National Aeronautics and Space Administration

FY 2015 Agency Financial Re

www.nasa.gov
Cover Image Captions and Credits

Front Cover:

Outside Front Main Image: Artist’s concept, Reach New Heights, Benefit All Humankind, Reveal The Unknown. (Credit: 

NASA)

Outside Front Bottom Images (left to right): The Ikhana UAS soars over the Mojave Desert during a flight from NASA 

Armstrong Flight Research Center, Edwards, California. (Credit: NASA Photo/Carla Thomas) ; Engineers Clean Mirror with 

Carbon Dioxide Snow. (Credit: NASA); Rocket Sled Tests May Lead to Mars. (Credit: NASA)

Inside Front: Mars Weather-Station Tools on Rover’s Mast. (Credit: NASA)

Rear Cover:

Outside Rear: Solar Arrays on the International Space Station. (Credit: NASA)
Message from the Administrator

NASA FY 2015 Agency Financial Report Page i

Message from the 

Administrator

November 13, 2015

I am proud to present NASA’s Fiscal Year (FY) 2015 Agency Financial 

Report, which provides information on our financial performance and 

insight into our stewardship of taxpayer dollars and the resources entrusted to NASA. This report also summarizes our progress toward 

achieving NASA’s Mission to drive advances in science, technology, 

aeronautics, and space exploration to enhance knowledge, education, innovation, economic vitality, and stewardship of Earth. 

Efficient and effective financial management makes our mission possible. We received an unmodified “clean” audit opinion on our FY 

2015 financial statements, with no material weaknesses. The report 

of the independent auditors is included in this Agency Financial Report. I am able to provide reasonable assurance that the performance 

and financial information in this report is reliable and complete.

Our long-term goal is to send humans to Mars, and to enable that goal we are undertaking a sustainable campaign and developing new systems for the human exploration of deep space. In FY 2015, 

NASA accomplished the successful Orion Exploration Flight Test (EFT)-1 in December 2014. This was 

the first test flight of the Orion spacecraft, which is designed to take humans on deep space missions in 

the future. Orion did not carry any people into space on this flight, but it became the first human-rated 

spacecraft to leave low Earth orbit since the Apollo 17 mission. This year we also accomplished major 

milestones in the development of the new Space Launch System (SLS), including the first qualification 

booster test. With support from the Exploration Ground Systems program, these new capabilities will 

carry astronauts into deep space.

Even in the face of cargo resupply setbacks in FY 2015, we continued vital research and technology 

development activities on the International Space Station (ISS). In FY 2015, NASA initiated the U.S.-

Russian joint one-year human health and performance research project and the Identical Twins Study. 

The one-year crew mission is the latest step in the ISS’ role as a platform for preparing humanity for 

exploration into deeper space. In addition, Boeing and SpaceX, NASA’s Commercial Crew Program 

partners, have made great strides to re-establish America’s capability to launch astronauts to the ISS, 

including constructing the infrastructure needed to safely launch and operate crew space transportation 

systems, refining designs, and starting to build test vehicles.

Our robotic explorers also continued to astound in FY 2015, including the New Horizons mission’s accomplishment of the historic first-ever flyby of Pluto, and the Dawn mission’s exploration of the dwarf 

planet Ceres. We added to our scientific and exploration capabilities by launching several missions, including the Magnetospheric Multiscale (MMS) mission and the significant achievement of launching five 

Earth-observing missions in one calendar year.
NASA FY 2015 Agency Financial Report

Message from the Administrator

Page ii 

Transformative capabilities and cutting-edge technologies are being developed, tested, and flown by 

NASA today. Our space technology programs advanced several technologies, including the second 

near-space test flight of the Low Density Supersonic Decelerator (LDSD), a technology that could enable 

larger payloads to Mars and set the stage for future human explorers, and printing the first 3D-printed 

object in space on the ISS. Our technologies, partnerships, and education for the next generation contribute to the Nation’s innovation economy. NASA accomplished a number of Federal government “firsts” 

this year, including the public release of NASA’s technology portfolio (TechPort) system and the release 

of NASA’s software catalog with an extensive collection of codes available for use at no charge.

NASA’s mission success is thanks to our multi-disciplinary team of diverse, talented people across our 

Centers. We are committed to nurturing an innovative environment that fosters teamwork and excellence. For the third year in a row, employees named NASA the Best Place to Work in the Federal Government among large agencies. 

As shown in this report, we strive to put your tax dollars to efficient and innovative use. In the year ahead, 

NASA will continue to push the boundaries of exploration. Along the way, we will make new scientific 

discoveries, develop new technologies and capabilities, and deliver tangible benefits to the public. Additional details on these achievements are provided in this report, and if you would like more information 

on our progress toward achieving our strategic goals, I invite you to read our Annual Performance Report, 

which will be released concurrently with NASA’s Budget Estimates in early calendar year 2016.

Charles F. Bolden, Jr.

Administrator
NASA FY 2015 Agency Financial Report

 Table of Contents

Page iii

Image Caption: European Space Agency (ESA) astronaut, Samantha Cristoforetti, photographed the Gulf 

of Aden and Horn of Africa from the International Space Station. (Credit: NASA)

Management Discussion and Analysis............................1

Welcome to NASA.................................................................................3

 Vision and Mission Statement.............................................................................5

Organization.......................................................................................................7

Workforce.........................................................................................................11

Core Values.......................................................................................................12

FY 2015 In Review...............................................................................13

Mission Performance.............................................................................................15

Performance Overview......................................................................................15

Performance Summary......................................................................................18

Strategic Goals and Highlights............................................................................24

Strategic Goal 1: Expand the frontiers of knowledge, capability, 

and opportunity in space.............................................................................24
NASA FY 2015 Agency Financial Report

Strategic Goal 2: Advance understanding of Earth and develop 

technologies to improve the quality of life on our home planet..................34

Strategic Goal 3: Serve the American public and accomplish our Mission 

by effectively managing our people, technical capabilities,and 

infrastructure.............................................................................................42

Financial Performance...........................................................................................49

CFO Letter................................................................................................................49

Financial Highlights............................................................................................51

Overview of Financial Position...................................................................51

Sources of Funding...................................................................................54

Net Cost of Operations................................................................................55

Limitations of the Financial Statements..............................................................59

Systems, Controls and Legal Compliance........................................61

NASA’s Internal Control Framework.................................................................63

Management Assurances.................................................................................65

Financial Systems Strategies............................................................................67

Looking Forward..................................................................................69

Financials.........................................................................73

Introduction to the Principal Financial Statements.............................................75

Financial Statements, Notes, and Supplemental Information............................76

Letter from the Inspector General on the Audit.................................................113

Independent Auditors’ Report..........................................................................115

Other Information.........................................................135

Office of Inspector General Letter on NASA’s Top 

Management and Performance Challenges.....................................................137

FY 2015 Inspector General Act Amendments Report.....................................181

Background........................................................................................181

NASA’s Audit Follow-Up Program............................................................182

FY 2015 Audit Follow-Up Results...........................................................183

Improper Payments Information Act (IPIA) Assessment.................................189

Recapture Audit...............................................................................................199

Do Not Pay Initiative........................................................................................201

Schedule of Spending......................................................................................203

Freeze the Footprint.......................................................................................205

Summary of Financial Statement Audit and Management Assurances........207

Page iv 
NASA FY 2015 Agency Financial Report

Management Discussion 

and Analysis

Page 1

Welcome to NASA....................................................................................3

Vision and Mission Statement...............................................................................5

Organization..........................................................................................................7

Workforce.............................................................................................................11

Core Values.........................................................................................................12

Image Caption: Artist’s concept of the New Horizons spacecraft as it approaches Pluto and its largest 

moon, Charon, in July 2015. The craft’s miniature cameras, radio science experiment, ultraviolet and infrared spectrometers, and space plasma experiments will characterize the global geology and geomorphology 

of Pluto and Charon, map their surface compositions and temperatures, and examine Pluto’s atmosphere 

in detail. (Credit: NASA)
NASA FY 2015 Agency Financial Report

This page has been left blank intentionally.

Page 2 
Welcome to NASA

NASA FY 2015 Agency Financial Report Page 3

Flying over an Aurora. (Credit: NASA)

 Welcome to NASA

NASA has chosen to produce an Agency 

Financial Report (AFR) and Annual Performance Report (APR). NASA will publish its 

Fiscal Year (FY) 2015 APR concurrently with 

its Congressional Budget Justification and 

will post it on NASA’s Web site at http://www.

nasa.gov by February 2016. 

This FY 2015 AFR provides an overview of 

NASA’s major programmatic and financial 

results for FY 2015. It integrates financial 

and program performance to demonstrate 

stewardship and accountability and highlights 

FY 2015 achievements. 

NASA demonstrates stewardship of its 

resources and accountability for results 

through compliance with the Chief Financial 

Officers Act (CFO Act) and the Government 

Performance and Results Act Modernization 

Act of 2010 (GPRAMA). Financial aspects 

of the Agency’s business operations are 

accounted for according to U.S. generally 

accepted accounting principles and Federal 

Accounting Standards Advisory Board 

standards.

NASA presents both performance and financial results of operations by strategic goal. 
Welcome to NASA

Page 4 NASA FY 2015 Agency Financial Report

Highlights of key program activities contribut-

ing to each strategic goal are provided in the 

Mission Performance discussion (page 15). 

A high-level summary of the linkage between 

program results and the cost of operations is 

provided in the Statement of Net Cost (SNC), 

which can be found in the Financials section 

(page 73). The SNC presents comparative 

net cost of operations during FY 2015 and FY 

2014 by strategic goal and for the Agency as 

a whole. In addition, the Financials section 

explains any significant changes in NASA’s 

financial condition from FY 2014 to FY 2015. 

Financial systems that meet requirements 

of the Federal Financial Management 

Improvement Act (FFMIA) are vital to NASA’s 

financial management program. The AFR 

describes NASA’s compliance with the FFMIA, 

as well as the built-in checks and balances 

required by the Office of Management 

and Budget’s (OMB) Circular A-123. OMB 

Circular A-123 places responsibility for 

internal controls over financial reporting on 

Agency management for the purpose of 

safeguarding assets and improving efficiency 

and effectiveness of operations. 

Finally, the AFR presents the Agency’s 

audited FY 2015 and FY 2014 financial 

statements and the related independent 

auditor’s financial statements audit opinion.

The FY 2015 AFR can be found on NASA’s 

Web site at: 

http://www.nasa.gov/news/budget/.

Image Caption: This NASA/ESA Hubble Space 

Telescope image presents the Arches Cluster, 

the densest known star cluster in the Milky Way. 

(Credit: NASA/ESA)
Welcome to NASA

NASA FY 2015 Agency Financial Report

Vision and Mission Statement

The National Aeronautics and Space Act of 1958 created NASA to provide for research into 

problems of flight within and outside the Earth’s atmosphere and to ensure that the United

States conducts activities in space devoted to peaceful purposes for the benefit of humankind. 

In 2010, the President and the Congress unveiled an ambitious new direction for NASA, 

laying the groundwork for a sustainable program of exploration and innovation. This new 

direction extends the life of the International Space Station (ISS), supports the growing commercial space industry, and addresses important scientific challenges while continuing our 

commitment to robust human space exploration, science, and aeronautics programs. The 

strong bipartisan support for the NASA Authorization Act of 2010 confirms our essential role 

in addressing the Nation’s priorities.

In 2014, NASA released a new Strategic Plan that builds upon the groundwork established in 

2010 by outlining the Agency’s vision for the future and providing a clear, unified, and longterm direction for all of NASA’s activities. The Strategic Plan is the foundation on which NASA 

will build and measure the success of its programs and projects. The Strategic Plan can be 

found on NASA’s Web site at: 

http://www.nasa.gov/sites/default/files/files/2014_NASA_Strategic_Plan.pdf.

As established in the strategic plan, NASA’s Vision and Mission are:

The NASA Vision

We reach for new heights and reveal 

the unknown for the benefit of humankind.

The NASA Mission

Drive advances in science, technology, 

aeronautics, and space exploration 

to enhance knowledge, education, 

innovation, economic vitality, and 

stewardship of Earth.

NASA’s three strategic goals are:

1. Expand the frontiers of knowledge, capability, and opportunity in space.

2. Advance understanding of Earth and develop technologies to improve the quality of life on 

our home planet.

3. Serve the American public and accomplish our Mission by effectively managing our people, technical capabilities, and infrastructure.

Page 5
Welcome to NASA

Page 6 NASA FY 2015 Agency Financial Report

NASA’s overarching approach for achieving the Mission contains five key strategies for 

governing the management and conduct of the Agency’s aeronautics and space programs. 

These strategies are the standard practices that each organization within NASA employs in 

developing and executing their plans to achieve the Mission. They also provide a framework 

that guides NASA’s support for other areas of national and Administration policy: government 

transparency; science, technology, engineering, and mathematics (STEM) education; energy 

and climate change; innovation; and increased citizen and partnership participation to help 

address the multitude of challenges faced by the Nation. The strategies listed below help 

strengthen the Agency and support U.S. competitiveness on a global scale.

Overarching Approach

Invest in 

next-generation 

technologies and 

approaches to spur 

innovation.

Inspire students to be 

our future scientists, 

engineers, explorers, 

and educators through 

interactions with NASA’s 

people, missions, 

research, and facilities.

Expand partnerships 

with international, 

intergovernmental, academic, 

industrial, and entrepreneurial 

communities, recognizing them 

as important contributors of 

skill and creativity to our 

missions and for the 

propagation of our results. 

Commit to environmental stewardship 

through Earth observation and science, 

and the development and use of green 

technologies and capabilities in NASA 

missions and facilities.

Safeguard the public trust through 

transparency and accountability 

in our programmatic and financial 

management, procurement, and 

reporting practices.

NASA developed four agency priority goals for FY 2014 - FY 2015, consistent with the requirements of GPRAMA. The statements for each FY 2014 - FY 2015 agency priority goal 

are in the following graphic. NASA will continue the four themes from the FY 2014 - FY 2015 

goals with new agency priority goals for FY 2016 - FY 2017. More information is available at: 

http://www.performance.gov/agency/national-aeronautics-and-space-administration?view=p

ublic#overview. 
Welcome to NASA

NASA FY 2015 Agency Financial Report Page 7

FY 2014 - FY 2015 Agency Priority Goals

Human Exploration and Operations, 

Commercial Crew Program:

By September 30, 2015, the 

Commercial Crew Program will 

complete the first phase of certification 

efforts with Commercial Crew 

Transportation partners and will make 

measurable progress toward the second 

certification phase with industry partners 

while maintaining competition. 

Human Exploration and Operations, 

International Space Station 

Program: 

By September 30, 2015, NASA will increase the utilization of the International 

Space Station internal and external 

research facility sites with science and 

technology payload hardware to 70 

percent.

Science, James 

Webb Space Telescope Program:

By October 2018, NASA will launch 

the James Webb Space Telescope, 

the premier space-based observatory. 

To enable this launch date, NASA will 

complete the James Webb Space 

Telescope primary mirror backplane and 

backplane support structures and deliver 

them to the Goddard Space Flight 

Center for integration with the mirror 

segments by September 30, 2015. 

Human Exploration and Operations, 

Exploration Systems Development: 

By September 30, 2015, NASA will 

complete the Space Launch System, 

Orion, and Exploration Ground Systems 

Critical Design Reviews (CDRs), 

allowing the programs to continue to 

progress toward Exploration Mission 

(EM)-1 and EM-2 missions.

Organization

NASA’s organizational structure is designed to accomplish its Mission and provide a framework for sound business operations, management controls, and safety oversight. The Office 

of the Administrator provides the overarching vision and strategic direction for the Agency. 

The Agency’s science, research, and technology development work is implemented through 

four mission directorates supported by the Mission Support Directorate: 

Science Mission Directorate (SMD) manages the Agency’s science portfolio budget 

account and focuses on programmatic work 

on Earth, planetary, astrophysics, and heliophysics research. SMD engages the U.S. 

science community, sponsors scientific research, and develops and deploys satellites 

and probes in collaboration with NASA’s 

international partners and other agencies 

(through the Joint Agency Satellite Division) 

to answer fundamental scientific questions 

and expand understanding of space. Additional information on SMD is available at: 

http://science.nasa.gov/.
Welcome to NASA

Page 8 NASA FY 2015 Agency Financial Report

Aeronautics Research Mission Directorate (ARMD) manages the budget account for 

the Agency’s aeronautics research portfolio, 

which enables technology innovation and development allowing the U.S. aviation industry 

to continue to grow and maintain global competitiveness. Research programs conduct 

cutting-edge research at both the fundamental and integrated systems levels to address 

national and global challenges. ARMD guides 

its research efforts using a strategic vision that 

embraces the multiple roles of aviation and 

expands the understanding of those roles to 

the global stage, while working to address tomorrow’s challenges. Additional information 

on the ARMD is available at: http://www.nasa.

gov/topics/aeronautics/index.html.

Space Technology Mission Directorate 

(STMD) manages the Space Technology 

budget account, which also funds the crosscutting activities of the Office of the Chief 

Technologist. STMD pioneers new technologies and capabilities needed by the Agency 

and commercial sector. It develops technologies that support the broader space economy 

and other Government missions in space 

and complements technology development 

in NASA’s other mission directorates, delivering solutions to NASA’s technology needs 

for future science and exploration missions. 

Additional information on the Office of the 

Chief Technologist is available at: http://

www.nasa.gov/offices/oct/home/index.html.

Human Exploration and Operations Mission Directorate (HEOMD) manages the 

budget account for the Exploration and 

Space Operations portfolio. HEOMD manages development of the Space Launch System 

(SLS), the Orion spacecraft, and future exploration technologies. It works with U.S. commercial space industry partners to develop 

commercial systems for providing crew and 

cargo transportation services to and from low 

Earth orbit. HEOMD also manages operations 

and research for the ISS, and communications systems and networks that enable deep 

space and near-Earth exploration. Additional 

information on the HEOMD is available at:

http://www.nasa.gov/directorates/heo/home/

index.html.

The Mission Support Directorate (MSD)

supports all NASA missions in a crosscutting manner. For example, MSD manages 

the Safety, Security and Mission Services 

(SSMS) and Construction and Environmental Compliance and Restoration (CECR) 

accounts, in addition to functions such as 

procurement and financial management, 

which cut across all mission directorates. 

SSMS and CECR accounts fund operations 

at Headquarters and the Centers as well as 

institutional and programmatic construction 

of facilities. MSD reports progress on major national initiatives to the Administrator 

and other senior Agency officials, provides 

independent reviews and investigations, 

and liaises with the public and other Federal agencies. MSD is based at Headquarters, but has representatives at the Centers 

to provide coordination and control. Additional information on the MSD is available at: 

http://msd.hq.nasa.gov/.

Office of Education (Education) develops 

and manages a portfolio of educational programs for students and teachers at all levels. 

Education seeks to develop a vibrant pool 

of future workforce for sustainable support 

of national and NASA missions by attracting 

and retaining students in STEM disciplines 

and raising public awareness of NASA’s activities. To achieve these goals, Education 

works in partnership with other Government 

agencies, non-profit organizations, museums 

and the education community at large. Additional information on the Office of Education 

is available at: 
Welcome to NASA

NASA FY 2015 Agency Financial Report Page 9

http://www.nasa.gov/offices/education/

about/.

The Administrator’s Staff Offices support 

the Administrator’s administrative responsibilities by providing a range of high-level 

guidance and support in critical areas like 

safety and mission assurance, technology planning, equal opportunity, information 

technology, financial administration, small 

business administration, international relations, and legislative and intergovernmental affairs. Additional information on the 

Administrator’s staff offices is available at: 

http://www.nasa.gov/about/org_index.html.

NASA comprises Headquarters in Washington, DC, nine operating Centers located 

across the country, and the Jet Propulsion 

Laboratory, a Federally Funded Research 

and Development Center operated under a 

contract with the California Institute of Technology. NASA works in partnership with academia, the private sector, state and local 

governments, other Federal agencies, and a 

number of international organizations to support and achieve its Mission.

Organizational Structure

Note: Administrator may delegate direct reports to Deputy Administrator at his/her discretion.

* Center functional office directors report to Agency functional AA or Chief. Deputy and below report to

Center leadership.

** NMO oversees the Jet Propulsion Laboratory and other Federally Funded Research and Development 

Center work.

Human Exploration 

and Operations 

Mission Directorate

Chief, Safety and 

Mission Assurance

Kennedy Space 

Center

Marshall Space 

Flight Center

Langley Research 

Center

Stennis Space 

Center

Johnson Space 

Center

Armstrong Flight 

Research Center

Goddard Space 

Flight Center

Glenn Research 

Center

Jet Propulsion 

Laboratory 

Ames Research 

Mission Support Center

Directorate

Administrator

Deputy Administrator

Associate Administrator

Chief of Staff

Deputy Associate Administrator

Associate Deputy Administrator 

Senior Advisor to the Administrator for 

Strategy and Policy Implementation

Chief Engineer

Chief Health and 

Medical Officer

Chief Financial Officer*

Chief Information Officer*

Chief Scientist

Chief Technologist

Diversity and Equal 

Opportunity

Legislative and 

Intergovernmental 

Affairs*

International and 

Interagency Relations

Education Communications*

Small Business 

Programs

General Counsel

Advisory Groups

NAC and ASAP

Inspector General

Human Capital Management

Strategic Infrastructure

Headquarters Operations

NASA Shared Services Center

Procurement

Protective Services

Aeronautics 

Research Mission 

Directorate

Reporting Structure

Administrator

Associate Administrator

Science Mission 

Directorate

Space Technology 

Mission Directorate

Office of 

Strategy and 

Policy

Office of 

Evaluation

Office of 

Agency Council 

Staff

NASA Management 

Office** 
Welcome to NASA

Page 10 NASA FY 2015 Agency Financial Report

Centers and Facilities Nationwide

Under the leadership of the Administrator, NASA’s mission directorates, MSD, and staff offices at Headquarters provide overall guidance and direction to the Agency. NASA’s Centers 

and installations conduct the Agency’s day-to-day work in laboratories, on airfields, in wind 

tunnels, in control rooms, and in NASA’s other one-of-a-kind facilities.

5

6

4 2

1

3

Ames Research Center (ARC)

Armstrong Flight

Research Center (AFRC)

Jet Propulsion

Laboratory (JPL)

Stennis Space Center (SSC) Marshall Space Flight Center (MSFC)

Kennedy Space Center (KSC)

Langley Research

Center (LaRC)

NASA Headquarters

Goddard Space Flight Center (GSFC)

Johnson Space Center (JSC)

Glenn Research

Center (GRC)

1) Plum Brook Station, Sandusky, OH, managed by GRC

2) Software Independent V Validation Facility, Fairmont, WV, managed by GSFC

3) Goddard Institute for Space Studies, New York, NY, managed by GSFC

4) Wallops Flight Facility, Wallops, VA, managed by GSFC

5) White Sands Test Facility and Space Network, White Sands, NM, managed by JSC

6) Michoud Assembly Facility, New Orleans, LA, managed by MSFC

(noted by numbers on map)

Select NASA Facilities

7) NASA Shared Services Center, Stennis Space Center, MS, managed by SSC

7

Note: JPL is a Federally Funded Research and Development Center in Pasadena, California. The 

California Institute of Technology manages JPL.

The NASA Shared Services Center (NSSC) was established in March 2006 to provide all 

NASA Centers timely, accurate, and cost-effective support services in the areas of financial 

management, human resources, information technology, procurement, and business support services.
Welcome to NASA

NASA FY 2015 Agency Financial Report Page 11

Workforce

As of the end of FY 2015, NASA employed 

more than 17,500 civil servants, including 

full-time, part-time, term appointee, student, 

and other non-permanent workers at its 

nine Centers, Headquarters, and NSSC. 

In addition, approximately 4,800 full-time 

equivalent employees perform NASA-funded 

work as employees of the Jet Propulsion 

Laboratory, operated by the California Institute 

of Technology. More information about 

NASA’s workforce is available at: https://wicn.

nssc.nasa.gov/. The NASA Office of Human 

Capital Management (OHCM) is responsible 

for planning and managing the Agency’s 

workforce to ensure that the right skills are 

available to support NASA’s Mission.

Talented and engaged people are NASA’s 

greatest resource. NASA’s Mission requires 

great responsibility and the continued need 

for a highly skilled, agile, inclusive, and innovative workforce. While many drivers of a 

positive workplace culture contribute to employee engagement and mission accomplishment, analysis has shown that three areas 

have the greatest potential to increase innovation given the current environment. The 

NASA Strategic Management Council will focus on the following three principal areas that 

will help to embed innovation in the NASA 

culture:

• 

• 

• 

Recognizing and rewarding innovative 

performance: Reward and appreciate employees for their innovative performance 

and contributions to their workplace.

