 

b) Are NWS and NOAA workforce management saving any money by not filling 

these vacancies? 

15) During a briefing at the end of September sponsored by the University Corporation for 

Atmospheric Research (UCAR) and the Weather Coalition, a recommendation was made 

to establish a U.S. Weather Commission, based on the NRC's recommendations in its 

August report titled, "Weather Services for the Nation: Becoming Second to NOlie." 

What is your reaction to this suggestion? 
84 

Responses by Ms. Maureen Wylie 

U.S. House of Representatives 

Committee on Science, Space, and Technology 

Subcommittee on Investigations & Oversight 

Ouestions for the Record 

"Mismanagement of Funds at tIle National Weather Service and the Impact on the Future of 

. Weather Forecasting" . 

Wednesday, September 12,2012 

2:00 p.m. - 4:00 p.m. 

231'8 Rayburn House Office Building 

Ms. Maureen Wylie 

Chief, Resource and Operations Management, and 

former Chief Financial Officer, National Oceanic and Atmospheric Administration, 

U.S. Department of Commerce 

Ouestions submitted by Dr. Paul Broun. Chairman, Subcommittee on Investigations & Oversight 

1) When did you first become aware of the allegations at NWS? 

2) When did you first become aware that a potential unauthorized reprogramming occurred? 

3) What are the reporting requirements for an agency when it identifies a potential 

unauthorized reprogramming? 

4) Who is/was the NOAA official responsible for making that notification to OMB and 

Congress? 

a) Is that different now? 

5) When did you first find out about a structural deficit at NWS? 

6) Over the years, how many reprogramming requests has NOAA sent to the Appropriations 

Committees under your tenure? 

a) How many requests were for NWS? 

b) How many requests were sent relative to Continuing Resolutions? 

c) Please explain the circumstances surrounding the above-mentioned requests. 

7) When was the last time NOAA attempted to deal with the structural deficit in a formal 

marmer? 

a) How did NOAA attempt to do so? 

8) Have you seen the Investigative Report produced by the NWS in the Fall of 2011? When 

did you first see it? 
85 

9) Have you seen the Investigative Report produced by senior NOAA and Department of 

Commerce staff, and completed in May of2012? When did you fIrst see it? 

10) How did you fIrst hear about the allegations in the investigative report? 

a) What did you do in response to those allegations? 

11) Explain how the CFO council operates, 

a) What does it look at - budget formulation, or execution? 

b) Do you take down minutes? 

c) Are there formal presentations? 

d) How often does it meet? I 

, 12) What is your role in supervising Line Office (LO) CFOs? 

13) Have you ever contributed to any LO CFO's Performance Review? 

a) Whose Performance Reviews did you review as NOAA CFO? 

14) As NOAA CFO, were you involved in Line Office budget formulation or budget 

execution? 

15) How,can the NOAA CFO ensure that the buqget is being implemented appropriately if it 

is not involved in budget execution? 

16) Without having any insight into budget execution, how can the NOAA CFOconduct 

budget formulation? 

17) If you don't have superVisory authority over Line Office CFOs, why did you meet with 

the NWS CFO after you heard the allegations? 

18) Does the NOAA CFO sign-off on Summary Level Transfers (SLTs)? 

19) Has a Line Office ever submitted a SLT that did not conform to accepted business 

practices, such as exceeding the allowable $500,000 threshold? 

a) If so, how did you respond to those requests? 

b) If you rejected those requests, did you ever conduct any follow-up to see how that 

shortfall was addressed? 

20) Who generates Budget Operating Plans (BOPs)? 

a) Does the NOAA CFO sign off or approve them? 

b) Has this always been the case? " 

21) Are you aware of the GAO report "Financial Management: NOAA Needs to Better 

Document its Policies and Procedures for Providing Management and Administration 

Service," from january 2011? 

a) When did NOAA switch from allowing all M&A funds to be taken from one 

account to taxing all Programs, Projects, and Activities (PP As)? 
86 

b) How many Financial Management Centers (FMCs) are there in NOAA? 

c) How many FMCs are there in NWS? 

22) How do Line Offices develop M&A budgets from Operations, Research, and Facilities 

(ORP) and Programs, Acquisitions, and Constructions (PAC) accOlmts for Programs, 

Projects, and Activities (PPAs)? 

23) In the report, GAO states that, "NOAA's documentation ofits policies and procedures for 

M&A Services does not always conform to applicable federal standards." It also states 

that " ... the five line offices and the FMCs have no or limited documentation of their 

policies and procedures for the M&A services they provide." NOAA agreed to the 

recommendations and stated that it has already created an Administrative Cost Working 

Group chaired by one of the Line Office CFOs . 

. a) Who was that Chair? 

b) Please provide the new NOAA policy and directives related to M&A services, 

including how the costs are developed, as well as how those costs are covered. 

24) The NOAA Finance Office handbook states that "preparers ofSLTs are required to 

maintain adequate supporting documentation for each SLT." 

a) Was this done atNWS? 

b) Who is responsible for ensuring the Line Offices follow the NOAA Finance 

Office handbook? ') 

25) What are Periodic Program Reviews? 

a) As part of your monthly meetings with Line Office CFOs, did you conduct a 

Periodic Program Review regarding any aspect ofNWS (A WIPS, NEXRAD, 

WRIP, etc)? 

26) Dr. Lubchenco's decision memorandum indicates that management controls were 

ineffective and that, "theNWS operated with an unacceptable lack of transparency 

relating to budgeting ... " This wasn't new. GAO told you in December 2010 and NOAA 

agreed this was an issue. Based on your position as former CFO and now CROM, what 

should be done better? 

27) Please comment on the following statements from Dr. Lubchenco's decision memo: 

a) " ... [I]n addition to the reprogramming violations, the investigation also found that 

these actions went unchecked in large part due to various management issues. It 

is clear that this issue would have been discovered and corrected earlier had 

senior leadership within the NWS exercised appropriate oversight." 

b) " ... [T]here is no doubt that financial controls in place at the department; NOAA, 

and NWS were ineffective at detecting this practice.' 

c) " ... [T]he NOAA CFO did not playa supervisory role, even though she was 

clearly in the best position to understand the line office CPO's fmancial 

decisions." 
87 

28) Dr. Lubchenco's decision memo goes on to direct that that the "DAA, AA, and NOAA 

CFO serve as reviewing officials on the NWS CFO performarice plan and evaluation," 

and that the "NOAA CFO's office expand its current supervision of the SLT process to 

ensure that SLT transactions are provided appropriate higher level review." 

a) How do you respond to those directives? 

b) What prevented you from monitoring the SL T process in the past? 

29) Dr. Lubchenco' s decision memo states that, "the NWS did not have a documented 

transparent process to address emerging budget issues." The report recommended that, ' 

"NWS create a well documented process, vetted by stakeholders, and include explicit 

programmatic decisions allowing the bureau to align its budget formulation and 

execution with the available funds." 

a) The position description for the NOAA CFO states, "[t]he Office of the Chief 

Financial Officer (CFO) provides guidance and staff support to NOAA 

organizations in the areas of budget formulation and execution, resources 

management, financial systems development and fmancial management." 

(Emphasis added.) Ifbudget formulation is already the responsibility of the 

NOAA CFO, ",{hy is this directive necessary? 

30) SLTs are examined at the NOAA CFO's office level but only for particular "business 

rules." 

a) Should there be a greater role for the CPO? 

31) Who is responsible for providing budget training for Line Office personnel? 

32) The Acting NWS CPO reviewed the state of the NWS budget and found that it needed 

$35 million in FYI2. 

a) Did you review this as well? 

b) Do you concur? 

33) When did you assume the role of Chief of Resources and Operations Management 

(CROM)? 

34) Explain what the ?ROM does and how it is different than the NOAA CFO. 

35) Was the NWS CFO taking from A WIPS procurement, or limiting the forward funding of 

the procurement? Does this matter in terms of allowable transfers? 

36) Do you consider "moving programs to the right" a "reprogramming?" 

37) Do any other agencies (to your knowledge) use similar interpretations for reprogramming 

as they pertain to "moving to the right" and "forward funding?" 

38) What additional controls are required to identify this type of activity, prevent it from 

happening, and ensure that budget formulation and execution are based on accurate 

information? 
88 

39) How would you characterize the NOAA CFO's office under your leadership? Was it 

open and candid with respect to raising concerns? 

40) Wouldyou consider the NOAA Corporate Board an appropriate venue to raise detailed 

concerns? 
89 

Responses by Inspector General Todd J. Zinser 

U.S. House of Representatives 

Committee on Science, Space, and Technology 

Subcommittee on Investigations & Oversight 

Ouestions for the Record 

"Mismanagement of Funds at the National Weather Service and the Impact on the Future of 

Weather Forecasting" 

Wednesday, September 12,2012 

2:00 p.m. - 4:00 p.m. 

2318 Rayburn House Office Building 

Inspector General Todd J. Zinser, 

U.S. Department of Commerce, 

Office of Inspector General 

Ouestions submitted by Dr. Paul Broun Chairman. Subcommittee on Investigations & Oversight 

1) The two May 24, 2012 decision memos from NOAA and DOC appear to go to great 

lengths to segregate NWS from NOAA and Commerce. 

a) Are you satisfied with the extent of responsibility and accountability at NOAA 

and DOC regarding mismanagement at one of the most important line offices 

within one of the largest bureaus at the Department of Commerce? 

b) To what extent will your office review accountability by eitber NOAA or DOC 

personnel? 

c) Are you satisfied with botb tbe timing and manner in which NOAA has responded 

and investigated the claims of mismanagement of funding at tbe weather service? 

We have undertaken a review of Departmental and NOAA corrective actions and will issue a 

report upon the completion of our work. The Department and NOAA are making changes to 

NOAA's reporting structure as a result of the unauthorized reprogramming, indicating that 

they too are not satisfied. NOAA's response to initial complaints of unauthorized 

reprogramming has left us concerned. Other potential Antideficiency Act (ADA) violations have 

arisen, increasing our concern. 

2) What is your initial reaction to having received two additional complaints 

about unauthorized reprogramming of funds at NWS since the issuance of tbe 

Investigative Report? 

Once a problem becomes public and management takes actions to address complaints, often 

there are subsequent complaints. The audit of the Department's fiscal year (FY) 20 12 financial 

statements disclosed a material weakness and issues with NOAA's oversight of financial 
90 

management, including indications of additional unauthorized reprogramming and potential 

ADA violations that require further review and analysis for a determination. 

Questions submitted by Ranking Member Paul Tonko, Subcommittee on Investigations & 

Oversight 

1) Please explain the hotline system in place in May 20 I O--you told Committee staff that the 

Hotline system consisted of two operators and a manager. How were calls/tips 

aggregated, assigned and reviewed? Did this system change substantially at any point 

prior to November 2011? If so, please explain how. Provide the names and titles of all 

current or fonner staff who worked to manage allegations between May 2010 and 

November 2011. 

In May 20 I 0, senior-level career federal employees at OIG were responsible for initial hotline 

intake and review. Complaints are reviewed on a case-by-case basis and based on the judgment 

of staff then assigned accordingly. We review our processes and personnel performance 

regularly, making enhancements and staff assignments for continual improvement. The Inspector 

General's (IG's) testimony addressed some key enhancements to our complaint handling 

function, including the hiring of contractor support for 24-hours/7-days-a-week coverage. 

With respect to providing the names and titles of OIG employees for public record, we identify 

the IG as the overall responsible official. 

2) Please explain why three of the four allegations regarding financial misconduct triggered 

referrals to agency management and yet one of the allegations triggered a decision to 

open your own investigation. There appears to have been no awareness, from one 

allegation to another, that similar allegations were coming in to your office. 

a) Why was there no systematic cross-tabulating of these allegations so that they 

could easily be aggregated? 

b) What guidance was provided for staff to make decisions on how to handle 

allegations that came into your office? 

c) Why do similar allegations end up in such different baskets of work? How do 

you explain such inconsistent handling of essentially the same complaint? 

d) Have you instituted steps to guarantee that cross-checking will occur in the 

future? 

As noted in the testimony, NOAA received the initial anonymous complaint some 2 months 

prior to OIG. NOAA assigned it internally to the NWS chief financial officer (CFO) for review. 

The agency followed this course of action without notifying OIG and without following up with 

the NWS CFO to obtain inquiry results. We initiated our review after receiving the second 

anonymous complaint a few months later. 

2 
91 

In his testimony, the IG addressed OIG's handling of complaints in this matter. He recounted 

how OIG staff "zero-filed" the first complaint sent anonymously to GAO FraudNet, setting it 

aside for future action in the event of additional complaints on the same subject. As the IG has 

testified, he would not have chosen to handle the first complaint in this manner. 

At the time this complaint was "zero-filed," OIG investigative policy was applicable and 

decisions on how to handle such complaints were based on the judgment of OIG staff 

responsible for the hodine at the time. However, this complaint and all incoming complaints 

have been and will continue to be cross-referenced through our indices with previously 

received complaints. 

Without being able to go back and explore the rationale for why this first NWS complaint was 

"zero-filed," OIG has nonetheless conducted a risk assessment on our hodine intake and 

review processes, instituted a number of process improvements, and provided training to OIG 

staff and the Department. In addition, it has been OIG practice since June 20 I I to provide the 

Deputy Secretary quarterly updates on hotline performance. 

3) In your testimony you spoke of an allegation in late 20 10. We assume you were referring 

to the October 20 I 0 allegation. Please specify which allegation sparked the January-toApril 2011 preliminary investigation by your office, when the allegation came in, how it 

got to your office (through the Hotline or some other method?) and provide any 

documentation of that allegation that your office possesses. 

The OIG complaint follow-up and review completed in 20 II stemmed from the October 20 I 0 

hodine allegation. The anonymous complaint was assigned to OIG's audit group for research 

and follow-up with NOAA management. 

4) Since opening a preliminary investigation appears to require an allocation ofIG staff in a 

way that a management referral may not, we would like to better understand how the one 

NWS allegation came to become a preliminary investigation. 

a) In the chain between the recipient of the relevant tip (we assume the hotline staff) 

and your deputies, please identify who recommended and who approved that a 

preliminary investigation be opened. How was that communicated to the line 

staff who carried out that preliminary work? 

b) Please provide the name or names ofthe person(s) on the OIG staff, whether 

current or former OIG employees, who played any role in conducting this 

preliminary investigation. 

c) Did the person or persons who recommended, approved and assigned that 

preliminary investigation ever inform their superiors about this issue? Who was 

told, and when, about the allegations being investigated? 

The anonymous complaint was assigned to OIG's audit group for further assessment. Because 

the complaint was anonymous, our staff first completed research to fully understand NOAA's 

budget and budgetary processes with respect to NWS. This required both a review of policy 

3 
92 

and procedures and numerous interviews with senior NOAA officials responsible for the 

financial management of NWS, as well as Departmental financial officials. Throughout the 

process, NOAA officials stated that the actions they took to manage NWS funds were not 

improper. Our audit team questioned this response and-during a meeting in April 20 I I with 

the NWS Director of the Budget Accountability Office and the Deputy CFO for NWS-we 

offered them the opportunity to confirm, with the Department official responsible for 

reprogramming requests, that the questioned funding shifts did not violate any applicable 

appropriations law or regulation. Despite sending follow-up e-mails, we did not receive a 

response to our request. OIG followed up again in the November 20 I I memorandum, which 

we attached to the IG's testimony, communicating our preliminary determination that the shift 

of money was to fund the NWS shortfall and thus would likely require Congressional approval. 

We again requested that NOAA officials provide us the results of their meeting with the 

Department regarding this issue. 

Our process was consistent with (a) the ADA. (b) OMB's Circular A-II, Section 145-

Requirements for Reporting Antideficiency Act Violations-which states that agency staff must 

contact department counsel and budgetary offices to assess potential ADA violations, and (c) 

the Department's Accounting Prindples and Standards Handbook, which states that "a 

determination concerning liability" under the ADA "is within the province of the Department's 

Office of General CounseL" In May 2012, approximately I year after OIG's April 20 II request, 

we were provided the results of the Department's internal inquiry into the alleged 

mismanagement of funds within the NWS. In November 2012, the Department notified OIG 

that its review has confirmed our initial concern that NOAA violated the ADA. 

With respect to providing the names and titles of OIG employees for the pUblic record, we 

identify the IG as the overall responsible official. 

5) It was approximately a year between the original allegation that triggered your staff's 

preliminary investigation and a memorandum landing on your desk. In the intervening 

time, allegations of an Anti-Deficiency Act violation by the top financial official at the 

National Weather Service were never brought to your attention by your staff. How do 

you explain that this audit or investigative issue was never elevated to you in the course 

of an entire year? What steps have you taken to insure that similarly serious work will be 

briefed to you in a timely fashion? 

As noted in the IG's testimony, the actions of OIG staff induded alerting senior officials at 

NOAA and NWS of compliance questions about certain financial transactions. Department 

management has the ultimate responsibility for the integrity of its financial records, and 

routinely makes adjustments to financial records throughout the year. Although discussions 

between OIG staff and Departmental financial management staff are routine, such adjustments 

are typically not brought to the attention of OIG, and rarely are such entries handled at the IG 

level. However, when large general ledger adjustments become necessary, the OIG may be 

involved. For example, the annual financial statement audit prompted NOAA to post one large 

adjustment to correct a $616 million property classification and to reverse $1 15 million in 

related depreciation expense that had been recorded in fiscal year 2012. 

4 
93 

6) Please describe the system (or systems) you had in place between May of2010 and 

November 2011 for senior leadership to have access to you. Did you hold regular 

meetings or was some other system in place? If you did hold regular meetings, please tell 

us how frequently those meetings were routinely held. Please provide a copy of the 

agenda for each such meeting to the Committee from June 1, 20 I 0 to the present. 

I met regularly with senior leadership during this time, both formally and informally, and 

continue to do so. 

7) You told Committee staff that you have overhauled your hotline tip review system so that 

all tips are aggregated each week and forwarded to you and your senior staff for direct 

review and assignment. When was this system put in place? What analysis went into 

making a decision to implement such a system? Are there other IG shops that you would 

point to as an inspiration for the system you have adopted? 

As mentioned during the IG's testimony, OIG-at the IG's initiative-has fostered the continual 

improvement of the effectiveness and efficiency of our hotline operation. Prior to his current 

appointment, the IG was a 24-year career federal employee whose experience included 

overseeing hotline operations at another office of inspector general for 15 years. 

8) You indicated to Committee staff that a contractor had been hired to handle and 

aggregate hotline allegations. Please provide the name of the contractor and the date the 

contract went into effect. 

OIG's contract with Global Compliance Services, Inc., for 24/7 hotline complaint intake, was 

awarded in March 20 I I. 

9) At the hearing you indicated that your office had gone back to review all the items that 

had been "z-filed" in the five years of your old system. When did this review ofthe zfiles occur? Please provide all documents associated with the assignment to undertake a 

z-file review and all materials produced by that review? 

The testimony addressed our analysis of complaints filed for future reference (Le., "zero-filed"), 

which was completed in December 20 II and covered the preceding 2 years. The IG's 

testimony did not refer to a 5-year period. 

10) What analysis has been done to identify all allegations that had been sent over to the 

agency for review during those five years? What steps have been taken to evaluate the 

appropriateness of those assignments and to see whether the agency had meaningfully 

handled them? Has your office opened or re-opened any specific cases as a result? Have 

you begun your own investigations of any allegations that were inappropriately referred 

back to the agency for them to investigate? 

The analysis OIG undertook concerned a backlog of complaint referrals pending with NOAA 

for a substantial period of time. Based on this analysis, OIG has pulled back some complaint 

referrals to NOAA due to that agency's lack of responsiveness. As a result, OIG has re-opened 

5 
94 

several cases referred to NOAA to conduct administrative inquiries. We could not identify any 

that we re-opened because we considered them to be inappropriately referred. OIG 

communicates regularly with agencies to which we refer complaints. In most cases, OIG will reopen a case due to inactivity, delinquency, or improper handling by agencies. We have also 

taken back complaints at the agency's request based on reasons such as the agency's inability to 

identify a neutral fact finder. 

11) In the Committee staff briefing, you indicated that you have undertaken a new effort to 

more accurately track allegations that have been sent to the agency and the disposition of 

those cases. When was this system put in place and how does it improve on previous 

practices? 

The testimony addressed key enhancements to our complaint handling function. In addition, 

please see our answers to questions I, 2, 7, 8, and 10 for further details. 

J 2) It is hard to understand why you allowed NOAA to investigate itself after your staff 

concluded that the NWS Chief Financial Officer appeared to have violated the law. 

Please provide a detailed explanation of why your office deferred to NOAA in running an 

investigation into misconduct at the National Weather Service. Be specific as to who you 

discussed this issue with in the Department, and on your own staff; the dates of those 

discussions; the key arguments offered in favor (and against) having NOAA do the 

investigation and what point were most compelling from your perspective. Please 

provide all materials regarding communications both within your office and between 

your office and the Agency (at any level, from the Secretary's office down to NWS) 

regarding who should handle the investigation. 

The Department is correct to investigate these instances. The ADA requires the head of the 

agency-which, in this case, is the Secretary of the Department of Commerce--to report 

violations of the law immediately to the President and Congress, including all relevant facts and 

a statement of actions taken, with a copy to the Comptroller General. 

The IG shared his decision regarding how OIG would handle this issue with several senior 

Department leaders during routine meetings. 

13) After deferring to NOAA to run an investigation, your office played an advisory role to 

the agency. According to evidence from the agency, your staff reviewed agency 

interview summaries and provided advice about further issues that should be raised in 

questioning as well as advice on who should interview. Please provide all records of 

communication with the agency, and within your office, regarding whether to play an 

advisory role, as well as discussion about NOAA's investigation and advice offered back 

to the agency. 

The inquiry was conducted jointly by the Department and NOAA. While this decision was not 

made by OIG, we advised that the assignment of NOAA's former chief administrative officer 

(CAO). whose retirement had already been scheduled to take place within a month, was not 

prudent. In addition, OIG cited concerns in December 20 I I surrounding the former NOAA 

6 
95 

CAO's interview of NOAA's chief financial officer, who indicated during the December 20 I I 

interview that it did not seem that any ADA violation had occurred. After OIG raised these 

concerns, the former NOAA CAO was relieved of this assignment and replaced with NOAA's 

Deputy Chief Counsel. 

14) Can you give us other examples from your work at Commerce where you have turned 

over to management the role of investigating themselves when the allegations and 

evidence suggest a probable violation of law? Do you believe it is a common practice 

within the IG community to give a potentially criminal investigation over to the 

management of an agency to run? 

Given that allegations routinely include possible violations of rules, regulations, and laws, it is 

fairly common for agency management and OIG to review matters that contain both 

management issues and other potential violations. It is often impractical to differentiate such 

matters, which often result in parallel reviews. 

According to OMS Circular A-123, which implements the Federal Managers' Financial Integrity 

Act of 1982, federal departments and agencies are responsible for establishing and maintaining 

internal control to achieve "effective and efficient operations, reliable financial reporting, and 

compliance with applicable laws and regulations." Further, with respect to fraud, the Acting 

Secretary of Commerce noted in her November I 3, 2012, representation letter for the 

Department's FY 2012 financial statements: "We acknowledge our responsibility for the design 

and implementation of programs and controls to prevent, deter, and detect fraud." OIG 

respects the Department's responsibility to do so. All department secretaries or designees are 

responSible for making the same or similar representation annually. 

15) Inspectors General are expected to promptly report to Congress all serious or flagrant 

issues uncovered within their agency. Chairman Issa has been concerned enough about 

the failure to do this that he recently wrote to all the Inspectors General to remind them of 

this obligation. You did not communicate with Congress regarding your belief that an 

Anti-Deficiency Act violation had occurred through either informal briefings, formal 

letters to the Chairs and Ranking Members of the Committees of jurisdiction, nor in your 

semi-annual report. In the meeting with Committee staff you said that you believed you 

had a conversation about the need to communicate to the Hill with NOAA management 

in the December 2011 time frame, were convinced that they would tell us, you dropped 

the matter. That is not what the law demands of you nor what we expect. 

a) Please explain your decision not to inform Congress of a probable violation of the 

Anti-Deficiency Act. 

b) Please explain why you did not follow up to insure that management actually 

informed Congress in a timely manner of what your office believed to be a 

violation oflaw? 

c) Please explain why neither your October 20 I 1 nor March 2012 semiannual report 

to Congress contains any reference to either an ongoing investigation/audit at 

NWS nor the findings from that effort? 

7 
96 

d) Please provide a copy of the letter you sent to Chainnan lssa in reply to his letter 

of August 3, 2012. 

According to the ADA, ultimate responsibility for determining whether a violation of that law 

has occurred and then reporting any violation lies with the "head of the agency." Accordingly, 

as occurs at other federal government agencies, the initial inquiry and legal determination of 

whether an ADA violation has occurred is performed by the Department's management and 

Office of General Counsel (OGC). This process is reflected in the Department's Accounting 

Principles and Standards Handbook, which states that "a determination concerning liability" under 

the ADA "is within the province of the Department's Office of General Counsel" and that the 

affected agency shall work with the OGC to "gather[ ] the pertinent facts." OGC could not 

begin its ADA analysis until NOAA and the Department completed their factual inquiry in May 

2012; by that time, Congress had been made aware of the matter and the potential for an ADA 

violation. Given the complexity of this instance, the Department only made a final 

determination of an ADA violation in recent days. 

As of the date of this response, the issue continues to receive Departmental attention, with no 

formal communication sent to the President and Congress, as called for by the ADA Per the 

Department's Accounting Principles and Standards Handbook, OIG would await final assessment 

prior to issuing any formal communications. This policy is consistent with practices at other 

federal government agencies. 

16) Each year the Department undergoes a financial audit to certify the integrity of its 

accounting. That audit is carried out by a private finn under contract to your office. 

While it is impossible to expect that any audit would have discovered the shenanigans at 

NWS without some tip to look very closely, the fact was that your office was receiving 

those tips. If the June 2010 tip had been acted upon more promptly by your office, it may 

well be the case that not only would the ADA activity been stopped through your 

intervention--saving the country another fiscal year of shell-game accounting--but you 

may also have been able to leverage the accounting effort to better understand where the 

money came from and where it went. 

a) What office within your shop manages the annual financial review? To whom do 

they report? 

b) Was there any effort in your office to connect tips regarding financial misconduct, 

or your own investigation, to the work being undertaken by your outside auditing 

finn? 

c) If there was no consideration of using the auditing finn in this way, why not? 

OIG has a financial statement audit team that works with an independent audit firm under 

contract. After the full report on the NWS financial misconduct was issued in May 2012, our 

financial statement audit team and independent audit firm were able to direct resources 

appropriately. The May 2012 Departmental review provided important indicators that allowed 

us to work with our contractor to test and analyze highest risk areas. These indicators included 

8 
97 

the identification of risk areas such as "summary level transfers" for the improper movement of 

expenses, as well as the identification of CFO-Ievel involvement in the execution of this financial 

mismanagement. We also worked with our independent audit firm to assess areas that had 

potential for additional possible mismanagement. 

NOTE: 

Given the investigative nature of many of the documents that you request, we would be pleased 

to provide those documents in accordance with the procedures for document requests 

required under the Privacy Act. 

9 
98 

Responses by Dr. William B. Gail 

Mismanagement of Funds at the National Weather Service and the Impact on the Future of 

Weather Forecasting 

Wednesday, September 12, 2012 

House of Representatives 

Subcommittee on Investigations and Oversight 

Committee on Science, Space, and Technology 

Washington, D.C. 

Testimony of William B. Gail, Corrections 

Line 1160, change "Council and the National" to "Council of the National" 

Line 1178, change "its role in how" to "its role and how" 

Line 1184, change "forecasted warnings" to "forecasts and warnings" 

Line 1240, change "effective in a constrained" to "effective. In a constrained" 

Questions for the Record 

Response to questions submitted by Dr. Paul Broun, Chairman 

1) How important are programs like A WIPS and NEXRAD to the future of weather 

forecasting? 

As discussed in the Committee's first report, "The National Weather Service Modernization and 

Associated Restructuring: A Retrospective Assessment" both A WIPS and NEXRAD, key 

technologies in the Modernization, led to improvements in weather forecasting. For example, the 

NEXRAD network is largely responsible for the improvement in the NWS capability to detect 

severe weather such as tornadoes. AWIPS allows forecasters to integrate all sources of weather 

data and aids them in preparing and issuingforecasts and warning. These technologies remain 

critical to the future of weather forecasting and will require updates to keep up with advancing 

technology. The Committee's recommendation that the NWS maintain infrastructure through 

continuous technology infusion applies to both the AWIPS and NEXRAD systems. 

2) The other witness on the second panel, Mr. Richard Him, disagrees with the NRC's 

recommendations that routine public forecasts be regionalized stating, "80 percent of the 

workload of creating a forecast involves the forecaster orienting himselfto the weather 

and developing an awareness of weather conditions." How do you respond to that? 

The Committee did not explicitly recommend that the NWS regionalize its forecasting, rather that 

the NWS consider ways in which better utilization of improved technologies could allow for 

regionalization or automation to free up forecaster work hours for other tasks such as the 

increasingly important role of communicating weather information to emergency management 

and the public. The Committee was careful to note that "[lJocal knowledge of phenomena, 

terrain, and infrastructure is an importantfactor inforecasting, and it needs to be accountedfor 

in any potential regionalization of functions. " The Committee also noted that the NWS should 

conduct a careful analysis of the value added by forecasters to numerical weather predictionproducedforecast guidance before pursuing regionalization and/or automation offorecasting. 
99 

3) Improvements from the NWS' MAR are rather impressive given your statistic that the 

probability of flash floods detection increased from about 40 percent to about 90 percent. 

a) How much more of an improvement can we expect at the NWS if, say, all the 

NRC's recommendations could be fulfilled? 

The Committee's analysis did not include quantifying the improvements that would result from 

its recommendations. Among its recommendations, the Committee suggested that the NWS 

pursue more incremental improvements in technology and workforce skillsets. It also suggested 

that the NWS develop measurable performance metrics to determine the value of these 

incremental improvements. Such metrics would allow the NWS to better prioritize investments in 

technology and workforce training to achieve the greatest benefit to its forecasts and other 

products. 

b) How much would it cost to implement all the NRC's recommendations? 

A cost analysis was beyond the charge of the Committee. 

c) Is this something that requires immediate attention or is there a time frame by 

which the NWS could address the NRC's recommendations? 

The Committee recognizes that implementation of its recommendations will require significant 

changes within the NWS and expects these changes to require as much as a decade. Among its 

recommendations, there are some "low-hangingfruit" that could be implemented in the near 

term. In the main recommendation category of core capability prioritization, this includes the 

continuation of existing, successful technology improvement programs, and the expanded use of 

prototyping and testbeds in the introduction of new technologies. In the category of enterprise 

leveraging, the NWS could begin pilot or experimental projects to explore the benefits and 

possible pitfalls of more open access to NWS capabilities, data, and services. The Committee's 

second major recommendation, that the NWS evaluate its function and structure, is already 

underway. The NWS has partnered with the National Academy of Public Administration to 

conduct such an evaluation. The Committee reiterates the importance of technical input to this 

evaluation. 
100 

Responses by Mr. Richard Hirn 

U. S. House of Representatives 

Committee on Science, Space and Technology 

Subcommittee on Investigations and Oversight 

Questions for the Record 

"Mismanagement of Funds at the National Weather Service and the Impact on the 

Future of Weather Forecasting" 

Wednesday, September 12,2012 

2:00 p.m. - 4 p.m. 

2318 Rayburn House Office Building 

Mr. Richard J. Him 

General Counsel and Legislative Director 

National Weather Service Employees Organization 

Ouestions submitted by Dr. Paul Broun Chairman. 

Subcommittee on Investigations and Oversight 

1. To the best of your knowledge, do any of the other line offices within 

NOAA have the same "structural deficit" issue as NWS? 

Although I am very familiar with other NOAA programs (and, in fact, NWSEO 

also represents employees in four other NOAA line offices), I am not in a position to 

state authoritatively whether there are any other NOAA line offices that have the same 

structural deficit issue as the NWS; however, I am not aware of any. 

2. You talk about dangerous staffing levels because oflapsed labor, yet, by all 

accounts, there doesn't appear to have been a detrimental impact on services 

provided by Weather Forecasting Offices. Is this a case of wanting more staff 

versus needing more? Can you identify areas that have been impacted by staffing 

levels? 

Regrettably, the detrimental impact of understaffing on services provided by local 

Forecast Offices and River Forecast Centers is well documented and not hypotheticaL 

As the National Research Council noted in its Retrospective Assessment of the 

NWS Modernization and Associated Restructuring (2011, at 83-84): 
101 

"The quality of the NWS's warning capability corresponds with its capacity to 

muster an ample, fully trained local staff at its WFOs as severe weather unfolds. With 

current staff levels, there are always two people working each shift. Though this works 

fine in fair weather, it can be problematic during severe weather ... Several recent 

Service Assessments (e.g., NWS, 2003,2009,2010) illustrate the critical role that 

adequately enhanced staffing (or lack thereof) plays in the success (or weakness) ofNWS 

warning performance during major events." 

The Service Assessments to which the NRC refers are conducted by the NWS 

after major storm events where there are multiple fatalities or a major economic impact, in 

order to evaluate its performance. Assessment teams, composed of experts from within 

and outside the NWS, evaluate activities before, during, and after events to determine the 

usefulness ofNWS products and services. The team generates a report, which serves as 

an evaluative tool to identify and share best practices in operations and procedures, and 

identify and address service. Numerous service assessments conducted since 2002 reveal 

that the ability of the NWS to protect lives during these major events was compromised 

due to inadequate staffing at Forecast Offices or River Forecast Centers. Relevant 

portions of these Service Assessments are excerpted below. The entirety of these reports 

can be found at: http://www.nws.noaa.gov/om/assessments/index.shtml 

In addition, after the April, 2011 major tornado outbreak in the southeastern 

United States, the NWS Southern Region conducted an analysis to quantify the degree of 

understaffing at seven Forecast Offices during the event and concluded that there was a 

demonstrated staffing shortfall equivalent to 6 or 7 workshifts per day. A copy of that 

internal report is attached. 

1. Service Assessment, Veterans Day Weekend Tornado Outbreak of November 

9-11,2002 

WFO Cleveland: 

FINDING 4: The Cleveland WFO did not have enough staff on duty to handle the 

workload during the event. 

(p. 16). 

WFO Nashville: 

Two operational problems at WFO Nashville were identified by the service 

assessment team during this event. First, after warning operations were sectorized on 

Sunday afternoon, November 10, an erroneous warning was issued and never corrected. 

2 
102 

This warning was for Van l?uren County and was issued with coding for Coffee County. 

The warning also stated storms were stationary but in fact were moving at 50 mph. 

Second, no warning was issued for the third supercell (the third in a series of five 

supercells mentioned above) as it moved over Bedford County and produced a tornado. 

This supercell then moved into Coffee County. A severe thunderstorm warning was 

issued for Coffee County after a tornado was on the ground. Since tornado warnings had 

been in effect for Coffee County previously (Coffee County was under tornado warnings 

from 5: 15 until 6:30 p.m. CST), local officials and the media interviewed perceived the 

public was warned for the tornado which began in Coffee County at 6:52 p.m. CST. The 

service assessment team concluded these operational problems might not have 

occurred if additional staff had been working this event with someone in the role 

of warning coordinator. (Finding 6) 

FINDING 6: Between 6: 15 and 7 p.m. CST, Sunday, November 10, an erroneous 

warning was issued for Coffee County and never corrected. Also, no warning was issued 

for the third supercell (in a series of five) as it moved over Bedford County producing a 

tornado. A severe thunderstorm warning was issued for this third supercell after it moved 

into Coffee County and produced another tornado. With three forecasters, an HMT, and 

the ITO, additional staffing, including a warning coordinator, may have mitigated these 

problems. 

(pp. 22,24). 

2. Service Assessment, Southeast United States Floods, September 18-23, 2009. 

WFO Peachtree City (Atlanta): 

Shift Leaders augmented staffing to cover increased operational workload by 

holding over staff trom the previous shift and bringing in additional help. The augmented 

night and weekend WFO staffing levels were adequate for providing basic forecast and 

warning services, but not for aggressively soliciting feedback reports on rain/flood 

impacts. There were an insufficient number of staff members to provide the full level of 

decision-support services typically available for a high impact event during normal 

weekday business hours when other administrative persounel would have been pressed 

into duty. 

(p.29). 

3 
103 

3. Service Assessment, Central United States Flooding of June 2008 

In June 2008, many locations in Illinois, Indiana, Iowa, Missouri, South Dakota, 

and Wisconsin experienced record and major flooding. Flooding also affected Kansas, 

Michigan, Minnesota, Nebraska, and Oklahoma. Numerous counties in many states 

received Disaster Declarations from FEMA. The damage affected the lives and livelihoods 

of many people in many communities, some places at a catastrophic level. Eleven people 

in six states died. 

(p.50) 

Major floods extending for periods of weeks or months create a considerable 

challenge. In June 2008, extensive overtime and significant, long-duration flooding placed 

tremendous stress on office staff. As the duration of an event increased, it became more 

difficult to maintain peak performance because fatigue started to offset adrenaline. Even 

offices with full staffing had to work very hard to sustain quality services. 

(p. 15) 

The extent and duration of flooding proved a serious challenge to operations at 

WFOs and RFCs. At WFO Des Moines, the Senior Service Hydrologist position was 

vacant. Hydrologists from three other offices temporarily rotated through the office 

during the flood event. NCRFC was also short-staffed and was supplemented by staff 

from two other RFCs. 

(p. 16) 

4. Service Assessment, The Historic Tornadoes of April 2011. 

The sheer magnitude of the outbreak left a significant emotional scar on many WFO 

staff members. Numerous hours spent issuing tornado warnings for killer tornadoes that 

were destroying the communities in which they lived, and losing contact with family and 

friends during the event, took a dramatic toll on staff. Employees worked strings oflong 

days in the aftermath, conducting damage surveys, which added to fatigue and stress. 

Fact: Staffmembers at WFOs HUN and BMX were affected personally by the tornadoes; 

many had their homes damaged or had friends who died or were injured. 

WFO personnel conducted storm surveys while search and rescue or recovery 

operations were ongoing. After the surveys, employees stated they were ill-prepared for 

interacting with survivors and the impact on themselves. MICs at WFOs HUN and BMX 

obtained counseling services from the NOAA Employee Assistance Program (EAP). 

(p. 38) 

4 
104 

5. Service Assessment, The Missouri/Souris River Floods of May - August 2011. 

Similar to the June 2008 central United States flood event (reference the NWS 

Service Assessment entitled, "Central United States Flooding of June 2008), strained 

staffing resources led to extensive overtime and personnel fatigue, especially as the 

duration of the event became prolonged. Some offices were challenged to an extreme level 

due to staff vacancies in their operational cadre of personnel. Many offices limited their 

ancillary program development work to focus efforts on ensuring quality services 

associated with flood event operations. 

(pp. 19-20) 

The perfonnance of on-site DSS [Decision Support Services] had an impact on the 

availability of human resources for other important activities at local NWS offices. DSS 

personnel were unavailable to contribute to routine operations, program development and 

other activities. Because of that, other staff members were required to cover the routine 

operations, and were unable to perform their own ancillary program responsibilities. .. 

DSS staffing, ongoing workload with local flood issues and, in some cases, short-staffing 

at the WFO, created significant challenges at most offices. 

Personnel providing on-site DSS, who work long hours many consecutive days, can 

become mentally and physically fatigued. NWS forecasters are accustomed to working 

additional hours of overtime during significant events on an occasional basis. However, 

the DSS personnel worked long hours over an extended period of time, with little 

opportunity to recharge mentally and physically. This can also impact the quality of 

service provided. 

(pp. 58-59) 

6. Service Assessment, Spring 2011 Middle & Lower Mississippi River Valley 

Floods. 

Despite the extra resources made available to the LMRFC [Lower Mississippi 

River Forecast Center] (i.e., support of the management team and persons deployed on a 

temporary duty assignment), many staff members worked long and consecutive daytime 

and evening/midnight shifts to respond to the operational and decision-support demands. 

(p.29) 

5 
105 

7. Service Assessment, Record Floods of Greater Nashville: Including Flooding in 

Middle Tennessee and Western Kentucky, May 1-4, 2010. 

Despite pre-event actions, the increased staffing during the event at the two NWS 

offices most impacted, WFO Nashville and OHRFC, [Ohio River Forecast Center] was 

not sustained consistently at levels required to respond comprchensively to the extreme 

flooding. 

(p. xii) 

OHRFC was in a reactive mode over the weekend with respect to flooding on the 

Cumberland River at Nashville. Record-breaking rains over largely unregulated 

(uncontrolled) basins of the Cumberland River, inadequate communication with USACE 

LRN concerning releases from Old Hickory Dam, less than optimum staffing at critical 

times and an overall lack of heightened situational awareness resulted in operational staff 

not staying abreast of record and catastrophic flooding. As a result, the flood warnings for 

the Cumberland River at Nashville had negative lead times in initial forecasts for Flood 

Stage, Moderate Flood Stage, and Major Flood Stage. 

OHRFC staff exhibited dedication to thc NWS mission. This historic event 

generated an extreme workload for an extended period of time. The staff worked diligently 

to meet the demands of river forecast operations. Inadequate staffing at times, specifically 

on Sunday, contributed to difficulties with Cumberland River forecasts. Additional staff 

was needed to maintain situational awareness and enhanced coordination and 

communication with WFOs and external partners. Staff augmentation would also have 

allowed for more frequent updates of river forecasts and critical, in-depth evaluation of 

observational data and assessment of hydrologic model results. 

By extending its operations to 24-hour coverage, the OHRFC demonstrated 

awareness that a serious flood event could develop over the weekend. Despite this 

increase, several operational decisions/actions over the weekend indicated inadequate 

staffing, especially during a critical period on Sunday, and left staff unprepared to deal 

effectively with a rapidly changing and catastrophic flood scenario. 

* * * 

Additional personnel were needed to maintain situational awareness, for timely 

updates to river forecasts as needed, and for forecast diagnosis to reduce the significant 

uncertainty of river projections, especially with respect to the Cumberland River. .. 

Additional staff on Sunday would have allowed for in-depth review of data and 

critical forecast processes and procedures by senior operational forecasters, enhanced 

communication with WFOs and partners, including obtaining real-time rainfall 

observations, and more frequent updates of river crest forecasts that had been exceeded. 

6 
106 

(pp. 40-41,42) 

WFO Nashville: 

Staffing resources were not adequately allocated to assist with hydrologic warning 

services given the magnitude of this event. Staffing was not adequate on the overnight 

shifts during the event. 