Engaging and connecting the workforce: 

Engage employees in the NASA Mission 

and enable them to cooperate, collaborate, and network with one another.

Building model supervisors and leaders: 

Develop supervisors and leaders who 

view developing employees as an important and productive use of time.

NASA cares about the environment in which 

employees work. Direct attention to the NASA 

work environment, workforce, and culture 

through both inclusion and innovative strategies are critical to achieving NASA’s Mission.

Image Caption: Members of the New Horizons science team react to seeing the spacecraft’s last and 

sharpest image of Pluto before closest approach later in the day, Tuesday, July 14, 2015 at the Johns Hopkins University Applied Physics Laboratory (APL) in Laurel, Maryland. (Credit: NASA/Bill Ingalls)
Welcome to NASA

Page 12 NASA FY 2015 Agency Financial Report

Core Values

NASA’s tradition of excellence is rooted in the 

four uncompromising shared core values of 

safety, integrity, teamwork, and excellence, 

as well as the firm belief that failure is not an 

option.

Safety: NASA’s constant attention to safety is 

the cornerstone upon which we build mission 

success. We are committed, individually and 

as a team, to protecting the safety and health 

of the public, our team members, and those 

assets that the Nation entrusts to us.

Integrity: NASA is committed to maintaining 

an environment of trust, built upon honesty, 

ethical behavior, respect, and candor. Our 

leaders encourage this virtue in the NASA 

workforce by fostering an open flow of communication on issues among all employees 

without fear of reprisal. At NASA, we regard 

and reward employees for demonstrating 

integrity. Building trust through ethical conduct as individuals and as an organization is 

a necessary component of mission success.

Teamwork: NASA’s most powerful asset 

for achieving mission success is a multidisciplinary team of diverse, competent people 

across NASA Centers. Our approach to teamwork is based on a philosophy that each team 

member brings unique experience and important expertise to project issues. Recognition 

of and openness to that insight improves the 

likelihood of identifying and resolving challenges to safety and mission success. We 

are committed to creating an environment 

that fosters teamwork and processes that 

support equal opportunity, collaboration, continuous learning, and openness to innovation 

and new ideas.

Excellence: To achieve the highest standards in engineering, research, operations, 

and management in support of mission success, NASA is committed to nurturing an organizational culture in which individuals make 

full use of their time, talent, and opportunities 

to pursue excellence in both the ordinary and 

the extraordinary.
NASA FY 2015 Agency Financial Report

FY 2015 In Review

Page 13

NASA astronaut Scott Kelly captured this image of Aurora 

trailing a colorful veil over Earth, taken from the International Space Station on August 15, 2015. (Credit: NASA)

Mission Performance.............................................................................................15

Performance Overview......................................................................................15

Performance Summary.....................................................................................18

Strategic Goals and Highlights.........................................................................24

Strategic Goal 1: Expand the frontiers of knowledge, capability, and

opportunity in space ..................................................................................24

Strategic Goal 2: Advance understanding of Earth and develop 

technologies to improve the quality of life on our home 

planet..........................................................................................................34

Strategic Goal 3: Serve the American public and accomplish our 

Mission by effectively managing our people, technical capabilities, and 

infrastructure................................................................................................42

Financial Performance..........................................................................................49

CFO Letter........................................................................................................49

Financial Highlights..........................................................................................51

Overview of Financial Position..................................................................51

Sources of Funding...................................................................................54

Net Cost of Operations................................................................................55

Limitations of the Financial Statements............................................................59
Page 14 NASA FY 2015 Agency Financial Report

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Mission Performance

NASA FY 2015 Agency Financial Report Page 15

Mission Performance 

Performance Overview

NASA’s strategic goals and strategic objectives, as established in NASA’s 2014 Strategic 

Plan, are as follows: 

Strategic Goal Strategic Goal Strategic Goal

Expand the frontiers of knowledge, 

capability, and opportunity in 

space.

Advance understanding of Earth 

and develop technologies to 

improve the quality of life on our 

home planet.

Serve the American public and 

accomplish our Mission by 

effectively managing our people, 

technical capabilities, and 

infrastructure.

By empowering the NASA community 

to...

By engaging our workforce and partners 

to...

By working together to...

Objective 1.1: Expand human presence 

into the solar system and to the surface 

of Mars to advance exploration, science, 

innovation, benefits to humanity, and 

international collaboration.

Objective 2.1: Enable a revolutionary 

transformation for safe and sustainable 

U.S. and global aviation by advancing 

aeronautics research.

Objective 3.1: Attract and advance a highly 

skilled, competent, and diverse workforce, 

cultivate an innovative work environment, 

and provide the facilities, tools, and services 

Objective 1.2: Conduct research on needed to conduct NASA’s missions.

the International Space Station (ISS) to 

enable future space exploration, facilitate a 

commercial space economy, and advance 

the fundamental biological and physical 

sciences for the benefit of humanity. Objective 2.2: Advance knowledge of 

Earth as a system to meet the challenges of 

environmental change, and to improve life 

on our planet. 

Objective 3.2: Ensure the availability 

and continued advancement of strategic, 

technical, and programmatic capabilities to 

sustain NASA’s Mission. 

Objective 1.3: Facilitate and utilize U.S. 

commercial capabilities to deliver cargo and 

crew to space. 

Objective 1.4: Understand the Sun and its 

interactions with Earth and the solar system, 

including space weather. Objective 2.3: Optimize Agency technology 

investments, foster open innovation, and 

facilitate technology infusion, ensuring the 

greatest national benefit. 

Objective 3.3: Provide secure, effective, 

and affordable information technologies and Objective 1.5: services that enable NASA’s Mission. Ascertain the content, origin, 

and evolution of the solar system and the 

potential for life elsewhere. 

Objective 1.6: Discover how the universe 

works, explore how it began and evolved, 

and search for life on planets around other 

stars. 

Objective 2.4: Advance the Nation’s 

STEM education and workforce pipeline by 

working collaboratively with other agencies 

to engage students, teachers, and faculty in 

NASA’s missions and unique assets.

Objective 3.4: Ensure effective 

management of NASA programs and 

operations to complete the mission safely 

and successfully. 

Objective 1.7: Transform NASA missions 

and advance the Nation’s capabilities by 

maturing crosscutting and innovative space 

technologies. 

1 2 3
Mission Performance

Page 16 NASA FY 2015 Agency Financial Report

At the heart of NASA’s strategic goals and strategic objectives are the core missions of human space exploration, Earth and space science, aeronautics, and technology development. 

NASA is building capabilities for human space exploration, commercial space transportation, 

and the use of the International Space Station (ISS) for research, while also developing the 

James Webb Space Telescope (Webb). 

NASA sets near-term performance goals (PGs), which are targets for the next several years, 

as well as annual performance indicators (APIs) to measure and communicate progress 

towards achieving the Agency’s Vision and Mission. These PGs and APIs are aligned to 

the strategic goals and objectives. Together, the strategic goals, strategic objectives, PGs, 

and APIs, along with cross-agency priority (CAP) goals and Agency priority goals (APGs), 

form NASA’s strategy-performance framework. More information can be found in our 

2014 Strategic Plan, at nasa.gov/budget, and at performance.gov.

NASA Strategy and Performance Framework

2014 Strategic Plan

Annual Performance 

Indicator

1 Year

These goals cover the entire 

Federal Government; NASA 

supports many.

Cross-Agency 

Priority Goal

Up to 4 Years

Specific to NASA

Agency Priority 

Goal

2 Years

Strategic 

Objective

Up to 10 Years

Strategic Goal

Timeless

Performance Goal

Multi-Year

In this FY 2015 Agency Financial Report, NASA presents a high-level summary of performance, reflecting preliminary year-end assessments of progress towards the PGs and APIs. 

Final ratings and more detailed information will be provided in the Annual Performance Report 

(APR) in February 2016 at nasa.gov/budget.
Mission Performance

NASA FY 2015 Agency Financial Report Page 17

NASA determines these ratings based on a series of internal assessments that are part of 

ongoing monitoring of NASA’s program and project performance. External entities, such as 

scientific peer review committees and aeronautics technical evaluation bodies, validate select 

ratings prior to publication in the APR. 

For reporting purposes, NASA uses a color-coded system to represent the assessment and 

rating of performance. Every performance metric has specific, individualized rating criteria. 

The generic rating criteria in the table below are illustrative of the types of individualized criteria assigned to each performance measure, and broadly apply to the performance metrics.

Generic

Performance Goal and Annual Performance Indicator

Rating Criteria

Green NASA completed or expects 

to complete this performance 

measure within the estimated 

timeframe.

On Track or Complete

Red

Significantly Below Target 

and/or Behind Schedule

NASA did not or does not expect 

to complete this performance 

measure within the estimated 

timeframe. The program is 

substantially below the target and/

or significantly behind schedule.

Yellow

Slightly Below Target and/

or Behind Schedule

NASA completed or expects 

to complete this performance 

measure, but is slightly below the 

target and/or moderately behind 

schedule.

White

Cancelled or Postponed

NASA senior management 

cancelled or postponed this 

performance measure. The 

Agency no longer is pursuing 

activities related to this 

performance measure, or the 

program did not have activities 

during the fiscal year.

Note: These are generic criteria provided for informational purposes only. NASA develops measure-specific 

criteria to rate all of the Agency’s performance goals and annual performance indicators.
Mission Performance

Page 18 NASA FY 2015 Agency Financial Report

In FY 2015, NASA reviewed progress toward 73 multi-year performance goals and 110 annual performance indicators – in total, progress against 183 performance metrics. NASA 

provided the FY 2015 Performance Plan online at nasa.gov in March 2014. 

The summary of NASA’s preliminary assessment of progress is provided below. The Agency 

will release final ratings with the APR in February 2016.

Performance Summary RedSignificantly Below Target 

and/or Behind Schedule

White

Cancelled or Postponed

YellowSlightly Below Target 

and/or Behind Schedule

Green On Track or Complete

FY 2015 Preliminary Ratings

Overview

All Performance Metrics

Number of Performance Metrics 183

Green Yellow Red

163 16 4

89% 9% 2%

Performance Metrics by Strategic Goal

Strategic Goal 1 Strategic Goal 2 Strategic Goal 3

Expand the frontiers of 

knowledge, capability, and 

opportunity in space.

Advance understanding 

of Earth and develop 

technologies to improve 

the quality of life on our 

home planet.

Serve the American 

public and accomplish 

our Mission by effectively 

managing our people, 

technical capabilities, and 

infrastructure.

Number of Performance Metrics

76 47 60

Green Yellow Red Green Yellow Green Yellow Red

64 11 1 46 1 53 4 3

84% 15% 1% 98% 2% 88% 7% 5%

Note that these tables use preliminary ratings data for FY 2015. Final ratings will become available in February 2016 in the Annual Performance Report. 
Mission Performance

NASA FY 2015 Agency Financial Report Page 19

Year Total

Metrics Green Yellow Red White

FY 2015 183 163 16 4 -

FY 2014 192 180 10 2 -

FY 2013 170 158 4 - 8

FY 2015

183 Metrics

89% 9% 2% -

163 Green 16 Yellow 4 Red - White

FY 2014

192 Metrics

94% 5% 1% -

180 Green 10 Yellow 2 Red - White

 FY 2013

170 Metrics

93% 2% - 5%

158 Green 4 Yellow - Red 8 White

Performance Metric Trending

Rating Trending Over Last Three Fiscal Years RedSignificantly Below Target 

and/or Behind Schedule

White

Cancelled or Postponed

YellowSlightly Below Target 

and/or Behind Schedule

Green On Track or Complete

Note that these tables use preliminary ratings data for FY 2015. Final ratings will become available in February 2016 in the Annual Performance Report. 
Mission Performance

Page 20 NASA FY 2015 Agency Financial Report

Strategic Objective 1.1

Expand human presence into the solar 

system and to the surface of Mars to advance 

exploration, science, innovation, benefits to 

humanity, and international collaboration.

Green Yellow

2 PGs 1 PG

67% 33%

5 APIs 1 API

83% 17%

Strategic Objective 1.2

Conduct research on the International 

Space Station (ISS) to enable future 

space exploration, facilitate a commercial 

space economy, and advance the 

fundamental biological and physical 

sciences for the benefit of humanity.

Green Yellow Red

2 PGs 4 PGs -

33% 67% -

6 APIs 3 APIs 1 API

60% 30% 10%

Strategic Objective 1.3

Facilitate and utilize U.S. commercial capabilities to deliver 

cargo and crew to space. 

Green

2 PGs

100%

3 APIs

100%

Strategic Goal 1

Expand the frontiers of knowledge, capability, 

and opportunity in space. 

Green Yellow Red

24 PGs 5 PGs -

83% 17% -

40 APIs 6 APIs 1 API

84% 13% 3%

Ratings by Strategic Goal and Objective

FY 2015 PG and API Ratings RedSignificantly Below Target 

and/or Behind Schedule

White

Cancelled or Postponed

YellowSlightly Below Target 

and/or Behind Schedule

Green On Track or Complete

Note that these tables use preliminary ratings data for FY 2015. Final ratings will become available in 

February 2016 in the Annual Performance Report.
Mission Performance

NASA FY 2015 Agency Financial Report Page 21

Strategic Objective 1.5

Ascertain the content, origin, and evolution of the 

solar system and the potential for life elsewhere. 

Green Yellow

6 PGs -

100% -

8 APIs 1 API

89% 11%

Strategic Objective 1.7

Transform NASA missions and advance the 

Nation’s capabilities by maturing crosscutting 

and innovative space technologies. 

Green Yellow

3 PGs -

100% -

5 APIs 1 API

83% 17%

Strategic Objective 1.6

Discover how the universe works, explore how it began 

and evolved, and search for life on planets around 

other stars. 

Green

5 PGs

100%

6 APIs

100%

Strategic Objective 1.4

Understand the Sun and its interactions with Earth and the 

solar system, including space weather.

Green

4 PGs

100%

7 APIs

100%

RedSignificantly Below Target 

and/or Behind Schedule

White

Cancelled or Postponed

YellowSlightly Below Target 

and/or Behind Schedule

Green On Track or Complete

Note that these tables use preliminary ratings data for FY 2015. Final ratings will become available in 

February 2016 in the Annual Performance Report.
Mission Performance

Page 22 NASA FY 2015 Agency Financial Report

Strategic Objective 2.2

Advance knowledge of Earth as a system to meet the 

challenges of environmental change, and to improve life on 

our planet.

Green

8 PGs

100%

14 APIs

100%

Strategic Objective 2.1

Enable a revolutionary transformation for safe 

and sustainable U.S. and global aviation by 

advancing aeronautics research.

Green Yellow

6 PGs -

100% -

6 APIs 1 API

86% 14%

Strategic Objective 2.3

Optimize Agency technology investments, foster open 

innovation, and facilitate technology infusion, ensuring the 

greatest national benefit. 

Green

2 PGs

100%

2 APIs

100%

Strategic Goal 2

Advance understanding of Earth and develop technologies 

to improve the quality of life on our home planet.

Green Yellow

20 PGs -

100% -

26 APIs 1 API

96% 4%

Strategic Objective 2.4

Advance the Nation’s STEM education and workforce 

pipeline by working collaboratively with other agencies to 

engage students, teachers, and faculty in NASA’s missions 

and unique assets.

Green

4 PGs

100%

4 APIs

100%

RedSignificantly Below Target 

and/or Behind Schedule

White

Cancelled or Postponed

YellowSlightly Below Target 

and/or Behind Schedule

Green On Track or Complete

Note that these tables use preliminary ratings data for FY 2015. Final ratings will become available in 

February 2016 in the Annual Performance Report.
Mission Performance

NASA FY 2015 Agency Financial Report Page 23

Strategic Goal 3

Serve the American public and accomplish our 

Mission by effectively managing our people, 

technical capabilities, and infrastructure. 

Green Yellow Red

21 PGs 2 PGs 1 PG

88% 8% 4%

32 APIs 2 APIs 2 APIs

88% 6% 6%

Strategic Objective 3.1

Attract and advance a highly skilled, competent, 

and diverse workforce, cultivate an innovative 

work environment, and provide the facilities, 

tools, and services needed to conduct NASA’s 

missions.

Green Yellow

7 PGs 2 PGs

78% 22%

14 APIs 2 APIs

88% 12%

Strategic Objective 3.2

Ensure the availability and continued advancement of 

strategic, technical, and programmatic capabilities to 

sustain NASA’s Mission. 

Green

7 PGs

100%

8 APIs

100%

Strategic Objective 3.3

Provide secure, effective, and affordable 

information technologies and services that enable 

NASA’s Mission. 

Green Red

5 PGs 1 PG

83% 17%

5 APIs 2 APIs

71% 29%

Strategic Objective 3.4

Ensure effective management of NASA programs and 

operations to complete the mission safely and successfully. 

Green

2 PGs

100%

5 APIs

100%

RedSignificantly Below Target 

and/or Behind Schedule

White

Cancelled or Postponed

YellowSlightly Below Target 

and/or Behind Schedule

Green On Track or Complete

Note that these tables use preliminary ratings data for FY 2015. Final ratings will become available in 

February 2016 in the Annual Performance Report.
Mission Performance

Page 24 NASA FY 2015 Agency Financial Report

Strategic Goals and Highlights

Strategic Goal 1: 

Expand the frontiers of knowledge, 

capability, and opportunity in space.

NASA’s enduring and core goal, for over 50 

years, is to expand the frontiers of knowledge, capability, and opportunity in space 

and continually challenge the boundaries of 

science, technology, and imagination. This 

goal includes NASA’s strategic objectives 

for human exploration, the International 

Space Station (ISS), partnerships with U.S. 

industry, heliophysics, planetary science, 

astrophysics, and space technology development.

Strategic Objective 1.1: Expand human 

presence into the solar system and to the 

surface of Mars to advance exploration, 

science, innovation, benefits to humanity, 

and international collaboration.

NASA is entering a new era in human 

spaceflight: exploration beyond low Earth 

orbit, implementing a multiple destination 

exploration strategy with a capability-driven 

approach. The Human Exploration and Operations Mission Directorate’s (HEOMD’s) 

Exploration Systems Development programs are creating the first components of 

the architecture needed for human exploration beyond low Earth orbit. The first, foundational elements include the Orion spacecraft, the Space Launch System (SLS), and 

Exploration Ground Systems (EGS). Programs within this strategic objective also develop the technologies and capabilities for 

in-space propulsion, in-space operations, 

long-duration habitation, and other systems 

to support humans in hostile environments. 

Key Achievement in FY 2015: Orion’s 

Successful Exploration Flight Test-1

In December 2014, NASA launched the 

Image Caption: NASA’s Orion spacecraft awaits the U.S. Navy’s USS Anchorage for a ride home. Orion 

splashed down in the Pacific Ocean after its successful first flight test, where a combined team from NASA, 

the Navy, and Orion prime contractor Lockheed Martin retrieved the capsule. (Credit: U.S. Navy)
Mission Performance

NASA FY 2015 Agency Financial Report Page 25

Image Caption: The first test fire of the booster for NASA’s SLS rocket. (Credit: NASA)

Orion spacecraft on Exploration Flight Test 

(EFT)-1, aboard a Delta IV Heavy rocket. 

This was Orion’s first flight test, which sent 

the vehicle 3,600 miles into space during a 

two-orbit, 4.5-hour test. One of the objectives was to test how the spacecraft would 

fare returning to Earth at high speeds and 

temperatures. The test also provided important insight into key separation events, 

including whether the Launch Abort System 

and protective fairings came off at the right 

times, how the parachutes assisting Orion 

during its descent fared, and how the operations to recover Orion from the Pacific 

Ocean progressed.

Orion’s flight test yielded millions of elements of data, every piece of which is providing unique insight into how to improve 

the spacecraft’s design so that it can safely 

send astronauts on their way to Mars and 

return them home.

Key Achievement in FY 2015: SLS Booster Test

At Orbital ATK’s Promontory, Utah, test facility, engineers fired the booster for NASA’s 

SLS rocket for a two-minute test on March 

11, 2015. The test is one of two that will 

qualify the booster for flight before SLS begins carrying NASA’s Orion spacecraft and 

other potential payloads to deep space destinations.

The Exploration Systems Development Web 

site provides further information about the 

development of Orion, SLS, and the ground 

systems to support operations.

Strategic Objective 1.2: Conduct research on the International Space Station 

(ISS) to enable future space exploration, 

facilitate a commercial space economy, 

and advance the fundamental biological 

and physical sciences for the benefit of 

humanity.

The ISS is the world’s only orbiting, microgravity research and development laboratory, where researchers can perform 

multidisciplinary research and technology 

development to prepare for our exploration 

of the solar system. The Administration recently announced the decision to extend 

operations of the ISS through at least 2024. 
Mission Performance

Page 26 NASA FY 2015 Agency Financial Report

Image Caption: On January 19, 2015, Expedition 45/46 Commander, Astronaut Scott Kelly (right) and his 

twin brother, former Astronaut Mark Kelly (left), spoke to news media outlets at the Johnson Space Center 

about Scott Kelly’s upcoming One-Year mission aboard the International Space Station. (Credit: Robert 

Markowitz)

Continuing ISS operations are critical to 

achieving NASA’s and the Nation’s goals in 

science, technology, and human spaceflight. 

Key Achievement in FY 2015: Start of the 

One-Year Mission

In March 2015, U.S. Astronaut Scott Kelly 

and Russian Cosmonaut Mikhail Kornienko 

started a one-year mission on the ISS, which 

is twice as long as typical U.S. missions. 

The one-year crew mission is the latest step 

in the ISS’ role as a platform for preparing 

humanity for exploration into deeper space. 

These investigations are expected to yield 

beneficial knowledge about the medical, 

psychological, and biomedical challenges 

faced by astronauts during long-duration 

spaceflight.

While astronaut Scott Kelly is in space, 

NASA will also undertake unprecedented 

twin studies with Scott’s identical twin brother, retired astronaut Mark Kelly. These studies will be unique investigations into the genetic aspects of spaceflight.

Updates on current ISS operations, crew 

information, photos and video, positional information, and live-streamed high-definition 

views of Earth are available on the ISS Web 

site. 

Strategic Objective 1.3: Facilitate and utilize U.S. commercial capabilities to deliver cargo and crew to space.

U.S. commercial space transportation capabilities will provide safe, reliable, and cost 
Mission Performance

NASA FY 2015 Agency Financial Report Page 27

Image Caption: SpaceX conducts the pad abort test for the Crew Dragon spacecraft on May 6, 2015. 

(Credit: NASA)

effective access to and from low Earth orbit 

and the ISS for crew and cargo. NASA’s 

partnerships with American industry also will 

stimulate commercial industry, promote job 

growth, and expand knowledge. Through 

HEOMD’s Commercial Crew program, 

NASA is providing technical and financial 

support to industry providers during the 

development phase of their crew transportation systems, while certifying providers’ 

transportation systems to carry NASA astronauts to and from the ISS. 

Key Achievement in FY 2015: SpaceX 

Demonstrates Astronaut Escape System 

for Crew Dragon Spacecraft

In May 2015, SpaceX completed a successful pad abort test of its Crew Dragon spacecraft. The spacecraft traveled 3,561 feet up 

before jettisoning its trunk and safely splashing down under three main parachutes 

in the Atlantic Ocean. The Crew Dragon 

launch escape capabilities demonstrated 

the spacecraft’s ability to save astronauts in 

the unlikely event of a life-threatening situation on the launch pad.

Key Achievement in FY 2015: Construction of CST-100 Crew Access Tower

In FY 2015, Boeing and United Launch Alliance started assembly of a crew access 

tower a few miles from Space Launch Complex 41 at Cape Canaveral Air Force Station 

in Florida. The work is critical in readying 

the launch site for a crew flight test to certify 

their systems for operational missions to the 

ISS for NASA’s Commercial Crew program. 

Once assembled, the crew access tower 
Mission Performance

Page 28 NASA FY 2015 Agency Financial Report

Image Caption: The first crew access tower tiers begin to take shape at Space Launch Complex-41 for 

flights aboard the Boeing CST-100. (Credit: NASA/Jim Grossman)

will stand about 200 feet and will provide 

safe access to Boeing’s Crew Space Transportation (CST)-100 spacecraft as it stands 

on the pad atop a United Launch Alliance 

Atlas V rocket. 

Strategic Objective 1.4: Understand the 

Sun and its interactions with Earth and 

the solar system, including space weather.

The domain of heliophysics ranges from the 

interior of the Sun, to the upper atmosphere 

and near-space environment of Earth (above 

31.1 miles, or 50 kilometers), and outward to 

a region far beyond Pluto, where the Sun’s 

influence wanes against the forces of interstellar space. Earth and the other planets 

of the solar system reside in this vast extended atmosphere of the Sun, called the 

heliosphere, which is made of electrified and 

magnetized matter entwined with penetrating radiation and energetic particles. The 

emerging science of interplanetary space 

weather is also crucial to NASA’s human 

and robotic exploration objectives beyond 

Earth’s orbit. 