OHX [WFO Nashville] staffing was adequately augmented during the day and 

evening hours of Saturday and Sunday, including using the Information Technology 

Officer (ITO) and a Student Career Employment Program (SCEP) student to assist in 

operations; however, the overnight shift lacked additional operational staff. From 

midnight to noon Saturday, no additional forecasters were on duty; however, the WFO 

OHX SDM recommended additional staffing due to tornado watches and a flash flood 

watch in effect, numerous warnings issued and heavy rainfall forecast for Saturday. From 

midnight to 6:00 a.m. Sunday, staffing included only one additional forecaster, although 

there was a Particularly Dangerous Situation (PDS) Tornado Watch in effect, there had 

been severe flash flooding with fatalities Saturday and more heavy rain was forecast for 

Sunday. By Monday night there was no additional staffing, although the Cumberland 

River at Nashville had crested earlier that evening, many rivers were still in flood, and 

officials had evacuated the Waterford subdivision in Old Hickory (northeast of Nashville 

along the Cumberland River.) 

(pp.49-50) 

3. During a briefing at the end of September sponsored by the University 

Corporation for Atmospheric Research (UCAR) and the Weather Coalition, a 

recommendation was made to establish a U.S. Weather Commission, based on the 

NRC's recommendations in its August report, titled, "WeatherServicesforthe 

Nation: Becoming Second to None." What is your reaction to this suggestion? 

After the publication of the Oceans Commission report several years ago, NOAA 

and many in the Congress seemed solely focused on those aspects to NOAA's mission 

that were related to the oceans, to the near exclusion of weather. In fact, the prior 

Administration's proposal for a NOAA Organic Act, which was based on the Ocean 

Commission recommendations, would have literally abolished the NWS as a separate line 

office or agency. (That version was rightfully rejected by the House Science Committee). 

The proposed Weather Commission might be a good vehicle to bring a better balance to 

NOAA's perception of its mission and to educate Congress and the nation about the 

untapped opportunities that exist for improving the nation's safety and commerce 

through enhanced weather services. 

7 
107 

Those who have proposed the Weather Commission have actively engaged us in 

discussions, seeking our ideas and support. Additional work needs to be done to define 

the objectives and role of such a commission, and to clarify how it will supplement rather 

than duplicate the fine work recently done by the National Research Council. NWSEO 

would likely support such a commission provided that its goals include addressing the 

role and interests of the NWS and its employees and not just the role and interests of the 

commercial and academic sectors. 

8 
108 

WFO Staffing Shortfall Verified 

April 27, 2011- Tornado Outbreak 

1" ~ NATIONAL WEATHER SERVICE * 

_ * 

_ T"""~, 

Southern Region Headquarters ~ , ~-

"''''' 

Methodology 

• 7 WFOs within outbreak area examined 

- Memphis, Jackson, Huntsville, Birmingham, Peachtree City, 

Nashville, and Morristown 

• NWS base staffing at each office is noted each 

day from April 25-30, 2011 (Mets +HMTs) 

• NWS office overtime/camp time used was 

compiled each day from April 25-30, 2011 

• Total office staffing is the base staffing plus 

overtime/camp time staffing 

• Staffing 'shortfall' is defined as the difference: 

i.e. total staffing less the base staffing 

6/2/2011 

1 
109 

6/2/2011 

~ational Weather Service OT/eT 

\:"-.;J hours per day per office 

Total Overtlme/Comp-tlme (OT/CTj Hours 

2 
110 

Explanation of NWS Staffing Graph 

• The following image depicts the 24-hour staffing for 

the 7 WFOs for the period 4/25 (0-2) through 4/30 

(D+3). The 27th , the day oftornadoes, is D+O 

• 'BASE' ('Fair Weather') staffing (blue line) represents 

the average number of 8-hour shifts our staffing level 

provides daily at each of the 7 WFOs 

• 'TOTAl' staffing (red line) represents the average 

amount of overtime/comp time (OT/eT) accrued by 

each of the 7 WFOs during the outbreak period. The 

daily values are normalized by 8 to depict the 

equivalent number of additional full-time shifts 

Explanation of Staffing Graph 

(Continued) 

• 'Deficit' (black bar graph) represents the average 

difference between 'Base' staffing and 'Total' 

outbreak staffing. Each bar represents the minimum 

shortfall in 8-hour shifts we experienced daily from 

4/25 through 4/30. In other words, the staffing 

shortfall shown is the minimum required to bridge 

our NWS office between 'Fair Weather' staffing and 

the minimum required severe weather WFO staffing 

• The drop-off at D+3 is Saturday. 

6/2/2011 

3 
111 

Daily Eight-Hour Shift Shortages 

Determined During Outbreak Period 

'··1--------

:EZ?C~~ ,/'"t 

~ 12.0 i +- -- .... --,-,-,--

• , ~ - -.--.,,~ _SbIftD.ffctt/Wi'O/O • ., 

; ~ _!A5!!. 8-HrSb!ftsjWFO!Dlv 

9..0 +---.. -~- . --....... TOTAt8-HrShiItt/WfO/lta,y' 

r &.0 t------.. ,,--

··t----- .. r--_L_ 0-2 I.'H tHO I)t1 Ot2 Dt3 

OutbrlllxPertod {4/25-4/301 

... ~'fItATH~~ 

t~~ Findings 

~ • Workload needs first increased with pre-event 

decision support for emergency response 

partners, (D-2, D-l) 

• Workload demands were extremely high during 

4/27 (D+O) with tornado outbreak as all 7 WFOs 

fully engaged in exhaustive warnings operations 

• By late evening, preliminary storm survey 

operations, post-event rescue/recovery support, 

and media needs, contributed to office workload 

5/2/2011 

4 
112 

Findings (continued) 

• Workload requirements remained very high for 

the first 3 days after the 4/27 outbreak (0+1 

through 0+3) 

• In addition to warning operations, storm 

damage assessment operations dominated the 

total of post storm OT/CT, followed by EM 

partner weather support for recovery 

operations and, media response activities 

",,"~T~q~ #~H4<t, 

~ ~.. 'j' Conclusions ~ •• i ~ \;,~ .... ~ ~",,,,,,,;I 

• A significant staff deficit at NWS Forecast Offices 

(WFOs) was demonstrated between base office 

staffing and required pre, during and post severe 

weather staffing, 4/25 through 4/30 

• This staffing deficit was equivalent to about 6-7 

work shifts per day from D+O through D+3 which 

was met through exhaustive OT/eT 

• This demonstrated staffing shortfall requires 3 to 

6 additional meteorologists per office ... the ERMet program requires 3 at each of 122 offices 

6/2/2011 

5 
(113) 

Appendix II 

ADDITIONAL MATERIAL FOR THE RECORD
114 

DEPARTMENT OF COMMERCE ACTING SECRETARY, MS. REBECCA BLANK, MAY 24, 2012 

MEMORANDUM SUBMITTED BY DR. KATHRYN D. SULLIVAN
115 

THE DEPUTY SECRETARY OF COMMERCE 

V.Jashington, D.C, 20230 

During the last two years, I believe we have' made great strides to improve the budget 

formulation and execution process, bringing more rigor and transparency to the process. The 

problems identified in the Investigative Report indicate that we have more work to do to 

ensure that these reforms are making their way to the sub-bureau levels. In addition, there 

need to be controls in place to detect and review such significant movement of expenses at an 

earlier stage in the process. One reason why this investigation took more time than expected 

was that resources were moved between units in the NWS in very indirect ways (that is, no 

allocated money was directly moved and no expenses were initially charged to an inappropriate 

program.) We need to make sure such activities are caught at an earlier stage in the future. I 

discuss below some steps 1 propose to institute to accomplish this. 

Finally, the failure of senior officials both inside ,and outside the NWS to respond approprlately 

and in a timely fashion to the repeated complaints regarding the questionable financial 

transactions is unacceptable. Questions and complaints from employees who challenged 

questionable directions were disregarded within the NWS, and several efforts to complain 

anonymously outside the NWS did not receive appropriate attention. That these complaints 

were not taken seriously is a significant failure that allowed the conduct to continue much 

longer than it should have. I am hopeful that the reforms I announce below will begin to 

address this problem and that no other complaint of this nature will be missed. 

Setforth below are my decisions regarding the Investigative Report's recommendations. In 

summary, I adopt the Investigative Team's recommendations for reforms at the Departmental 

level, with some modifications, and direct a few additional actions be taken that Secretary 

Bryson and I believe are also necessary to prevent this type of problem from occurring in the 

future. 

1. NOAA Decision Memo (Recommendations Nos. 1, 2, 3, 4, 5, 7, S, and 12). I am in 

receipt of Under Secretary Lubchenco's Decision Memo dated May 24, 2012, which acts upon 

the NOAA-specific recommendations contained in the Investigative Report. I concur in each of 

these deciSions and direct that NOAA provide an implementation plan for each of the 

decisions contained in Under Secretary Lubchenco's memo, with a timetable and milestones, 

no later than 30 days after the date of this memo. In addition, I want briefings regarding the 

process made in implementing these decisions within two months and again within six 

months of the date of the memo. 

2. Review of Use and Approval of Summary level Transfers [SLTs} across the 

Department with a focus on automated controls. [Recommendation No.6). The Investigative 

Team found that NWS misused SlTs to switch accounting codes assigned to past expenses from 

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detecting or preventing this inappropriate reprogramming. I have taken immediate actions- detailed at 

the end of this memorandum - to address these failures. 

Importantly, the Team did not find any evidence that any NWS employee committed fraud or received 

personal financial gain through their actions. This fact does not excuse, or reduce the seriousness of the 

employees' actions. 

The Investigative Team did identify personnel-related issues; NOAA is addressing those issues separately 

and concurrently. 

The actions taken by the NWS employees were not immediately apparent to the Investigative Team 

because they were buried in difficult-to-detect transactions. The Investigative Team took pains to do a 

thorough analysis of the relevant and extensive financial records to fully understand what actions took 

place and to be able to make recommendations about steps to take to prevent simffar transgressions in 

the future. 

The Investigative Team found that in FY 2010 and FY 2011 the NWS employees used a variety offinancial 

mechanisms during budget execution. Specifically, they did not assess NWS programs evenly or in 

appropriate amounts to cover NWS common services. This left a shortfall in the Management and 

Administration account, an account handled by the Office of the Assistant Administrator. In response to 

this shortfall, and other operational needs, the employees moved expenses out of Local Warnings and 

Forecasts (lWFj base budget and into other NWS programs. This in turn freed up funds to cover 

expenses in other programs within LWF. 

In addition, while the NWS employees did not transfer obligation authority between accounts, they 

inappropriately used summary level transfers (SLTsj--meant under normal circumstances to allow 

corrections to accounting errors--to transfer previous expenses from one NWS program to another. To 

accomplish this, NWS employees switched accounting codes on expenses paid out ofthe lWF base 

budget to codes for programs outside of LWF. Because of these actions, funds appropriated for 

programs like the Advanced Weather interactive Processing System Program and the Weather Radio 

Improvement Project were used to pay for NWS expenses within LWF. And separate funds within LWF 

were in turn freed up to pay for shortfalls in other NWS operations. 

In addition to the reprogramming violations, the investigation also found that these actions went 

unchecked In large part due to various management issues. It is clear that this issue would have been 

discovered and corrected earlier had senior leadership within the NWS exercised appropriate oversight. 

The NWS operated with an unacceptable lack of transparency relating to budgeting and without 

mechanisms for staff to air their concerns about budget formulation and execution within NWS, creating 

an environment of mistrust. 

There is no doubt that financial controls in place at Department, NOAA and NWS were ineffective at 

detecting this practice. The automated controls within the financial management system were not 

configured to flag transactions such as these SLTs. SLTs are examined at the NOAA CFO's Office level but 

only for particular "business rules"; none of which were triggered by these transactions. Moreover, 

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THE DEPUTY SECRETARY OF COMMERCE 

WashIngton, D.C. 20230 

4. Appfopriations law training for financial staff and managers with budget oversight 

roles, including the proper use of SLTs. (Recommendation No.9}. The Investigative Team 

found that pertinent NWS employees had not received sufficient training on reprogramming or 

appropriations law. While the evidence suggests that most If not all of the employees who 

were involved were aware they were acting contrary to sound financial management 

procedures, It is important that we provide our financial staff with appropriate training for the 

issues they face. While appropriations law training has been provided to certain staff members, 

It was not as Widely-available or as broadly designed as it needs to be. 

Accordingly, I direct the Department of Commerce Office of the General Caunsel and Office of 

Budget to collaborate to develop a training program that addresses core appropriations law 

concepts, Including reprogramming, the Anti-Deficiency Act, and the appropriate use of SLTs. 

This training pragram should be in place no later than August 1,2012 ond should either be 

available on-lin!' when needed or be provided at least twice each year. Each bureau should 

designate staff that would benefit from this training and require it as part of their 

performance plans. 

S. Review of the sufficiency of financial management and oversight experience in the 

Senior Executive Service cadre. (Recommendation No. 10). As the Investigative Report notes, 

it is imperative for members ofthe Senior Executive Service (SES) to be prepared to discharge 

the financial oversight duties that are required of their positions. While some of the employees 

who enter the SES have experience with financial oversight, it is important that we not assume 

this knowledge. This Is equally true for certain non-SES political appointees. 

f therefore direct the Department of Commerce Office of Budget and the Office of the General 

Counsel to work with the Oepartment of Commerce Director of Human Resources to develop a 

training program that addresses /inancial oversight and basic tenets 0/ appropriations law for 

appropriate SES employees and political appointees who oversee any budget processes. This 

training shOUld either be aval/able on-line when needed or be made available at least twice 

each year and shall be mandatary for all employees who enter the SES. Bureaus should 

develap al/st of political appointee positions that require this training as well. 

6. Review the adequacy of training provided to SES and political leadership in the 

Department regarding how to address complaints in an appropriate and timely manner. 

{Recommendation No. lll. As discussed at length in the Investigative Report, the first 

complaint regarding the questionable financial actions was made in early 2010. However, it 

was not until late 2011 that a thorough review of the allegations was conducted. The failure of 

officials to respond appropriately and in a timely manner to complaints allowed this conduct to 

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"We recommend that, as part of [the Acting NWS CPO's] review, he determine 

how best to assess NWS programs to fully fund the NWS OAA common services 

account. H 

"We recommend that {the Acting NWS CFOj harmonize NWS practices with 

those of other line offices and NOAA Finance policies, ensuring that NWS 

programs are assessed uniformly and that the OAA account is fully funded at the 

beginning of each fiscal year. " 

ADMINISTRATOR DECISIONS #2: 

I instruct the NWS CFO to fully fund the NWS Office of the Assistant Administrator common 

services account at the beginning of each fiscal year. 

I instruct the NWS CFO to assess NWS programs equably for common services beginning 

immediately. 

I further instruct the NOAA CFO to work with each line office eFO to ensure all program offices 

within a line office are assessed equably for common services accounts. I expect the NOAA 

Acting CFO to consult with NOAA's Assistant Secretary for Environmental Observations and 

Prediction, Chief of Staff and General Counsel before providing me an update by July 1 on his 

progress towards ensuring programs within line offices are assessed for common services 

equably and expect this work to be completed no later than August 1. 

I instruct the NOAA CFO to ensure there is a training procedure for staff in line eFO Offices to 

make staff aware that it is NOAA policy to ensure program offices are assessed equably for 

common services accounts. This procedure must be in place no later than July 1. 

The investigation found that: 

Existing budget controls failed to prevent [NWS employees] from 

engaging in questionable financial practices and failed to promptly 

identify ... behavior. Clearly, NOAA must have adequate budget controls 

in place to prevent such behavior in the future. Currently, some line 

office CFOs report to the DAA and others, as in this case, report directly 

to the AA. . .. The Deputy AA had no direct supervisory role over the CFO 

and, despite significant efforts, was unable to get even basic financial 

information that could have revealed a problem earlier. Nor did the 

NOAA CFO playa supervisory role, even though she was clearly in the 

best position to understand the line office CFO's financial decisions. 

Investigative Team Recommendations 4 and 5: 

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"We recommend that NOAA modify the supervisory structure of the NWS to ensure that there is 

appropriate oversight over the CFO, and that NOAA reviews the CFO reporting structure in all its 

line offices." 

"We recommend that NOAA adjust the supervisory structure of each line office so that the AA 

and DAA, along with the NOAA CFO, each playa port in supervising their respective fine office 

CFO." 

ADMINISTRATOR DECISIONS 1t3: 

I instruct the NOAA Deputy Undersecretary for Operations to change the supervisory structure 

of the NWS so that the financial process is directly supervised by the NWS DAA and the NWS AA 

and NOAA cm serve as reviewing officials on the NWS CFO performance plan and evaluation. 

I instruct the NOAA Deputy Undersecretary for Operations to review the supervisory structure in 

all other NOAA line offices to ensure the line Office AA. DAA and NOAA CFO all playa role in the 

rating and reviewing of Line Office CFO performance plans and evaluations. I expect an update 

from the Deputy Undersecretary for Operations no later than July 1. 

I instruct the NWS AA to examine the membership, roles, and responsibilities of the Corporate 

Board for providing budget review and oversight going forward, and in consultation with the 

Assistant Secretary for Environmental Observations and Prediction and the Deputy 

Undersecretary for Operations provide to me an analysis and proposal by August 1. 

The investigation found that: 

Summary Level Transfers (SLTs) Were Used Improperly to Facilitate the 

Inappropriate Transfer of Funds. In this case, SLTs were used to switch 

accounting codes assigned to past expenses from one account to 

anather, a purpose far which they were never intended ... The [NWS 

employee's] use ofSLTs accomplished two objectives. First, the 

[employees] believed that Sl Ts allowed any "color" of money (PAC or 

ORF) to be converted into flexible LWF or otherfunds ... Second, SLTs 

made detection of movement between funds difficult, and prevented 

clear reprogramming transactions from being flagged in project reviews 

or audits. 

[T]here was a breakdown in controls intended to prevent the misuse of SLTs. 

Investigative Team Recommendation 6 and 7: 

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"We recommend that the DOC CFO be tasked with reviewing the use of and approval rights for 

SL Ts across the Department, to determine whether they are an appropriate financial tool and, if 

so, what changes to controls at either at the bureau or the Departmental/evel may be 

warranted. In particular, we recommend that the DOC CFO jocus on automated controls within 

the DOC financial management system, if jeasible, that might fiag SL Ts involving large dollar 

amaunts or SL Ts used to transjer junds between PPAs. " 

·We further recommend that the NOAA CFO's Office expand its current supervision oj the SLT 

process to ensure that SL T transactions are provided appropriate higher level review." 

ADMINISTRATOR DECISION #4: 

Recommendation 6 is outside my purview as NOAA Administrator but I fully contur with the 

recommendation. 

I instruct the NOAA CFO's Office to expand its current supervision of SLTs to ensure the 

transactions are provided appropriate review. I expect a memo from NOAA's Acting CFO 

detailing the current review of SLTs and a time line for implementing procedures to ensure a 

higher level review no later than date July 1. 

The investigation found that: 

Many ofthe problems in this matter arose because of a lack of budget 

process transparency and a culture within NWS that did not encourage 

questioning or provide independent channels for reporting dubious 

budget decisions. 

Investigative Team Recommendation 8: 

"We recommend that the NWS AA create an action plan to address these issues, to be reviewed 

by the NOAA Deputy Undersecretary for Operations. The plan should focus on ensuring 

adequate input into NWS budget decisions from senior program managers and NWS leadership, 

and creating avenues to raise concerns about budget issues to senior NWS or NOAA leadership 

without jear oj retaliation. Furthermore, we recommend that the DOC CFO examine these issues 

in the other bureaus and other NOAA line offices." 

ADMINISTRATOR DECISION 115: 

! instruct the NWS AA to create an action plan to address the issues outlined in 

Recommendation 8 that ensures proper input into NWS budget deCisions from senior program 

managers and NWS leadership and creates avenues to raise concerns about budget issues to 

both senior NWS and NOAA leadership without fear of retaliation. Additionally the plan should 

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explicitly concern itself with the structure and function of the NWS Corporate Board. This plan is 

due no later than July 1 to the Deputy Undersecretary for Operations. 

I instruct the Deputy Undersecretary for Operations to review this plan and make changes or 

approve the plan no later than August 15. Prior to approval I expect the Deputy Undersecretary 

for Operations to brief me on the action plan. 

I further instruct the Deputy Undersecretary for Operations to examine issues outlined in 

Recommendation 8 within the other NOAA Line Offices and report the findings to me no later 

than August 15. 

The Investigation found that: 

Those interviewed ... were dear that NWS did not have a documented, 

transparent process to address emerging budget issues. 

Investigative Team Recommendation 9: 

nWe recommend that NWS create a process that is well-documented, vetted with stakeholders, 

and includes explicit programmatic decisions aJlowing the bureau to align its budget formulation 

and execution with the available funds." 

ADMINISTRATOR DECISION #6; 

I accept this recommendation and instruct the NWS AA to create a well-documented process 

that includes explicit time for programmatic decisions that align its budget formulation and 

execution with available funds. Each year this process must include a formal briefing for the 

NOAA Administrator and Deputy Administrator on the NWS budget execution plan after a 

budget is enacted. The goal is to ensure NWS leadership is planning budget execution based on 

the available funds. 