Key Achievement in FY 2015: NASA 

Launches the Magnetospheric Multiscale 

Mission

In March 2015, NASA launched four identical spacecrafts that make up the Magnetospheric Multiscale (MMS) mission. MMS 

is the first mission dedicated to studying the 

mystery of how magnetic fields around Earth 

connect and disconnect, explosively releasing energy via a process known as magnetic 

reconnection. The four spacecrafts will fly in 

a pyramid formation through space to take 

unprecedented measurements of magnetic 

reconnection phenomenon as it occurs in 

different areas of Earth’s magnetosphere. 

Magnetic reconnection is a common process throughout the universe: occurring in 

space near Earth, in the atmosphere of the 

Sun and other stars, in the vicinity of black 

holes and neutron stars, and at virtually any 

boundary between space plasmas, includ-
Mission Performance

NASA FY 2015 Agency Financial Report Page 29

Image Caption: The four MMS observatories were processed for launch in a clean room at the Astrotech 

Space Operations facility in Titusville, Florida. (Credit: NASA/Ben Smegelsky)

ing the boundary between the solar system’s heliosphere and interstellar space. It 

is one of the most important drivers of space 

weather events. Eruptive solar flares, coronal mass ejections, and geomagnetic storms 

all involve the release, through reconnection, of energy stored in magnetic fields. 

Space weather events can affect technology 

systems such as communications networks, 

GPS navigation, and electrical power grids.

Key Achievement in FY 2015: NASA’s 

Solar Probe Plus Mission Successfully 

Completed Its Critical Design Review

NASA’s Solar Probe Plus mission, a spacecraft that will fly closer to the Sun than any 

before, reached a major milestone in March 

2015 when it successfully completed its Critical Design Review, or CDR. An independent NASA review board met at the Johns 

Hopkins University Applied Physics Laboratory (APL) to review all aspects of the mission plan. APL has designed and will build 

and operate the spacecraft for NASA. The 

CDR certifies that the Solar Probe Plus mission design is at an advanced stage and 

that fabrication, assembly, integration, and 

testing of the many elements of the mission 

may proceed. Solar Probe Plus is scheduled to launch in the later half of calendar 

year 2018. 

Scientists have long wanted to send a probe 

through the Sun’s outer atmosphere, or corona, to better understand the solar wind 

and the material it carries into the solar system. The primary science goals for the Solar Probe Plus mission are to trace the flow 

of energy and understand the heating of 

the solar corona and to explore the physical mechanisms that accelerate the solar 

wind and energetic particles. To meet these 

goals, Solar Probe Plus will carry four instrument suites into the corona and study the 

solar wind and energetic particles as they 

blast off the surface of the star. The instruments will study magnetic fields, plasma, 

and energetic particles, and will image the 

solar wind. The spacecraft and instruments 

will be protected from the Sun’s heat by a 

4.5-inch-thick carbon-composite shield. 
Mission Performance

Page 30 NASA FY 2015 Agency Financial Report

Image Caption: An artist’s rendering of Solar 

Probe Plus shows the solar panels folded into 

the shadows of its protective shield, as it gathers 

data on its approach to the Sun. (Credit: NASA/

JHU-APL)

During the closest passes around the Sun, 

temperatures outside the spacecraft will 

reach nearly 2,500 degrees Fahrenheit.

Strategic Objective 1.5: Ascertain the 

content, origin, and evolution of the solar system and the potential for life elsewhere. 

Planetary science is a grand human enterprise that seeks to understand the history of 

the solar system and the distribution of life 

within it. NASA is at the frontier of a journey of scientific discoveries that are yielding a profound new understanding of the 

solar system. Robotic exploration is the 

current approach to planetary science and 

is the necessary precursor to the expansion 

of humanity beyond Earth. Ground-based 

research and observations supplement 

NASA’s space-based assets. NASA’s Planetary Science Division continues to expand 

knowledge of the solar system, with active 

missions and Earth-based research programs exploring all the way from Mercury to 

Pluto and beyond. 

Key Achievement in FY 2015: New Horizons Arrives at Pluto 

In FY 2015, the New Horizons mission accomplished the historic first-ever flyby of 

Pluto. The New Horizons mission will increase understanding of worlds at the edge 

of the solar system by making the first reconnaissance of the dwarf planet Pluto and by 

venturing deeper into the distant, mysterious 

Kuiper Belt, a relic of solar system formation. New Horizons traveled more than nine 

years and three billion miles to reach Pluto.

Image Caption: Pluto nearly fills the frame in 

this image by NASA’s New Horizons spacecraft, 

taken on July 13, 2015, when the spacecraft was 

476,000 miles (768,000 kilometers) from the 

surface. This is the last and most detailed image sent to Earth before the spacecraft’s closest approach to Pluto on July 14. The image is 

dominated by the large, bright feature, informally 

named the “heart,” which measures approximately 1,000 miles (1,600 kilometers) across. 

(Credit: NASA/APL/SwRI)
Mission Performance

NASA FY 2015 Agency Financial Report Page 31

Image Caption: A cluster of mysterious bright spots on dwarf planet Ceres can be seen in this image, taken 

by NASA’s Dawn spacecraft on May 4, 2015. (Credit: NASA/JPL-Caltech/UCLA/MPS/DLR/IDA)

Key Achievement in FY 2015: Dawn 

Arrives at Ceres

NASA’s Dawn spacecraft arrived at Ceres, 

the largest object in the main asteroid 

belt between Mars and Jupiter, on March 

6, 2015. Dawn is the first mission to visit 

a dwarf planet, and the first to orbit two 

distinct targets in the solar system. Dawn 

launched in 2007 and previously explored 

the protoplanet Vesta for 14 months, from 

2011 to 2012.

Dawn has provided images of mysterious and unique features on Ceres, including bright spots and a mountain with steep 

slopes protruding from a relatively smooth 

area of the dwarf planet’s surface.

Strategic Objective 1.6: Discover how 

the universe works, explore how it began 

and evolved, and search for life on planets around other stars. 

NASA leads the Nation and the world on a 

continuing journey to answer some of the 

most profound questions that touch the 

hearts of all humanity: How does the universe work? How did we get here? Are we 

alone? The scope of astrophysics is truly 

breathtaking, ranging from the birth of the 

universe and the development of stars and 

galaxies over cosmic time, to the search for 

life on planets around other stars. Often in 

cooperation with ground-based observatories, NASA astrophysics missions exploit the 

full range of the electromagnetic spectrum 
Mission Performance

Page 32 NASA FY 2015 Agency Financial Report

Image Caption: The pathfinder (or test model) 

of the Webb backplane is prepared for test inside 

Chamber A at NASA’s Johnson Space Center. 

(Credit: NASA)

and the physics of high-energy subatomic 

particles to understand the broad diversity 

of objects in the universe.

Key Achievement in FY 2015: Webb Pathfinder Telescope Tested in Cryovacuum 

Chamber 

The James Webb Space Telescope (Webb)

will be a large infrared telescope with a 

6.5-meter primary mirror. NASA continues 

to make progress toward the planned October 2018 launch date. A key step in FY 2015 

was the test of the pathfinder (or test model) 

of the Webb backplane inside NASA’s giant thermal vacuum chamber (Chamber 

A), located at NASA’s Johnson Space Center in Houston, Texas. Previously used for 

manned spaceflight missions, this historic 

chamber is now being readied for a cryogenic test, which will simulate the frigid temperatures the Webb telescope will encounter in 

space.

Webb will be the premier observatory of the 

next decade, serving thousands of astronomers worldwide. It will study every phase 

in the history of the universe, ranging from 

the first luminous glows after the Big Bang, 

to the formation of solar systems capable of 

supporting life on planets like Earth, to the 

evolution of Earth’s solar system.

Key Achievement in FY 2015: TESS Mission Confirmed to Proceed into Development

NASA has officially confirmed the Transiting 

Exoplanet Survey Satellite (TESS) mission, 

clearing it to move forward into the development phase. This marks a significant step 

for the TESS mission, which will search the 

entire sky for planets outside the solar system, known as exoplanets. TESS is expected to find more than 5,000 exoplanet candidates, including 50 Earth-sized planets. It 

will also find a wide array of exoplanet types, 

ranging from small, rocky planets to gas giants. Some of these planets could be the 

right sizes, and orbit at the correct distances 

from their stars, to support life. TESS is an 

ideal follow-up to the Kepler mission, which 

searches for exoplanets in a fixed area of 

the sky, and will complement several other 

critical space-based missions and groundbased observations.
Mission Performance

NASA FY 2015 Agency Financial Report Page 33

Strategic Objective 1.7: Transform NASA 

missions and advance the Nation’s capabilities by maturing crosscutting and innovative space technologies.

For decades, NASA’s investment in space 

technology has helped make the United 

States the global leader in space exploration and scientific discovery, while significantly contributing to the technology-based 

U.S. economy. NASA’s Space Technology 

Mission Directorate (STMD) continues that 

legacy today with a portfolio that spans a 

broad range of technical areas and various stages of technical maturity, from early 

stage concepts through flight demonstration. 

Through STMD, NASA advances technologies to improve capabilities for future human 

exploration and science missions (e.g., SLS, 

Orion, outer planetary exploration). In addition, STMD collaborates with other Government agencies to transform the Nation’s capabilities in key technology areas; academia 

and other organizations to advance early 

stage concepts and technology development; and industry to advance technologies 

with potential to benefit the U.S. commercial 

space sector. The following are just a few 

examples of recent accomplishments:

• Advanced Orion compression pads, a 

game changing woven thermal protection system technology tailored to the 

needs of the Orion spacecraft. This 

technology has completed mission infusion review for Exploration Mission 1.

• The second near-space test flight of 

the Low Density Supersonic Decelerator (LDSD), a technology that could enable larger payloads to Mars and set 

the stage for future human explorers. 

• The first in-space, 3D-printed object 

(aboard the ISS), paving the way to future long-term space expeditions.

Key Achievement in FY 2015: NASA Advances the State of the Art in High Power 

Solar Arrays

High power solar arrays represent a key 

STMD technology investment that can significantly benefit future NASA missions, 

other U.S. Government agencies, and commercial space. In 2012, NASA selected 

two companies – Alliant Techsystems, Inc. 

(now Orbital ATK) and Deployable Space 

Systems (DSS) – to develop solar arrays to 

enable future electric propulsion systems. 

Each company has a distinct design for its 

array. The Orbital ATK MegaFlex design is 

a circular array that opens axially like a fan. 

The DSS Mega-ROSA (i.e., Roll-Out Solar 

Array) design features a rectangular shape 

with flexible, modular “winglets” attached to 

a composite boom that can be rolled in or out 

like a window shade. These novel arrays 

are sized to provide approimately 20 kilowatts of power per wing, offering significant 

benefits over current systems. Compared 

to those on current commercial satellites, 

for example, these solar arrays can produce 

electricity with half the mass, a quarter of the 

stowed volume, and four times the radiation 

tolerance. Additionally, automated manufacturing of the new arrays could reduce 

cost by 35 percent.

There are many potential applications. Together with advanced thrusters and other 

novel technologies, these arrays will enable 

high-power solar electric propulsion for future NASA missions. These missions could 

include planetary or cis-lunar science missions, deep space human exploration, satellite servicing, orbital debris removal, and 
Mission Performance

Page 34 NASA FY 2015 Agency Financial Report

Image Caption: ATK’s MegaFlex and DSS’s Mega-ROSA high power solar arrays. (Credit: NASA)

payload delivery. Additionally, another infusion application includes a functional space 

demonstration of large, advanced solar arrays on the ISS as an upgrade for increased 

power. 

These systems are of interest for commercial satellite applications, as well. Current 

commercial satellites use large composite 

fold-out panels. The reduced mass and 

stowage volume afforded by these new solar arrays can lower satellite launch costs 

and eliminate the need for large, expensive 

launch shrouds. Similarly, these arrays offer potential costs savings and operational 

benefits for military satellite missions, and 

therefore are of interest to the U.S. Department of Defense.

Both teams have made great progress on 

their array designs, and possible applications for these systems continue to unfold. 

These high power solar arrays are only two 

examples of STMD’s investment in a broad 

range of technologies with crosscutting, 

transformative payoffs. 

Strategic Goal 2: 

Advance understanding of Earth 

and develop technologies to 

improve the quality of life on our 

home planet.

NASA’s accomplishments advance the understanding of Earth and help to improve life 

for its inhabitants, whether developing new 

aircraft technologies for safer, more efficient 

air travel, uncovering the complexities of 

Earth’s natural systems, or transferring technologies to the commercial marketplace. 

This goal includes NASA’s objectives for 

aeronautics research, Earth science, technology portfolio optimization, and science, 
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NASA FY 2015 Agency Financial Report Page 35

technology, engineering, and mathematics 

(STEM) education.

Strategic Objective 2.1: Enable a revolutionary transformation for safe and sustainable U.S. and global aviation by advancing aeronautics research.

The Aeronautics Research Mission Directorate (ARMD) contributes unique innovations 

to aviation through research activities that 

help sustain and advance the U.S. civil aviation industry. The results of these activities 

will enable a revolutionary transformation of 

the aviation system to improve quality of life 

and productivity on Earth.

ARMD established a new strategic vision in 

the 2014 NASA Strategic Plan, identifying 

six new strategic research thrusts: safe, efficient growth in global operations; innovation 

in commercial supersonic aircraft; ultra-efficient commercial vehicles; transition to lowcarbon propulsion; real-time, system-wide 

safety assurance; and assured autonomy 

for aviation transformation. 

Key Achievement in FY 2015: NASA completes the Environmentally Responsible 

Aviation Project

The Environmentally Responsible Aviation 

project concluded its final year having successfully completed eight Integrated Technology Demonstrations that support a NASA 

goal to enable industry to build advanced, 

ultra-efficient commercial vehicles. For airplanes that will be flying in the 2020-2025 

timeframe, NASA research is aimed at cutting fuel use in half, reducing emissions up 

to 75 percent during takeoff and landing, 

and quieting aircraft noise 42 decibels below 

current standards. Two of these demonstrations took place this year aboard Boeing’s 

ecoDemonstrator 757, a flying laboratory 

that allows researchers to try out aeronautical innovations in real-world conditions. The 

first of the two demonstrations studied how 

small jets embedded in an aircraft’s vertical 

tail and blowing air over its surfaces could 

provide enough force to safely allow smaller 

tails on future aircraft designs. That would 

save weight, reduce drag and drop fuel usage up to 0.5 percent – a small number that 

quickly adds up to big savings for an airline 

operating hundreds of flights each day. 

Image Caption: NASA’s recent green aviation 

tests included the Active Flow Control Enhanced 

Vertical Tail Flight Experiment, for which 31 small 

devices called sweeping jet actuators were installed on the tail of a Boeing 757 ecoDemonstrator aircraft to determine what, if any, impact 

the devices had on the aerodynamics of the tail. 

(Credit: NASA/Boeing)
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Page 36 NASA FY 2015 Agency Financial Report

Image Caption: Materials scientist Mia Sioch (left) and systems engineer Mike Alexander (center), both 

from NASA’s Langley Research Center, join Boeing technician Felix Boyett on a scissor lift so they can 

count insect residue on the right wing of Boeing’s ecoDemonstrator 757 aircraft as part of NASA non-stick 

bug coating research in Shreveport, Louisiana. (Credit: NASA/Paul Bagby)

Find out more about ARMD’s first demonstration with Boeing’s ecoDemonstrator in 

their press release, “NASA Wraps Up First 

Green Aviation Tests on Boeing ecoDemonstrator.”

The other demonstration studied how well 

special coatings worked to prevent sticky 

bug residue from building up on the leading edge of an airplane wing and increasing drag. Less bug residue would smooth 

airflow and help reduce fuel consumption. 

NASA knowledge gained through the ecoDemonstrator research will be publicly available to benefit industry.

Find out more about ARMD’s second demonstration with special coatings in their press 

release, “NASA Tests Aircraft Wing Coatings 

that Slough Bug Guts.”

Strategic Objective 2.2: Advance knowledge of Earth as a system to meet the 

challenges of environmental change, 

and to improve life on our planet.

NASA’s Earth Science programs shape an 

interdisciplinary view of Earth, exploring the 

interaction among the atmosphere, oceans, 

ice sheets, land surface interior, and life itself, which enables scientists to measure 

global and climate changes and to inform 

decisions by government, organizations, 

and people. NASA’s global observations 

provide a unique vantage point from which 

to study and gain understanding of changes 

in the planet. Since the Agency’s inception 

in 1958, NASA has established itself as a 

world leader in Earth science and climate 

studies. 
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NASA FY 2015 Agency Financial Report Page 37

Image Caption: NASA successfully completed the launch of five new Earth-observing missions in less 

than a year. (Credit: NASA)

NASA does more than develop and build 

Earth-observing spacecraft and sensors. 

The Agency’s multidisciplinary team of scientists, engineers, and computer modelers 

also analyze vast archives of data for insights into Earth’s interconnected systems—

atmosphere, ocean, ice, land, biosphere—

and openly provide that data to the global 

community. NASA designs and deploys airborne, ground-based, and ocean-going field 

campaigns that complement, enhance, and 

improve space-based observational capabilities. NASA also works with other government agencies and partner organizations 

to apply Earth science data and computer 

models to improve decision making and 

solve problems.

Key Achievement in FY 2015: SMAP 

Launch Completes Five Launches in 11 

Months

With the launch of Soil Moisture Active Passive (SMAP) on January 31, 2015, NASA 

successfully completed the launch of five 

new Earth-observing missions in less than 

a year. In addition to SMAP’s measurements of soil moisture to improve climate 

and weather forecasts, the new missions 

are making ground-breaking observations 

of carbon dioxide (Orbiting Carbon Observatory-2, or OCO-2), ocean winds (ISS-RapidScat), clouds and aerosols (Cloud Aerosol 

Transport System, or CATS) and precipitation (Global Precipitation Measurement, or 
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Page 38 NASA FY 2015 Agency Financial Report

GPM). Three of these missions, RapidScat, 

CATS, and SMAP launched in FY 2015.

These new missions will use the vantage 

point of space to give scientists the data they 

need to better understand Earth as a whole 

system. With these missions, including two 

instruments mounted on the exterior of the 

ISS, NASA now has 18 Earth-observing 

space missions in operation, providing the 

world with an improved global view of this 

changing planet. Observations from these 

missions, like all NASA data, will be freely 

available to the international scientific community and decision makers in the United 

States and abroad. 

Key Achievement in FY 2015: NASA Satellites Provide Critical Information on Extent of California Drought

Working with the California Department of 

Water Resources (CDWR) and other state 

and Federal agencies, a NASA Applied Sciences project team applied Landsat, Terra, 

and Aqua satellite observations to create 

monthly fallowed-area maps of the Central 

Valley of California. The maps depict crop 

development on more than 200,000 fields 

in the valley, and a key innovation was 

the monthly production during the growing 

season. In 2014 and 2015, CDWR used 

the maps and other data to gauge idle agricultural land and inform state authorities 

about the extent of a drought. The information helped inform the allocation of drought 

emergency funds to food banks and social 

services agencies in affected counties, to 

provide support for farmworkers and their 

families.

Image Caption: The statewide map of California is based on data from the Landsat series of satellites and 

from NASA’s Terra and Aqua satellites. They show changes in crop cultivation and idle agricultural lands 

in California in August 2011 (on the left) and August 2014 (on the right). Brown pixels depict farms and orchards that have been left fallow, or “idled,” since January 1 in each year. Green pixels show plots where 

at least one crop was grown during the calendar year. (Credit: NASA Earth Observatory image by Joshua 

Stevens, based on data from Forrest Melton, California State University, Monterey Bay)
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NASA FY 2015 Agency Financial Report Page 39

Image Caption: NASA’s TechPort is an integrated, Agency-wide software system designed 

to capture, track, and manage NASA’s portfolio 

of technology investments. (Credit: NASA)

Image Caption: The NASA Software Catalog 

offers an extensive portfolio of software products for a wide variety of technical applications. 

(Credit: NASA)

Strategic Objective 2.3: Optimize Agency 

technology investments, foster open innovation, and facilitate technology infusion, ensuring the greatest national benefit.

NASA’s Office of the Chief Technologist 

(OCT) enables critical technology 

development and open innovation, optimizes 

NASA’s technology portfolio, and maximizes 

the transfer of NASA technology to U.S. 

partners. This work is performed under 

the Partnership Development and Strategic 

Integration program.

Key Achievement in FY 2015: NASA Releases TechPort

In FY 2015, NASA publicly released the 

Technology Portfolio System (TechPort), 

which is NASA’s first comprehensive resource for locating information about NASAfunded technology development activities. 

NASA’s technology development activities 

cover a broad range of areas, such as propulsion, nanotechnology, robotics, and human health. TechPort contains a variety of 

useful information on these activities, including technology descriptions, images, and locations where work is being performed.

This beta system enables the public to explore NASA’s technology portfolio and learn 

about technology programs and projects 

as NASA works to mature technologies for 

aeronautics, space exploration, and scientific discovery missions. NASA is offering the 

public the opportunity to give this beta system a trial run and then provide feedback. 

Users’ input will enhance the system design 

and the type of information provided in future versions. 

Key Achievement in FY 2015: NASA Releases Second Edition of the NASA Software Catalog

In 2015, OCT released the second edition 

of the NASA Software Catalog, a downloadable collection of software programs providing cutting-edge solutions for a wide array of 

industrial, academic, government, and public applications. 

The catalog includes more than 1,000 software codes organized into 15 categories, 

available for use at no charge. It enables 

NASA projects, government agencies, and 

other users to save money and time by using 

ready-made coding tools rather than buying 

or building their own. Since the catalog de-
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Page 40 NASA FY 2015 Agency Financial Report

Image Caption: The 2015 NASA Technology Roadmaps are comprised of 15 distinct Technology Area 

roadmaps. (Credit: NASA)

buted in 2014, NASA has seen a dramatic 

increase in code sharing across government 

projects, and more than 100,000 downloads 

of the catalog and millions of visitors to the 

Web site to date.

Visit the Technology Transfer Program web 

site to find out more about NASA technologies, read success stories, explore additional resources, and to view the Patent Portfolio.

Key Achievement in FY 2015: NASA Unveiled the Latest Technology Roadmaps 

for Future Agency Needs

NASA has released the Agency’s 2015 technology roadmaps, laying out the promising new technologies that will help NASA 

achieve its aeronautics, science, and human 

exploration missions for the next 20 years, 

including the NASA’s journey to Mars.

NASA released a Request for Information, 

seeking public comment on the draft roadmaps to increase awareness, generate innovative solutions for space exploration and 

scientific discovery, and inspire public involvement in the U.S. space program. Public input was received and incorporated into 

the roadmaps. The final roadmaps were 

posted on OCT’s Web site in July 2015.

The roadmaps are a key part of NASA’s 

Strategic Technology Investment Plan. 

They lay out the strategy, guiding principles, 

and priorities for developing technologies 

that are essential to NASA’s Mission and 
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NASA FY 2015 Agency Financial Report Page 41

help achieve national goals. Many of the 

technologies developed will also help meet 

the needs of other government agencies, as 

well as support the growth of the U.S. commercial space industry.

Strategic Objective 2.4: Advance the Nation’s Science, Technology, Engineering, 

and Math (STEM) education and workforce pipeline by working collaboratively 

with other agencies to engage students, 

teachers, and faculty in NASA’s missions 

and unique assets.

NASA’s education programs work in collaboration with other Federal agencies to 

improve the quality of STEM education 

in the United States, which supports both 

NASA’s Strategic Plan and the Administration’s STEM policy. To maintain a globally 

competitive Nation, the Office of Education’s 

programs develop and deliver activities that 

support the growth of NASA’s and the Nation’s STEM workforce, help develop STEM 

educators, engage and establish partnerships with institutions, and inspire and educate the public. 

Key Achievement in FY 2015: NASA Hosts 

Rocket Week at Wallops Flight Facility 

Rocket Week, held in June 2015 at NASA’s 

Wallops Flight Facility in Virginia, provided 

student and educator participants with the 

Image Caption: On June 25, 2015, NASA successfully launched a Terrier-Improved Orion suborbital 

sounding rocket from NASA’s Wallops Flight Facility. It carried student experiments developed through the 

RockOn/RockSat-C programs. More than 200 middle school and university students and instructors participating in Rocket Week at Wallops were on hand to witness the launch. (Credit: NASA)
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Page 42 NASA FY 2015 Agency Financial Report

opportunity to learn about rocketry, developing experiments for space flight, team work, 

and how to apply these lessons in the classroom and to careers. 

About 150 university and community college students and instructors built and flew 

experiments on a NASA suborbital rocket 

through the RockOn and RockSat-C programs. Conducted in collaboration with the 

Colorado and Virginia Space Grant Consortia, RockOn is in its eighth year, while RockSat-C is in its seventh year. In addition, 

20 high school educators examined how to 

apply rocketry basics into their curriculum 

through the Wallops Rocket Academy for 

Teachers (WRATS), which is in its fifth year.

Strategic Goal 3: 

Serve the American public and accomplish our Mission by effectively 

managing our people, technical 

capabilities, and infrastructure.

NASA maintains a dedicated, knowledgeable workforce and cutting-edge facilities 

and capabilities to carry out the ambitious 

tasks for its Mission. The programs under Strategic Goal 3 support all of NASA’s 

space-, air-, and Earth-based research and 

innovation activities, producing the best return on the Nation’s investment. Strategic 

Goal 3 includes NASA’s strategic objectives 

for the Mission Support Directorate (MSD), 

technical capabilities, information technology (IT) services, and Safety and Mission 

Success programs.

Strategic Objective 3.1: Attract and advance a highly skilled, competent, and 

diverse workforce, cultivate an innovative work environment, and provide the 

facilities, tools, and services needed to 

conduct NASA’s missions.

NASA is dedicated to innovation, bold ideas, 

and excellence, which enable the Agency to 

provide the day-to-day operations required 

to support and achieve its missions. Programs aligned with Strategic Objective 3.1 

ensure effective management of human 

capital, finance, information technology, infrastructure, acquisitions, security, real and 

personal property, occupational health and 

safety, equal employment opportunity and 

diversity, small business programs, external 

relations, internal and external communications, stakeholder engagement, and other 

essential corporate functions. 

Key Achievement in FY 2015: NASA 

named the Best Place to Work in the Federal Government for the Third Consecutive Year 

NASA’s most powerful asset for achieving 

mission success is a multidisciplinary team 

of diverse, talented people across NASA 

Centers. For the third consecutive year, 

NASA was voted the Best Place to Work 

in the Federal Government, according to 

the Partnership for Public Service. Based 

on 2014 Employee Viewpoint Survey results, this survey also named NASA the topranked large agency on innovation. These 

results are a testament to the excellence of 

NASA’s workforce and their determination to 

maintain America’s leadership in space exploration. 

Information on careers at NASA, benefits, 

retirement information, and the Human 

Capital Program are available on the NASA 

People Web site. 
Mission Performance

NASA FY 2015 Agency Financial Report Page 43

Image Caption: Buildings are demolished at NASA’s Santa Susana Field Laboratory in California. (Credit: 

NASA)

Key Achievement in FY 2015: NASA 

achieves success in freezing the footprint from FY 2012 to FY 2015 

NASA identifies underutilized assets and 

demolishes facilities as part of its facilities 

strategy to renew and modernize the Agency’s facilities and to sustain capabilities. 

Since 2004, NASA has demolished or disposed of 1,380 facilities, and since FY 2012, 

when the Office of Management and Budget 

issued the Freeze the Footprint policy for the 

Federal Government, NASA has achieved a 

2.2 percent total reduction in square footage 

for office and warehouse space. In concert with demolition activities, NASA also 

consolidates facilities, uses public-private 

partnerships to offset operating costs, and 

requires offsets for new construction. These 

policies, activities, and investments reduce 

long-term facilities sustainment, utilities, and 

other support requirements, allowing NASA 

to focus on renewing and modernizing facilities and capabilities.

Strategic Objective 3.2: Ensure the availability and continued advancement of 

strategic, technical, and programmatic 

capabilities to sustain NASA’s Mission.

NASA’s technical capabilities and assets 

support NASA missions, as well as the work 

of others outside of the Agency. The programs under Strategic Objective 3.2 ensure 

that the Agency’s key capabilities and critical assets will be available in the future to 

support the missions that require them, such 

as launch services to NASA and civil sector 
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Page 44 NASA FY 2015 Agency Financial Report

Image Caption: NASA’s SMAP observatory 

launches aboard a United Launch Alliance Delta 

II rocket on January 31, 2015, at Space Launch 

Complex-2, Vandenberg Air Force Base, California. (Credit: NASA/Kim Shiflett)

missions, as well as an uninterrupted, reliable space communications network to allow data transmissions to Earth from space.

Key Achievement in FY 2015: Successful 

launches of Expendable Launch Vehicles 

for NASA Missions

The Launch Services program achieved a 

100 percent success rate in FY 2015 with 

the successful launch of two NASA missions. 

This included the launch of the SMAP observatory on a United Launch Alliance Delta II 

rocket on January 31, 2015.

Key Achievement in FY 2015: Successful Series of Tests for the Space Launch 

System (SLS) RS-25 Rocket Engine

As of August 2015, the Rocket Propulsion 

Test (RPT) program performed 399 tests in 

FY 2015 for a total of 115,814 seconds, while 

maintaining a 98.5 percent test facility availability. RPT’s customers included the SLS 

program’s series of tests of the RS-25 developmental engine as part of the engine’s 

preparation for a return to deep-space missions aboard the new SLS rocket. NASA is 

designing the SLS to carry humans deeper 

into space than ever before, to such destinations as an asteroid and Mars. Four RS-25 

engines will power the core stage of the new 

vehicle. RS-25 engines formerly served as 

the Space Shuttle’s main engines. They will 

be operated at slightly higher power levels 

to provide the additional thrust needed to 

power the SLS. The main goal of the series was to test the engine under simulated 

temperature, pressure, and other changes 

required by the SLS design. The first test 

in the series was in January, and the series 

concluded successfully at the end of the fiscal year.

Image Caption: Engineers conducted an SLS 

RS-25 rocket engine test fire at NASA’s Stennis 

Space Center, Mississippi, in June 2015. (Credit: NASA)
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NASA FY 2015 Agency Financial Report Page 45

Image Caption: An artist’s concept of TDRS-L 

shows the satellite in orbit. (Credit: NASA)

Key Achievement in FY 2015: Initial Operational Capability achieved for TDRS-L

In FY 2015, NASA completed Initial Operational Capability for the Tracking and 

Data Relay Satellite (TDRS)-L, which was 

launched in January 2014. TDRS-L is the 

latest element in the communications network that links NASA’s ground controllers 

to orbiting spacecraft, including the Hubble 

Space Telescope, the ISS, and NASA’s 

Earth-observing missions.

Strategic Objective 3.3: Provide secure, 

effective, and affordable information 

technologies and services that enable 

NASA’s Mission.

Information technology is a critical component of NASA’s infrastructure to enable 

mission success. The Agency IT Services 

(AITS) program provides the policy and 

management for NASA’s enterprise IT services, including end user services, business applications, network management, 

computing platforms and data centers, and 

Web services for the Agency’s Web sites. IT 

security is a crucial element within the delivery of these services to ensure the confidentiality, integrity, and availability of NASA’s information assets. The AITS program 

provides innovative IT solutions to assist 

NASA’s scientists, engineers, and analysts 

with cost-effectively achieving their mission. 

The program also improves public access to 

NASA’s scientific and technical information 

and increases public participation in NASA’s 

diverse activities.

Key Achievement in FY 2015: Leveraging 

NASA’s Data

NASA released over 30,000 datasets and 

40 application programming interfaces during FY 2015 through its public online portal at https://data.nasa.gov/, supporting the 

Federal cross-agency priority goal on open 

government data. Datasets available on 

NASA’s data portal are automatically listed 

on the Government-wide Web site, data.

gov. NASA’s data portal includes developer 

resources to help users build applications 

that utilize NASA’s data, as well as robust 

data visualization tools to increase the public understanding of the datasets. Additionally, participants in the 2015 International 

Space Apps Challenge used NASA datasets 

for their challenge submissions across four 

areas: Earth, Outer Space, Humans, and 

Robotics. To obtain a clearer understanding 

of the demand for NASA’s data, the Agency 

introduced a new capability at data.nasa.

gov that allows the public to request specific datasets. Furthermore, in order to improve the accessibility of certain key data, 

NASA’s Open Innovation team provided fully 

machine-readable datasets on NASA’s intellectual property and user facilities on data.

gov. Previously, these data were stored in 
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Page 46 NASA FY 2015 Agency Financial Report

Image Caption: NASA’s data portal, located at http://data.nasa.gov, is a continually growing catalog of 

publically available NASA datasets, Application Programming Interfaces (APIs), visualizations, and more. 

(Credit: NASA)

separate databases and in non-machine 

readable formats. The user facilities dataset alone has been viewed over 2,000 times 

on data.gov. 

NASA also took strides to use its data 

more effectively to improve mission performance. On July 16, 2013, there was a 

near catastrophic incident during NASA’s 

224th spacewalk, or extravehicular activity 

(EVA). A Mishap Investigation Board (MIB) 

later identified the EVA data and data systems as one of the root-causes that required 

correction since inability to quickly access a 

previous failure mode resulted in the team 

relying on data from memory. The MIB recommended the integration of EVA data systems to provide EVA users with easy access 

to complete, accurate, and up-to-date data, 

which led to the initiation of the EVA Data Integration (EDI) project. The EVA Management Office turned to the Office of the Chief 

Information Officer (OCIO) for help in solving this data integration challenge. Through 

this collaboration, the EDI project developed 

a vision and integration plan that leverages 

OCIO’s cloud computing and data architecture initiatives to solve the problems of the 

traditional stove-piped data systems. Ultimately, the EDI project reduces data complexity, increases value of data through unified systems, improves timely availability of 

data, makes data collaboration easier, and 

allows for smarter mission decisions.

Key Achievement in FY 2015: Upgrades 

to the Security Operations Center

NASA completed a set of upgrades in FY 

2015 for the Security Operations Center 
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NASA FY 2015 Agency Financial Report Page 47

(SOC) at Ames Research Center. The upgrades spanned across 27 Intrusion Detection Systems, increasing the Agency’s 

readiness to combat cyber threats. These 

technology upgrades improve the SOC’s 

capability to detect and prevent security incidents, increasing the ability to analyze system and network vulnerabilities across the 

enterprise as compared to known and evolving cyber threats.

Strategic Objective 3.4: Ensure effective 

management of NASA programs and operations to complete the mission safely 

and successfully.

Safety and Mission Success (SMS) programs protect the health and safety of the 

NASA workforce and improve the likelihood 

that NASA’s programs, projects, and operations will be completed safely and successfully. NASA’s commitment to safety and 

mission success encompasses its employees, contractors, commercial partners, and 

the American public. SMS activities are 

conducted by the Office of the Chief Engineer (OCE), Office of Safety and Mission 

Assurance (OSMA), and Office of the Chief 

Health and Medical Officer (OCHMO).

SMS successfully implemented its strategic 

objective of enhancing mission success of 

NASA’s programs, projects, and operations, 

while ensuring the safety and health of the 

public and the NASA workforce in FY 2015. 

SMS demonstrated this through the following:

• 

• 

• 

• 

• 

Zero fatalities or permanent disabling injuries to the public resulting from NASA 

activities. 

Maintaining a Total Case Rate and Lost 

Time Case Rate that exceeded the goals 

of the President’s Protecting Our Workers and Ensuring Reemployment initiative.

Reducing the non-mission failure damage to NASA assets. 

Ensuring 100 percent of Category 1 and 

2 projects used Agency SMS policy, procedures, and independent assessments 

focused on both technical and programmatic mission success.

Ensuring that 100 percent of the engineering and programmatic workforce 

had access to the standards and knowledge base needed to maintain and build 

their skills.
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Financial Performance

NASA FY 2015 Agency Financial Report Page 49

Financial Performance

CFO Letter

November 13, 2015

On behalf of the National Aeronautics and Space Administration (NASA), 

I am pleased to present the Fiscal Year (FY) 2015 financial highlights and 

financial statements. As demonstrated throughout this Agency Financial 

Report (AFR), NASA is committed to the highest standards of financial 

accountability in support of the Nation’s aeronautics and space missions 

executed around the world. The AFR is the cornerstone of NASA’s efforts 

to provide transparent, meaningful financial information to the American 

public and to demonstrate the Agency’s effective stewardship of the finite 

resources entrusted to it. 

More importantly, the AFR culminates the work and dedication displayed 

every day by the Agency’s workforce, the Office of Inspector General, and 

our independent external auditor. The AFR represents the intersection between NASA’s programs and financial management. As the complexity and diversity of our mission portfolio grows, the Agency’s financial systems and processes are also evolving to meet expanding program, 

management, and other stakeholder information needs. 

NASA operates world-wide, with nine operating Centers and associated component facilities and one 

Federally Funded Research and Development Center. The AFR represents the complexity of financing 

our operations, through a combination of public-private partnerships and relationships/agreements with 

a multitude of other Federal agencies to achieve our respective missions. Similar to the progress in our 

mission portfolios, NASA continues to make progress in the effectiveness of our financial management 

practices and systems. For example, this year NASA: 

• 

• 

• 

Initiated a business process documentation and streamlining effort with the goal of defining consistent, effective core business processes across our diversified Centers and facilities. NASA focused 

on the travel and reimbursable agreement processes in FY 2015 and additional areas will be added 

in the future. 

Expanded the use of the Department of Defense’s Wide Area Workflow (WAWF) eInvoicing system. 

WAWF is an electronic invoicing, receipt and acceptance system that will improve NASA’s cash flow 

management, eliminate lost documents and, ultimately, reduce operating costs. 

Improved the budget formulation and execution systems to better align with mission needs and 

to increase the usage of those systems across the Agency. These systems provide a consistent 

means for developing, maintaining and tracking NASA’s budget and budget decisions. 
Financial Performance

Page 50 NASA FY 2015 Agency Financial Report

• Continued to meet Improper Payments Information Act (IPIA) and Improper Payments Elimination 

and Recovery Act (IPERA) compliance requirements over the last nine years. NASA has reviewed 

all of its programs annually and has not identified significant improper payments for any of its programs. 

As evidence that our efforts continue to have tangible results, I am pleased to report that NASA remains 

in substantial compliance with the Federal Financial Management Improvement Act (FFMIA). I also take 

great pride in reporting that for the fifth year in a row NASA received an unmodified “clean” audit opinion 

on our FY 2015 financial statements, with no material weaknesses. This year’s opinion identifies two 

significant deficiencies, one related to information technology and the other to NASA’s asbestos liability 

estimate, and non-compliance with the Single Audit Act. We take these issues seriously and have developed plans toward addressing the reported issues as soon as possible.

The financial highlights that follow explain how we used the funds entrusted to us to perform our mission 

and achieve the results described in this AFR’s Performance section. In the Financial section, we provide 

our audited financial statements, accompanying notes, and the independent auditor’s opinion on our 

financial statements. 

I am pleased with our achievements and remain committed to ensuring sound financial management that 

delivers reliable and actionable information for both internal and external decision makers and stakeholders. I appreciate the immense dedication of the entire Agency, with special thanks to the Office of 

Inspector General.

David P. Radzanowski

Chief Financial Officer 
Financial Performance

NASA FY 2015 Agency Financial Report Page 51

Financial Highlights

This section provides highlights of NASA’s financial performance for fiscal year (FY) 2015. 

The highlights explain the financial results of program and operational decisions. Key components of this section include:

Overview of Financial Position — Balance Sheet

Sources of Funding — Statement of Budgetary Resources

Net Cost of Operations — Statement of Net Cost

Overview of Financial Position

NASA’s Balance Sheet provides a comparable snapshot of the Agency’s financial position 

as of September 30, 2015 and September 30, 2014. It displays amounts in three primary 

categories:

• 

• 

• 

Assets, which are the 

future economic benefits 

owned or available for use 

by NASA; 

Liabilities, which are 

amounts owed by NASA 

but not yet paid; and 

Net Position, which reflects 

the sources and uses of 

Agency funding.

Percent 

Balance Sheet Categories (%) 

(In Millions of Dollars) 2015 2014 Change

Total Assets $ 16,979 $ 18,155 (6)

 Fund Balance with Treasury 9,980 10,293 (3)

 General Property, Plant and Equipment 6,782 7,679 (12)

 Other 217 183 19 

Total Liabilities $ 4,811 $ 4,560 6

Accounts Payable 1,455 1,565 (7)

Environmental and Disposal Liabilities 1,412 1,274 11 

Other Accrued Liabilities 1,372 1,185 16

Other Liabilities 529 488 8

Federal Employee and Veteran’s Benefits 43 48 (10)

 Total Net Position $ 12,168 $ 13,595 (10)

Unexpended Appropriations 6,988 7,413 (6)

Cumulative Results of Operations 5,180 6,182 (16)
Financial Performance

Page 52 NASA FY 2015 Agency Financial Report

Fund Balance with Treasury,

$9,980,

59%

General Property, Plant and Equipment, 

$6,782, 

40%

Other,

$217, 

1%

Asset by Type for FY 2015

(in Millions of Dollars)

Assets were the largest of the three categories (Total Liabilities plus Total Net Position 

will always equal Total Assets). NASA’s asset balance at the end of FY 2015, was $17 

billion, 6 percent lower than in FY 2014.

The Agency’s Fund Balance with Treasury 

(FBWT) and its General Property, Plant and 

Equipment (G-PP&E) were the two primary 

components of the total asset balance. 

FBWT, which represents NASA’s cash balance with the U.S. Department of the Treasury, was the largest asset at $10 billion, 

59 percent of total assets. This cash balance included Congressional appropriations 

funds available for NASA’s mission work 

(for example, employee labor or purchased 

goods and services from contractors) that 

have not yet been paid. 

NASA’s G-PP&E had a net book value of 

$6.8 billion as of September 30, 2015, which 

was a decrease of $897 million, 12 percent 

lower than in FY 2014. The decrease was 

driven by depreciation of the International 

Space Station (ISS). 

The Other category represents the amount 

of Investments, Accounts Receivable, and 

Other Assets at the end of FY 2015. The 

increase of $34 million, 19 percent higher 

than in FY 2014, is primarily due to launch 

services supporting National Oceanic and 

Atmospheric Administration (NOAA) Geostationary Operational Environmental Satellite-R (GOES-R). As the launch date is approached, milestone requirements increase 

in value. This increase is most apparent in 

the launch year and the two years before 

launch. GOES-R is slated to launch in early 

2016.
Financial Performance

NASA FY 2015 Agency Financial Report Page 53

Accounts Payable,

$1,455, 

30%

Environmental and 

Disposal Liabilities, 

$1,412,

29%

Other Accrued 

Liabilities,

$1,372, 

29%

Other Liabilities,

$529, 

11%

Federal Employee and 

Veteran's Benefits,

$43,

1%

Liabilities by Type for FY 2015

(in Millions of Dollars)

Liabilities as of September 30, 2015, 

were $4.8 billion. Accounts Payable, 

Environmental and Disposal Liabilities, 

and Other Accrued Liabilities represent the 

majority of NASA’s liabilities. 

Accounts Payable, which represents 

amounts owed to other entities, was $1.5 

billion, a decrease of $110 million, or 

7 percent, compared to FY 2014. The 

decrease is primarily due to contract 

closeout activities in FY 2015 which resulted 

in payment of invoices, thereby reducing the 

accounts payable balance compared to FY 

2014.

Environmental and Disposal Liabilities 

of $1.4 billion, represents the estimated 

cost to cleanup both known and projected 

environmental hazards. These liabilities 

increased by $138 million, or 11 percent, 

from FY 2014. The increase was primarily 

due to higher estimated cleanup costs for 

existing environmental restoration projects.

Other Accrued Liabilities with public entities 

were $1.4 billion, an increase of $187 million, 

or 16 percent, compared to FY 2014. This 

increase was related to the straight-line 

cost accrual process used for specific types 

of contracts and purchase orders that are 

accrued monthly and which will disburse 

over the period of performance.

Other Liabilities represents various amounts, 

including Advances to Others, Unfunded 

Annual Leave and Accrued Funded Payroll. 

The increase of $41 million, 8 percent 

higher than in FY 2014, is primarily due to 

more advance payments being received 

for the Planetary Ventures lease in FY 

2015. This agreement did not exist in FY 

2014. Additionally, more advances were 

received in FY 2015 from the Department 

of Homeland Security for NASA to provide 

application development and computing 

infrastructure support for the Automated 

Behavior Analysis (AuBA) system.

Federal Employee and Veteran’s Benefits 

are amounts the Department of Labor 

estimates on behalf of NASA for future 

workers’ compensation liabilities for 

current employees. The estimate for future 
Financial Performance

Page 54 NASA FY 2015 Agency Financial Report

workers’ compensation benefits includes the 

expected liability for death, disability, medical 

and miscellaneous costs for approved 

compensation cases, plus a component of 

claims incurred but not reported.

Net Position, comprised of Unexpended 

Appropriations and Cumulative Results of 

Operations (“net worth”), decreased by $1.4 

billion, 10 percent from FY 2014. Unexpended Appropriations, at $7 billion, was 

down by 6 percent from FY 2014 balances. 

This was primarily due to a decrease in unobligated balances available in FY 2015 

compared to FY 2014. Cumulative Results 

of Operations, at $5.2 billion, was down by 

16 percent from FY 2014 balances, primarily 

due to the increase in depreciation expense 

associated with the ISS and higher costs to 

execute NASA missions.

Sources of Funding

The Statement of Budgetary Resources provides information on the budgetary/funding 

available to NASA. NASA’s resources consist 

primarily of funds received from two sources: 

• Appropriations from Congress for the 

current fiscal year and unobligated balances from prior fiscal years; and 

• Revenue from agreements with other 

governmental organizations or private 

entities

In FY 2015, the total funds available for use 

by the Agency were $22.2 billion. 

Appropriations from Congress for FY 2015, 

at $18 billion, comprised 81 percent of the 

funds available for use by the Agency. Congress designates the funding available to the 

Agency for a specific NASA mission or purpose. Appropriations that remained available from prior years comprised $1.2 billion, 

5 percent of NASA’s available resources in 

FY 2015. 

NASA’s funding also included $3.1 billion in 

FY 2015 from revenue earned from agreements of $2.8 billion and recoveries of prior 

year obligations of $256 million. Earned 

Congressional 

Appropriations,

$18,013,

81%

Revenue from 

Agreements,

$3,067, 

14%

Prior Year 

Congressional 

Appropriation, 

$1,151, 

5%

Less: Other,

$(56), 

0%

Sources of Funding by Type for FY 2015

(in Millions of Dollars)
Financial Performance

NASA FY 2015 Agency Financial Report Page 55

revenues with other governmental organizations or private entities were received under 

NASA’s authority to provide goods, services, 

or use of facilities to other entities on a reimbursable basis.

Of the $22.2 billion funding available to 

NASA in FY 2015, NASA obligated $21.1 billion for programmatic and institutional use. 

An obligation results from an agreement that 

binds the Government to make an expenditure (or outlay) of funds, and reflects a reservation of budget authority that will be used to 

pay for a contract, labor, or other items. The 

remaining $1.1 billion remains available for 

obligation until the funds expire. 

Net Cost of Operations

The Statement of Net Cost presents Net 

Cost of Operations by strategic goal and for 

NASA overall. NASA’s strategic goals are 

described in the Mission Performance section of the Agency Financial Report. The 

Net Cost of Operations represents gross 

cost incurred less revenue earned for work 

performed for other government organizations or private entities. As of September 

30, 2015, NASA’s gross cost was $21.9 

billion, an increase of $1.5 billion from FY 

2014. Earned Revenue from other government organizations or private entities was 

$2.3 billion, 10 percent of gross costs, leaving NASA with a FY 2015 net cost of $19.6 

billion, an increase of $1.4 billion from FY 

2014.

Gross Cost of Operations

NASA’s day-to-day operations are performed at NASA and contractor offices and 

facilities around the globe and in space. 

Gross Costs of Operations is presented in 

the following table, detailing select NASA 

programs that supported each strategic 

goal. Gross Cost of Operations includes 

expenses incurred for NASA’s R&D investments that are expected to maintain or increase national economic productive capacity or yield other future benefits. See the 

Required Supplementary Stewardship Information section (page 99) of this report for 

further discussion. Highlights of NASA program activities as of September 30, 2015, 

that contributed to gross costs are provided 

for each strategic goal. A discussion of activities and costs that were reimbursed primarily by other government organizations 

or private entities (for example, earned revenue) is also provided.