The process for explicit programmatic decisions that align formulation and execution with 

available funds must be complete no later than September 1 and must be briefed to NOAA 

leadership including the NOAA Administrator, Deputy Administrator, Oeputy Undersecretary for 

Operations, Chief Resource and Operations Manager, and NOAA CFO prior to that date. 

The investigation found that: 

Those interviewed during the course ofthe Team's inquiry agreed that 

neither the NWS CFO staff nor senior NWS leadership had received 

formal reprogramming or appropriations law training. It is imperative 

that those making financial decisions fully understand basic 

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appropriations concepts so that they can recognize and prevent illicit 

activity when it arises. 

Further, members ofthe Senior Executive Service (SES) must be 

prepared to discharge properly the duties of financial oversight that SES 

positions entail. Individuals are promoted to the SES from an array of 

backgrounds, often more technical and programmatic than financial 

management experience. It should not be assumed that their prior 

experiences equip them fully for the new dimensions of financial 

oversight responsibility they are assuming. 

Investigative Team Recommendation 11: 

'We recommend that NOAA and the DOC review the sUfficiency of financial management and 

oversight experience in the 5£5 cadre. n 

ADMINISTRATOR DECISION #7: 

I instruct the Director of NOAA Workforce Management and the NOAA Chief Resource and 

Operations Manager (CROM) with consultation with the Assistant Secretary of Environmental 

Observations and Prediction to undertake a review ofthe financial management and oversight 

experience within NOAA AA, DAA, and any other SES leadership positions they identify as having 

budget formulation and execution oversight roles. (This information is to be used only to inform 

the level of additional training needed and not as a metric for promotion or continued service.) 

I further instruct the Director to propose the additional training necessary to ensure all NOAA 

personnel who are involved in financial transactions have the requisite knowledge to perform 

their duties responsibly, This report should be reviewed and approved by the Deputy 

Undersecretary for Operations and the Assistant Secretary for Environmental Observations and 

Prediction and is due to me no later than August 1. 

I reviewed the Investigative Team's recommendation for increased training on appropriations 

law. The Deputy Secretary's decisions speak to this important recommendation. 

The investigation found that: 

NOAA may need to initiate additional investigation into actions arising 

in prior years, and into tangential issues. Issues that NOAA may seek to 

investigate further include: 

(1) A full audit of the NWS budget for FY 2010 and FY 2011, to 

determine the full extent of unlawful fund reprogramming; 

(2) An audit of NWS financial practices prior to FY 2010, to 

determine when and how the NWS budget shortfall began, 

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and whether there was improper reprogramming of funds 

prior to 2010; and 

(3) An NW5 program review, to determine (a) the impact of Mr. 

Byrd's financial decisions on NWS programs; and (b) 

whether financial problems existed within NWS because of 

program dysfunction. 

Investigative Recommendation 13: 

"We concur with these recommendations and endorse a full NWS financial and program audit. N 

ADMINISTRATOR DECISION #8: 

I agree a full NWS financial and program audit is warranted. 

I instruct NOAA's CROM to Initiate the process of contracting with outside independent firms to 

conduct a financial audit and a program audit of the NW 5. These audits will look at FY 2006 

through the first quarter of FY 2012 and are to begin no later than July 15. The financial audit 

must investigate whether the belief held by NWS employees thatthere is a "structural deficit" 

within the NWS budget bears merit. In addition it must examine if any other Line Offices were 

involved in or harmed by these unauthorized transactions. I instruct the CROM to obtain the 

concurrence of the Deputy Undersecretary for Operations on the audit scope and schedule. 

The investigative team reported to me that: 

The Hill has been notified of the on-going NWS investigation and is 

anxious to learn the results. Once Congress learns of the activity that 

occurred in this matter, it will be imperative to begin restoring 

Congress' and the public's confidence in the NWS' ability to 

appropriately manage its budget. 

Investigation Recommendation 14: 

"We recommend that NOAA immediately notify Congress of any unlawful reprogramming of 

funds within NWS of which it has knowledge. At the some time, NOAA should pravide Congress 

with a corrective action plan, in line with this Report and Recommendations, outlining how 

NOAA intends to address the problems that led to NWS' unlawful reprogramming of funds. 

NOAA's submission to Congress should include a cleor picture of the current stote oj the NWS 

budget, as welJ as any necessary modifications to the FY 2012 and FY 2013 spend plans." 

ADMINISTRATOR DECISION #9: 

I have instructed my staff including my Chief of Staff, Deputy Director of legislative Affairs, and 

NOAA CFO to work with Department officia Is to notify Congress ofthe inappropriate 

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reprogramming found in this report. I Instruct my staff to work with Department officials to 

determine whether an Anti-Deficiency Act violation occurred and if so, to make appropriate 

notifications to Congress. I have also instructed my staff to provide our Appropriations and 

Authorizing Committees with our FY 2012 reprogramming request, which include a clear picture 

of the current state of the NWS budget, and to begin discussions with them about a FY 2013 

reprogramming. In addition I have instructed my staff to release this Decision Memorandum to 

Congress and to ensure that I and my staff are available to brief interested Members. 

The Investigation found that: 

[The NWS employees that were Interviewed J believe there is a 

"structural deficit" with the NWS budget. This, along with apparent 

shortfalls in the NWS OAA account, created a motive for [the NWS 

employee's] actions. Accordingly, it is imperative to determine if such a 

structural deficit exists and, if so, the causes and extent of that shortfall. 

ADMINISTRATOR DECISION #10: 

I instruct the Acting NWS CFO to examine each program office to determine jf [the government 

employee's] belief that a "structural deficit" existed is supported by evidence and if so, to 

determine the causes and extent of that shortfall. r expect a time line and plan of action to 

complete this review no later than July 1. 

I expect the outside independent financial and programmatic audits to be appointed in response 

to Investigation Recommendation #13 to examine this issue as well. 

The Investigative Team found that: 

NOAA, DOC, and the DIG did not taketimelv action when notified of 

alleged improprieties within the NWS cm's Office. Although hindsight is 

20-20, it is clear that NOAA Officials, DOC Office of the Chief Financial 

Officer, and the Inspector General's Office were all made aware that 

there were allegations of significant problems within the NWS eFO's 

Office throughout 2010 and 2011, but failed to act in time to stop the 

activity until the very end of FY 2011. 

ADMINISTRATOR DECISION #11: 

The senior NOAA officials, Department of Commerce Office of the CFe, and the Office of the 

Inspector General all failed to act on earlier anonymous complaints relating to this matter. In 

order to ensure all NOAA personnel understand how to deal with and where to send anonymous 

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complaints NOAA will review the current system of filing, logging, and responding to the type of 

fiscal complaints that prompted this investigation and recommend any further changes in 

consultation with Department officials and the Office of the Inspector General. NOAA will also 

reaffirm through yearly all hands messages where and how employees should send anonymous 

complaints, and what steps managers can take to quickly evaluate such complaints and ensure 

appropriate and timely follow-up. In addition NOAA will institute a yearly training for all NOAA 

SES employees regarding how to handle anonymous complaints. 

ADMINISTRATOR DECISION #12: 

This report raises the issue of the delegation of authority into NOAA's Line Offices without 

sufficient oversight. During my tenure as Administrator I have been confronted with other 

instances within NOAA in which authority was delegated before my time to Line Offices and 

Program Offices within our Lines without providing sufficient oversight from Headquarters. It 

has been my goal to find those instances and to take action. Today I instruct my Deputy 

Undersecretary for Operations to review delegations of authority into all NOAA Line Offices that 

lack sufficient oversight. I expect this review to be completed within the next three months. It 

should include existing mechanism for controls and structures of reporting and 

recommendations for the appropriate levels of oversight and control. In addition! instruct the 

Deputy Undersecretary for Operations to ensure that sufficient avenues exist within NOAA for 

employees to raise serious concerns to headquarters without fear of retaliation from their 

immediate supervisors. 

I hereby instruct all officers and employees of NOAA to take all steps necessary to implement these 

actions. 

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UNDER SECRETARY OF COMMERCE FOR OCEANS AND ATMOSPHERE, DR. LUBCHENCO, 

MAY 24, 2012 MEMORANDUM SUBMITTED BY DR. KATHRYN D. SULLIVAN
127 

The current set of actions was set in motion onJuly 13,2011 when the Office of inspector General 

referred an anonymous complaint to NOAA's Chief Administrative Officer through the OIG's normal 

procedure for referring anonymous hotline complaints, The complaint was not flagged in any 

extraordinary manner. That complaint resulted in a preliminary review of budget execution within NW$ 

launched on August 17, 2011.1 received a verbal report of their findings on November 29, 2011 and took 

the actions described above. As early as December 6, the Investigative Team was in communication with 

the Office of the Inspector General to seek advice and guidance; on December 13-with the DIG's 

cooperation -language was explicitly added to the Charge for the investigation that the diG would 

"actively engage in this effort." The Investigative Team was charged with immediately beginning an 

internal inquiry into the alleged mismanagament of funds atthe National Weather Service during Fiscal 

Years 2010 and 2011 and to provide recommendations for corrective action. 

Over the course ofthe past five months the Investigative Team conducted thirty interviews of over 

twenty Department of Commerce employees, completed an extensive review of NWS financial records, 

and reviewed a large number of documents including emails, financial information, memoranda, and 

other material provided by witnesses in support of their testimony. Throughout the investigative 

process the Team consulted with the Office of the inspector General regarding the conduct of the 

investigation, including whom to interview and what lines of questioning to pursue. The investigation 

focused on FY2010 and FY2011 because that was the time period referenced in the complaints received. 

The Team has since noted that NOAA may need additional inquiry into activities in prior years. Later in 

this memo I direct additional inquiry. 

On May 11, 2012 the Investigative Team provided me with its report, including its findings and 

recommendations. I have fully reviewed the report and carefully considered each recommendation. 

Any inappropriate action at the National Weather Service is serious and a matter of grave concern. I 

consider the improper and irresponsible actions described in the report to be wholly unacceptable and 

to require swift corrective actions, At the end of this memo, I set forth my decisions about the 

corrective actions needed to address the problems identified. 

I have reviewed the report with the knowledge that our nation relies on NOAA's National Weather 

Service to be a trusted source of real-time information. I have been assured that none of the local 

forecasts and warnings -life- and property- saving services provided by NWS on a daily basis-- was 

jeopardized by the misconduct. I consider NOAA's responsibility to provide these services to the nation 

to be one of NOAA's most important missions. 

Findings 

The Investigative Team found that NWS employees engaged in the reprogramming of NWSfunds 

without Congressional notification during the years in question. These actions may be a violation of the 

Anti-Deficiency Act. The Team also found failure of management and oversight by NWS leadership. In 

addition, the Team found significant problems with budget and financial controls at the National 

Weather Service and that Departmental financial and management controls were ineffective at 
128 

THE DEPUTY SECRETARY OF COMMERCE Washington, D.C. 20230 

one account to another, which allowed them to free up funds in accounts that they believed 

were underfunded. The use of SLTs made it more difficult to detect the movement offunds 

and prevented the transactions from being flagged during program reviews and audits. 

When used properly, SLTs are a useful tool which provides financial officers with the flexibility 

to fix errors or mistakes In accounting codes for past expenses. Thus, it would be inappropriate 

to prohibit their use. However, this case shows the danger presented when these tools are 

misused. 

Over the past six months, the Department of Commerce CFO/ ASA has led a process to improve 

real-time business Intelligence within the bureaus and between bureaus and the central 

Departmental C offices. This effort needs to be explicitly expanded to assure that the misuse of 

SlTs cannot recur. Accordingly, I direct the Department of Commerce CFOjASA to conduct a 

comprehensive review of how SLTs are used across the Department with a view to ensuring 

that they are being used appropriately and that there are proper procedures in place for 

approving and monitoring such transactions. In addition, I direct the Department of 

Commerce CFOjASA to explore whether automated controls can be added to the existing 

departmental financial management system to flag SLTs that deserve additional review, 

Finally, I direct the Department of Commerce CFO/ ASA to provide me with the results of this 

review no later than three months from the date ojthis report. 

3. Examination of bureau and line office budget formulation processes to ensure 

transparency and accountability. (Recommendation No.7). The Investigative Team found 

that the current budget process at NWS lacked transparency and that the culture within NWS 

did not encourage the questioning of assumptions or provide a process for reporting 

questionable budget decisions. As discussed above, we have implemented a number of 

reforms during the past two years at the Department to bring greater rigor and transparency to 

the budget process but it is clear from the Investigative Report that more needs to be done. 

Accordingly, I direct the Department of Commerce CFO/ASA to examine the budget 

formulation processes being utilized In the bureaus and, where appropriate, in line offices 

within bureaus to determine whether the reforms are being appropriately implemented and 

cascaded. I alsa direct the Department of Cammerce CFO/ ASA to ensure that there are 

opprapriate avenues for finanCial managers within the Department to raise concerns about 

budget issues without fear of retaliation. Finally, I direct the Department of Commerce 

CFOjASA to provide me with an update on these matters no later than three months from the 

date of this report. 

3 
129 

there had been insufficient training for NWS budget personnel or NWS leadership on reprogramming 

and appropriations law. 

While certain mechanisms existed that ultimately allowed employees to report improprieties to a 

number of different sources outside of NWS, NOAA headquarters, the Office of the Inspector General 

and the Department of Commerce Chief Financial Officer's Office all bear responsibility for missing and 

mishandling early complaints about the questionable financial transactions. 

The section below details the twelve decisions I find necessary to address the problems uncovered in 

the investigation. Below, I first summarize an investigation finding(s) and the recommendation(s) made 

by the Investigative Team, then I present the action I hereby direct . 

••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• ~ •••• I 

Decisions 

The investigation found that: 

Acting NWS CFO has reviewed the state of the NWS budget and has 

determined a reprogramming of $26 million is needed into LWF and an 

additional $9 million is needed to complete the NEXRAD Dual 

Polarization upgrade for FY 2012. 

Investigative Team Recommendation 1: 

"We recommend presenting this reprogramming to Congress and discussing 

options to appropriately fund these accounts in FY 2013. " 

ADMINISTRATOR DECISION #1: 

I instruct my staff to immediately deliver the FY 2012 reprogramming requests 

to our Appropriations and Authorizing Committees, to begin a discussion on 

changes needed to the FY 2013 budget and to Include a clear picture of the 

current state of the NWS budget and any adjustments that may be needed to 

ensure continuity of core NWS operating activities. The FY 2012 reprogramming 

and changes needed in the FY 2013 budget have been prepared by the Acting 

NWS cm, the NWS ASSistant Administrator (AA), the Acting NOAA CFO and the 

Department of Commerce Deputy Assistant Secretary for Resource 

Management. They have been briefed to senior officials within the NWS, NOAA 

and the Office of the Secretary including myself and Deputy Secretary Blank. 

Investigative Recommendations 2 and 3: 

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THE DEPUTY SECRETARY OF COMMERCE 

Washington. D.C. 20230 

continue for at least a year and half longer than it should have. Such lapses cannot be 

tolerated. 

To address this problem, I direct the Department of Commerce General Counsel to ensure that 

that both SES and political leadership within the Department afe trained an the proper 

process for reviewing and responding to complaints made regarding misconduct allegedly 

occurring under their supervision. In addition, I will ask the Department of Commerce 

Inspector General to review his processes to ensure that complaints received by his office are 

appropriately addressed. 

***** 

In addition to the foregoing decisions based on recommendations made by the 

Investigative Team in the Investigative Report, I also want to address two other issues. 

First, the selective method being used by the NWS to tax line offices for common 

services created a Situation in which certain line offices were not paying their fair share while 

others were paying more than their fair share. This allowed the movement of money in a 

nontransparent way. Such a practice is untenable. Under Secretary lubchenco has instructed 

the Acting CFO of the NWS to institute a fairer allocation method and to harmonize NWS 

practices with those of other NOAA line offices. In addition, I direct the Department of 

Commerce CFO/ ASA to conduct 0 review of procedures currently used by bureaus to allocate 

funds from sub-bureaus and line offices to common central service funds and ensure that the 

procedures are transparent and result in fair and objective allocations. I further direct the 

Department of Commerce CFO/ ASA to provide me with the results of this review no later than 

three months from the date of this report. 

Second, the Investigative Report hotes that there was inadequate supervision of 

financial staff within the NWS, with no clear oversight from the NOAA CFO, and no oversight 

within NWS except by the Assistant Administrator (AA). The Deputy AA had no oversight 

authority. In her decision memo, Under Secretary lubchenco instructs the NOAA 'Deputy Under 

Secretary for Operations to review the supervisory structure of all NOAA line offices (including 

NWS) to ensure that line office CFO offices receive oversight from multiple sources. I direct the 

Department of Commerce CFO/ ASA to oversee a similar review of the reporting structure of 

all Bureaus within DOC that contain line offices to make sure that all line CFOs are 

appropriately supervised. I further direct the Department of Commerce CFO/ ASA to provide 

me with the results of this review no later thon three months from the date of this report. 

5 
131 

THE DEPUTY SECRETARV OF COMMERCE 

Washington, D,C. 20230 

I hereby instruct all officers of the Department of Commerce and the National Oceanic and 

Atmospheric Administration to take all steps necessary to implement these decisions. 

12L«-a ~. MaJ1~ Deputy Secretary ReJecca Blank 

6 
AU Illdactiorwl;llepursuant to fOIAEJcemption(b)(6). 

Executive Summary 

Between earJy 2010 and late 2011, a series of complaints was received by the Department of 

Commerce (DOC) Office of the Inspector General (OIG), officials from the National Oceanic 

and Atmospheric Administration (NOAA), DOC Office of the Chief Financial Officer, and the 

Government Accountability Office (GAO), aUeging an array of misconduct on the part o • • These complaints resulted in a preliminary 

investigation conducted at the request ofNWS leadership that found reason to believe that 

may have engaged in the unauthorized reprogramming ofNWS 

program funds in fiscal year (FY) 2010 and FY 201 t. in violation of those years' Federal 

Appropriations Acts. The present executive level inquiry was initiated in light of these 

preliminary findings. 

The present inquiry team conducted more than 30 interviews of over 20 witnesses, perfonned 

extensive financial analysis, consulted with the IG's Office, NOAA CFO's Office and the DOC 

General Counsel's Office, and examined large numbers of documents, e-maiJs, memoranda,. and 

spreadsheets pertinent to the allegations against Ultimately. the 

inquiry team finds that to engage in the unauthorized 

reprogramming ofNWS funds inFY 2010 andFY 2011, in violation of the FY 2010 and 201 J 

Federal Appropriations Acts. The inquiry team further finds that significant management, 

leadership, budget, and financial control problems led to an environment where such activity 

could occur. 

The inquiry team found no evidence that_ committed fraud or personally gained from 

• conduct. Instead,_ appeared motivated by a desire to keep a variety ofNWS 

programs operational despite whatl believed to be inadequate funding to maintain these 

programs at necessary levels ofperfonnance. To keep certain NWS programs functioning, in FY 

2010 and FY 2011_ failed to assess NWS programs or Financial Management Centers 

(FMCs) evenly or in appropriate amounts 10 cover NWS common services, leaving a significant 

shortfall in tne Management and Administration (M&A) account handled by the Office of the 

Assistant Administrator (OAA). To make up for this shortfall, along with additional NWS 

budget deficits._ inappropriately transferred past expenses out of the Local Warnings 

and Forecasts base budget (LWF), which contained flexible Operations, Research, and Facilities 

CORP) funds. to programs such as the Advanced Weather Interactive Processing System Program 

(A WIPS) and the Weather Radio Improvement Program (WRIP), thereby freeing money in the 

L \\IF to address shortfalls elsewhere within NWS operations. _ used summary level 

transfers (SLTs) to shift these expenses, thereby avoiding obvious detection and "colorizing" 

tightly controlled Procurement, Acquisition, and Construction (PAC) funds by converting them 

to ORF funds that could be used for a variety of purposes. 

AS redacbons are pUfstlant to FOtA Exe

___ was able to continuell inappropriate activities for tbe time period covered by 

....... ........ .. A "' ...... complaints, Pi"iiTt .bee."iiuse of the dynamic that 

I!I was nervous to chal

questionable responses were accepted and. a

trusted_ guidance, rarely 

to work without significant oversight. At the same tim

was a lack of transparency regarding budget policies and procedures throughout NWS, 

an atmosphere of distrust in NWS leadership and the NWS CFO's Office 

Looking back, it is clear that several complaints concerning_ activities went u

allowingll activities to continue for much ionger than should have been possible. NO

officials, the Office of the Inspector General (OIG), and the DOC CFO's Office all rece

complaints alleging possible reprogramming activities in FY 2010, and yet the activity c

untill.te FY 2011. 

Finally, two unrelated complaints about_ are not supported by the evidence. T

involves an allegation that_ allowed NWS to spend five hundred thousand doll

conduct a space consolidation study using funds from other NWS programs, at a time w

NWS budget was facing shortfalls. In fact, money spent by NWS in this study was reim

by the Acquisitions and Grants Office (AGO). which was the beneficiary of the work. 

Moreover, the space consolidation project was designed to save NWS significant money 

future years. The second complaint involves a claim that_ inappropriately influ

the outcome of a competitive acquisition to have an award made to the company 

The inquiry finds that a NOAA contracting officer was present for all meetings between 

• and representatives from , who believes that_ actions w

appropriate . 