Strategic Goal 1,

$12,644

64%

Strategic Goal 3,

$5,024,

26%

Strategic Goal 2,

$1,902,

10%

Net Cost of Operations by Strategic Goal

(In Millions of Dollars)
Financial Performance

Page 56 NASA FY 2015 Agency Financial Report

Percent 

Gross Cost by Strategic Goal (%)

(In Millions of Dollars) 2015 2014 Change

Strategic Goal 1 $ 12,962 $ 11,788 10 

International Space Station 3,941 2,921 35 

Space Launch System 1,753 1,825 (4)

Orion Multi-Purpose Crew Vehicle 1,319 1,041 27 

Other NASA Programs 5,949 6,001 (1) 

Strategic Goal 2 $ 3,741 $ 3,646 3 

Science Mission Directorate Reimbursable 1,493 1,474 1 

Earth Systematic Mission 633 590 7 

Earth Science Research 424 420 1 

Other NASA Programs 1,191 1,162 2 

Strategic Goal 3 $ 5,158 $ 4,895 5

Center Management and Operations 1,877 1,993 (6)

Space Communications and Navigation 514 566 (9)

Science & Engineering 496 363 37

Other NASA Programs 2,271 1,973 15

Total Gross Costs by Strategic Goal $ 21,861 $ 20,329 8 

Strategic Goal 1: Expand the frontiers of 

knowledge, capability, and opportunity in 

space. 

Gross Costs for Strategic Goal 1 were $13 

billion, an increase of $1.2 billion, 10 percent over FY 2014 costs. The costs for this 

strategic goal represent 59 percent of total 

Agency gross cost. The three primary programs that support this goal International 

Space Station (ISS), Space Launch System 

(SLS), and Orion contributed over 50 percent of the cost for Strategic Goal 1: 

• 

• 

The ISS Program had costs of $3.9 billion, 

$1 billion higher costs in FY 2015 compared to FY 2014, and were largely driven by the launches of two domestic commercial cargo transportation systems.

The SLS program had costs of $1.8 

billion, $72 million lower cost in FY 2015 

compared to FY 2014. SLS completed a 

key milestone ground test in preparation 

for future missions to help propel NASA’s 

SLS rocket and Orion Spacecraft while 

continuing the development of the SLS 

heavy-lift rocket. 

• The Orion program incurred costs of $1.3 

billion, $278 million higher costs in FY 

2015 compared to FY 2014. The primary 

increase in Orion program costs resulted 

from a successful first orbital uncrewed 

test flight, and continued work to launch 

another uncrewed test flight in FY 2018.

Strategic Goal 2: Advance understanding of Earth and develop technologies to 

improve the quality of life on our home 

planet.

Gross Costs for Strategic Goal 2 were $3.7 

billion, an increase of $95 million, 3 percent over FY 2014 costs. The costs for this 

strategic goal represent 17 percent of total 

Agency gross cost. Almost half of the costs 

incurred for Strategic Goal 2 were in support 

of activities performed for other government 

organizations or private entities who reimburse NASA for these costs (earned revenue). The primary reimbursable activities 

are described in the earned revenue discussion below.

The largest NASA organization and 

programs supporting Strategic Goal 2 were 
Financial Performance

NASA FY 2015 Agency Financial Report Page 57

the Science Mission Directorate, Earth 

Systematic Mission, and Earth Science 

Research.

• 

• 

• 

The Science Mission Directorate Reimbursable organization incurred costs 

of $1.5 billion, $19 million higher costs 

compared to 2014. NASA conducted 

the “fit check” between the Joint Polar Satellite System (JPSS)-1 spacecraft and the Payload Attach Fitting 

to assure both components are mechanically compatible in preparation 

of mating the components at launch. 

The Earth Systematic Mission program 

incurred costs of $633 million, $43 million higher costs in FY 2015 compared to 

2014. The Gravity Recovery and Climate 

Experiment Follow-On (GRACE-FO)

project completed development and design phase of the GRACE-FO satellites, 

which are scheduled to launch in 2017.

The Earth Science Research program 

incurred costs of $424 million, $4 million higher costs in FY 2015 compared to 2014. The Scientific Computing project embarked on various 

experiments to test and improve onboard computing and reliability for 

the next generation of NASA’s Earth, 

Space and Planetary Science missions.

Strategic Goal 3: Serve the American 

public and accomplish our Mission by effectively managing our people, technical 

capabilities, and infrastructure.

Gross Costs for Strategic Goal 3 were $5.2 

billion, an increase of $263 million, 5 percent over FY 2014 costs. The costs for this 

strategic goal represent 24 percent of total 

Agency gross cost. Three of the largest 

NASA programs supporting Strategic Goal 

3 were Center Management and Operations 

(CMO), Space Communications and Navigation (SCaN), and Science and Engineering (S&E).

• 

• 

• 

CMO had costs of $1.9 billion, $116 million lower costs in FY 2015 compared 

to 2014. This is related to costs provided to the CMO for Agency programs 

and projects that reside at and are executed, along with the care of institutional assets, establishing and maintaining the staff and their competencies, 

and the maintenance and operation of 

facilities required by current and future 

programs and projects at the Centers.

SCaN had costs of $514 million, $52 million lower costs in FY 2015 compared to 

2014.

S&E program had costs of $496 million, 

$133 million higher costs in FY 2015 compared to 2014. The increase was due to 

an engineering services contract award 

at NASA’s Goddard Space Flight Center.

Earned Revenue 

Total earned revenue, which represents work 

performed by NASA for other government 

organizations or private entities, was $2.3 

billion in FY 2015, an increase of $156 million 

from FY 2014. Two programs accounted for 

over half of NASA’s earned revenue in FY 

2015: JPSS and GOES-R.

• NASA supports JPSS in partnership with 

NOAA. JPSS had earned revenue of $805 

million, an increase of $46 million from 

2014, primarily due to the completion of 

“fit check” for the JPSS-1 spacecraft. In 

addition, a delivery order was awarded for 
Financial Performance

Page 58 NASA FY 2015 Agency Financial Report

the Rapid Spacecraft Acquisition III (Rapid III) contract for the JPSS-2 spacecraft. 

• Earned Revenue from GOES-R was 

$603 million, an increase of $39 million 

from 2014, primarily due to completion of 

the development of the GOES-R series 

satellite. The first satellite in the GOESR series is scheduled for launch in early 

2016. 

Image Caption: Engineers prepare to remove the CERES instrument from the Radiometric Calibration 

Chamber following the completion of thermal vacuum testing at Northrop Grumman’s manufacturing facility 

in Redondo Beach, Calif. This sensor will be integrated onto NOAA’s JPSS (Joint Polar Satellite System) 

spacecraft, scheduled for launch in 2017. (Credit: Northrop Grumman Corporation)
NASA FY 2015 Annual Financial Report

Financial Performance

Page 59

Limitations of the Financial Statements

The principal financial statements have been 

prepared to report the financial position and 

results of operations of NASA, pursuant 

to the requirements of 31 U.S.C. 3515(b). 

While the statements have been prepared 

from the books and records of NASA in accordance with generally accepted accounting principles for Federal entities and the 

formats prescribed by the Office of Management and Budget (OMB) Circular A-136, the 

statements are in addition to the financial 

reports used to monitor and control budgetary resources, which are prepared from the 

same books and records. The statements 

should be read with the realization that they 

are for a component of the U.S. Government, a sovereign entity.

Image Caption: Lights of an Aurora From the International Space Station. NASA Astronaut Scott Kelly 

captured this photo of an aurora from the International Space Station on June 23, 2015. The dancing lights 

of the aurora provide spectacular views on the ground, but also capture the imagination of scientists who 

study incoming energy and particles from the Sun. Aurora are one effect of such energetic particles, which 

can speed out from the Sun both in a steady stream called the solar wind and due to giant eruptions known 

as coronal mass ejections or CMEs. (Credit: NASA)
NASA FY 2015 Annual Financial Report

Financial Performance

Page 60 

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NASA FY 2015 Annual Financial Report

Systems, Controls, and 

Legal Compliance

Page 61

NASA’s Internal Control Framework...................................................................63

Management Assurances...................................................................................65

Financial Systems Strategies............................................................................ .67

Image Caption: Soyuz Rocket Boosts Expedition 44 Crew to the International Space Station. 

Soyuz TMA-17M launched from the Baikonur Cosmodrome in Kazakhstan to the International Space Station on July 23, carrying Expedition 44 Soyuz Commander Oleg Kononenko of the Russian Federal Space 

Agency (Roscosmos), Flight Engineer Kjell Lindgren of NASA, and Flight Engineer Kimiya Yui of the Japan 

Aerospace Exploration Agency into orbit to begin their five-month mission on the Station. (Credit: NASA)
Page 62 NASA FY 2015 Annual Financial Report

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Systems, Controls and Legal Compliance

NASA FY 2015 Agency Financial Report Page 63

Systems, Controls and

Legal Compliance

NASA’s Internal Control Framework

The Federal Managers’ Financial Integrity Act (FMFIA) requires agency heads to 

evaluate and report on the internal control 

and financial systems to ensure the integrity of Federal programs and operations. 

This evaluation aims to provide reasonable 

assurance that internal controls are operating effectively to ensure efficient operations, 

reliable financial reporting, and compliance 

with applicable laws and regulations. 

Internal control is at the core of NASA 

fulfilling its mission and achieving its goals 

while safeguarding governmental resources. 

NASA management is responsible for 

implementing internal control activities 

that are appropriate to their department’s 

processes. NASA’s policy is to comply 

with Office of Management and Budget 

(OMB) Circular A-123, Management’s 

Responsibility for Internal Control, which 

provides government-wide requirements for 

internal control and accountability, based 

on the FMFIA. OMB Circular A-123 also 

requires agencies to establish internal 

controls over their programs, financial 

reporting, and financial management 

systems.

NASA evaluates internal control across 

the Agency at various levels of the 

organization to ensure significant risks are 

identified, and related internal controls are 

tested and evaluated. NASA evaluates 

the effectiveness of the internal controls 

over operations, management systems, 

and financial reporting with consideration 

of reviews and other relevant sources of 

information.

NASA management is responsible for 

establishing and maintaining effective 

internal controls in its respective areas of 

responsibility. As part of this responsibility, 

management regularly evaluates internal 

control, and NASA executive leadership 

provides annual assurance statements 

reporting on the effectiveness of internal 

controls at meeting objectives. In addition, 

the NASA Office of the Chief Financial 

Officer (OCFO) deploys an extensive annual 

testing and assessment methodology that 

evaluates internal controls over financial 

reporting.

The FMFIA assurance statement is primarily 

based on individual assurance statements 

submitted by NASA Officials-in-Charge 

(OIC). These statements are based upon 

organizational self-assessments that are 
Systems, Controls and Legal Compliance

Page 64 NASA FY 2015 Agency Financial Report

informed by various sources of information 

such as internal reviews of controls, as well 

as recommendations for improvements 

from external audits, investigations, and 

reviews conducted by the Office of Inspector 

General (OIG) and the Government

Accountability Office (GAO). The Mission 

Support Council (MSC), the organization 

responsible for oversight of NASA’s Internal 

Control Program, advises the Administrator 

on the Statement of Assurance. The Senior 

Assessment Team (SAT), which is an arm 

of the MSC, helps to guide the internal 

control evaluation and reporting process. 

The Management System Working Group 

(MSWG) performs the first-level evaluation 

of annual results and serves as the primary 

advisory body for NASA internal control 

activities. The MSWG analyzes the annual 

assessment results and reports issues that 

may significantly impact the effective design 

and operation of internal controls to the SAT. 

An illustration of the Annual Statement of 

Assurance process is included below.

The NASA FMFIA Annual Statement of Assurance (SoA) Process 

NASA

Administrator

Mission Support Council

(MSC)

Senior Assessment Team (SAT)

Management Systems Working Group

(MSWG)

NASA Officials-in-Charge/Center Directors

Assurance Statements

Annual Assessment of Internal Controls over Programs,

Operations, Financial Reporting & Systems
Systems, Controls and Legal Compliance

NASA FY 2015 Agency Financial Report Page 65

Management Assurances

Administrator’s Statement of Assurance

November 13, 2015

NASA management is responsible for establishing and maintaining effective internal controls 

and financial management systems that meet the objectives of the Federal Managers’ Financial Integrity Act (FMFIA), the Federal Financial Management Improvement Act (FFMIA), as 

well as all other related laws and guidance. NASA is committed to a robust and comprehensive internal control program. We recognize that ensuring the effective, efficient, economical, 

and responsible use of the resources that have been provided to the Agency is not only good 

stewardship, but also the proper approach to maximize our progress toward the realization 

of our mission goals. Integrity and ethical values are emphasized throughout the Agency 

and communicated both formally and informally through training, codification in policy, and 

through organizational norms and culture. As a result, managers and employees throughout 

the Agency are actively engaged in identifying or updating key control objectives, assessing 

risks, implementing controls or other mitigating strategies, conducting reviews, and taking 

corrective actions as necessary.

NASA conducted its Fiscal Year 2015 annual assessment of the effectiveness of internal 

controls over operations and compliance with applicable laws and regulations in accordance 

with FMFIA and the Office of Management and Budget (OMB) Circular A-123, Management’s 

Responsibility for Internal Control. Based on the results of this evaluation, NASA provides 

reasonable assurance that its internal controls over the effectiveness and efficiency of operations and compliance with applicable laws and regulations as of September 30, 2015, were 

operating effectively and no material weaknesses were found in the design or operation of 

the internal controls.

In addition, NASA’s Office of the Chief Financial Officer performed an assessment of the 

effectiveness of internal controls over financial reporting in compliance with OMB Circular 

A-123, Appendix A-Internal Control over Financial Reporting. Based on the results of the 

evaluation, there were no material weaknesses identified in the design or operation of these 

controls. NASA provides reasonable assurance that internal controls over financial reporting 

were operating effectively, as of June 30, 2015. Finally, in accordance with the requirements 

of the FFMIA, we assessed the implementation and maintenance of NASA financial management systems. We found that these substantially comply with Federal financial management 

systems requirements, applicable Federal accounting standards, and the U.S. Government 

Standard General Ledger at the transaction level.

In conclusion, NASA makes an unqualified statement of assurance that its internal controls 

for FY 2015 were operating effectively.
Systems, Controls and Legal Compliance

Page 66 NASA FY 2015 Agency Financial Report

NASA will continue its commitment to ensuring a sound system of internal control exists over 

operations, reporting, and financial systems and will continue to monitor and enhance its 

quality assurance activities.

Charles F. Bolden, Jr.

Administrator
Systems, Controls and Legal Compliance

NASA FY 2015 Agency Financial Report Page 67

Financial Systems Strategies

NASA’s Core Financial (CF) and budget 

management systems include the Systems Applications & Products (SAP) Enterprise Resources Planning (ERP) and the 

e-budget suite of tools. The CF system has 

served as NASA’s financial accounting system of record since 2003, and the e-budget 

tools have supported budget formulation 

and congressional presentation/justification 

since 2007. Both suites of tools provide the 

foundation for NASA’s ability to achieve its 

financial management objectives and management of the budget. 

To date, NASA has implemented the following CF modules: funds management, 

financial accounting, sales and distribution, 

investment management, materials management, controlling (cost), project systems, 

and real estate, as well as a Contractor Cost 

Reporting (CCR) extension. Collectively, 

these integrated components make up NASA’s financial system of record for financial 

statements, external reports, project analysis, and management control. Transactions 

within the integrated modules and interfaces 

are recorded on a real-time basis. The CF 

system is supported by other commercial 

off-the-shelf (COTS) software, NASA developed applications, and interfaces with systems managed by other Federal agencies. 

NASA is developing and evaluating options 

to receive and process all applicable invoices electronically by the end of 2018 in 

accordance with OMB’s directive M-15-19, 

Improving Government Efficiency and Saving Taxpayer Dollars Through Electronic 

Invoicing. We are working closely with the 

Procurement community and plan to make a 

decision regarding a system solution by the 

spring of 2016. Additionally, we will investigate end-to-end payment process changes 

to improve payment cycle time, reduce interest penalties, and reduce operating costs.

The Agency has implemented and developed 

several required Performance Measures 

Manager (PMM) system enhancements 

mandated by OMB for Strategic Objective 

Annual Review (SOAR) related activities, 

other Agency glossy reports and an updated annual performance plan. In addition, as 

part of this enhancement cycle, NASA has 

performed system maintenance to synchronize NASA’s system with Treasury’s system, 

Budget Formulation and Execution Manager 

(BFEM). NASA is continuously levied with 

evolving OMB requirements for Federal 

strategic planning, performance management, and reporting. To remain a leader in 

innovation and in anticipation of OMB requirements, NASA is investigating future initiatives to enhance performance reporting. 

Since initial implementations, all of these 

tools have been continuously enhanced and 

expanded for changing policies, standards, 

OMB requirements, and internal assessments to ensure tight controls. As a result 

of NASA’s efforts to continually enhance our 

Financial and Budgetary tools/systems, we 

have achieved an unmodified opinion for the 

last 4 years and have improved budgetary 

deliverables in accordance with congressional direction.
Systems, Controls and Legal Compliance

Page 68 NASA FY 2015 Agency Financial Report

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NASA FY 2015Agency Financial Report Page 69

Looking Forward

Image Caption: This image shows the Gravity Recovery and Climate Experiment 1 & 2 (GRACE 1 & 2). 

GRACE provides highly accurate measurements of the gravitational field of the Earth, and determines how 

this field varies with time. (Credit: NASA)
Page 70 NASA FY 2015 Agency Financial Report

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Looking Forward

NASA FY 2015 Agency Financial Report Page 71

Looking Forward

In FY 2016, NASA will build on the successes achieved across FY 2015, as it expands 

the frontiers of knowledge, capability, and 

opportunity. NASA, its partners, and the 

Nation are embarking upon an ambitious exploration program that will incorporate new 

technologies and leverage proven capabilities as humankind expands its reach out into 

the solar system. NASA is entering a new 

era in human spaceflight of exploration beyond low Earth orbit. Next year, the Space 

Launch System (SLS), Orion, and Exploration Ground Systems (EGS) programs will 

make progress towards Exploration Mission 

(EM)-1, an uncrewed test flight to distant retrograde lunar orbit (and the first pairing of 

Orion with SLS).

In addition, to further knowledge about how 

humans live and work in space, the joint 

U.S.-Russian one-year mission will be completed in FY 2016. U.S. astronaut Scott 

Kelly and Russian cosmonaut Mikhail Kornienko will live on the International Space 

Station (ISS) for one year, which is twice as 

long as crew members typically stay on the 

ISS. The mission’s investigation of genetics 

and the effects of long-duration spaceflight 

on humans is being assisted through comparisons with astronaut Scott Kelly’s identical twin, retired astronaut Mark Kelly, who 

remains on Earth.

NASA will complete concept refinement 

studies for the Low Boom Flight Demonstration (LBFD). These studies are elements of 

a research program over the next decade to 

focus on overcoming the adverse impact of 

sonic boom in order to alleviate public concern and environmental impacts. NASA is 

making progress towards innovation in commercial supersonic transportation, which 

could be a game changer for transcontinental and intercontinental travel. 

NASA’s science programs will continue to 

seek answers to profound questions, address the need to understand humanity’s 

place in the universe, and provide information to policy makers who address issues affecting all life on Earth. NASA is also working 

to improve its operations and is increasingly 

launching its science missions on schedule 

and on budget.

NASA will launch several missions in FY 

2016, including the Interior Exploration using Seismic Investigations, Geodesy and 

Heat Transport (InSight) mission to Mars. 

This robotic lander will study the deep interior of the planet Mars, and is similar in design 

to the Mars lander that the Phoenix mission 

used successfully in 2007 to study ground 

ice near the north pole of Mars. The reuse 

of this technology will provide a low-risk path 

to Mars without the added cost of designing 

and testing a new system from scratch. 

NASA will also continue to make strides 

in the development of other key science 

missions for future launches, including the 

following:

• 

• 

• 

• 

• 

Solar Probe Plus (SPP) 

Solar Orbiter Collaboration (SOC) 

Ionospheric Connection (ICON) 

Global-scale Observations of the Limb 

and Disk (GOLD) 

Transiting Exoplanet Survey Satellite 

(TESS) 
Looking Forward

Page 72 NASA FY 2015 Agency Financial Report

• 

• 

• 

• 

• 

• 

• 

Neutron star Interior Composition Explorer (NICER) 

Origins-Spectral Interpretation-Resource Identification-Security-Regolith 

Explorer (OSIRIS-REx) 

Mars 2020 

Ice, Cloud, and land Elevation Satellite 

(ICESat-2) 

Surface Water and Ocean Topography 

(SWOT)

Gravity Recovery and Climate Experiment (GRACE) Follow-On mission

James Webb Space Telescope (Webb) 

NASA expects its innovative research activities and technology development to lead to 

future spacecraft advancements, support 

life in space, and enable the next generation air transportation system. U.S. technological leadership is vital to national security, 

economic prosperity, and global standing. 

NASA will remain committed to contributing to science, technology, engineering, and 

mathematics (STEM) education, the Nation’s economic vitality, and stewardship of 

Earth.

Humanity’s future in space is bright and 

NASA is leading the way. NASA reaches 

for new heights, toward the next giant leap. 

As a foundational component of this journey, NASA will continue to focus on fiscal 

responsibility, performance management, 

and long-term affordability, while addressing 

management challenges or risks that may 

pose roadblocks to future success.
NASA FY 2015 Agency Financial Report

Financials

Page 73

Introduction to the Principal Financial Statements...........................................75

Financial Statements, Notes, and Supplemental Information..........................76

Letter from the Inspector General on the Audit. 11

Independent Auditors’ Report. 11

Image Caption: Just 15 minutes after its closest approach to Pluto on July 14, 2015, NASA’s New Horizons 

spacecraft looked back toward the Sun and captured this near-sunset view of the rugged, icy mountains and 

flat ice plains extending to Pluto’s horizon. The smooth expanse of the informally named icy plain Sputnik 

Planum (right) is flanked to the west (left) by rugged mountains up to 11,000 feet (3,500 meters) high, including the informally named Norgay Montes in the foreground and Hillary Montes on the skyline. To the right, 

east of Sputnik, rougher terrain is cut by apparent glaciers. The backlighting highlights over a dozen layers 

of haze in Pluto’s tenuous but distended atmosphere. The image was taken from a distance of 11,000 miles 

(18,000 kilometers) to Pluto; the scene is 780 miles (1,250 kilometers) wide. (Credit: NASA/JHUAPL/SwRI)
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NASA FY 2015 Agency Financial Report Page 75

Introduction to the Principal 

Financial Statements

The principal financial statements are prepared to report the financial position and 

results of operations of the National Aeronautics and Space Administration (NASA), 

pursuant to the requirements of 31 U.S.C. 

3515 (b). The statements are prepared from 

the records of NASA in accordance with 

generally accepted accounting principles 

(GAAP) and the formats prescribed by the 

Office of Management and Budget (OMB)

Circular No. A-136, Financial Reporting Requirements, Revised (August 2015). The 

statements are in addition to financial reports prepared by NASA in accordance with 

OMB and U.S. Department of the Treasury 

(Treasury) directives to monitor and control 

the status and use of budgetary resources, 

which are prepared from the same records. 

The statements should be read with the understanding that they are for a component 

of the U.S. Government, a sovereign entity. One important implication of this is that 

NASA has no authority to pay liabilities not 

covered by budgetary resources. Liquidation of such liabilities requires enactment 

of an appropriation. Comparative data for 

FY 2014 is included where applicable. The 

principal financial statements, which include 

the following, are the responsibility of management:

• Consolidated Balance Sheet provides 

information on assets, liabilities, and net 

position as of the end of the reporting 

period. Net position is the difference between assets and liabilities. It is a summary measure of the Agency’s financial 

condition at the end of the reporting period.

• 

• 

• 

• 

• 

Consolidated Statement of Net Cost 

reports net cost of operations during 

the reporting periods by strategic goal 

and at the entity level. It is a measure 

of Gross Cost of Operations less Earned 

Revenue, and represents cost to taxpayers for achieving each strategic goal and 

Agency mission at the entity level. 

Consolidated Statement of Changes 

in Net Position reports the beginning 

balance of net position, current financing sources and use of resources, unexpended resources (transactions that affect net position) for the reporting period, 

and ending net position for the current 

period. 

Combined Statement of Budgetary 

Resources reports information on sources and status of budgetary resources for 

the reporting period. Information in this 

statement is reported on the budgetary 

basis of accounting which supports compliance with budgetary controls and controlling legislation. 

Required Supplementary Stewardship Information provides information 

on NASA’s Research and Development 

costs by strategic goal. 