The inquiry team was instructed to concentrate primarily on financial records and event

in FY 2010 and FY 2011. This period is the focus of the earlier draft investigation repo

referenced by complaints and allegations and is the period in which most of the alleged 

inappropriate conduct arose. The inquiry team recognizes that there are clearly define

questions regarding this matter that remain unanswered, and that NOAA may need to inadditional investigation into actions arising in prior years, and into tangential issues. A

of this report are listed areas that NOAA may consider appropriate for further review 
All redactioo$!lr$plll'$uatltto FOIAEXf:lmption(b)(6). 

REPORT 

Procedural History 

This inquiry is the result of a series of complaints filed with the leadership of the National 

Oceanic and Atmospheric Administration (NOAA), the Department of Commerce (DOC) Office 

of Inspector General (OIG), DOC Office of Chief Financial Officer, and the Government 

Accountability Office (GAO), involving alleged mismanagement offunds within the National 

Weather Service (NWS). The complaints assert a series of wrongful acts, but focus primarily on 

the decisions of the to keep a variety ofNWS 

programs operational by inappropriately transferring funds from other NWS programs, including 

the Advanced Weather Interactive Processing System Program (AWIPS), the Weather Radio 

Improvement Program (WRJP), and the Next Generation Radar Program (NEXRAD). As 

described more fully below. NOAA has worked with the support and guidance of the OIG to complete its investigation into these allegations. 

A. The Complaints 

about financial mismanagement 

seeing the letter,1I cannot confinn 

done with it.! (Exhibit 43). However, 

have given a copy of such a complaint to_ 

with the OIG, (Exhibit 43). Staff from the NWS CFO's 

a response to the complaint addressed to_ dated Apri130, 2010; 

accordingly,_ must have received a copy of the complaint prior to that time. (Exhibit 

80). No response to the complaint was ever given to_. 

The complaint letter stated that the NWS was "practicing financial deceit," and that "[iJn each of 

the last several years, NWS/CFO has moved appropriated funds around from program to 

program, PAC to ORF, into labor etc. to pay for unanticipated, underfunded, underestimated, or 

mismanaged programs, actions, etc." (Exhibit 43) The complaint further stated that this practice 

had detrimental effects on N\VS programs, as it "increases costs in many situations, delays 

improvements or needed maintenance, allows spares to drop below needed levels, and puts the 

manager at risk." (Exhibit 43) Finally, the complaint referenced an NWS office space 

assessment. posing the question, "[s]ince we are short of money, why is_ spending on 

the order of $500K to do a 'space assessment' study?" (Exhibit 

43). 

l!P!!!e 

(Exhibit 43). 

AN r.,dadiOI\$ are pursuant to FO

On May 25, 2010, GAO referred an almost identical anonymous complaint letter t

on the GAO FraudNET website to the DOC 010 for further investigation. This co

Accordingto 

_ the individual handling the OIG Hotline at th

no longer employed by 010, improperly coded this complaint as "2" ('zero file," 

referraVaction), thus failing to comply with OIG's protocol for such complaints. A

this complaint was not referred to NOAA until July 20 I L 

In late 2010, the IG's Office apparently received a similar complaint, alleging that 

funds had been inappropriately shifted from the A WIPS program to fund other NW

This compiaint is referenced in a November 18, 20111etter to_ fro

(Exhibit 44). This complaint wa

referred to NOAA. However, between January and April 2011, OIG staff conduct

inquiry into the complaint, which resulted in a request to f

infonnation in light of what appeared to be a reprogramming of approximately $10

without approval. (Exhibit 44). May 2011. 

snoUlQ expect a member of the 

the transfer was accomplished without the need for a reprogram-;ing reques 

• never provided additional information to the OIG or •••• 

On June 15,2011, the OIG received another anonymous complaint on its e-mail H

alleging that: 

Rumors abound about your investigating. for diverting AWIPS funds. 

_ spending many hours building a cover story. Do not let them hid

facts! Ask other programs and OOS too. Also ask about how much has be

on the crazy office space thing! 

.(EiiXiih.ib.i'i4i6) •.• o.niJUiiIY.I3ii'i20.I.l'.'iihe.oiI.Gi'iieDiierr.ed this matter to the_ • for further investigation. (Exhibi

On November 9, 20 II, the OIG referred another complaint 

alleging that had inappropriately redirected NEXRAD fun

cover NWS shortfalls in through the OIG hotline by 

and alleged that "a few years ago, DOC specifically z

NWS NEXRAD Product Improvement (PI) Program beginning FY 11 ... [but} the 

CFO has redirected O&M funding to continue these efforts." (Exhibit 47). The co

further charged that used "Weather Radio Improvement Program (W

procurement funding to cover shortfalls in the NWS base budget." (Exhibit 41).

_ concluded that: 
AIIredactionsarepursuanltoFOlAEJ(fllnption{b)(6). 

continues to rely on questionable and improper financial practices to 

'""manage" the NWS budget instead of sound, well thought out budget plans. This is 

resulting in increasing budget shortfalls, numerous acquisition programs (AWIPS 

and WRlP) with_ budget issues, and increased risks to NWS operations. 

(Exhibit 47). 

B. NOAA's Preliminary Investigation 

The investigation led by_ focused primarily on whether_ "had 'diverted' 

funding allocated for the [AWIPS] program," but also touched on allegations surrounding the 

NWS Acquisitions and Grants (AGO) office space study and_ contacts with a private 

company, that had business before the Agency. (Exhibit 50, at p, 1). During 

the course o. investigation,_ and. team interviewed a number ofNWS employees 

familiar with the A WIPS program and its budget, looked at emails and other exhibits provided 

these witnesses, and made a preliminary examination of financial data regarding the A WIPS 

program. On November 28, 201 1,_ issued a draft report, in which. made preliminary conclusions, mfer aba, that: 

An redactions are pursuant to FO

(l) engaged in the unauthorized reprogramm

(2) 

(3) 

(4) 

(5) 

and other program funds in FY 2010 and FY 2011, a violation of th

these years' Federal Appropriations Acts. (Exhibit 50, at p. 3); 

Based on the significance ofthese preliminary findings, NOAA immediately pl

on indefinite administrative leave and assigned the CFO for NOAA Fisheries to acCFO pending the outcome of further investigation. DOC and NOAA leadership th

a senior investigative team led by senior executives from NOAA and DOC to revi

upon the investigative work done by _ 

_ ,and __ 

, were assigned to conduct the investigation for 

investigative team, and NOAA Assistant Secretary Kathryn Sullivan and DOC De

Secretary for Resource Management Hari Sastry were assigned to provide leadersh

oversight (Exhibit 51). Throughout this Report, these individuals are referred to 

"investigative team" or "inquiry team. ,,1 

C Scope of Present Investigation 

The senior investigative team was initially charged with clarifying or expanding up

of fmdings in the preliminary report, including: 

charged with providing leadership over the i 

the inquiry team determined that it was to 

and they were therefore removed from the investigation team Moreover,_ 

201 I Thereafter, was ass.igned to conduct the investigation with 

were not replaced. 
Ad re<1actioM ate /XlfSu3nt to FOIA Exeroplloll (bJ(6). 

What role NWS senior leadership had in the transactions, and whether NWS, NOAA and 

Department senior leadership had knowledge of the financial transactions under review; 

The role oftne NWS CFO's staff in the transactions; 

Whether there was any indication of fraud; 

• The identification of internal controls that could have or should have prevented the 

transactions from and 

• The determination of whether there were possible violations of the Procurement Integrity 

Act or Standards of Conduct. 

(Exhibit 51). Initially, tbe team was to produce a report by December 30, 2011. (Exhibit 51). 

After further discussions both internally within NOAA and with the OIG, the initial charge to the 

senior investigative team was modified in a document dated December 13, 2011. (Exhibit 52). 

This further charge made clear that "the DOC Office of Inspector General will actively engage" 

in the investigation. Since this document was issued, the OIG has provided guidance to the 

senior investigative team, giving advice on a variety of issues, including recommendations for 

witness intetviews, lines of questioning, and the overall scope and timing of th.e investigation. 

In consultation with the OIG and senior DOC and NOAA leadership, the senior investigative 

team has focused on six areas in answering the questions under its charge outlined above: (1) the 

A WIPS allegations; (2) the NEXRAD allegations; (3) the WRIP allegations; (4) the Office 

Renovation allegations; (5) the improper contact with NOOs aHegations; and (6) the_ allegations. Although the imtial target date for completion of a final investigative report was 

January 13,2012, the complexity of the financial analysis involved and the expanded scope of 

the investigation required extension of the completion date until May 9,2012. 

The investigation team has concentrated primarily on financial records and events arising in FY 

2010 and FY 20 II, the focus of the earlier draft investigation report, and the period in which 

most of the alleged inappropriate conduct arose. The team curtailed its investigation into prior 

years in an effort to complete its investigation and report expeditiously, so that NOAA could take 

this report into account in its budget planning for FY 2012 and FY 2013, and could quickly make 

appropriate personnel decisions. The investigation team recognizes that certain questions 

regarding this matter remain unanswered, and that additional inquiries may need to be made into 

actions arising In prior years, and into tangential issues. At the end of this report are listed areas 

that NOAA may consider appropriate for further review. 

D. 1\tIet!J,odology of Present Investigation 

To answer the questions posed in its charge, the investigative team conducted a series of 

interviews and completed an extensive review of NWS financial records. In addition, the inquiry 

team has reviewed large numbers of emails. financial information, memoranda, and other 

documents provided by witnesses in support of their testimony. The inquiry team consulted with 

AN radac!loll$ J.I(e pursuant to fOI

the IG's Office, the NOAA CFO's Office, and the DOC General Counsel's Office 

course of its investigation. 

1. Witness Interviews 

Interviewees were selected based on a number of factors, including potential know

allegations, financial knowledge, and management roles within NWS, NOAA, and 

Interviewees were selected and lines of questioning were formulated with the assis

01G. Many witnesses were interviewed more tban once, as the scope of the invest

expanded. As a result, some 30 interviews were conducted of21 witnesses. Follo

interview of each witness, the witness' statement was shared with the ala for revi

In addition to interviews, the sworn affidavits of 14 witnesses interviewed during t

thelll Investigation were reviewed. Relevant portions of these affidavits were c

evidence in the present inquiry. 

Witness interview summaries are attached as exhibits and referenced throughout th

Position descriptions of all key witnesses are attached to their witness summaries. 

team interviewed the following DOC employees: 

a. 

b. 

4 In some cases, the witness' statement was also shown [0 the interviewee. However, in mld.Deeem

OIG recommended ending this practice, and the investIgate team stopped allowmg witnesses to rev

statements 
c. 

d. 

e. 

-

2. Financial Analysis 

AU redactions are pUisuanllo FOIA Exempt\OII (b)(6J. 

based onll 

consultation with 

records including, 

most notably, the Commerce Business Systems (CBS) Report entitled «Program Authority and 

Allotment by Quarter by Program" (BE521D). Using this report. the team conducted CBS 

queries for: (1) Structured Query Language (SQL) - Budget Operating Plans (BOPs) for Select 

P4 - BOP Dat. for all NWS CBS Program4 Codes [orFY 2010 and FY 20ll; and (2) SQLSummary Level Transfers (SLTs) by Batch - SLT query for all NWS Program4_code values on 

the FROM side. To complete the review, the inquiry team sorted the queries by NWS Program 

Group (e.g., ASOS, A WIPS, Local Warnings and Forecasts) and then isolated all transactions 

related to Organization Code 20-01. Organization Code 20-01 represents the National Weather 

Service, Office of the Assistant Administrator (OAA). 

The inquiry team compared the total amounts represented in the BOPs query for each Program 

Group to report BE521 to ensure consistency. Once relative consistency was established, the 

inquiry team compared each program's total amount to appropriated amount. Differences 

9 

AM are pursuant to FO

between these amounts were likely the result of carryover funds from the previous 

adjustments made throughout the year to match BOP totals to the appropriated am

The inquiry team further filtered the BOP data to include only transactions that app

to mitigating the NWS budget shortfall. These transactions had identifying words 

"mitigate", "shortfall". and "overrun" in the Notes section of the transaction. The 

derived a percentage of the amounts related to the shortfall in comparison to the to

AA amount by Program Group, to test for a possible reprogramming of funds. 

A similar analysis was performed of Summary Level Transfers (SLTs). Using a q

sorted by program group and then further filtered to isolate transactions that appea

related to mitigating the NWS budget shortfall. In addition to identitying words u

transactions noted above, the SLTs also described "moving expenses" or "moving 

one program to another. Transactions were netted coming "From" the program gr

going «To" the program group. amounts were then compared to appropriate

detennine if the percentage was below or above the 10% reprogramming threshold

of this analysis appear consistent with evidence provided by witness testimony. 

Finally, a sample SLT transfers was selected to trace to expenditure 

confirm that the transferred expenses had no relationship 10 the program to which 

were moved. 

The results of this process are described in Section III(B)(I). infra. 

3. Document Review 

Many witnesses provided emails, financial information, memoranda, and other doc

support of their allegations, either independently or at the request of the inquiry tea

information was reviewed carefully, and makes up several exhibits attached to this 

II. Factual Findings 

A. Background 

1. NWS and NWS CFO Management Structure 

10 
AI redactions ara pursuant 10 FOIA exemption (,b){6). 

11 

AU re4acbollS are pursuant 10 FO

2. The NWS Budget 

a. Background 

As shown below in Figure 2, the overall NWS budget fOfFY 2011 was approxima

million. Approximately $879.0 million of FY 2011 funds were Operations, Resea

Facilities (ORF) funds, while the remainder, approximately $97.0 million, was Pro

Acquisitions, and Construction (PAC) funds. As a general rule, ORF funds are mo

12 
Alredaetiol'l$ pursuamtoFOIA Exernptlon (b}(S). 

than PAC funds, in that they can be spent on "a wide variety of labor and systems operations." 

(Exhibit 17). In contrast, PAC funds may be used only for procurement, acquisition and 

construction of capital assets. 

NWS Appropriation 2005 - 2011 

(inthou!l.aJlds) 

NWS Spend Plans FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

ORF $703,926 $746,844 $774,963 $808,300 $847,938 $892,118 $879,582 

lWF Base (ORF 

subset) $522,948 $526,470 $564,729 $578,424 $601,876 $617,842 $628,121 

PAC $79,055 $101,400 $109,429 $106,923 $110,951 $107,727 

Total $782,981 $848,244 $884,392 $915,223 $958,889 $999,845 

AI! years depicted exclude supplementa! funding 

FY 2009 exclude ARRA funding of $16.4M 

Figure 2 

Within the NWS budget, appropriations are allocated into different accounts termed Programs, 

Projects and Activities (PPAs). The PPAs are executed by NWS' 13 Financial Management 

Centers (FMC's), which include OST and OOS. A list of all NWS PPAs is attached as Exhibit 

87. s 

The NWS budget is designed to have considerable flexibility. and is made up primarily of a 

single large PPA line item called "Local Warnings and Forecasts Base" (LWF). As shown in 

Figures 3 and 4, in FY 2010 and FY 2011 LWF contained over $600 million in ORF funds. 

NOAA created a flexible budget for NWS to allow it to respond to weather emergencies quickly 

and efficiently, and to allow for rapid improvements in meteorological technology. (Exhibit 17). 

5 NWS has an estabhshed process for allocating funds to FMCs and PPAs, which is managed by the NWS CFO's Office's Budget Formulation and Program Analysis Division (Formulation Division). This process begins with the 

final congressionally enacted appropriation. Initially, the Formulation Division reverses prior-year, one time 

allocation actions to establish current year start points for each PPA by fMC. The Formulation DiviSion maintains a 

control table that ties appropriatIOn level changes to each PPA that is updated to meet the enacted appropriations for 

each given year. ThIS control table becomes the foundation for current year allocations and the subsequent 

allotment process. The Formulation DiviSlOn applies current year modifications, both internal and external, to the 

allocatIOns by PPA and FMC. External funding level moddications are comprised of programmatIC changes. 

enacted rescissions, inflationary adjustments to base (ATBs), enacted pay adjustments, inclusion of congressionally 

directed projects and Holhngs Scholarship assessments. Internal funding level modifications include shifting 

program and/or project responsibilities between FMCs, changes to labor costs, spread of the NOAA direct bili 

assessment, spread ofNWS's corporate/common services (CS) assessment, and any shortfall mItigation strategies 

13 

$96,899 

$976,481 

At r«Jactiol'l$ are pursuant to FO

(10Th dsl 

NWS FY 11 

PPA's Budaet Peree

Local Warnings & Forecasts Base $628,121 6

Other ORF PPAs $251,461 2

PAC PPA's $ 96,699 1

Total8udget $976.461 100

FIgure 3 

(In Tho

NWS FY 10 

PPA's Budaet Perce

Local Warnings & Forecasts Base $617,842 

Other ORF PPA's $274,276 

PAC PPA's $107,727 

Total Budoet $999,845 10

10 

21% 

Figure 4 

14 
All rlldactions are pU!'$uant t<,l FOIA exemption \b)(6). 

Despite the intended budget flexibility, witnesses familiar with the NWS budget have stated that 

increases in labor costs and constraints on management's ability to reshape the workforce have 

impinged on the flexibility in managing the NWS budget and in handling NWS budget deficits. 

(Exhibits 17, 23. 25). Indeed, NOAA senior leadership has believed for many years that the 

NWS business operations model is unsustainable because it relies too heavily on labor, and that 

high labor costs negate the flexibility created by the L WF. (Exhibit 17). Accordingly, NOAA 

senior leadership has instructed NWS ·to no longer create new positions, SO they must find ways 

to move forward with the same number of employees, or less (Exhibit 17).6 

b. NWS Budget Deficits 

The Office of the Assistant Administrator (OAA) Account 

Each year, NWS is responsible for paying a number of overhead costs. including common 

service expenses (e.g., rent and utilities), management and administration (M&A) expenses (e.g., 

costs to run the Assistant Administrator's Office and information tecbnology support), and direct 

bill expenses (e.g., NOAA overhead costs, general counsel's office fees, and AGO fees). Prior 

to FY 2008, many of these expenses were paid for through the NWS Local Warnings and 

Forecasts (LWF) PPA account (Exhibit 54). However, in FY 200& growing common service 

expenses required NWS to create a "common services assessment" across most NWS PPAs, 

including those overseen by OST and OOS. (Exhibits 4, 23, 25). Since then, the common 

services assessment levied against the NWS PPAs has averaged in the 4·5% range, which is 

charged against the program's enacted budget authority. (Exhibits 23, 25). Collectively, those 

witbin NWS term the account where these assessments are collected the "Office of the Assistant 

Administrator Account" or the "OAA Account,,7 

NWS does not assess a standard percentage for each PPA for the common services assessment 

Instead, determined that some PPAs, including those overseen by field 

and "operational" offices, should not pay an assessment because it would "cripple mission 

perfonnance." (Exhibits 4,10,23,25). In particular, two PPAs have always been excluded from 

the OAA account assessment, the Weather & Climate Supercomputmg Program and the Central 

Underslandmg the challenges facing NWS, in the fal! of 2010 NOAA asked the National Research Council of the 

National Academy of$clences 10 study the past and future of:N'NS' operatIOns and provide a two-part report. The 

first part of the report, entitled "National Weather Service Modernl1:atJon and Asscclated Restructuring: A 

Retrospective Assessment," was issued in September 2011. The second part of the report. which win discuss future 

steps to improve NWS. is due in the summer 0(2012, (Exhibit 17). NOTE: Tbe language in this footnote, .and 

the te:.:t oftbe paragraph prece<iiug this (ootllote in the body orthe Report, were added by tbe inqlliry team 

after tbe final version oftbis Report was submitted fO'r review, to' darify points: in the Report and address concerns raised by reviewers. 

1 In fact, there is no actual OAA account, since funds stay Within Ihe PPA in which they were al!otted, but the funds 

are accounted for under the AA's Office FMC. (Extublts 25, 29). 

15 

redactions are purauanl to FO

Forecast Guidance Program. Moreover, the L WF PPA has a specific dollar amoun

it, instead of a percentage. (Exhibit 25). 

Each year, the NWS CFQ's Office calculates the assessment rate for the OAA Acc

dividing the total cost of common services and direct bills by the total enacted NW

authority after subtracting the enacted budget authority for Weather & Climate Sup

and Central Forecast Guidance. The assessment rate in FY 2010 was set at 5.7% a

at 4.81%. 

The amounts assessed tathe PPAs do not cover the full costs of the OAA account, 

significantly underfunded at the beginning ofFY 2010 and FY 2011. (Exhibits 4,

FY 20 to and FY 2011, the estimated total common service expenses were approxi

$42,0 million. (Exhibits 23, 25), However. in its mitial budget allocation, NWS a

PPAs only approximately $30.0· $32.0 million. (Exhibits 23. 55). Accordingly, i

years the NWS CFO's Office underfunded the OAA account by approximately $] 

(Exhibits 10. 12.23.25). 

The gap that was left in the OAA account was covered by identifying funds though

needed by programs, and transferring them via a Budget Operating Plan transfer (a 

known as "BOPing") to the OAA. As such, the shortfalls in the OAA account wer

through budget execution instead of budget fonnulation. (Exhibits 10, 12,23,25). 

_ when asked about the appropriate assessment rate for the OAA account 

5% was the goal. because more than that and you would attract 

questions about the cost of overhead, and they were always 

looking to reduce overhead. I knew it wasn't sufficient, but there 

was often money left over at the end of the year - plans fel! 

through, projects weren't fully executed - and I knew the money 

could be used for the [OAAI account. 

(Exhibit 8). _ believed that funding the OAA account through execution w

to carry out operations to meet a broad array of operational requirements in an unc

environment of weather and water events. (Exhibit 4). That said,_ ackn 

NWS. - .... "' •• 

2. Additional NWS Budget Deficits 

Beyond the shortfalls in the OAA account, for many years NWS has operated with 

those interviewed term a "structural deficit," dating back to at least 2004, meaning 

budget has begun each of the last several fiscal years with a shortfall that must be a

16 
All redacticnsare pUfsuanttoF01A ElI:emptlofl(b)(6), 

through execution during the course of the year.s (Exhibit 26, 40). The size of this perceived 

budget shortfall has never been clearly defined, in large part because it is based on what NWS 

leadership and program mangers deem essential to NWS operations. As such, estimates of the 

size of the deficit from NWS program and financial analvsts range from $35.0 million 

to $99,0 million. 

Witnesses presented several explanations for the NWS "structural deficit." First, the NWS 

budget increased only modestly between FY 2005 and FY 20 I J, at an average rate of 

approximateJy 3.5% per year, At the same time, labor costs increased as statutorily mandated 

pay raises grew. Meanwhile, NWS overhead costs increased, as NWS had to pay for unfunded 

IT mandates, including expenses for NOAANet, and other programs. 9 (Exhibits 23, 25), There 

programs that appear underfunded - for example, III has opined that GPS radiosondes require $5.0 million more 

each year than appropriated, (Exhibit 25). 

same 

As a result, funds within the L WF 

PPA that could have been spent on NWS programs were instead spent on increased labor costs. 

By FY 2010, NWS' was absorbing an additional $10,0 million on unfunded labor costs. By FY 

2011, this number rose to $113 million, (Exhibit23), 

3. Handline: ofNWS Bude:et Deficits 

In September 2010,_ made a presentation to the NWS Corporate Board in whichl 

described looming NWS funding deficits beginning in FY 2011, in the range of $47 million. 

(Exhibits 4, 15,29,32, 57} The Board charged_ to work with members of an 

«Investment Assessment Team" (lA T) made up of resource managers from several NWS offices. 

to look at how to address the shortfall. (Exhibits 1, 4, 15, 29) 

8 NOTE: Portions of the sentence attached to this footnote in the tot oftbe Report were added by the inquiry 

team after the final version of this Report was submitted, to clarify points in the Report and address concerns 

raised by reeipients. 

Overhead costs increased Significantly inFY 2010 and FY 2011, particularly in the Alaska and Pacific RegIOns, 

where there were increases in mandatory non-labor costs, IT, communications, rent and utilities. (Exhibit 23)< 

17 

AH redactions rue pursuarttlo FO

There is a tendency for FMCs (some more than others) to allow for 

a comfortable cushion going into the next fiscal year by forward 

funding some contracts to be sure money is available for 

operations in case of unforeseen events, or just to bank "excess" 

funds, It is exacerbated by each FMC optimizing their flexibility 

at the expense sometimes of Corporate, This can be seen in some 

instances as purchasing more inventory than needed - both 

supplies and services depending upon individual's risk tolerance as 

opposed to a Corporate rationale. As you and they know, the 

private sector minimized this practice long ago. 
AHredactioooarepursuanltoFOlAExemptlon(b)(S). 

(Exhibit 59), Notably, according to , there is nothing 

inherently wrong with shortening a contract period. and there may be legitimate reasons to do so; 

however, the funds taken from shortening a contract can only be used for congressionally 

authorized purposes. (ExhibIt 41). 

In addition to cutting contract perfonnance periods, as the end ofFY 2010 and FY 2011 

approached and operational needs and shortfalls became more precise,_ acknowledged 

that. moved program funds that were not needed within the fiscal year, or that could be 

deferred, to the OAA account or to other programs that were running deficits. (Exhibit 4). 

Typically, program funding was funneled through the Office of the AA (the "OAA account") 

and exchanged for LWF funds thatcouJd be used more flexibly. Funds were moved from FMCs 

to the OAA account via the "BOPing" process, a term used to indicate a direct transfer of funds, thus increasing the program line under the OAA and decreasing the funding line in the FMC's. 

The CFO's office would then move expenses charged to the Local Warnings and Forecasts Base 

(LWF) PPA to the increased OAA program line via a Summary Level Transfer (SLT)to free up 

L WF funds. which it would in turn "BOP" back to programs that had funding gaps. 

SL Ts are designed to provide financial officers with the flexibility to reassign accounting codes 

on past expenses, most notably to fix errors or mistakes in account coding. Here, SLT5 were 

used to change accounting codes on expenses previously paid out of the L WF to those of other 

PPAs, thereby freeing up flexible LWF funds that could be used for almost any purpose. 

Several witnesses called this process "colorizing" money, because PAC or ORF funds would be 

sent to the OAA, and SLT5 would be used to convert these funds to flexible L WF funds that 

could be used for any purpose, thus "losing their color." (Exhibits 13,25,37). See Section 

lIJ(BX I), mfra, for a more detailed explanation of this process. 

_, 

in both FY 2010 and FY •••• 

worked with FMCs to determine whether there were contracts that 

could be shortened or program funds that could be cut without negative consequences, so that the 

NWS CFO's Office could move these funds elsewhere within NWS. (Exhibit 10). In FY 2011, 

of 

programs and contracts, prioritIZing the most important. (Exhibit 60). Ultimately, money was 

taken from a number ofOST programs: the AWIPS program,l! the Complete and Sustain NOAA 

Weather Radio program (specifically a part of this program called the Weather Radio 

Improvement Program, or WRIP), the Automated Surface Observing System program (ASOS), 

11 Money was removed from the A WlPS PX processor program, one ofOST's top prioritIes, with a promise that the 

money would be returned in FY 2012, which it was. (Exhibit \3). 

19 

AU redactions ar!.l puf$Q3nl to FO

and the Central Forecast Guidance (specifically the Hurricane Forecast Improveme

HFlP),12 for a total of$15.4 million, to fund other NWS shortfalls. (Exhibit 13,6

1I!11 ••• was worried about thi

different reason - because believed that it would create larger financial problem

As_ explains it: 

I had discussed this management deficiency with •• 

and was surprised by. response .• explained to me that by 

moving certain acquisitions into the next fiscal year, the NWS 

would still be able to do what it needed to do by using the new 

fiscal year budget, and the same operations can be repeated year 

after year. I tried, but was not able to make him understand that 

his action equivalently moved these residual requirements into the 

next fiscal year, adding to the existing requirements for the new 

fisca! year, and creating an even bigger budget deficit for the new 

fiscal year. 

>1 Because orthe transfer of funds, the HFIP program had to delay awarding grants, although monemto the program at the beginnmg of the following fiscal year. (Exhibit 36) 

came so late In the tea! year, ;r:::; 

short time anolted. (Exhlbil 36). 

20 
All n:odacttons are pIlrSUllnl\O FOIA Exemption (1))(6). 

.·.···.-·ii·Oii·-.·ii··-ii··.-O."."'."'.".'O.O.--.",.-."O.'."Oii".-ii'."'.' .. NWS program managers. As. 

• explained: 

The way program funding is being managed by is 

having a negative effect on my program managers' ability to run 

their programs effectively. The program and project managers and 

I are tired of struggling to understand what will be deferred and 

when. It seems there .. miioiri,e icuii",an.dith,ejjjlCO battles are wearying. iii ••• was extremely frustrated ... the funds d( 

issues were key to his decision to leave NWS ... The decisions 

coming out of the OCFO about what to cut and when appear to be 

willy-nilly, ad hoc decisions without understanding the complex 

inderdependencies of schedules and funds. 

(Exhibit 18) .•••••••• ......... 'i ..... "J v,'''',,,, "'''''''6 that, "the 

NWS has a train " ... ....... 

_ (Exhibit 38) 

B. The Advanced Weather Interactive Processing System Program (AWlPS) 

1. Background 

The Advanced Weather Interactive Processing System (AWIPS) is an advanced information 

processing, display, and telecommunications system that integrates all meteorological, 

hydrological, radar, and satellite data, enabling a forecaster to prepare and issue more accurate 

forecasts and warnings. AWlPS is the centerpiece of modem NWS forecasting operations, 

allowing a forecaster to vjew, analyze, and combine large amounts of weather data to quickly 

arrive at an accurate forecast. Within NWS, OST oversees the AWIPS program. In general, 

program oversight within NWS is split between two offices, with OST handling implementation 

and improvement (typically termed "Product Improvement" or "PI"), and OOS handling 

operations and maintenance (typically termed "0&11"). However, AWIPS is the exception; 

OST handles both the AWIPS PI and the AWlPS O&M programs. (Exhibit 13).14 

The A WIPS O&M budget pays for maintenance costs, periodic technology refreshment. and 

government FTE and contractor positions necessary to maintain the A WIPS system. (Exhibit 

14 In the past, there have been attempts to transfer the A WIPS O&M program to OOS. However. due to a 

disagreement between OST and OOS over the resources necessary to run the O&M program the transfer never took 

place 

21 

AI reductions ale plJfSlJeml t<l FO

29). The largest percentage of maintenance costs goes to fund a contract between 

Raytheon Company (Raytheon) to maintain and service the A WIPS system. The c

in 2005 and is a ten year contract (5 year base with five options), worth app

$1.2 million per month, or $14.4 million per yeae (Exhibit 62). Prior to FY 2010

O&M contract with Raytheon ran annually from August to August, and under the 

Raytheon was paid in monthly installments. 

2. Reallocation ofFY 2009 AWIPS Funding to Cover Shorfal

!'!QgJ]m 

An early attempt to transfer money from the AWIPS program to anot

program was flagged as a potential reprogramming of funds by

• In late 2009, during the course ofa regularly scheduled 

that approximately $611 thousand was taken from the A WIPS program to cover a 

Weather Radio Improvement Program (WRIP). (Exhibit 11). _ aske

into this matter, because. was concerned that it was an unlawful reprogrammin

without congressional approval. (Exhibit 10). 

_ 

the matter. (Exhibits 10, II). iiiilii. and learned that any transfer of funds between programs in exthousand was potentially a reprogramming. (Exhibits to, 11). \\1henlleamed th

infonnation,_ asked_ to transfer money back to the AWIPS p

that the transfer would be under $500 thousand and beneath the reprogramming ca

10, 11), $112 thousand back to the AWIPS 

(Exhibit 11). _ that I had informed wh

done. (Exhibit 11). 

3. Reallocation ofFY 2010 AWIPS Funds to Cover the NWS 

ShQrtfall 

Thereafter. in FY 2010 andFY 2011,_ directed that QST reallocate millio

from the A WlPS program to cover shortfalls elsewhere within the NWS budget. T

taken primarily from the AWlPS Q&M contract with Raytheon, but also from oth

programs. (Exhibits 4, 10.25, 29, 3). Instead of directly moving funds to other pr

2009, which raised reprogramming concerns, the A WIPS program transferred fund

account, a move that could be viewed as covering common NWS expenses. These 

used to either reduce the OAA budget shortfall or, through the use of SLTs, to pay 

already incurred by the LWF, thus freeing up flexible LWF funds that could be us

22 
AU redactions tire pm$lItIl'\t to FOIA EJemptiQn (b}{6), 

within NWS. Using this method. money was moved between programs indirectly. without the 

possibility of tracing how and why funds were transferred. 13 

4. Reallocation ofFY 201 t A WIPS Funds to Cover the NWS Budget 

Shortfall 

continues to thal.lhls not a reprogramming of funds because. believes that the A WIPS 

not been paymg Its frur share mto the OAA Account. and because some of tile transferred money was 

used to cOVer the shortfall in this account (Exbiblt 4). 

23 

AU red.actions are pursuant to FO

_ says that_ had instructed her that it was necessary to take m

AWIPS program because it was the end of the fiscal year, and NWS had to "make 

(Exhibit 16). _ explained that certain AWIPS contracts were "'forward fun

money needed to be taken from these contracts to cover other NWS shortfalls. (Ex

the time,_ thought that taking money from the AWIPS program was a 

approach. and trusted the expertise l6). 

24 
AU redactiel'$ a«l pursuant Ie FOIA Exemptkm (b}(6). 

the A WIPS O&M account, SLTs would be used to change the 

accounting codes on expenses incurred outside of the AWIPS O&M program to the AWIPS O&M accounting code, Because these expenses were previously billed to the Local Warnings 

and Forecast (LWF) line item, this would free up money in the L WF account, which contained 

flexible ORF funds that could be used for any pwpose. 

it 13). As previously noted, 

used SLTs to transfer previously paid expenses from the L WF 

freeing L WF funds that could be used for other programs within NWS. 

In the end, a total of approximately $5.5 million was transferred from the A WIPS program in FY 2011. Three months of the Raytheon contract was for approximately $3.8 million. 

and the remainder came from a fund to purchase new AWIPS processors. (Exhibit 13). II 

_ says that the money taken from AWIPS in the closing daysofFY 2011 went "to pay 

shortfalls in Permanent Change of Station (peS) moves for the Regions _ .. (and] to buy a 

depleted supply ofradoisondes and balloons." (Exhibit 12). _ understood that this 

transaction could pose a problem: 

(Exhibit 12). 

Could this be perceived as reprogramming? In my opinion 

absolutely, but if it had not been done the NWS would have 

certainly been in fiscal year 2011. 

25 

M rfX1&ctions are pursvant Ie FO

period witb Raytheon, a concern. raised with_. (Exhibit 1). Specificall

the AWlPS program had to defer planned upgrades to AWIPS servers until FY 20

increasing the risk that the systems could fail and making it impossible to upgrade 

software. (Exhibit 1). agrees, stating that "[t]his is having a dra

the AWIPS program. .[t]or example, the LDAP servers need attention ... [i)t wil

draconian measures to fix this." (Exhibit 22). 

broader view, noting that: 

(Exhibit 31). 

This constant uncertainty about the budget allotments has had a 

negative effec:t on our programs. Our spend plans keep changing . 

.it requires constantly realigning things, and All this 

has definitely resulted in added risk to our programs. And as the 

years go by and the amounts needed are getting larger, there is no 

way all of this borrowed funding can be returned. I fear when aU 

this comes due, there will be no funds there. 

were any 

program from the reallocation of contract fun

says that there may have been increased risk to the A WI

Ultimately,_ actions clearly brought significant risk to the AWlPS progr

beyond the scope of this inquiry to conduct a program review to determine whethe

actual damage to the A WIPS program. NWS will need to make this detennination as the ramjfications financial decisions unfold. 

C. The Weather Radio Improvement Program (WRIP) 

t. Background 

The Weather Radio Improvement Program (WRlP) was created in 2008 to update 

weather radio network, which transmits severe weather warnings to 98% of the Un

population. The Department of Homeland Security also has access to the radio ne

allowing it to broadcast warnings in case of national emergency_ The NOAA radio 

utilizes a text to speech system, which allows computer generated weather reports 

broadcast throughout the country. Among other improvements, the WRIP program 

to update this system, replacing the outdated computerized voice mOidu.leii'IiOjjniithii'i

network. The WRIP program exists within OST, and is overseen by 

26 
AI redactions are pursuant tl) FOIA Ex.emptlon (b){6). 

_ it is part of the "Complete and Sustain NOAA Weather Radio" PPA and uses almost 

exclusively PAC funds. 

On November 2. I, 201 q OIG Web Hotline alleging, mteralia, that at the endofFY 2011 

transferred approximately $4.6 million from the WRIP program to the NWS "base budget" (Le., the LWF PPA). (Exhibit 47). According to_, this created a "huge" FY 2012 budget 

shortfall in the WRrP program. (Exhibit 37). 

was a l\2U.O mtillon shorttall in the NJ.::XKAl.) U&M tluctget, and that. II wanted to move money from the WRIP program into the NEXRAD O&M program to 

cover this deficit. Because the WRIP budget was made up of PAC funds, WRIP monies could 

transferred to the NEXRAD O&M budget without 

Notably,_ acknowledges thatl knows that all but a small percentage of money in the 

WRlP program was made up of PAC funds, (Exhibit 8). When_ was asked directly if 

using SLTs to transfer PAC money out of the WRIP program to free up ORF money in the 

NEXRAD Q&M fund would be a reprogramming,1 admitted that it would be. (Exhibit 8). 

27 

Ai redactions are pUfsuant 10 FO

money was taken from the WRIP program or where it went, and does n

whether it was PAC or ORF money. _ does not believe that there was a n

on the WRIP program, but acknowledges that there was increased risk to the progr

removing funds. (Exhibit 20). 

_ explained that approximately $8.0 million was removed from the WRIP 

thatFoes not believe that the WRlP program will ever be implemented because 

(Exhibit 2). 

D. The Next Generation Weather Radar (NEXRAD) 

NEXRAD is a network of approximately 160 high resolution Doppler weather rad

throughout the country that are operated by NWS. NEXRAD radars detect precipi

wind patterns, and allow the weather service to track storms. tornadoes, and cold f

other capabilities. 18 In 2007, NWS created the NEXRAD Product Improvement P

(NEXRAD PI)' funded by PAC funds, to upgrade NEXRAD radars with dual pola

capabilities, allowing for increased radar data and an ability to provide imiiiPiI,o.v.eid

iiw.arniinigsi'iifliooiid.and flash flood warnings, and general forecast services .• 

• is primarily responsible for the NEXRAD PI program. 

The NEXRAD Operations and Management Program (NEXRAD O&M) is a main

program that keeps NEXRAD radars operational by providing day-to-day repairs a

The NEXRAD O&M program has a budget of approximately $46.0 million per ye

UNEXRAD is part of the NEXRAD" PPA (See EWlbit 87) 

28 
All redactions are pursuant to FOIA Exemption (b)(6). 

_ oversaw the NEXRA.D O&M Program .• 

_.in.doversees the assets in the O&Mprogram, 

distributing funds among six regions for radar repairs, and providing funds for emergency and 

periodic maintenance of NEXRAD radars. 

"II_ cQnfirmed that funds were stopped for the- NEXRAD PI program in FY 2013 "without prejudice," meaning that the program was not defunded because it bad problems, but 

only because of higher budgetary priorities. (Exhibit 17> 82). Although not "zeroed out" until 

FY 2013, the NEXRAD PI program has depleted all of its funds. (Exhibit 20). _ 

that NEXRAD O&M funds are currently being 

used to implement software purchased through the NEXRAD PI program, and that this will 

continue in coming years. (Exhibits 1, 20, 33, 41). 

_ agrees, noting that the NEXRAD PI program is no longer running because there are 

no funds left in the program. However,_ believes that installation of dual polarizati 

software is appropriately funded by the NEXR.AD O&M program. (Exhibit 20). 

emphasizes that the software being installed is not tailored to each radar. which 

funds from the 

29 

All redactions are pursuant to FO

------

Similarly, does not believe that it is a problem for 

O&M program to pay for implementation of the dual polarization updates to the N

radars because this falls into the category of "sustained re·engineering." (Exhibit 2

as firm, notes that the question of whether p

installation of the dual polarization software with NEXRAD O&M funds is approp

whether the funds are being used for "sustaining" the program (permitted) or "pro

improvement'"' (not permitted). _ believes that you can "argue it both way

33). 

It is beyond the scope of this inquiry to make a final determination of whether usin

O&M funds to pay for implementation of the dual polarization updates to the NEX

appropriate. HQwever, at the end of this report, the inquiry team recommends that 

a program review, in which such a detennination may be made. 19 

E. AGO Office Consolidation Efforts 

On May 25, 2010, an anonymous complaint was filed with GAO that, in part, refe

NWS office space assessment, posing the question. "[s]ince we are short of money

spending on the order of$500K I ) to do a 'space ass

study?" (Exhibit 42). The complaint was referencing a 2009 office space consolid

that was conducted by NOAA staff. (Exhibit 4). Based on the results of this inter

NWS decided to move forward with consolidating space witb the NOAA Acquisit

Office (AGO). 

NWS and AGO signed an MOD spelling out the terms of the space consolidation 

(Exhibit 74). Under the MOU, NWS will provide one floor of space in SSMC 2 to 

provide facilities support and infrastructure. in exchange for full reimbursement fo

provided by NWS. (Exhibit 74). AGO will also pay NWS $250 thousand for ·'mo

requirement costs," and then an additional $950 thousand over the course of the ne

reimburse NWS's initial outlay. (Exhibit 74). 

The cost to implement the space consolidation was approximately $1.0 million, fo

muvers. installation costs, and contractor staff support. (Exhibit 75). The work w

paid for by NWS, and was completed by Earth Resources Technulogy, Inc., which 

HI NOTE: The lAngUAge in the paragraph preceding this rootnote in the body or the Report w

inquiry team After the final version of this Report was submitted, to darify points in the Rep

concerns raised by recipients. 

30 
M re.dactioll$ are pursuanl to FOIA Exemption (b)(6) 

payments between December 2009 and November 2011, (Exhibit 76). However, AGO refunded 

NWS $1.2 million, as provided under the MOD. (Exhibit 25). 

31 

All redactions are pursuant to F

G. _ 

III Findings 

A. No Evidence of Fraud 

The inquiry team did not find any evidence that money thal_ or others tr

NWS programs was used for corrupt or fraudulent purposes. Although some inte

anger or frustration that program funds were depleted, not one alleged 

;ained personally ---

32 
AU redactions are pursuant to FOIA Exlm'lption (b){6) 

R _ Directed the Unlawful Reprogramming of Funds F·rom Various 

NWS Programs to Cover Perceived Shortfalls Within the NWS Budget 

It is the conclusion of this inquiry that did not follow 

legally acceptable financial management practices and policies in their management of 

appropriated funds, and that NWS funds were reprogrammed unlawfully. 