Required Supplementary Information 

contains a Combining Statement of Budgetary Resources and information on 

Deferred Maintenance.
Financials

Page 76 NASA FY 2015 Agency Financial Report

Financial Statements, Notes, and 

Supplemental Information

National Aeronautics and Space Administration

Consolidated Balance Sheet

As of September 30, 2015 and 2014

(In Millions of Dollars)

2015 2014

Assets (Note 2):

Intragovernmental:

Fund Balance with Treasury (Note 3) $ 9,980 $ 10,293 

Investments (Note 4) 17 17 

Accounts Receivable (Note 5) 191 161

Other Assets (Note 8) 6 -

Total Intragovernmental 10,194 10,471

Accounts Receivable, Net (Note 5) 2 5

General Property, Plant and Equipment, Net (Note 6) 6,782 7,679

Other Assets (Note 8) 1 -

Total Assets $ 16,979 $ 18,155

Stewardship PP&E (Note 7)

Liabilities (Note 9):

Intragovernmental:

Accounts Payable $ 38 $ 113 

Other Liabilities (Note 11) 120 82

Total Intragovernmental 158 195

Accounts Payable 1,417 1,452

Federal Employee and Veteran Benefits 43 48

Environmental and Disposal Liabilities (Note 10) 1,412 1,274 

Other Accrued Liabilities (Note 11) 1,372 1,185

Other Liabilities (Note 11) 409 406

Total Liabilities 4,811 4,560

Commitments and Contingencies (Note 12)

Net Position:

Unexpended Appropriations 6,988 7,413

Cumulative Results of Operations 5,180 6,182

Total Net Position 12,168 13,595

Total Liabilities and Net Position $ 16,979 $ 18,155

The accompanying notes are an integral part of these financial statements.
Financials

NASA FY 2015 Agency Financial Report Page 77

National Aeronautics and Space Administration

Consolidated Statement of Net Cost

For the Fiscal Years Ended September 30, 2015 and 2014

(In Millions of Dollars)

 2015 2014

Cost by Strategic Goal (Note 13)

Strategic Goal 1 – Expand the frontiers of knowledge, capability, and opportunity in space:

Gross Costs $ 12,962 $ 11,788

Less: Earned Revenue 318 277

Net Costs 12,644 11,511

Strategic Goal 2 – Advance understanding of Earth and 

develop technologies to improve the quality of life on our 

home planet:

Gross Costs $ 3,741 $ 3,646

Less: Earned Revenue 1,839 1,731

Net Costs 1,902 1,915

Strategic Goal 3 – Serve the American public and accomplish our Mission by effectively managing our people, 

technical capabilities, and infrastructure:

Gross Costs $ 5,158 $ 4,895

Less: Earned Revenue 134 127

Net Costs 5,024 4,768

Net Cost of Operations

Total Gross Costs $ 21,861 $ 20,329

Less: Total Earned Revenue 2,291 2,135

Net Cost $ 19,570 $ 18,194 

The accompanying notes are an integral part of these financial statements.
Financials

Page 78 NASA FY 2015 Agency Financial Report

National Aeronautics and Space Administration

Consolidated Statement of Changes in Net Position

For the Fiscal Years Ended September 30, 2015 and 2014

(In Millions of Dollars)

2015 2014

Cumulative Results of Operations:

Beginning Balances $ 6,182 $ 6,819

Budgetary Financing Sources:

Appropriations Used 18,381 17,320

Nonexchange Revenue 4 4

Other Financing Sources:

Donations and Forfeitures of Property - 7 

Transfers In/Out Without Reimbursement 31 49

Imputed Financing 156 178

Other (4) (1)

Total Financing Sources 18,568 17,557

Net Cost of Operations (19,570) (18,194)

Net Change (1,002) (637)

Cumulative Results of Operations 5,180 6,182 

Unexpended Appropriations:

Beginning Balance 7,413 7,113 

Budgetary Financing Sources:

Appropriations Received 18,010 17,647

Appropriations Transfered In/Out 2 -

Other Adjustments (56) (27)

Appropriations Used (18,381) (17,320)

Total Budgetary Financing Sources (425) 300

Unexpended Appropriations 6,988 7,413

Net Position $ 12,168 $ 13,595

The accompanying notes are an integral part of these financial statements.
Financials

NASA FY 2015 Agency Financial Report Page 79

National Aeronautics and Space Administration

Combined Statement of Budgetary Resources

For the Fiscal Years Ended September 30, 2015 and 2014

(In Millions of Dollars)

2015 2014

Budgetary Resources:

Unobligated Balance, Brought Forward, October 1 $ 1,151 $ 1,044 

Recoveries of Prior Year Unpaid Obligations 256 339 

Other Changes in Unobligated Balance (56) (27)

Unobligated Balance from Prior Year Budget Authority, Net 1,351 1,356

Appropriations 18,013 17,647 

Spending Authority from Offsetting Collections 2,811 2,501

Total Budgetary Resources $ 22,175 $ 21,504

Status of Budgetary Resources:

Obligations Incurred (Note 14) $ 21,071 $ 20,353 

Unobligated Balance, End of Year:

Apportioned 1,016 1,018 

Unapportioned 88 133

Total Unobligated Balance, End of Year 1,104 1,151

Total Status of Budgetary Resources $ 22,175 $ 21,504

Change in Obligated Balance:

Unpaid Obligations:

Unpaid Obligations, Brought Forward, October 1 $ 10,124 $ 9,771

Obligations Incurred (Note 14) 21,071 20,353

Outlays (Gross) (-) (20,970) (19,661)

Recoveries of Prior Year Unpaid Obligations (-) (256) (339)

Unpaid Obligations, End of Year 9,969 10,124 

Uncollected Payments:

Uncollected Payments, Federal Sources, Brought Forward, October 1 (-) (988) (1,051)

Change in Uncollected Payments, Federal Sources (117) 63

Uncollected Payments, Federal Sources, End of Year (-) (1,105) (988)

Memorandum (Non-Add) Entries:

Obligated Balance, Start of Year 9,136 8,720

Obligated Balance, End of Year $ 8,864 $ 9,136 

Budget Authority and Outlays, Net:

Budget Authority, Gross $ 20,824 $ 20,148

Actual Offsetting Collections (-) (2,694) (2,564)

Change in Uncollected Payments, Federal Sources (117) 63

Budget Authority, Net $ 18,013 $ 17,647 

Outlays, Gross $ 20,970 $ 19,661

Actual Offsetting Collections (-) (2,694) (2,564)

Outlays, Net 18,276 17,097

Distributed Offsetting Receipts (-) (4) (5) 

Agency Outlays, Net $ 18,272 $ 17,092

The accompanying notes are an integral part of these financial statements.
Financials

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Financials

NASA FY 2015 Agency Financial Report Page 81

Note 1: Summary of Significant 

Accounting Policies

Reporting Entity 

The National Aeronautics and Space Administration (NASA) is an independent agency 

established by Congress on October 1, 1958, 

by the National Aeronautics and Space Act 

of 1958. NASA was incorporated from its 

predecessor agency, the National Advisory 

Committee for Aeronautics, which provided 

technical advice to the United States (U.S.) 

aviation industry and performed aeronautics 

research. Today, NASA serves as the principal Agency of the U.S. Government for initiatives in civil space and aviation.

NASA is organized into four Mission Directorates supported by one Mission Support 

Directorate (see Organization at page 7):

• 

• 

• 

• 

Aeronautics Research: conducts research which enhances aircraft performance, environmental compatibility, capacity, flexibility, and safety of the future 

air transportation system;

Human Exploration and Operations: develops new capabilities, supporting technologies and foundational research for 

affordable, sustainable human and robotic exploration;

Science: explores the Earth, Moon, 

Mars, and beyond; charts the best route 

of discovery, and obtains the benefits of 

Earth and space exploration for society; 

and

Space Technology: develops new technologies needed to support current and 

future NASA missions, other agencies 

and the aerospace industry.

The Agency’s administrative structure includes the Strategic Management Council, 

Mission Support Council, Program Management Council, and other Committees to integrate strategic, tactical, and operational 

decisions in support of strategic focus and 

direction.

Operationally, NASA is organized into nine 

Centers across the country, the Headquarters Office, the NASA Shared Services Center (NSSC), and the Jet Propulsion Laboratory (JPL). JPL is a Federally 

Funded Research and Development Center (FFRDC), operated for NASA by a contractor, California Institute of Technology 

(Caltech), staffed by Caltech employees in 

NASA-owned facilities.

The Agency’s consolidated financial statements present the accounts of all funds that 

have been established and maintained to 

account for the resources under the control 

of NASA management.

Basis of Accounting and Presentation

These consolidated financial statements are 

prepared in accordance with the U.S. generally accepted accounting principles and Federal Accounting Standards Advisory Board 

(FASAB) standards in the format prescribed 

by the OMB Circular No. A-136, Financial 

Reporting Requirements, Revised (August 

2015). FASAB authority to set Federal government accounting standards is recognized 

by the American Institute of Certified Public 

Accountants (AICPA). The financial statements present the financial position, net cost 

of operations, changes in net position, and 

budgetary resources of NASA, as required 

by the Chief Financial Officers Act of 1990, 

Public Law (P.L.) 101-576, and the Government Management Reform Act (P.L.) 103-

356.
Financials

Page 82 NASA FY 2015 Agency Financial Report

The financial statements should be read 

with the realization that they are for a component of the U.S. Government, a sovereign 

entity. One important implication of this is 

that liabilities cannot be liquidated without 

legislation providing resources and legal authority to do so. The accounting structure 

of Federal agencies is designed to reflect 

proprietary and budgetary accounting. Proprietary accounting uses the accrual method 

of accounting. Under the accrual method of 

accounting, revenues are recognized when 

earned and expenses are recognized when 

incurred, without regard to the timing of receipt or payment of cash. Budgetary accounting does not use the accrual method of 

accounting; it accounts for the sources and 

status of funds to facilitate compliance with 

legal controls over the use of Federal funds.

Material intra-agency transactions and balances have been eliminated from the principal statements for presentation on a consolidated basis, except for the Statement of 

Budgetary Resources, which is presented 

on a combined basis in accordance with 

OMB Circular No. A-136, Financial Reporting Requirements, Revised (August 2015). 

As such, intra-agency transactions have not 

been eliminated from the Statement of Budgetary Resources.

Budgets and Budgetary Accounting

NASA complies with Federal budgetary accounting guidelines of OMB Circular No. 

A-11, Preparation, Submission and Execution of the Budget, Revised (June 2015).

Congress funds NASA’s operations through 

nine main appropriations: Science; Aeronautics; Exploration; Space Operations; Education; Safety, Security and Mission Services; 

Space Technology; Office of Inspector General; and Construction and Environmental 

Compliance and Restoration. Reimbursements received under reimbursable service 

agreements cover the cost of goods and 

services NASA provides to other Federal 

entities or non-Federal entities. The reimbursable agreement shall be priced based 

on cost principles to reasonably reflect the 

actual cost for the goods and services provided to the customer. 

Research and Development, Other Initiatives and Similar Costs

NASA makes substantial Research and Development (R&D) investments for the benefit 

of the United States. The R&D programs include activities to extend our knowledge of 

Earth, its space environment, and the Universe; and to invest in new aeronautics and 

advanced space transportation technologies 

supporting the development and application 

of technologies. Following guidance outlined in the FASAB Technical Release No. 

7, Clarification of Standards Relating to the 

National Aeronautics and Space Administration’s Space Exploration Equipment, NASA 

applies the Financial Accounting Standards 

Board’s (FASB) Accounting Standards Codification (ASC) 730-10-25, Research and 

Development - Recognition, and FASB ASC 

730-10-50 Research and Development - 

Disclosure, to its R&D projects.

Use of Estimates

The preparation of financial statements requires management to make assumptions 

and reasonable estimates affecting the reported amounts of assets and liabilities and 

disclosures of contingent liabilities as of the 

date of the financial statements and the reported amounts of revenues and expenses 

for the reporting period. Accordingly, actual 

results may differ from those estimates.
Financials

NASA FY 2015 Agency Financial Report Page 83

Fund Balance with Treasury

The U.S. Department of the Treasury (Treasury) collects and disburses cash on behalf 

of Federal agencies during the fiscal year. 

The collections include funds appropriated by Congress to fund the Agency’s operations and revenues earned for services 

provided to other Federal agencies or the 

public. The disbursements are for goods 

and services received in support of its operations and other liabilities. Fund Balance 

with Treasury (FBWT) is the balance of cash 

NASA has in its account with the Treasury. 

NASA’s FBWT is comprised of balances in 

general funds, trust funds, working capital 

funds, and other types of funds.

Investments in U.S. Government 

Securities

NASA investments include the following intragovernmental non-marketable securities:

(1) The Endeavor Teacher Fellowship Trust 

Fund (Endeavor Trust Fund) was established from public donations in tribute to 

the crew of the Space Shuttle Challenger. 

The Endeavor Trust Fund bi-annual interest 

earned is re-invested in short-term bills. P.L. 

102-195 requires the interest earned from 

the Endeavor Trust Fund investments be 

used to create the Endeavor Teacher Fellowship Program. 

(2) The Science, Space and Technology 

Education Trust Fund (Challenger Trust 

Fund) was established to advance science 

and technology education. The Challenger 

Trust Fund balance is invested in short-term 

bills and long-term bonds. P.L. 100-404 requires that a quarterly payment of $250,000 

be sent to the Challenger Center from interest earned on the Challenger Trust Fund investments. In order to meet the requirement 

of providing funds to the Challenger Center, 

NASA invests the bi-annual interest earned 

in short-term bills with maturity that coincides with quarterly payments of $250,000 to 

beneficiaries. Interest received in excess of 

the amount needed for quarterly payment to 

beneficiaries is invested in long-term bonds.

Accounts Receivable

Most of NASA’s accounts receivable is for 

intragovernmental reimbursements for cost 

of goods and services provided to other Federal agencies; the rest is for debts to NASA 

by non-Federal government entities. Allowances for delinquent non-Federal accounts 

receivable are based on factors such as: aging of accounts receivable, debtors’ ability 

to pay, payment history, and other relevant 

factors. Delinquent non-Federal accounts 

receivable over 120 days are referred to 

Treasury for collection, wage garnishment 

or cross-servicing in accordance with the 

Debt Collection Improvement Act (DCIA). 

The Digital Accountability and Transparency 

Act of 2014 (DATA Act) amended the DCIA 

requirement of 180 days to 120 days. 

Operating Materials and Supplies

NASA does not maintain inventory stock for 

resale. The Agency follows the purchases 

method of accounting for operating materials and supplies under which it expenses 

operating materials and supplies when purchased, not when used.

General Property, Plant and Equipment

NASA reports depreciation expense using 

the straight-line method over an asset’s 

estimated useful life, beginning with the 

month the asset is placed in service. 

General Property, Plant and Equipment 

(G-PP&E) are assets with acquisition costs 
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Page 84 NASA FY 2015 Agency Financial Report

of $500,000 or more, a useful life of 2 years or 

more, and R&D assets that are determined 

at the time of acquisition to have alternative 

future use. Assets that do not meet these 

capitalization criteria are expensed. NASA 

increased the capitalization threshold from 

$100,000 to $500,000 for personal and 

real property beginning October 1, 2014. 

Assets acquired prior to October 1, 2014, 

were capitalized at the prior threshold of 

$100,000 or more. Capitalized costs include 

costs incurred by NASA to bring the property 

to a form and location suitable for its intended 

use. Certain NASA assets are held by 

government contractors. Under provisions 

of the Federal Acquisition Regulation 

(FAR), the contractors are responsible for 

the control and accountability of the assets 

in their possession. These governmentowned, contractor-held assets are included 

within the balances reported in NASA’s 

financial statements.

NASA has barter agreements with international entities; the assets and services received under these barter agreements are 

unique, with limited easement to only a few 

countries, as these assets are on the International Space Station (ISS). The intergovernmental agreements state that the parties 

will seek to minimize the exchange of funds 

in the cooperative program, including the 

use of barters to provide goods and services. 

NASA has received some assets from these 

parties in exchange for future services. The 

fair value is indeterminable; therefore, no 

value was ascribed to these transactions 

in accordance with FASB ASC 845-10-25 

Non-Monetary Transactions – Recognition 

and ASC 845-10-50 Non-Monetary Transactions – Disclosure. The amounts reflected in 

NASA’s financial reports for the ISS exclude 

components of the ISS owned or provided 

by other participants in the ISS. 

Statement of Federal Financial Accounting 

Standards (SFFAS) No. 10, Accounting for 

Internal Use Software requires the capitalization of internally developed, contractor 

developed, and commercial off the shelf software. Capitalized costs for internally developed software include the full costs (direct 

and indirect) incurred during the software 

development stage only. For purchased 

software, capitalized costs include amounts 

paid to vendors for the software and other 

material costs incurred by NASA to implement and make the software ready for use 

through acceptance testing. When NASA 

purchases software as part of a package of 

products and services (for example: training, maintenance, data conversion, reengineering, site licenses, and rights to future 

upgrades and enhancements), capitalized 

and non-capitalized costs of the package 

are allocated among individual elements on 

the basis of a reasonable estimate of their 

relative fair market values. Costs not susceptible to allocation between maintenance 

and relatively minor enhancements are expensed. Software in progress of being developed is not amortized until placed in service. NASA capitalizes costs for internal use 

software when the total projected cost is $1 

million or more and the expected useful life 

of the software is 5 years or more.

Beginning FY 2015, NASA implemented SFFAS No. 44, Accounting for Impairment of 

General Property, Plant, and Equipment Remaining in Use, to recognize and report permanent impairment losses to G-PP&E remaining in use except internal use software 

as required. G-PP&E is considered impaired 

when there is a significant and permanent 

decline in the service utility of G-PP&E or 

expected service utility for construction work 

in process. There are existing processes 

and internal controls in place to reasonably 
Financials

NASA FY 2015 Agency Financial Report Page 85

assure identification and communication of 

potential material impairments; therefore, 

NASA does not conduct a periodic survey 

solely for the purpose of implementing these 

standards. NASA recognizes an impairment 

loss as a result of applying these standards 

as applicable.

Beginning FY 2015, NASA implemented 

SFFAS No. 42, Deferred Maintenance and 

Repairs, and amended the relevant required 

supplementary information (RSI) accordingly (see page 110).

Liabilities Covered by Budgetary 

Resources

As a component of a sovereign entity, NASA 

cannot pay for liabilities unless authorized 

by law and covered by budgetary resources. 

Liabilities covered by budgetary resources 

are those for which appropriated funds are 

available as of the balance sheet date. Examples of covered liabilities include accounts 

payable and employees’ salaries. Budgetary resources include unobligated balances 

of budgetary resources at the beginning of 

the year, new budget authority, and spending authority from offsetting collections.

Liabilities and Contingencies Not 

Covered by Budgetary Resources 

Liabilities not covered by budgetary resources are those for which congressional appropriation is required. Liabilities not covered 

by budgetary resources include future environmental cleanup liability, legal claims, pensions and other retirement benefits, workers’ 

compensation, annual leave, and cancelled 

appropriations.

Federal Employee and Veteran’s 

Benefits

A liability is recorded for workers’ compensation claims related to the Federal Employees’ 

Compensation Act (FECA), administered by 

the U.S. Department of Labor. The FECA 

provides income and medical cost protection to covered Federal civilian employees 

injured on the job, employees who have incurred a work-related occupational disease, 

and beneficiaries of employees whose death 

is attributable to a job-related injury or occupational disease. The FECA program initially pays valid claims and subsequently seeks 

reimbursement from the Federal agencies 

employing the claimants. The FECA liability 

includes the actuarial liability for estimated 

future costs of death benefits, workers’ compensation, and medical and miscellaneous 

costs for approved compensation cases.

Personnel Compensation and Benefits

Annual, Sick and Other Leave

Annual leave is accrued as it is earned; the 

accrual is reduced as leave is taken. Each 

year, the balance in the accrued annual 

leave account is adjusted to reflect current 

pay rates. To the extent current or prior year 

appropriations are not available to fund annual leave earned but not taken, funding will 

be obtained from future financing sources. 

Sick leave and other types of non-vested

leave are expensed as taken.

Retirement Benefits

NASA employees participate in the Civil Service Retirement System (CSRS), a defined 

benefit plan, or the Federal Employees Retirement System (FERS), a defined benefit 

and contribution plan. For CSRS employees, NASA makes contributions of 7.0 percent of gross pay. For FERS employees, 
Financials

Page 86 NASA FY 2015 Agency Financial Report

NASA makes contributions of gross pay of 

13.2 percent to the defined benefit plan, 1.0 

percent to a retirement savings plan (contribution plan), and matches employee contributions up to an additional 4.0 percent of 

gross pay. For those employees participating in FERS, a thrift savings plan is automatically established, and NASA makes a 

mandatory contribution of 1.0 percent to this 

plan.

Insurance Benefits

SFFAS No. 5, Accounting for Liabilities of 

the Federal Government requires Government agencies to report the full cost of Federal Employee Health Benefits (FEHB) and 

the Federal Employees Group Life Insurance (FEGLI) Programs. NASA uses the 

applicable cost factors and data provided by 

the Office of Personnel and Management to 

value these liabilities.

Reclassifications of 2014 Information

Certain reclassifications have been made to 

the FY 2014 financial statements, footnotes 

and supplemental information to better align 

with the Agency’s policies and procedures 

effective in FY 2015.

Note 2: Non-Entity Assets

Non-entity assets are assets held by NASA 

but not available for obligation. The total 

non-entity assets during FY 2015 and FY 

2014 are less than one-half million dollars. 

(In Millions of Dollars) 2015 2014

Total Non-Entity Assets $ — $ —

Total Entity Assets 16,979 18,155 

Total Assets $ 16,979 $ 18,155

Note 3: Fund Balance with 

Treasury

Treasury processes cash receipts and disbursements for NASA. Those transactions are reconciled against NASA’s records. FBWT is NASA’s cash balance with 

the Treasury. The FBWT is comprised of 

balances in general funds, trust funds, working capital fund, and other types of funds. 

General Funds primarily consist of appropriated funds for NASA. Trust Funds include 

balances in the Endeavor Trust Fund; Challenger Trust Fund; and Gifts and Donations. 

The Working Capital Fund (WCF) consists 

of balances related to NSSC, IT Infrastructure Integration Program (I3P) and Solutions 

for Enterprise-Wide Procurement (SEWP). 

Other types of funds include Deposit funds 

and Budget Clearing and Suspense funds.

(In Millions of Dollars) 2015 2014

Fund Balances:

General Funds $ 9,796 $ 10,135 

Trust Funds 1 1

Working Capital Fund 171 152

Other Fund Types 12 5

Total $ 9,980 $ 10,293

The Status of Fund Balance with Treasury 

represents the total fund balance recorded 

in the general ledger for unobligated and 

obligated balances. Unobligated Balances 

— Available is the amount remaining in appropriation funds available for obligation. 

Unobligated Balances — Unavailable is the 

amount remaining in appropriation funds 

used only for adjustments to previously re-
Financials

NASA FY 2015 Agency Financial Report Page 87

corded obligations. Obligated Balances Not 

Yet Disbursed is the cumulative amount of 

obligations incurred for which outlays have 

not been made. Non-budgetary FBWT is 

comprised of amounts in other types of 

funds.

(In Millions of Dollars) 2015 2014

Status of Fund Balances with Treasury:

Unobligated Balances:

Available $ 1,016 $ 1,018

Unavailable 88 133

Obligated Balance Not 8,864 9,136 Yet Disbursed

Non-Budgetary FBWT 12 6

Total $ 9,980 $ 10,293

Note 4: Investments

Investments consist of non-marketable par 

value intragovernmental securities issued 

by Treasury’s Bureau of the Fiscal Service. 

Trust Fund balances are invested in Treasury securities, which are purchased at either a premium or discount, and redeemed 

at par value exclusively through Treasury’s

Federal Investment Branch. The effectiveinterest method is used to amortize premiums on bonds, and the straight-line method 

is used to amortize discounts on bills.

Interest receivable on investments was less 

than one-half million dollars. In addition, 

NASA did not have any adjustments resulting from the sale of securities prior to maturity or any change in value that was more 

than temporary.

2015

Amortized Market 

Amortization (Premium) Interest Invest- Other Value 

(In Millions of Dollars) Cost Method Discount Receivable ments, Net Adjustments Disclosure

Intragovernmental Securities: Straight-Line

Non-Marketable: Effective-interest

Par value $ 20 0.115 - 6.602% $ (3) $ — $ 17 $ — $ 17 

Total $ 20 $ (3) $ — $ 17 $ — $ 17 

2014

Amortized Market 

Amortization (Premium) Interest Invest- Other Value 

(In Millions of Dollars) Cost Method Discount Receivable ments, Net Adjustments Disclosure

Intragovernmental Securities: Straight-Line

Non-Marketable: Effective-interest

Par value $ 20 0.03 - 6.602% $ (3) $ — $ 17 $ — $ 17 

Total $ 20 $ (3) $ — $ 17 $ — $ 17 
Financials

Page 88 NASA FY 2015 Agency Financial Report

Note 5: Accounts 

Receivable, Net

The Accounts Receivable balance represents net valid claims by NASA to cash or 

other assets of other entities. Intragovernmental Accounts Receivable represents 

reimbursements due from other Federal 

entities for goods and services provided by 

NASA on a reimbursable basis. Accounts 

Receivable Due from the Public is the total 

of miscellaneous debts owed to NASA from 

employees and/or smaller reimbursements 

from other non-Federal entities. A periodic 

evaluation of Accounts Receivable Due from 

the Public is performed to estimate any uncollectible amounts based on current status, 

financial and other relevant characteristics of 

debtors, and the overall relationship with the 

debtor. An allowance for doubtful accounts 

is recorded for Accounts Receivable Due 

from the Public in order to reduce Accounts 

Receivable to its Net Realizable Value in accordance with SFFAS No. 1, Accounting for 

Selected Assets and Liabilities. The total 

allowance for doubtful accounts during FY 

2015 and FY 2014 is less than one–half million dollars.

2015 2014

Allowance for Allowance for 

Accounts Uncollectible Net Amount Accounts Uncollectible Net Amount 

(In Millions of Dollars) Receivable Accounts Due Receivable Accounts Due

Intragovernmental $ 191 $ — $ 191 $ 161 $ — $ 161

Public 2 — 2 5 — 5

Total $ 193 $ — $ 193 $ 166 $ — $ 166
Financials

NASA FY 2015 Agency Financial Report Page 89

Note 6: General Property, Plant 

and Equipment, Net

Beginning October 1, 2014, NASA increased the capitalization threshold from 

$100,000 to $500,000 for personal and real 

property. Assets acquired prior to October 

1, 2014, were capitalized at the prior threshold of $100,000 or more. As recommended 

by the Government Accountability Office 

(GAO), NASA periodically evaluates the 

capitalization thresholds in order to ensure 

their continuing relevance to the materiality 

for the financial statements. NASA determined that the new capitalization threshold 

provides reasonable balance between costs 

and benefits, including operating efficiency, 

while assuring the fair presentation of the financial statements. In addition, NASA made 

reclassifications to the major classes of GPP&E disclosed in the following table for FY 

2014 in order to better align with the Agency’s policies, procedures, and programs effective in FY 2015.

NASA has one capital lease and several 

operating leases for both real and personal 

property. Leased property is primarily comprised of office buildings, storage facilities, 

and office equipment from both Federal and 

non-Federal entities.

There is no known restriction to the use or 

convertibility of NASA G-PP&E.

2015

Depreciation Accumulated Useful Life Cost Book Value (In Millions of Dollars) Method Depreciation

Space Exploration PP&E

International Space Station Straight-line 5–20 years $ 12,802 $ (12,107) $ 695 

Assets Under Construction N/A 892 — 892 

Space Shuttle Straight-line 5–20 years 87 (87) —

Total 13,781 (12,194) 1,587

Other PP&E

Structures, Facilities and Leasehold Improvements Straight-line 15–40 years 9,983 (7,198) 2,785

Equipment Straight-line 5–20 years 3,137 (1,969) 1,168

Construction in Process N/A 787 — 787

Assets Under Construction N/A 318 — 318 

Internal Use Software and Development Straight-line 5 years 280 (265) 15 

Land N/A 122 — 122 

Total 14,627 (9,432) 5,195

Total General PP&E $ 28,408 (21,626) 6,782

2014

Depreciation Accumulated Useful Life Cost Book Value (In Millions of Dollars) Method Depreciation

Space Exploration PP&E

International Space Station Straight-line 5–20 years $ 12,905 $ (11,050) $ 1,855

Assets Under Construction N/A 818 — 818

Space Shuttle Straight-line 5–20 years 92 (92) — 

Total 13,815 (11,142) 2,673

Other PP&E

Structures, Facilities and Leasehold Improvements Straight-line 15–40 years 9,674 (6,891) 2,783

Equipment Straight-line 5–20 years 2,965 (1,819) 1,146

Construction in Process N/A 535 — 535

Assets Under Construction N/A 402 — 402

Internal Use Software and Development Straight-line 5 years 275 (257) 18

Land N/A 122 — 122

Total 13,973 (8,967) 5,006

Total General PP&E $ 27,788 $ (20,109) $ 7,679
Financials

Page 90 NASA FY 2015 Agency Financial Report

Note 7: Stewardship PP&E

Federal agencies are required to classify 

and report heritage assets, multi-use heritage assets, and stewardship land in accordance with SFFAS No. 29, Heritage Assets 

and Stewardship Land.

Stewardship PP&E have physical characteristics similar to those of G-PP&E but differ 

from G-PP&E because their value is more 

intrinsic and not easily determinable in dollars. The only type of stewardship PP&E 

owned by NASA are heritage assets. 

Heritage assets are PP&E which possess 

one or more of the following characteristics:

 

• 

• 

• 

Historical or natural significance

Cultural, educational, or aesthetic value

Significant architectural characteristics

Dollar value and useful life of heritage assets are not easily determinable. There is 

no minimum dollar threshold for designating 

PP&E as a heritage asset, and depreciation 

expense is not taken on these assets. For 

these reasons, heritage assets (other than 

multi-use heritage assets) are reported in 

physical units, rather than with assigned dollar values. In accordance with SFFAS No. 

29, the cost of acquisition, improvement, 

reconstruction, or renovation of heritage assets is expensed in the period incurred. 

Assets that are used in day-to-day government operations and have a heritage function are considered multi-use heritage assets. Such assets are accounted for as 

G-PP&E and are capitalized and depreciated in the same manner as other G-PP&E. 

Multi-use heritage assets at the end of the 

period totaled 70 and 71 buildings and structures as of September 30, 2015 and September 30, 2014, respectively. The value 

associated with these multi-use heritage assets is reflected in the G-PP&E values reported in Note 6. 

When a G-PP&E has no use in operations, 

but is designated as a heritage asset, its cost 

and accumulated depreciation are removed 

from the books. They remain on the record 

as heritage assets, except where there is 

legal authority for transfer or sale at which 

time they are removed from the heritage asset record. Heritage assets are withdrawn 

when they are disposed or reclassified as 

multi-use heritage assets. Heritage assets 

are generally in fair condition suitable for 

display. 

NASA currently has three major classes of 

heritage assets: Buildings and Structures; 

Air and Space Displays and Artifacts; and Art 

and Miscellaneous Items. The first two categories of heritage assets support NASA’s 

mission by providing the public with tangible 

examples of assets which were built and deployed to support NASA’s mission. These 

real life assets enhance the public’s understanding of NASA’s numerous programs. 

Typically the Buildings and Structures have 

been designated as National Historic Landmarks. 

The third category of heritage assets, Art 

and Miscellaneous Items, is mainly comprised of items created by artists who have 

contributed their time and talent to record 

their impressions of the U.S. Aerospace 

Program in paintings, drawings, and other 

media. These works of art not only provide 

a historic record of NASA projects, but they 

support NASA’s mission by giving the public 

a new and fuller understanding of advancements in aerospace.
Financials

NASA FY 2015 Agency Financial Report Page 91

Heritage Assets (In Physical Units) 2014 Additions Withdrawals 2015

Buildings and Structures 12 — — 12

Air and Space Displays and Artifacts 614 17 15 616

Art and Miscellaneous Items 1,022 5 — 1,027

Total Heritage Assets 1,648 22 15 1,655

Note 8: Other Approved 

Liabilities/Assets

NASA’s Other Assets consist of Intragovernmental Advances and G-PP&E that NASA 

determines are no longer needed and are 

awaiting disposal, retirement, or removal 

from services. The Intragovernmental Advances are reported at cost and primarily 

represent the payments made to the Army 

Corps of Engineers in support of the construction of the Computational Research 

Facility at Langley Research Center. The 

G-PP&E Other Assets are recorded at estimated net realizable value.

(In Millions of Dollars) 2015 2014

Intragovernmental Assets 

 Other Advances $ 6 $ —

Non-Intragovernmental Assets

 General PP&E - Removed from Service and Pending Disposal

Total Other Assets

1 —

 $ 7 $ —

Note 9: Liabilities Not Covered 

by Budgetary Resources

Liabilities not covered by budgetary resources are liabilities for which congressional action is needed before budgetary resources 

can be provided. They include certain environmental matters (see Note 10, Environmental and Disposal Liabilities for more 

information), annual leave, workers’ compensation under the Federal Employees’ 

Compensation Act (FECA) administered by 

the Department of Labor, cancelled appropriations, legal claims, and pensions and 

other retirement benefits.

The present value of the FECA actuarial liability estimate at year-end was calculated 

by the Department of Labor using a discount 

rate of 3.13 percent in FY 2015 and 3.46 percent in FY 2014. This liability includes the 

estimated future costs for claims incurred 

but not reported or approved as of the end 

of each year. NASA has recorded Accounts 

Payable related to cancelled appropriations 

for which there are contractual commitments 

to pay. These payables will be funded from 

appropriations available for obligation at the 

time a bill is processed, in accordance with 

P.L. 101-510, National Defense Authorization Act.
Financials

Page 92 NASA FY 2015 Agency Financial Report

(In Millions of Dollars) 2015 2014

Intragovernmental Liabilities:

Other Liabilities

Workers' Compensation $ 10 $ 10

Total Intragovernmental 10 10

Public Liabilities:

Accounts Payable

Accounts Payable for Cancelled Appropriations 49 42

Federal Employee and Veterans Benefits

Actuarial FECA Liability 43 48

Environmental and Disposal Liabilities 1,412 1,274

Less: Enviornmental and Dispoal Liabilities - Funded 82 68

Other Liabilities

Unfunded Annual Leave 208 209

Contingent Liabilities 1 36

Total Liabilities Not Covered by Budgetary Resources 1,641 1,551

Total Liabilities Covered by Budgetary Resources 3,170 3,009

Total Liabilities $ 4,811 $ 4,560

Note 10: Environmental and 

Disposal Liabilities

In accordance with guidance issued by the 

FASAB, if an agency is required by regulation to clean up hazardous waste resulting 

from Federal operations, if estimable, the 

amount of cleanup cost must be reported 

and/or disclosed in the financial statements.

NASA records an estimated liability for restoration projects, which are known contaminations of PP&E. NASA also records an 

estimated liability for the future disposal of 

PP&E which currently, or prior to their disposal, will become contaminated.

NASA assesses the likelihood of required 

cleanup as probable, reasonably possible or 

remote. If the likelihood of required cleanup 

is probable and the cost can be reasonably 

estimated, a liability is recorded in the financial statements. If the likelihood of required 

cleanup is reasonably possible, the estimated cost of cleanup is disclosed in the notes 

to the financial statements. If the likelihood 

of required cleanup is remote, no liability is 

recorded or estimate disclosed.

Environmental and Disposal Liabilities represent cleanup costs resulting from: 

• 

• 

• 

Operations including facilities obtained 

from other governmental entities that 

have resulted in contamination from 

waste disposal methods, leaks and spills;

Other past activity that created a public 

health or environmental risk, including 

identifiable costs associated with asbestos abatement; and

Total cleanup costs associated with the 

removal, containment, and/or disposal 

(In Millions of Dollars) 2015 2014

Environmental Liabilities

Restoration Projects $ 1,324 $ 1,188

Property, Plant & Equipment 66 64

Asbestos 22 22

Total Environmental and Disposal Liabilities $ 1,412 $ 1,274
Financials

NASA FY 2015 Agency Financial Report Page 93

of hazardous wastes or material and/or 

property at permanent or temporary closure or shutdown of associated PP&E.

Federal, state, and local statutes and regulations require environmental cleanup. The 

statutes and regulations most applicable to 

NASA covering environmental response, 

cleanup, and monitoring include: the Comprehensive Environmental Response, Compensation and Liability Act; the Resource 

Conservation and Recovery Act; the Nuclear Waste Policy Act of 1982; as well as state 

and local laws.

Consistent with SFFAS No. 5, Accounting 

for Liabilities of the Federal Government and 

with SFFAS No. 6, Accounting for Property, 

Plant, and Equipment, NASA estimates the 

anticipated environmental disposal cleanup costs for PP&E. NASA recognizes and 

records in its financial statements an environmental cleanup liability for PP&E that is 

probable and measurable. 

Restoration Projects

NASA recorded a total estimated liability for 

known restoration projects of $1.3 billion 

in FY 2015. This was an increase of $136 

million over the $1.2 billion recorded in FY 

2014. The increase in this liability is primarily due to the availability of new or updated 

information on the extent of contamination 

and refinements to the estimation methodology.

In addition to the probable cleanup costs 

for known hazardous conditions recognized 

in the financial statements, there are other 

remediation sites where the likelihood of required cleanup for known hazardous conditions is reasonably possible. Remediation 

costs at certain sites classified as reasonably possible were estimated to be $6 million for FY 2015 and $10 million for FY 2014.

With respect to environmental remediation 

that NASA considers reasonably possible 

but not estimable, NASA concluded that either the likelihood of a NASA liability is less 

than probable but more than remote or the 

regulatory drivers and/or technical data that 

exist are not reliable enough to calculate an 

estimate.

PP&E

NASA recorded a total estimated liability for 

the future closure of PP&E of $66 million in 

FY 2015. This was an increase of $2 million 

over the $64 million recorded in FY 2014.

 

The current proposed decommissioning 

approach for the ISS is to execute a controlled 

targeted deorbit to a remote ocean location. 

This is consistent with the approach used to 

deorbit other space vehicles such as Russia’s 

Progress, Europe’s Automated Transfer 

Vehicle (ATV) and Japan’s H-II Transfer 

Vehicle (HTV). The documented target 

reliability for this decommissioning approach 

is 99 percent. Prior to decommissioning the 

ISS, any hazardous materials on board the 

ISS would be removed or jettisoned. As a 

result, only residual quantities of hazardous, 

toxic, and radioactive materials would 

remain prior to the decommissioning. 

Based on past experience with the re-entry of 

satellites, larger portions or fragments of the 

ISS would be expected to survive the thermal and aerodynamic stresses of re-entry. 

However, the historical disposal of satellites 

and vehicles into broad ocean areas with a 

controlled deorbit has left little evidence of 

their re-entry. Any remaining contamination 

in the ISS debris field would not be expected 

to have a substantive impact on marine life. 

Therefore, the probability of NASA incurring 
Financials

Page 94 NASA FY 2015 Agency Financial Report

environmental cleanup costs related to the 

ISS is remote and no estimate for such costs 

has been developed or reported in these financial statements.

Asbestos 

Effective in FY 2013, NASA and other Federal government agencies are required to 

accrue and/or disclose the costs and the 

associated liabilities for abatement of both 

friable and non-friable asbestos. NASA 

maintains numerous structures and facilities across each of the Centers which are 

known to contain asbestos. Based on work 

completed to date, NASA has determined 

that information regarding both the quantity 

of asbestos and the costs associated with 

the removal and disposal of asbestos is insufficient to reasonably estimate the liability 

associated with the removal and disposal of 

asbestos.

As prescribed in FASAB Technical Release 

10, Implementation Guidance on Asbestos 

Cleanup Costs Associated with Facilities 

and Installed Equipment, NASA determined 

that completing site-specific inventories of 

asbestos, and gathering reliable cost estimates regarding the removal and disposal 

of asbestos, would cost an estimated $22 

million for FY 2015 and FY 2014.

Note 11: Other Liabilities

Other Liabilities are comprised of intragovernmental liabilities and liabilities with public 

entities. Other Accrued Liabilities primarily 

consist of the accrual of contractor costs 

for goods and services. The period of performance for contractor contracts typically 

spans the duration of NASA programs, which 

could be for a number of years prior to final 

delivery of the product. In such cases, NASA 

records a cost accrual throughout the fiscal 

year as the work is performed. Advances 

from Others primarily consists of payments 

received from other Federal agencies in advance of the performance of services under 

reimbursable agreements. Other Liabilities 

also includes Federal employee payroll and 

benefit liabilities, including unfunded annual 

leave and funded sick leave that has been 

earned but not taken, and salaries and wages that have been earned but are unpaid.

(In Millions of Dollars) 2015 2014

Current Non-Current Total Current Non-Current Total

Intragovernmental Liabilities:

Advances From Others $ 41 $ — $ 41 $ 56 $ — $ 56 

Workers’ Compensation 4 6 10 5 6 11

Employer Contributions and Payroll Taxes 12 — 12 10 — 10

Other Accrued Liability 57 — 57 5 — 5

Total Intragovernmental 114 6 120 76 6 82

Unfunded Annual Leave — 208 208 — 209 209

Accrued Funded Payroll 64 — 64 61 — 61

Advances from Others 118 — 118 90 — 90

Employer Contributions and Payroll Taxes 6 — 6 5 — 5

Liability for Deposit and Clearing Funds 12 — 12 5 — 5

Contingent Liabilities — 1 1 — 36 36

Other Accrued Liabilities 1,372 — 1,372 1,185 — 1,185

Total Public 1,572 209 1,781 1,346 245 1,591

Total Other Liabilities $ 1,686 $ 215 $ 1,901 $ 1,422 $ 251 $ 1,673
Financials

NASA FY 2015 Agency Financial Report Page 95

Note 12: Commitments and 

Contingencies

NASA is a party in various administrative 

proceedings, court actions (including tort 

suits), and claims. For cases in which management and legal counsel believe it is probable that the outcomes will result in a loss to 

NASA, contingent liabilities are recorded. 

There were cases reviewed by legal counsel 

where the probable future measurable loss 

is remote and as such no contingent liability 

has been recorded in connection with these 

cases. 

There are several cases where the likelihood 

of loss is reasonably possible, with the loss 

estimated up to $190 million for September 

30, 2015.

There are certain contracts which may contain provisions regarding contingent obligations to fund accumulated unfunded employee benefit plans upon contract termination. 

Currently, these potential liabilities are not 

measurable.

(In Millions of Dollars) 2015 2014

Contingent Liabilities $ 1 $ 36 

Total Contingent Liabilities $ 1 $ 36
Financials

Page 96 NASA FY 2015 Agency Financial Report

Note 13: Intragovernmental 

Cost and Exchange Revenue

Intragovernmental costs and revenue are 

exchange transactions made between 

NASA and other Federal government entities. Costs and revenue with the Public result from transactions between NASA and 

non-Federal entities. Reimbursable agreements shall be priced based on cost principles to reasonably reflect the actual cost 

for the goods and services provided to the 

customer. 

(In Millions of Dollars) 2015 2014

Strategic Goal 1 – Expand the frontiers of knowledge, capability, and

opportunity in space

 Intragovernmental Costs 

 Public Costs 

 Total Gross Costs 

 Less:

 Intragovernmental Earned Revenue 

 Public Earned Revenue 

 Total Earned Revenue 

 Net Cost 

Strategic Goal 2 – Advance understanding of Earth and develop 

technologies to improve the quality of life on our home planet

 Intragovernmental Costs 

 Public Costs 

 Total Gross Costs 

 Less:

 Intragovernmental Earned Revenue 

 Public Earned Revenue 

Total Earned Revenue 

 Net Cost 

Strategic Goal 3 – Serve the American public and accomplish our 

Mission by effectively managing our people, technical capabilities, 

and infrastructure 

 Intragovernmental Costs 

 Public Costs 

 Total Gross Costs 

Less:

Intragovernmental Earned Revenue

Public Earned Revenue

Total Earned Revenue

Net Cost

 Net Cost of Operations 

$ 381

12,581

$ 403

11,385

12,962 11,788

231

 87

196

 81

318 277

$ 12,644 $ 11,511

$ 155

 3,586

$ 131

 3,515

 3,741 3,646

 1,792

 47

1,686

 45

 1,839 1,731

$ 1,902 $ 1,915

$ 558

4,600

$ 596

4,299

5,158 4,895

 40

94

55

72

134 127

$ 5,024 $ 4,768

$ 19,570 $ 18,194

Note 14: Apportionment 

Categories of Obligations 

Incurred: Direct vs. 

Reimbursable Obligations

Category A consists of amounts requested 

to be apportioned annually and distributed 

for each calendar quarter in the fiscal year. 

Category B consists of amounts requested 

(In Millions of Dollars) 2015 2014

Direct Obligations:

Category A $ 1 $ 1

Category B 18,273 17,786

Reimbursable Obligations:

Category B

Total Obligations Incurred

 2,797 2,566

$ 21,071 $ 20,353

to be apportioned on a basis other than calendar quarters, such as time periods other 

than quarters, activities, projects, objects, or 

a combination thereof.
Financials

NASA FY 2015 Agency Financial Report Page 97

Note 15: Explanation of 

Differences Between the 

Statement of Budgetary 

Resources (SBR) and the 

Budget of the U.S. Government

The FY 2017 Budget of the United States 

Government (President’s Budget), which 

presents the actual amounts for the year 

ended September 30, 2015, has not been 

published as of the issue date of these financial statements. On approval of the Administration, NASA will publish its FY 2017

President’s Budget Request on the NASA 

web site at: 

http://www.nasa.gov/news/budget

NASA reconciled the amounts of the FY 

2014 column on the Statement of Budgetary Resources (SBR) to the actual amounts 

for FY 2014 in the FY 2016 President’s Budget for budgetary resources, obligations incurred, distributed offsetting receipts, and 

net outlays as presented below.

Distributed 

Offsetting

Receipts

Budgetary 

(In Millions of Dollars) Resources Obligations Net Outlays

Combined Statement of Budgetary Resources $ 21,504 $ 20,353 $ (5) $ 17,092 

Included on SBR, not in President's Budget

Expired Accounts (218) (83) — — 

Distributed Offsetting Receipts — — 5 7

Budget of the United States Government $ 21,286 $ 20,270 $ — $ 17,099 

The difference between the SBR and the President’s Budget represents expired accounts 

and distributed offsetting receipts reported on the SBR but not in the President’s Budget.

Note 16: Undelivered Orders 

at the End of the Period

Undelivered Orders represent the amount 

of goods and/or services ordered to perform 

NASA’s mission objectives, which have not 

been received. The total Undelivered Orders 

at the end of the period totaled $7.2 billion 

and $7.4 billion as of September 30, 2015 

and September 30, 2014, respectively.
Financials

Page 98 NASA FY 2015 Agency Financial Report

Note 17: Reconciliation of 

Net Cost to Budget

SFFAS No. 7, Accounting for Revenue and 

Other Financing Sources and Concepts for 

Reconciling Budgetary and Financial Accounting, requires a reconciliation of proprietary and budgetary accounting information. 

Accrual-based measures used in the Statement of Net Cost differ from the obligationbased measures used in the Statement of 

Budgetary Resources. This reconciliation 

shows the relationship between the net obligations derived from the Statement of Budgetary Resources and net costs of operations derived from the Statement of Net Cost 

by identifying and explaining key items that 

affect one statement but not the other.

(In Millions of Dollars) 2015 2014

Resources Used to Finance Activities

Budgetary Resources Obligated

Obligations Incurred $ 21,071 $ 20,353

Less: Spending Authority from Offsetting Collections and Recoveries 3,067 2,840

Net Obligations 18,004 17,513

Other Resources

Donations & Forfeitures of Property — 7 

Transfers In/Out Without Reimbursements 31 49

Imputed Financing from Costs Absorbed by Others 156 178

Net Other Resources Used to Finance Activities 187 234

Total Resources Used to Finance Activities 18,191 17,747

Resources Used to Finance Items Not Part of the Net Cost of Operations

Change in Budgetary Resources Obligated for Goods, Services, and

 Benefits Ordered But Not Yet Provided 374 (205)

Resources that Fund Expenses Recognized in Prior Periods (40) (3)

Resources that Finance the Acquisition of Assets (918) (1,104)

Other Resources or Adjustments to Net Obligated Resources that Do

 Not Affect Net Cost of Operations (31) (56)

Total Resources Used to Finance Items Not Part of the Net Cost of Operations (615) (1,368) 

Total Resources Used to Finance the Net Cost of Operations $ 17,576 $ 16,379

Components of Net Cost that Will Not Require or Generate Resources

 in the Current Period

Components Requiring or Generating Resources in Future Periods

Increases in Annual Leave Liability $ — $ 4

Increases in Environmental and Disposal Liability 138 31

Other 8 41

Total Components of Net Cost that Will Require or Generate Resources

 in Future Periods 146 76

Components Not Requiring or Generating Resources

Depreciation 1,652 1,624

Revaluation of Assets or Liabilities (21) —

Other 217 115

Total Components of Net Cost of Operations that Will Not Require

 or Generate Resources 1,848 1,739

Total Components of Net Cost of Operations that Will Not Require

 or Generate Resources in the Current Period 1,994 1,815

Net Cost of Operations $ 19,570 $ 18,194
Financials

NASA FY 2015 Agency Financial Report Page 99

Required Supplementary 

Stewardship Information

Stewardship Investments: 

Research and Development

NASA’s strategic goals and outcomes are 

the basis of the Agency’s performance 

framework and are executed to support its 

strategic plan. To provide a complete analysis of NASA costs, both Research and Development (R&D) and non-R&D costs are 

presented. Descriptions for the strategic 

goals and outcomes associated with these 

costs are also presented.