1. Reprogramming 

a Background 

The requirements for reprogramming are defined by statute, in Section 505 of the annual 

Appropriations Act, and the process for requesting and approving a reprogramming of funds is 

discussed in the DOC Budget Handbook. (Exhibit 40). As noted in the Senate Committee 

Report for the Department of Commerce 2011 Appropriations Bill, to "reprogram" under Section 

505 is to "change the use of funds from the specific purposes provided for in the act. or, in the 

absence of direction from the Committee on Appropriations, from the specific purposes provided 

for in the administration's budget request." See Senafe Report Departments of 

Commerce and Just;ce, Science, and Related Agencies Appropriafions Bill 2011. Section 505 

requires that the Committee on Appropriations "be notified by letter, at least 15 days prior to 

reprogramming of funds. whether permanent or temporary, in excess of $500,000 or 10 percent, 

whichever is less, between programs, projects or activities." Jd. Importantly, the Senate 

Committee Report notes that "{t]he CommIttee also expects that any items that are subject to 

interpretation will be reported ... [and] expects that each department and agency ... will follow 

these notification policies precisely ... " fd. says that it is 

"finance 101" that if you are going to move money betweenPPA's, that this is a reprogmmming 

and you must first seek permission from Congress. (Exhibit 41).20 

b. Financial Analysis 

There were approximately 4700 SLTs used by NWS in 2010 and 201 1 to move expenses 

between PPAs, several of which required a reprogramming notification to Congress that never 

occurred. Notably, is aware of only one reprogramming 

21) Notably, in FY 2010, Ccmgress arguably passed even more stringent reporting requirements for a reprogramming 

of funds The full explanatory for this requirement IS fmmd in H.R. Rep. 111-366 (Conf. Rep.) (2009) 

The 'f' proviso of both ORF and PAC appropriations stated 

Provided further, That any deviation from the amounts designated for specific activities in the explanatory 

statement accompanying thIS Act, or any use of deobligated balances of funds provided under this heading 

in previous years, shall be subject to the procedures set forth in section 505 of this Act 

DOC GC appropriations lawyers are determining whether. under this proviso, the typ!cal $500 thousand Of 10"/0 rule 

does not apply, requiring a notice of reprogramming for any realJocatlOn of funds between programs 

33 

AU radaclJons ;:!le to FO

request from_ in either FY 2010 or FY 2011, a $4.7 million request invol

ProfiIerPAC account in FY 2011. 21 (Exhibits 8, 40). NWS did not submit any o

reprogramming requests to. office during these years. (Exhibit 40). In fac

recognizes the process necessary to pursue a reprogramming of funds, and explain

when interviewed. (Exhibit 8). 

As noted previously, it is beyond the scope of the current inquiry to examine every 

funds or expenses within NWS. either historically or in FY 2010 and FY 2011. Su

would require a fun audit of the NWS budget, and the inquiry team was tasked wi

expeditiously completing its work. 

Instead, using the methodology described supra in Section I(D)(2), the inquiry tea

the total amounts moved between programs using SLTs, as both a whole dollar am

percentage of each programs' total appropriated funds, and examined a sampling o

expense transfers between programs that either involved large dollar amounts or a

questionable. possibly VIOlating reprogramming Jaws. A synopsis of the inquiry te

is found in Figures 5 through 8 below. A disc containing spreadsheets supporting 

is attached as Exhibit 85. 

Figure 5 shows the total amounts moved from various NWS programs using SLTs 

in tenus of both whole dollar amounts and a percentage of each program's total ap

funds. Figure 6 shows some of the specific transactions that may involve the unla

reprogramming of funds in FY 2010. Figure 7 shows the total amounts moved fro

NWS programs using SLTs in FY 2011, in terms of both whole dollar amounts an

of each programs total appropriated funds. Figure 8 shows some of the specific tr

may involve the unlawful reprogramming of funds in FY 2011. 

l1O.fcourse, __ is aware 0_ attempt to transfer funds from the AWlPS pro

which. n;:r:"":' potential reprogrammmg, and. corrected. (See SectIOn 1(8)(2), supra) 

34 
AI! redactions are pUlsuant to FOIA Exemplic" (b)(6) 

Amounts Moved Between PPAs Using SLTs In FY 2010 

179 (336) (157) -9.60%22 

AWIPS"" 

ORF 7,463 (97) 7,366 39,346 18.72% 

PAC 791 791 24,000 3.30% 

NEXRAD 

ORF 1,259 (1,047) 212 46,121 0.46% 

PAC 733 (300) 433 7,976 5.43% 

lWF 8,955 (17,211) (8,256) 617,842 -1.34% 

Figure 5 

Sample Problematic FY 2010 SLT Transactions 

From f ORF' Program program4 

Fiscal Year To PA.C Group Oeser. 

fORECAST 

GUIDANCE 

Appro'll!d 

Amount Reason Provided Date 

$ 1..400,000.00 1 1712212010 

AW!Psln order to gain CfG 

a ..... 

$ 1,400.000.00 Tomoveci>ar,esoutofCfGlnlo 7/22/2010 

avitliability·EOYCQlrettion. 

$ 88,497.00 

$$$.497.00 

17121/2010 

AWiPsinordertogajnCFG 

7/22/2010 

AWlPsl/lordertogainCFG 

avaliabU'tv-EOYCorrections 

21 A negative percentage mdlcates that more expenses were removed from the program budget using SLTs than 

were added to the program budget using SL Ts. Because expenses were removed, the result of a negauve percentage 

is a net increase in funds available to the program. Accordingly, In 2010, ASOS received 9.6% over its appropnated 

allotment of fUnds. as $336,000 In expenses was removed from the program. In contrast, in 2010 AWIPS had 

18 72"A. of its appropriated ORF funds transferred to other programs, as approxmlatety $7,463,000 in SL T expenses 

was transferred to A WIPS NOTE: Tbe language in this (ootnote was added by tbe inquiry team after the final 

version o(this Report was submitted, to clarify points in the Repol'! and address concerns raised by 

recipients. 

35 

AU redactions arQ pursuant to FOIA Exe

0'''' $464,365.00 T, "' .... """. "G 

GUIDANCE ,W1lUabUity-EOYCorrectlons 

$ 464,365.()O romwecilarg,uoutofCFG

AWIPslnorde.togalnCfG 

avallabUiIy"EOYCormction$ 

$ 190,00CI..00 

fOl!.ECAST AWlhlnordertoga!nCFG 

GUlOANCE IIvar.",bilrty-£OYCoffection. 

$190,000.00 TomoYecllara:esoutofCl'G

AWlPsinordertola,nCfG 

CENTAAL $ 1,l92,WO.00 TomoveGhareMoutofCFGfORECAST AWIPs In order to cain CfG 

Ivallabdlty-EOYCorrmlOM 

$ 1,39<!,60(UXI 

AWlhlncrdertolalnCFG 

i.!vallabiUty·EOYCoffe<:tlOn$ 

lOCA!.WARNINGS TomOlleexpen .... oo.ttoflW

Warnmgs. & fORECASTS 

& EOY,osts: 

NATIONAl SEA $70,000.00 To move lI>tpen1ei cut oflW

GRANT COllEGE ordertofretlupavailabHityf

PROGRAM BASE'" EOYcosts 

$231,250.00 Tomwee"pen.sesQutoflW

RESEARCH crdertoft""up:wallabilltyfQPROGAAM EOYCc5t$ LAaORATORIES& $ 500,000.00 

COOPERATWE oMettoftetlupavaUabllityf

INSTITUm" EOY,c$t$ 

0" AWIP5 $1,500,000.00 

ordertofreauplva,labi!ityf

$11.673,424.00 

Figure 6 

UThe Nationa! Sea GrantCoilege Program Sase and Competitive Research Program are part of another 

the Office of Oceanic and Atmospheric Research, 

:/4 The Laboratories & Cooperative Institutes Is part of the Advanced Hydro!ogical Prediction Services PPA

36 
All rec:lac:\iOlt$ are pursuant to FOIA E,;empth:m (b)(6), 

Amounts Moved Between PYAs Using SLTs In FY 2011 

Sample Problematic FY 2011 SLT Transactions 

from I 

T. 

ORfl 

PAC 

Progntm Program4 

Group Oescr. 

LOCAL WARNINGS 

& fORECASTS 

& 

37 

Amount Reason Provided 

$1,374.223,00 I To movu'!tI'erl1.".out oftocal 

Warninl!slntosystemSltCountsto 

properlylldjustthetoealwamlngs 

o\ter-run from $27M to$20M I'er 

__ GUldanceorl15Jun 

2011. 

Appro.wd "". 6/16/2011 

$ 1,374,223.00 I TomOlleexpenttSolll:oflocai j6/16/2011 

wamlngslnto.vst"ms,cwuntsto 

properiyldjusttlletoc.iwaml"l!l' 

ol/t!r-run from $27M to $2OM l'(Or 

__ GuldameonlSJun 

2011. 

Wan>ln\}! 

& 

Wlrni"is 

& 

& 

Warnings 

& 

. 

All redactions are pursuant to FOIA 

LOCAlWARN!NGS $366,711.00 

&fORECASlS wtIm,ngs Into symms ltcooun

ov"r·runfrom$27Mlo$20M

$ 366,717.00 I To 

wamings inw systems Itttoun

proj)ltrly adJust the loulwarn

olleNun 'rom $27M to $2OM 

lOCAlWARNlNGS $408,000.00 TomOVH'l<pensesolltoftot& FORECASrS 

properlv adjust tile local war

OV1!!f·rllnfrom$21Mto$20M

.. rn:eOO15

$406,000.00 Irn ....... 

warnings Into syslerM accoun

prop"ny adjust loao!wam

from $21M to $2OM 

__ Gu!darn:eon1

2011. 

LOCAtWARN!NGS $2,418.000.00 Tn mOlll!txpl!rlsesoutofloao

& FORECASTS 

oveNun from $21M to $ZOM 

$ 2,418,000.00 I To move ""perl"" out 

w .. .. <tou

proPl!riy adjust the loul w;lm

oV!!f·runfrom$21Mto$20M

__ GuidenteonlS

ID" 

lOCAl. WARNINGS $ 349,000.00 

&roRECASTS w"rnlngslntosystenlsattou

properlYlIdju;tthetOCilIWllm

__ 

OIIer-l1Infrom$21Mto$20M

Guldanc",,,nl

2011, 

WEATHfRAADIO $ 349,()()(},QO I 

TRANSMITTER:S& ..... 

COMMS properiYlldjU5tt'h..locoolwar

over-ron from $27M to $2OM 

lOCAl. WARNINGS $659,000,00 

&fOIlECASTS W3m1ncs;nl:l>systl!ms*o::«>u

propllrlyadjustth..lo«lwtlrn

ov!!f-run from $27M to $2OM 

__ GuldanteOnlS

201L 

I 

38 
AU redactions are pursuant to fOIA Exemption (b)(6). 

l\IWSfG HWSTGBACKUp· $ 659,000.00 I To mQlleexpenses alit ofl<x:al 16/16/2011 

• CIP w:amll1gs Into to 

CIP adjust tile loul wammgs 

ove ... ",nlrom $27M to $2OM Per 

2011 

$2,000,00000 To mOve ch:uge!i 1/12/1.011 

$ 2,000.000.00 1/12/2011 

LOCAL WARNINGS S 1,218,133.00 TRANSf to HI.E£ UP fUNDING IN 9/20/2011 

Warnings & fORECASTS lWF ACCOUNT & CORRECT PCARO 

It. TlIANS 

Camp!..te COMPLETE AND $ 1,21$,13.3.00 TRANSftoFREEUpFUNDlNGIN 9/20/2011 

;;ond SUSTAIN NOAA LWf ACCOUtrr & (QRRfCT PCAllD 

SWiu,in WEATHER RADIO TRANS 

",M 

Weather 

FROM OM lOCAlWARNJNGS $ 71S,611.35 TRANSFt"fREEUPFUNOINGIN 9/20/2011 

Wa.rnmp & rORECASTS lWf ACCOUNT & PCARD 

. 

CompJ.ete COMptflEANO $ 719,611.35 TRANSft"FRHUPfUNDINGm 9/20/2011 

SUSTAIN NOAA lWF ActOUNT & CORRECT f>CAiIO 

Sustain WEATIiERRAOIO 

NOM 

Weather 

Radkl . 

l<)Q1 LOCAlWAANINGS S 119.1.11.35 Tl'IANSF to FREE UP fUNDING IN 19/20/2011 

& fORECASTS lWF ACCOUNT & CORRECT KAAD 

& TRANS 

C.m,'''' $ "',6l1" 

and SUSTAIN NOAA ACCOUNT &. CORRECT pCAAO 

SwlJin RADIO TlIANS 

"OM 

bdio:> 

lOCAL WARNINGS $ 538,140.50 TRANSFtofREEUPFIJNOINGIN 9/20/2011 

W<l<!>lnp & fORECASTS lWF ACCOUNT & CORRECT PCARD 

. 

Complete COMPLETE AND $ 538,180.60 TRANSF t"FREE UP FUNOING1N 9/20/2011 

Jod SU$TAlNNOM lWFACCOUNT&COI'IRECTPCAI'IO 

SlIlta!n WEATHER MOIO 

"OAA 

LOCAL WARNINGS S OO.OO().OO TRANSF to FREE UP FUNDING IN 9/20/2011 

WJm;n11 & FORECASTS LWF ACCOUNT & CORRECT PCARO 

& TflANS 

39 

12, 13, 19,25,29, 

Complete 

.. d 

S""tain 

NOAA 

AU redaetlOOO are Pllf'$!.Iarrtto FOIA 

$ 60,000.00 ! TRANSf to:> fRiE UP FUNOtNG 

lWf ACCOUNT &. CORRECT PC

TRANS 

lOCAlWAI!.NlNGS $ 276.$4 TRANSF to FREE UP FUNDING 

& fORECASTS l WF ACCOUNT & CORRECT PC

. TRANS 

lOCAlWARNJNGS $ 276.34 TRANSf til FREE UP FUNDING 

& FORECASTS lWF AC.COUNT & CORRECT PC

. TRANS 

$21.6$2,Q20.2$ 

Figure 8 

in accordance with Congressional " . . 

reallocation of the budget authority." (Exhibit 12). Similarly, program managers re

participate in the scheme to use SL Ts to transfer money between programs, caHing s

"money laundering," and "washing money." (Exhibits 13, 31, 37). In short. the purp

moving funds through SLTs was clear to those involved in the transactions. 

In light of the financial documentation and witness statements, and in consultation w

reneral Counsel's Office, the inquiry t

not follow legally acceptable financia

management of appropriated funds. and t

2. Anti-Deficiency Act (ADA) Violations 

The Anti-Deficiency Act (ADA) is a funds control statute that restricts avai

obligation and mandates administrative procedures to control rates of obligation. Se

§ 1341, et seq. The Act's central prohibition, set out at 31 U.S.c. § 1341(a)(1), prov

relevant part "An officer or employee of the United States Government or the Distr

Columbia government may not-{A) make or authorize an expenditure or obligation 

an amount available in ao appropriation or fund for the expenditure or obligation; or 

the government in a contract or obligation for the payment of money before an appromade unless authorized by law." A violation of this section requires "appropriate ad

discipline," id. § 1349(a), including possible suspension without payor removal from 

if the violation was knowing and willful, a fine of up to $5 thousand and/or imprison

40 
AU redactions are pUTS,!!'!nt to FOIA Exemption (b}(6), 

to two years. fd. at § 1350, The Government Accounting Office (GAO) provides guidance on 

following the ADA in its "Red Book," Principles of Appropriations Law. 

Whether a reprogramming offunds violates the ADA is a question that must be detennined by 

the DOC GC's Office. in consultation the NOAA CFO, and is beyond the scope of this report. 

The inquiry team, in consultation with NOAA leadership, has been instructed that the findings in 

this report will be provided to DOC GC and the NOAA CFO to detennine if an ADA violation 

has occurred. 

3. Violations of Federal Financial Management Standards 

Beyond violations of appropriations law,_ actions. along with those o. ii,i •• that facilitated the unlawful reprogramming of funds, were adverse to a 

series of financial management standards established by statute and policy_ For example, the 

Office of Management and Budget (O:MB) has issued policies stating that: 

The proper stewardship of Federal resources is a fundamental 

responsibility of agency managers and staff Federal employees must 

ensure that government resources are used efficiently and effectively to 

achieve intended program results. Resources must be used consistent 

with agency mission, in compliance with law and regulation, and with 

minimal potential for waste, fraud and mismanagement. 

Management and Budget COMB) Circular A·123, Section I, Management Accountahlbty and 

Control (1995). Similarly, the Federal Managers' Financial Integrity Act of 1982 mandates that 

"internal accounting and administrative controls.. shalt be established. and shall provide 

reasonable assurances that. funds, property, and other assets are safeguarded against waste, 

loss, unauthorized use, or misappropriation ... " 31 U.S.C § 3512. Moreover, the Federal 

Financial Management Improvement Act of 1996 requires that all agency financial transactions 

"be consistently and accurately recorded. monitored, and uniformly reported throughout the 

Federal Government," 31 U.S,C § 3512," 

maintaining internal controls to achieve the objectives of effective and efficient operations, 

reliable financial reporting, and compliance with applicable laws and regulations." NOAA 

Fmance Office Handbook, §6-03. The Handbook notes that, «internal controls should be 

designed to provide reasonable assurance regarding prevention of or prompt detection of 

unauthorized acquisition, use or disposition of assets," and that NOAA management is 

responsible for developing and maintaining organizational structures and methods that address 

control environment, risk assessment, information and communications, and monitoring. Id, § 6-

AN redactions are pursuantio FO

04. As described supra,_ along with the actions of those that faconduct, violated these policies. 

C. Summary Level Transfers (SLTs) Were Lsed Improperly to Fa

Inappropriate Transfer of Funds 

As previously noted, SLTsare designed to provide financial officers with the flexi

reassign accounting codes on past expenses, most notably to fix errors or mistakes 

coding. In this case, SLTs were used to switch accounting codes assigned to past 

one account to another, a purpose for which they were never intended, thereby res

funds in the L WF that had already been spent. 

The CFO Office's use ofSLTs accomplished two objectives. First, the CFO's Off

that SLTs allowed any "color" of money (PAC or ORF) to be 

acknowledged as much". --I (Exhibit 25). Second, SL Ts 

prevented clear reprograming 

from being flagged in project reviews or audits. (Exhibit 30). As:_iiiii

, has stated, "SLTs make tracking the use of fund

difficult, if not impossible." (Exhibit 30). 

Tracking SLT fund transfers is extraordinarily difficult because, unless specified i

record through a "reason code" and supporting documentation, an SL T transfers ex

between programs as a flat dollar amount, without specifying which expenses are 

transaction. In this case, the NWS CFO's Office did not maintain detailed records 

transactions, and there is no supporting documentation to detennine which expens

transferred between programs.26 Even so, as shown in figures 6 and 8 above, man

explanations provided in the "reason codes" establish an inappropriate purpose for 

(e.g., «To iin.o.rd.e.r ,.o_g.ai.n 

Corrections"). 

has stated that there was no need to provide a better explanation in the SLT reason 

"we knew what the SLT(s) were for." (Exhibit 88). 

As described above. the CFO's Office approached program and resource manager

and OOS and tried to convince them to use SLTs to transfer cbarges between prog

least three cases, NWS employees refused to do so. _told the CFO's O

would not use SLTs to "colorize" money and was "not going to launder money for 

(Exhibit 13). _ also refused to use SLTs, saying that. would not parti

26 Notably. this lack of documentatIon Violates NOAA's internal financial policies, which state tha

SLTs are required to maintain adequate supporting documentation for each SL T .. [conSisting] o

and/or any other documentation Inat provides sufficient justification for the SJ..T. The documentat

available for audIt by internal and external auditors when necessary." NOM finance Office Hand

(3)(Q 

42 
Mr'.ldactiotl$!lIepursuaottoFOIAExemptlon(b)(6). 

_, 

"washing" the money. (Exhibit 37). Moreover. the CFO's Office approached •••• 

asking 'will you do SLTs and send us the [L WF] monies?'" (Exhibit 

because "(iJn my opinion. it is a fonn of laundering the money." 

(Exhibit 31). 

Manifestly, SLTs were not meant to be used to transfer funds between programs and to obfuscate 

paper trails. The inquiry team can only conclude that were 

knowingly using SL Ts to do so. The result was not only the reprogramming of funds without 

congressional authorization, but the alienation of a number of NWS resource and program 

managers who were outraged at the requests to use SL T s to '"colorize" money, 

D. _ did not Appropriately Assess PPAs for Common Services 

The process of not assessing some programs, designating dollar amounts below the assessed rate, and handling shortfalls through execution, created an environment where some programs were 

paying for joint expenses that should have been borne by other programs. Moreover, 

intentionally leaving a gap in the OAA office budget at the beginning of each fiscal year and later pulling funds from various progf'dffiS burdened those programs with more than their fair 

43 

AI redacflollSare pursusnt to FO

share of OAA account costs. 

The inquiry team concludes that it was not appropriate for .........

as this method created financial problems within NW

and did not provide for "effective and efficient operations" as required under NOA

NOAA Office Finance Handbook, § 6w03. Any assessment should have been made 

proportionately across aU PPAs, using a valid algorithm, to ensure a fair distributio

the PPAs, and a fully funded OAA account. 

E. Objected, but Ultimately Participated in, the U

Reprogramming of Funds 

44 
154 

I 
AUredac!lonaarepwsuarrttoFOIAExemption(b)(6). 

Finally, the NWS Corporate Board does not appear to pJay a significant oversight role in the 

NWS budget, and the NWS Corporate Board's attempt to address the NWS shortfall was 

ineffectual. As described above, in September 2010_ gave a presentation to the 

Corporate Board in whichl described the NWS shortfalt In response, the Corporate Board 

tasked_ with working with a team of program and financial managers to address the 

shortfalL However, it does not appear that the Corporate Board ever followed up on its request 

_ created a two-page draft plan to address the shortfall that was never finalized, and 

continued Wlth his practices of handling the shortfaU using questionable tactics. When asked 

whether. ever told the Corporate Board about his movement of funds out of A WIPS._ 

stated that "we communicated to but not the Corporate Board" (Exhibit 9). 

According to , employees are often hesitant to provide detailed information and 

documents to the Corporate Board because pre-decisional information and documents often 

make their way to the Union. or in some cases to the Hill and to the public. (Exhibit IS). If true, 

this may have affected the ability oflhe Corporate Board to get necessary information to 

effectively oversee the NWS budget shortfall. 

47 

2. 

AU rttdactiol'l$ are pursuant to FO

.. 

Qverlv Relied on 

Failed to Consider Seriousl 

Behavior 

48 
All redactions are pursuant to FOIA Exemption {b}(6). 

formulation process within NWS hinders a more systemic and proactive approach to addressing. 

budget shortfalls." (Exhibit 32). _ does not even know how funds were made 

available to address operational shortfalls within OOS in FY 2011 or prior years. (Exhibit 32). 

If OOS was short of funds at the end of the year, _ would give 00$ a charge code to use 

for charging expenses without explanation. (Exhibit 32). 

Similarly, feels that there was not an environment within the 

NOAA CFO's Office that was conducive to being open and candid with respect to raising 

concerns or issues. (Exhibit I). also says that there was a lack of communication "due to 

impatience with details" • resulting in decisions being made with 

incomplete information. (Exhibit 1). 

is 

before they 

_ notes that "[i]t was not 100% clear at the time 

that the funds held back were part of the annual percentage taken to support front office 

operations," although_ decided that this is what it must have been for. (Exhibit 13). 

More money was taken out orOST later,_ assumed that "the additional dollars were 

needed to pay NWS labor bills," told." (Exhibit 13). 

49 

redllcllons afe pun;uant to FO

....... , ..... ,.!I.!I. made clear that "the p

managers were not informed where and how the fe-allocated budget was expended

14).11 further noted that "the AWIPS Program (and other programs too) was not 

about how and where these withheld funds were used, even after several requests tfor information." (Exhibit 14). 

is even more pointed 

remarks, stating that "frankly, we feel like we are being asked to obfuscate or obsc

movement of money in this organization., [t]he OCFO puts very little in writing 

communication from them, is not in writing," (Exhibit 18), rep

assertion, stating that "The OCFO does a lot they don't document these 

us." (Exhibit 22). _ also notes that'_ tends to not put things c

these reallocations and funding manipulations in writing. ,.CFO staff will come d

manipulations II want us to do and avoid the emails," (Exh

concurs, noting that' are hard pressed 

anything in writing (email)." (Exhibit 27). 

These examples point to significant communication and transparency problems reg

issues within the NWS, which led to frustration and mistrust on the part of program 

managers. Ultimately, it falls upon the to m

appropriate budget information is provided to staff and that the budget process is o

transparent. See NOAA Fmance Office Handbook, § 6-04 (NOAA management is 

for establishing internal controls that promote information sharing and communica

G. NOAA. DOC, and the OIG Did Not Take Timely Action When 

Alleged Improprieties Within the NWS CFO's Office 

Although hindsight is it is clear that NOAA Officials, DOC Office of the C

Officer, and the Inspector General's Office were all made aware that there were al

significant problems within the NWS CFO's Office throughout 2010 and 201 t, bu

in time to stop the activity unlll the very end ofFY 2011. 

Early Complaints 

In early 2010, received an anonymous letter 

alleged, infer alia, that "[i1n each of the last several years,_ has moved a

funds around from program to program, PAC to ORF, into labor etc. to pay for una

underfunded, underestimated, or mismanaged programs, actions, etc." (Exhibit 43

_ remembers not taking the letter seriously, because. assumed that th

not understand the flexibility of the NWS budget that might allow for such transfer

II! has no record of when. received this letter or what. did with it, but b

sent the Jetter to the IG'sOffice and Congress, since they were listed as "cc's" 

along with (Exhibit 17). Clearly, the complaint ended up in the h

50 
AU redactions are pYfSuant to FOIA Exemption (b)(6). 

(Exhibit 80). Although not clear how_ 

-"":ceived the complaint, it does not appear that the response was ever 

any other action was taken in response. 

Thereafter, on May 25, 2010, the IG's Office received an almost identical complaint. (Exhibit 

42). Again, it does not appear that any action was taken by the IG on this complaint. Although 

standard protocol requires the IG's Office to provide a copy of this complaint to NOAA for 

review, according to the 01G's Office this complaint was not provided to NOAA until later 

complaints arose in July 2011. 

The Anonymous Complaint to DOC 

The inquiry team found no one within NOAA that was notified of this incident. As noted in 

Section 1II(H)(2)(d) below, is expected to report any complaints or 

information that it receives regarding a potential reprogramming to NOAA or the IG's Office. 

A Second Complaint to the 10's Office 

In "late 2010," the apparently received another complaint, alleging that substantial funds 

had been inappropriately shifted from the A WIPS program .. s tiiies".TjhiS 

complaint is referred to in a November 18, 2011 letter from! 

, •• IiI.1II1II to (Exhibit 44). It is not clear how the IG's 

Office received this complaint, whether orally or in writing, but it too appears to have never been 

referred to NOAA. 

51 

All re4actions are pursuant 10 FO

Based on the "late 2010" complaint, between January and April 20 II, OIG staff c

limited review of the allegations, which resulted in a request to 

additional information in tight of what appeared to be an inappropriate transfer of$

from the AWIPS program to cover shortfalls within the NWS budget. (Exhibit 44on May 24, 2011, 

(Exhibi,45), 

stat

{Y]ou should expect a visit from or someone on 

behalf of the National Weather Service, regarding the movement o

funding from A WIPS to the National Weather Service, during or 

around FY 2010. They should be armed with explanations on jus

how the movement of funding from the A WIPS program was 

iCiiciiomiPlii'iheidliwiii'ihOiiU.' i'hie ineiieidifo.'iireprogramming. which the. insists is the case. 

_ never received information from NWS regarding the alleged 

recalls receiving a phone call in the summer 0[20l1 from ask

received information from NWS, but otherwise, did not hear 

(Exhibits 39, 83). Accordingly, in July 2011, 

to discuss the IG Office's allegations, and to see i could get N

provide. with additional information. (Exhibit 41). This was the first time th

had heard of these allegations, and. took further action. as described below. 

On November 18,2011, almost seven months sent the 

sent a letter to_:-outHning the results o

investigation, and stating that: 

52 
(Exhibit 44) 

AM redactlollS are pursuant to FOIA exemption (b)(6). 

your staff has not informed us of the results ofa meeting with the 

Department on this issue. Therefore, we ask that you advise 

whether your office has notified the Department's budget office of 

the nature and extent of the movement of A WlPS funding and, if 

so, the results of your discussions, 

4. NOAA is Notified of Allegations 

In July 2011, reported to liiie IG had 

concerns about NWS practicing "illegal reprogramming," and asked. if was going 

to provide additional infonnation to him as requested by the IG (See Section (IJ(F)(2), below). 

(Exhibit 40), This"Was the first time that_ became aware of allegations of 

improprieties in the transfer of funds within the NWS, (Exhibit 40). 

In response,_ went to_ who explained that the OIG had come to talk tolll 

about potential reprogramming of funds from the A WIPS mogram. and that. disll2reed with 

the rationale. 

H. Financial and Management Controls Were at Preventing an 

Unlawful Reprogramming of Funds 

It is clear that financial controls that were in place within OOC, NOAA, and NWS were 

ineffective at preventing the NWS CFO's Office from engaging in questionable and unlawful 

transfers of funds between prog(ams. To understand why, the inquiry team examined the various 

controls in place during FY 2010 and FY 201 L For purposes of this report, the inquiry team has 

separated these controls into two categories; automated controls and manual controls. It appears 

that weaknesses in the way various manual controls were applied contributed significantly to the 

problems that arose in the NWS CFO's Office. 

53 

AU redactions are pursuant 10 FO

1. Automated Controls 

Automated financial controls are those that occur automatically. either through com

financial systems, or be£:ause they are inherent in the budget structure. The inquir

identified three automated controls pertinent to the transactions at issue here: acco

fund controls, system approval right controls, and NWS budget structure controls. 

a. Accounting System Fund Controls 

Accounting system fund controls are designed to automatically prevent an FMC fr

overspending available apportioned funds. To create such controls, the amount of 

funds available to each program must first be established in DOC's financial mana

system. This is accomplished by summarizing apportionment data by specified da

having this data reviewed by a DOC budget officer, and then entering the data into 

financial management system. Once this infonnation is in the system, whenever p

requests are made the system automatically checks the amount requested against th

funds in the project account, before allowing the process to proceed and the obliga

However, these controls are not designed to prevent the transfer of charges from o

another through SLTs, as was done here, and were ineffective in flagging this activ

b. Approval Right Controls 

System approval rights are automatic flags in the DOC financial management syste

certain transactions from posting pending further review. These controls are desig

that certain transactions initiated in the DOC financial management system are pro

approved before execution. There is no control in the system that would flag large 

unconventional transactions such as the SLTs used here. However, the system wo

the execution of an SLT without proper approval within the system, and without n

being available. In the present case, where the NWS CFO's Office was approving 

SLTs in the system and adequate funds existed in the accounts at issue, system app

would not have flagged the transactions. However, in the future it may be possible 

system approval rights to require higher level review of certain SL T transactions, f

those involving a certain dollar amount or without adequate documentation, thereb

approval authority of sensitive transactions from resting in a single party. 

NWS Budget Structure Controls 

The structure of the NWS budget itself can act as an automated control to discoura

unlawful reprogramming of funds. As previously described in Section IICB), the p

NWS budget that is not assigned to labor costs is, by design, very flexible, primari

made up largely of a single large line item called Local Warnings and Forecasts Ba

that contains approximately $650 million. Although L WF funds are divided loose

•

ca.,eligilon

ll

· ellS., '.he.y.c.an.bellle.as.ililY transferred between programs within this PPA •

acknowledged that the flexibility of the NWS budg

54 
An redactions are pursuant to FOIA ExemptIon (b)(ff) 

created an environment where the NWS could easily move money between programs and 

projects without significant oversight. (Exhibit In Moreover, because of the flexibility of the 

budget, senior NWS and NOAA leadership assumed that, even when problems were raised. 

questionable transactions were permissible, (Exhibit 17), 

Although the flexibility of the NWS budget may have allowed for certain transactions in this 

matter to have gone unnoticed, senior NOAA and NWS leadership made clear that this flexibility 

is imperative for addressing weather emergencies and the rapidly changing technology that 

defines modern meteorological operations. (Exhibits 17. 19). Creating a rigid budget structure 

may serve as a control to prevent reprogramming, but only at the expense of the flexibility 

needed to operate NWS effectively and efficiently. 

2. Manual Controls 

There are two types of manual controls. First, transactional level controls. which include: (1) 

reviews of operating performance; and (2) the appropriate segregation of duties, including 

processes for approval and authorization. Second, entity level or environmental controls, which 

include: (l) the hiring and retention of competent (2) mechanisms to monitor and 

review operations and programs (i.e., oversight); (3) establishment of appropriate and clear 

internal reporting relationships, including clear documentation of these relationships, and 

facilitating a process by which managers are provided easy. with 

senior managers; and (4) requirements for the proper documentation of financial transactions. 

a Reviews of Operating Performance 

Reviewing operating performance involves the. monitoring of financial systems to ensure that 

they are implemented to plan. In the present matter, this involves the periodic review of spend 

plans to ensure that programs are obligating funds within their limits, Within the NWS CFO's 

Office, to ensure that spending and obligations are within approved apportionment levels, the 

office creates "budget operating plans" (BOPs), which are used as a basis for regular reviews of 

spending activity. During periods of continuing resolution. in particular. financial analysts 

closely monitor spending to ensure operations continue within approved levels. 

55 

All redactlons are pursuant to FO

It appears that regular reviews of BOPs and operating perfonnance were conducted 

Indeed, understanding that they were working at a deficit, the CFO's Office carefu

spending activity to enable it to identify FMC's and programs that might overspen

levels, or have funding overages, by fiscal year's end. (Exhibits 82, 83). The CFO

would then reapportion funds to address shortfalls, which is how the problems des

report arose. 

b. Segregation of Duties (Approval Process Controls

Approval process controls ensure that transactions are not executed without proper 

NWS, the FMC's have first approval rights in the CBS system for BOP transfers a

the CFO's office has final approval rights over BOP transfers. and intennediate ap

over SLTs. The NOAA CFO's Finance Office has final approval authority over 

they only review SLT s to ensure that they fall within certain "business rules," whic

application here. 29 The SES manager at the line office level (i.e., the line office CF

responsible for ensuring that SLTs do not violate appropriation laws. Both BOP tr

SLTs are subject to the same fund controls noted in the Automated Controls sectio

While the NWS CFO's Office approves all BOP transfers and SLTs, and would th

catch any questionable transactions initiated at the FMC level, in this case the appr

process was subverted because it was the CFO's office that directed the transaction

Accordingly. the approval control process became nothing more than a formality n

execute the improper movement of charges in the CBS system. 

c. Hiring and Retention of Competent Staff 

Hiring and retaining staff that are adequately trained and knowledgeable in their ar

expertise and fully understand their control function helps to ensure compliance w

laws and regulations. In this case, it does not appear that NWS CFO staff suffered 

incompetence in understanding substantive financial issues. To the contrary. NWS 

recognized problems in_ financial decisions, and repeatedly brought con

attention. 

,tlo1 ij must contam Me apprOPfJate 

well as fund code fiscal years; (3) Transfers between FMCs requlfe5 the approval of the affected FM

transfers will be done for any surcharge object classes or surcharge offset project codes, and (5) Th

and submitting the transfers is responsible for ensunng that there are adequate resources available f

(ExhibitSI) 

56 
AN fOOactiOIlS are pursuant to FOIA Exemption (b)(e), 

Notably, training plays an important role in the competence of staff .••••• 

have both stated that no fonnal training is provided to NOAA employees on appropriations law. 

(Exhibits 17, 41). Both now recognjze that such training may be necessary, particularly for 

senior leaders who don't have a financial background. (Exhibit 17). 

d. Mechanisms to Monitor and Review Operations and Programs 

1. Mechanisms to Monitor and Review Operations and 

Programs within the NOAA Budget Structure and the 

NOAA CFO's Office 

The NOAA CFO's Office relies heavily on line office CFOs to ensure that transactions are 

appropriate and appropriation laws are followed. {Exhibit 41), As such, the NOAA CFO's 

Office did not have established controls that would have caught the inappropriate conduct that 

occurred here. 

The NOAA CFO's Office focuses primarily on budget formulation, with line offices focusing 

principally on budget execution. This separation is purposeful. and is meant to allow those with 

the best knowledge of an Office's programs to have more control over them, leading to greater 

efficiencies and flexibility in budget execution. (Exhibit 41). However, this system leaves line 

offices with the responsibility of establishing many financial controls. (Exhibit 41). 

Budget Operating Plans (BOPs) are generated by line office CFO Offices. (Exhibit 41). The 

NOAA eFO's Office only tracks execution variances against line office BOPs to ensure that 

expenses are in line with the plans, (Exhibits 40, 41). As noted above, the NOAA CFO's Office 

also approves all SLTs, but only to ensure that they comply with certain business rules. 

(Exhibits 40, 41). 

In the present matter, fund transfers did not involve expenses that could be compared against 

BOPs, and therefore did not raise red flags for the NOAA CFO's Office. Although the 

transactions did involve SLTs, those SLTs did not violate any of the "business rules" established 

by the NOAA CFO, and therefore passed review by the NOAA CFO's Office. This is an area 

where NOAA could create stronger controls over the use ofSLTs. 

On the positive side, within the NOAA finance structure there are effective controls to ensure 

good opportunities for communication between line office CFOs and the NOAA CFO and senior 

NOAA leadership. For example, the NOAA CFO meets with line office CFO's on a monthly 

basis to discuss budget issues, and conducts periodic program reviews with various line office 

programs. (Exhibit 17). As noted, supra,_ caught a potential reprogramming violation 

in the WRIP program during one of these program reviews, showing that they are an effective 

57 

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means for addressing challenging financial issues. Where particularly problematic 

are identified, there is a "management control review" process, which periodically 

financial issues to ensure that they are handled appropriately. (Exhibit 17). There 

"CFO council" on which all program CFOs participate, that addresses financial is

to senior NOAA leadership. (Exhibit 17). 

2. Mechanisms to Monitor and Review 

Programs within the DOC CFO's Of

Because the DOC CFO's Office does not have day to day visibility at a level requ

these transactions, it would not necessarily be aware of unlawful reprogramming a

therefore has a limited role in acting as a control in addressing possible reprogram

violations. However, the DOC CFO's Office is still expected to report any compl

information that it receives regarding a potential reprogramming to NOAA or the 

In addition, some IT based programs are reviewed by the DOC CFO's Office thro

Commerce Information Technology Review Board (CITRB), which is chaired by 

Chief Information Officer (CIO) and co-chaired by the OOC CFO. The CITRB p

coordinated risk management and review, and provides advice to the Secretary an

Secretary regarding IT investments that merit special attention, involve Departmen

systems, or have significant life cycle costs, During CITRB reviews, program ma

discuss program funding. program scheduling and milestones. procurement related 

program risk areas, and other issues that they deem critical to the success of their p

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..... .......... .. 

Processes that Facilitate Easy, Open-{:ommunication with 

Senior Managers 

One of the most important controls over financial systems is the ability of employees to freely and openly report concerns to financial managers and senior leadership. See NOAA Finance 

Office Handbook, §§ As already described, employees repeatedly raised concerns 

over financial decisions made by_ to both_ and but these 

concerns went unaddressed. Moreover, the NWS Corporate Board was not seen as a safe place 

to raise detailed concerns. (Exhibit 15). The lack of response by management forced employees 

to go outside the standard chain of command to report improprieties to the 010, GAO fraudnet, 

and directly to NOAA senior leadership. This breakdown in process controls was the most 

significant reason that_ activities continued unabated for close to two years. 

In one sense, the present matter proves that certain system controls worked, since employees 

were able to report improprieties to a number of different sources outside ofNWS, instigating 

the instant inquiry. However, had_ and addressed concerns as they 

arose, problems would have been handled more quickly, efficiently, and with less long-term 

consequences to NWS. 

Proper Documentation of Financial Transactions 

As previously described, in violation of NOAA polley, NWS did not fuHy document summary 

level transfers (SLTs), making it impossible to track what expenses were transferred between 

PPAs and eliminating the paper trail that would more easily have established an unlawful 

reprogramming of funds, See NOAA Fmance Office Handbook, § ("preparers of 

SLTs are required to maintain adequate supporting documentation for each SL T'). NWS was 

oot entirely at fault here, since NOAA did not have requirements in place that would have 

mandated better record-keeping for SLTs. Manifestly, it is imperative that all fund transfers, 

whether direct or indirect, be traceable, allowing for complete budget transparency. 

Accordingly, if NOAA intends to continue allowing the use of SL Ts by line offices, it must 

create appropriate protocols to ensure that SLTs are fully and completely 

documented . 

................ 

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1. The Office Space Consolidation Efforts Were not Paid for Out 

Funds and Were an Authorized Management Decision 

There is no evidence to indicate that the NWS Office Space consolidation efforts w

were conducted between 2009 and 2012 were improper. An MOV exists between 

AGO that spells out the terms of the space consolidation agreement, and AGO reim

costs to implement lhe space consolidation efforts to NWS. (Exhibit 74). In the lo

space consolidation plan was projected to save NWS approximately $1 million per 

(Exhibit 4, 77). 

To the extent that there was a problem with the space consolidation project it was 

transparency. Like many decisions made within the NWS CFO's Office, no inform

provided to employees about the purpOse of the space consolidation efforts and lhe 

would 

K. Evidence Does Not Support 

Influence a NOAA Contract With __ 

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L. Issues for further inquiry 

As mentioned previously, the inquiry team was asked to expeditiously complete it

NOAA could review it in time to address budget planning for FY 2012 and FY 20

quickly make appropriate personnel decisions. The inquiry team recognizes that t

defined questions regarding this matter that remain unanswered, and that NOAA m

initiate additional investigation into actions arising in prior years, and into tangent

Issues that NOAA may seek to investigate further include: 

A full audit of the NWS budget for FY 2010 and FY 2011, 

the full extent of unlawful fund reprogramming; 

An audit ofNWS financial practices prior to FY 2010, to de

when and how the NWS budget shortfall began, and whelhe

improper reprogramming of funds prior to 2010; and 

An NWS program review, fo detennine (a) the impact 

financial decisions on NWS programs; and (b) whether fina

existed within NWS because of program dysfunction. 

61