Research and Development Costs by Strategic Goal

(In Millions of Dollars) 2015 2014 2013 2012 2011

Research and Development Costs

Basic

Strategic Goal 1 $ 2,005 $ 2,020 $ 1,728 $ 851 $ 827

Strategic Goal 2 1,088 970 1,147 329 304

Strategic Goal 3 (1) - - - -

Total Basic Expenses $ 3,092 $ 2,990 $ 2,875 $ 1,180 $ 1,131 

Applied

Strategic Goal 1 $ 1,729 $ 1,828 $ 1,993 $ 1,561 $ 1,497

Strategic Goal 2 622 578 597 480 467

Strategic Goal 3 - 6 - - -

Total Applied Expenses $ 2,351 $ 2,412 $ 2,590 $ 2,041 $ 1,964 

Development

Strategic Goal 1 $ 5,867 $ 4,980 $ 5,005 $ 3,023 $ 4,094

Strategic Goal 2 341 434 177 608 665

Strategic Goal 3 32 8 33 - -

Total Development Expenses $ 6,240 $ 5,422 $ 5,215 $ 3,631 $ 4,759 

Total Research and Development $ 11,683 $ 10,824 $ 10,680 $ 6,852 $ 7,854 

Non-Research and Development Cost

Strategic Goal 1 $ 3,361 $ 2,960 $ 2,770 $ 5,222 $ 5,907

Strategic Goal 2 1,690 1,664 1,742 2,137 1,784

Strategic Goal 3 5,127 4,881 5,027 5,818 4,337

Total Non-Research and Development Expenses $ 10,178 $ 9,505 $ 9,539 $ 13,177 $ 12,028 

Total Expenses $ 21,861 $ 20,329 $ 20,219 $ 20,029 $ 19,882 

NASA makes substantial R&D investments 

for the benefit of the Nation. These amounts 

are expensed as incurred in determining the 

gross cost of operations.

NASA’s R&D programs include activities to 

extend our knowledge of Earth, its space environment, and the Universe, and to invest in 

new aeronautics and advanced space transportation technologies that support the development and application of technologies 

critical to the economic, scientific, and technical competitiveness of the United States.

Investment in R&D refers to those expenses 

incurred to support the search for new or refined knowledge and ideas and for the application or use of such knowledge and ideas 
Financials

Page 100 NASA FY 2015 Agency Financial Report

for the development of new or improved 

products and processes with the expectation of maintaining or increasing national 

economic productive capacity or yielding 

other future benefits.

Strategic Goals and Outcomes:

Strategic Goal 1: Expand the frontiers of 

knowledge, capability, and opportunity in 

space

Strategic Objective 1.1: Expand human 

presence into the solar system and to the 

surface of Mars to advance exploration, science, innovation, benefits to humanity, and 

international collaboration.

Major Programs Include:

• 

• 

• 

• 

Orion Multi-Purpose Crew Vehicle Program

Space Launch System (SLS) Program

Exploration Ground Systems (EGS) Program

Advanced Exploration Systems (AES)

Outcomes:

• 

• 

• 

Achieve critical milestones in development of new systems for the human exploration of deep space. 

Develop a new transportation system 

that includes a crew capsule, a heavy-lift 

launch vehicle, and supporting ground 

facilities and systems.

Develop the technologies and capabilities for in-space propulsion, in-space operations, long-duration habitation, and 

other systems to support humans in hostile environments.

Strategic Objective 1.2: Conduct research 

on the International Space Station (ISS) to 

enable future space exploration, facilitate a 

commercial space economy, and advance 

the fundamental biological and physical sciences for the benefit of humanity.

Major Programs Include:

• 

• 

• 

International Space Station Program

Human Research Program

Human Space Flight Operations Program

Outcomes: 

• 

• 

• 

• 

• 

Sustain the operation and full use of the 

International Space Station (ISS) and expand efforts to utilize the ISS as a National Laboratory for scientific, technological, 

diplomatic, and educational purposes 

and for supporting future objectives in 

human space exploration.

Advance benefits to humanity through 

research.

Enable a commercial demand-driven 

market in low Earth orbit (LEO).

Enable long-duration human spaceflight 

beyond LEO.

Provide a basis for international exploration partnerships.

Strategic Objective 1.3: Facilitate and utilize 

U.S. commercial capabilities to deliver cargo 

and crew to space.

Major Programs Include:

• 

• 

Commercial Crew Program

Commercial Cargo Program

Outcomes: 

• U.S. commercial space transportation 

capabilities will provide safe, reliable, 

and cost effective access to and from 

LEO and the ISS for crew and cargo.
Financials

NASA FY 2015 Agency Financial Report Page 101

Strategic Objective 1.4: Understand the Sun 

and its interactions with Earth and the solar 

system, including space weather.

Major Programs Include:

• 

• 

• 

• 

Heliophysics Research Program

Living with a Star Program

Solar Terrestrial Probes Program

Heliophysics Explorer Program

Outcomes: 

• Increased understanding of the heliosphere (the extended atmosphere of the 

Sun), including what causes the Sun to 

vary, how do the geospace, planetary 

space environments and the heliosphere 

respond, and what are the impacts on 

humanity.

Strategic Objective 1.5: Ascertain the content, origin, and evolution of the solar system and the potential for life elsewhere.

Major Programs Include:

• 

• 

• 

• 

• 

• 

Planetary Science Research Program

Discovery Program

New Frontiers Program

Mars Exploration Program

Outer Planets Program

Planetary Technology Program

Outcomes: 

• Continue to expand knowledge of the 

solar system, seeking to answer fundamental questions: How did our solar 

system form and evolve? Is there life beyond Earth? What are the hazards to life 

on Earth? 

Strategic Objective 1.6: Discover how the 

universe works, explore how it began and 

evolved, and search for life on planets 

around other stars.

Major Programs Include:

• 

• 

• 

• 

• 

• 

Astrophysics Research Program

Cosmic Origins Program

Physics of the Cosmos Program

Exoplanet Exploration Program

Astrophysics Explorer Program

James Webb Space Telescope (Webb)

Outcomes: 

• Further understanding of the universe 

and how it works, its history, as well as 

the continued search for life beyond our 

Solar System.

Strategic Objective 1.7: Transform NASA 

missions and advance the Nation’s capabilities by maturing crosscutting and innovative 

space technologies.

Major Programs Include:

• 

• 

• 

Crosscutting Space Technology Development (CSTD)

Exploration Technology Development 

(ETD)

Small Business Innovation Research 

/ Small Business Technology Transfer 

(SBIR/STTR)

Outcomes: 

• 

• 

• 

Develop new pioneering technologies, 

increasing the Nation’s capability to perform space science, operate in space, 

and enable deep space exploration.

Strengthen our Nation’s leadership in 

space-related science, technology, and 

industrial base.

Foster a technology-based U.S. economy.
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Page 102 NASA FY 2015 Agency Financial Report

Strategic Goal 2: Advance understanding of Earth and develop technologies to 

improve the quality of life on our home 

planet.

Strategic Objective 2.1: Enable a revolutionary transformation for safe and sustainable 

U.S. and global aviation by advancing aeronautics research.

Major Programs Include:

• 

• 

• 

• 

Airspace Operations and Safety Program

Advance Air Vehicles Program

Integrated Systems Research Program

Transformative Aeronautics Concepts 

Program

Outcomes: 

• 

• 

Enable a revolutionary transformation of 

the aviation system to improve our quality of life and productivity on Earth.

Contributes unique innovations to aviation through research activities. These 

innovations serve as key enablers for the 

role of U.S. commercial aviation in sustaining American commerce and safe, 

environmentally sustainable mobility, 

and hence the Nation’s economic wellbeing.

Strategic Objective 2.2: Advance knowledge 

of Earth as a system to meet the challenges 

of environmental change, and to improve life 

on our planet.

Major Programs Include:

• 

• 

• 

• 

• 

• 

Earth Science Research Program

Earth Systematic Missions Program

Earth System Science Pathfinders Program

Earth Science Multi-Mission Operations 

Program

Applied Sciences Program

Earth Science Technology Program

Outcomes: 

• NASA’s Earth science programs shape 

an interdisciplinary view of Earth, exploring the interaction among the atmosphere, oceans, ice sheets, land surface 

interior, and life itself, which enables scientists to measure global and climate 

changes and to inform decisions by Government, organizations, and people.

Strategic Objective 2.3: Optimize Agency 

technology investments, foster open innovation, and facilitate technology infusion, ensuring the greatest national benefit.

Major Programs Include:

• Partnership Development and Strategic 

Integration

Outcomes: 

• 

• 

• 

Optimization of NASA’s technology portfolio.

Enabling of critical technology development and open innovation.

Maximized transfer of NASA technology 

to U.S. partners.

Strategic Objective 2.4: Advance the Nation’s Science, Technology, Engineering, 

and Math (STEM) education and workforce 

pipeline by working collaboratively with other agencies to engage students, teachers, 

and faculty in NASA’s missions and unique 

assets.

Major Programs Include:

• 

• 

Aerospace Research & Career Development Program

STEM Education and Accountability Program

Outcomes: 

• Federal agencies work together to im-
Financials

NASA FY 2015 Agency Financial Report Page 103

prove the quality of science, technology, 

engineering, and math (STEM) education in the United States.

NASA will increase impact on the Nation’s STEM education and workforce 

pipeline through the extension of STEM 

based internships, scholarships, and fellowships and the contribution of unique 

NASA mission and asset driven institution engagement, experiential learning, 

and professional development opportunities.

• 

Strategic Goal 3: Serve the American 

public and accomplish our Mission by effectively managing our people, technical 

capabilities, and infrastructure.

Strategic Objective 3.1: Attract and advance 

a highly skilled, competent, and diverse 

workforce, cultivate an innovative work environment, and provide the facilities, tools, 

and services needed to conduct NASA’s 

missions.

Major Programs Include:

• 

• 

• 

• 

Center Management and Operations

Agency Management

Institutional Construction of Facilities 

(CoF)

Environmental Compliance and Restoration

Outcomes: 

• Effective management of human capital, 

finance, information technology, infrastructure, acquisitions, security, real and 

personal property, occupational health 

and safety, equal employment opportunity and diversity, small business programs, external relations, internal and 

external communications, stakeholder 

engagement, and other essential corporate functions.

• 

• 

Sustainable management of NASA’s infrastructure.

NASA will have a diverse workforce infused with the spirit of innovation.

Strategic Objective 3.2: Ensure the availability and continued advancement of strategic, 

technical, and programmatic capabilities to 

sustain NASA’s Mission.

Major Programs Include:

• 

• 

• 

• 

• 

Space Communications and Navigation 

(SCaN)

Launch Services Program (LSP)

Rocket Propulsion Testing (RPT)

Programmatic Construction of Facilities

Strategic Capabilities Assets Program 

(SCAP)

Outcomes: 

• Key capabilities and critical assets will be 

available to NASA and other entities in 

support of NASA’s missions.

Strategic Objective 3.3: Provide secure, effective, and affordable information technologies and services that enable NASA’s Mission.

Major Programs Include:

• Agency IT Services Program

Outcomes: 

• 

• 

IT enablement of NASA’s mission and vision will be optimized.

A seamless collaborative and mobile 

work environment that safeguards NASA’s information assets will be created.
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Page 104 NASA FY 2015 Agency Financial Report

Strategic Objective 3.4: Ensure effective 

management of NASA programs and operations to complete the mission safely and 

successfully.

Major Programs Include:

• 

• 

• 

Office of the Chief Engineer (OCE)

Office of Safety and Mission Assurance 

(OSMA)

Office of the Chief Health and Medical 

Officer (OCHMO)

Outcomes: 

• 

• 

NASA will protect the health and safety 

of the NASA workforce.

Safety and Mission Success will improve 

the likelihood that NASA’s programs, 

projects, and operations are completed 

safely and successfully.
Financials

NASA FY 2015 Agency Financial Report Page 105

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Financials

Page 106 NASA FY 2015 Agency Financial Report

Required Supplementary 

Information

Combining Schedule of Budgetary Resources

For the Fiscal Year Ended September 30, 2015

Safety, 

Security 

Space and Mission 

(In Millions of Dollars) Operations Science Exploration Aeronautics Services Education

Budgetary Resources:

Unobligated Balance, Brought Forward, October 1 $ 196 $ 303 $ 115 $ 23 $ 232 $ 30 

Recoveries of Prior Year Unpaid Obligations 45 41 63 7 61 2 

Other Changes in Unobligated Balance (3) (12) (4) (2) (18) (4)

Unobligated Balance from Prior Year Budget Authority, Net 238 332 174 28 275 28 

Appropriations 3,822 5,243 4,367 642 2,759 119 

Spending Authority from Offsetting Collections 4 2 1 — 2,375 —

Total Budgetary Resources $ 4,064 $ 5,577 $ 4,542 $ 670 $ 5,409 $ 147

Status of Budgetary Resources: 

Obligations Incurred $ 3,844 $ 5,293 $ 4,482 $ 656 $ 5,151 $ 112 

Unobligated Balance, End of Year: 

Apportioned 169 273 58 12 247 33 

Unapportioned 51 11 2 2 11 2 

Total Unobligated Balance, End of Period 220 284 60 14 258 35 

Total Status of Budgetary Resources $ 4,064 $ 5,577 $ 4,542 $ 670 $ 5,409 $ 147 

Change in Obligated Balance:

Unpaid Obligations: 

Unpaid Obligations, Brought Forward, October 1 $ 1,490 $ 3,172 $ 1,919 $ 251 $ 1,821 $ 158

Obligations Incurred 3,844 5,293 4,482 656 5,151 112 

Outlays (Gross) (-) (3,700) (5,172) (4,837) (578) (5,052) (109)

Recoveries of Prior Year Unpaid Obligations (-) (45) (41) (63) (7) (61) (2)

Unpaid Obligations, End of Year 1,589 3,252 $ 1,501 322 $ 1,859 159 

Uncollected payments: 

Uncollected Payments, Federal Sources, Brought Forward, October 1 (-) — — — — (988) —

Change in Uncollected Payments, Federal sources — — — — (117) —

Uncollected Payments, Federal Sources, End of Year (-) — — — — (1,105) —

Memorandum (Non-Add) Entries:

Obligated Balance, Start of Year 1,490 3,172 1,919 251 833 158

Obligated Balance, End of Year $ 1,589 $ 3,252 $ 1,501 $ 322 $ 754 $ 159

Budget Authority and Outlays, Net:

Budget Authority, Gross $ 3,826 $ 5,245 $ 4,368 $ 642 $ 5,134 $ 119

Actual Offsetting Collections (-) (4) (2) (1) — (2,258) —

Change in Uncollected Payments, Federal Sources — — — — (117) —

Budget Authority, Net 3,822 5,243 4,367 642 2,759 119

Outlays, Gross 3,700 5,172 4,837 578 5,052 109

Actual Offsetting Collections (-) (4) (2) (1) — (2,258) —

Outlays, Net 3,696 5,170 4,836 578 2,794 109

Distributed Offsetting Receipts (-) — — — — — —

Agency Outlays, Net $ 3,696 $ 5,170 $ 4,836 $ 578 $ 2,794 $ 109
Financials

NASA FY 2015 Agency Financial Report Page 107

Combining Schedule of Budgetary Resources 

For the Fiscal Year Ended September 30, 2015 (continued)

American Construction 

Recovery and 

Office of and Rein- Environmental 

Inspector vestment Space Compliance 

(In Millions of Dollars) General Act Technology and Restoration Other Total

Budgetary Resources:

Unobligated Balance, Brought Forward, October 1 $ 4 $ 3 $ 22 $ 203 $ 20 $ 1,151 

Recoveries of Prior Year Unpaid Obligations — 9 8 19 1 256 

Other Changes in Unobligated Balance (2) (11) — — — (56)

Unobligated Balance from Prior Year Budget Authority, Net 2 1 30 222 21 1,351 

Appropriations 37 — 596 427 1 18,013 

Spending Authority from Offsetting Collections 1 — — 8 420 2,811 

Total Budgetary Resources $ 40 $ 1 $ 626 $ 657 $ 442 $ 22,175 

Status of Budgetary Resources: 

Obligations Incurred $ 38 $ 1 $ 576 $ 495 $ 423 $ 21,071 

Unobligated Balance, End of Year: 

Apportioned — — 49 162 13 1,016 

Unapportioned 2 — 1 — 6 88 

Total Unobligated Balance, End of Period 2 — 50 162 19 1,104 

Total Status of Budgetary Resources $ 40 $ 1 $ 626 $ 657 $ 442 $ 22,175 

Change in Obligated Balance:

Unpaid Obligations: 

Unpaid Obligations, Brought Forward, October 1 $ 4 $ 9 $ 344 $ 804 $ 152 $ 10,124 

Obligations Incurred 38 1 576 495 423 21,071 

Outlays (Gross) (-) (38) (1) (535) (545) (403) (20,970)

Recoveries of Prior Year Unpaid Obligations (-) — (9) (7) (19) (2) (256)

Unpaid Obligations, End of Year 4 — 378 735 170 9,969 

Uncollected payments: 

Uncollected Payments, Federal Sources, Brought Forward, October 1 (-) — — — — — (988)

Change in Uncollected Payments, Federal sources — — — — — (117)

Uncollected Payments, Federal Sources, End of Year (-) — — — — — (1,105)

Memorandum (Non-Add) Entries:

Obligated Balance, Start of Year 4 9 344 804 152 9,136 

Obligated Balance, End of Year $ 4 $ — $ 378 $ 735 $ 170 $ 8,864 

Budget Authority and Outlays, Net:

Budget Authority, Gross $ 38 $ — $ 596 $ 435 $ 421 $ 20,824 

Actual Offsetting Collections (-) (1) — — (8) (420) (2,694)

Change in Uncollected Payments, Federal Sources — — — — — (117)

Budget Authority, Net 37 — 596 427 1 $ 18,013 

Outlays, Gross 38 1 535 545 $ 403 20,970 

Actual Offsetting Collections (-) (1) — — (8) (420) (2,694)

Outlays, Net 37 1 535 537 (17) 18,276 

Distributed Offsetting Receipts (-) — — — — (4) (4)

Agency Outlays, Net $ 37 $ 1 $ 535 $ 537 $ (21) $ 18,272 
Financials

Page 108 NASA FY 2015 Agency Financial Report

Combining Schedule of Budgetary Resources

For the Fiscal Year Ended September 30, 2014 

Safety, 

Security 

Space and Mission 

(In Millions of Dollars) Operations Science Exploration Aeronautics Services Education

Budgetary Resources:

Unobligated Balance, Brought Forward, October 1 $ 170 $ 192 $ 53 $ 15 $ 300 $ 18

Recoveries of Prior Year Unpaid Obligations 115 74 45 8 38 5 

Other Changes in Unobligated Balance — — — — — — 

Unobligated Balance from Prior Year Budget Authority, Net 285 266 98 23 338 23

Appropriations 3,774 5,148 4,113 566 2,793 117

Spending Authority from Offsetting Collections 15 1 2 — 2,083 —

Total Budgetary Resources $ 4,074 $ 5,415 $ 4,213 $ 589 $ 5,214 $ 140

Status of Budgetary Resources: 

Obligations Incurred $ 3,878 $ 5,112 $ 4,098 $ 566 $ 4,982 $ 110

Unobligated Balance, End of Year: 

Apportioned 136 282 107 19 211 25

Unapportioned 60 21 8 4 21 5

Total Unobligated Balance, End of Period 196 303 115 23 232 30

Total Status of Budgetary Resources $ 4,074 $ 5,415 $ 4,213 $ 589 $ 5,214 $ 140

Change in Obligated Balance:

Unpaid Obligations: 

Unpaid Obligations, Brought Forward, October 1 $ 1,604 $ 3,030 $ 1,665 $ 231 $ 1,816 $ 164 

Obligations Incurred 3,878 5,112 4,098 566 4,982 110

Outlays (Gross) (-) (3,877) (4,895) (3,799) (538) (4,940) (111)

Recoveries of Prior Year Unpaid Obligations (-) (115) (74) (45) (8) (38) (5)

Unpaid Obligations, End of Year 1,490 3,173 1,919 251 1,820 158

Uncollected payments: 

Uncollected Payments, Federal Sources, Brought Forward, October 1 (-) — — — — (1,049) —

Change in Uncollected Payments, Federal sources — — — — 61 —

Uncollected Payments, Federal Sources, End of Year (-) — — — — (988) —

Memorandum (Non-Add) Entries:

Obligated Balance, Start of Year 1,604 3,030 1,665 231 767 164 

Obligated Balance, End of Year $ 1,490 $ 3,173 $ 1,919 $ 251 $ 832 $ 158

Budget Authority and Outlays, Net:

Budget Authority, Gross $ 3,789 $ 5,149 $ 4,115 $ 566 $ 4,876 $ 117

Actual Offsetting Collections (-) (15) (1) (2) — (2,144) —

Change in Uncollected Payments, Federal Sources — — — — 61 —

Budget Authority, Net 3,774 5,148 4,113 566 2,793 117

Outlays, Gross 3,877 4,895 3,799 538 4,940 111

Actual Offsetting Collections (-) (15) (1) (2) — (2,144) —

Outlays, Net 3,862 4,894 3,797 538 2,796 111

Distributed Offsetting Receipts (-) — — — — — —

Agency Outlays, Net $ 3,862 $ 4,894 $ 3,797 $ 538 $ 2,796 $ 111
Financials

NASA FY 2015 Agency Financial Report Page 109

Combining Schedule of Budgetary Resources

For the Fiscal Year Ended September 30, 2014 (continued)

American Construction 

Recovery and 

Office of and Rein- Environmental 

Inspector vestment Space Compliance 

(In Millions of Dollars) General Act Technology and Restoration Other Total

Budgetary Resources:

Unobligated Balance, Brought Forward, October 1 $ 4 $ 2 $ 12 $ 247 $ 31 $ 1,044 

Recoveries of Prior Year Unpaid Obligations — 2 14 20 18 339 

Other Changes in Unobligated Balance — — — — (27) (27)

Unobligated Balance from Prior Year Budget Authority, Net 4 4 26 267 22 1,356

Appropriations 37 — 576 522 1 17,647

Spending Authority from Offsetting Collections 1 — — 7 392 2,501

Total Budgetary Resources $ 42 $ 4 $ 602 $ 796 $ 415 $ 21,504

Status of Budgetary Resources: 

Obligations Incurred $ 38 $ 1 $ 580 $ 593 $ 395 $ 20,353

Unobligated Balance, End of Year: 

Apportioned — — 21 203 14 1,018

Unapportioned 4 3 1 — 6 133

Total Unobligated Balance, End of Period 4 3 22 203 20 1,151

Total Status of Budgetary Resources $ 42 $ 4 $ 602 $ 796 $ 415 $ 21,504

Change in Obligated Balance:

Unpaid Obligations: 

Unpaid Obligations, Brought Forward, October 1 $ 4 $ 10 $ 357 $ 723 $ 167 $ 9,771

Obligations Incurred 38 1 580 593 395 20,353

Outlays (Gross) (-) (38) — (578) (493) (392) (19,661)

Recoveries of Prior Year Unpaid Obligations (-) — (2) (14) (20) (18) (339)

Unpaid Obligations, End of Year 4 9 345 803 152 10,124

Uncollected payments: 

Uncollected Payments, Federal Sources, Brought Forward, October 1 (-) — — — — (2) (1,051)

Change in Uncollected Payments, Federal sources — — — — 2 63

Uncollected Payments, Federal Sources, End of Year (-) — — — — — (988)

Memorandum (Non-Add) Entries:

Obligated Balance, Start of Year 4 10 357 723 165 8,720 

Obligated Balance, End of Year $ 4 $ 9 $ 345 $ 803 $ 152 $ 9,136

Budget Authority and Outlays, Net:

Budget Authority, Gross $ 38 $ — $ 576 $ 529 $ 393 $ 20,148

Actual Offsetting Collections (-) (1) — — (7) (394) (2,564)

Change in Uncollected Payments, Federal Sources — — — — 2 63

Budget Authority, Net 37 — 576 522 1 17,647 

Outlays, Gross 38 — 578 493 392 19,661

Actual Offsetting Collections (-) (1) — — (7) (394) (2,564)

Outlays, Net 37 — 578 486 (2) 17,097

Distributed Offsetting Receipts (-) — — — — (5) (5)

Agency Outlays, Net $ 37 $ — $ 578 $ 486 $ (7) $ 17,092
Financials

Page 110 NASA FY 2015 Agency Financial Report

Deferred Maintenance and Repairs

For the Fiscal Years 2015 and 2014

Federal agencies are required to report information related to the estimated cost to 

remedy deferred maintenance of PP&E as 

required supplementary information in accordance with SFFAS No. 42, Deferred 

Maintenance and Repairs. 

Maintenance and repairs (M&R) are activities directed toward keeping fixed assets in 

an acceptable condition. Activities include 

preventive maintenance; replacement of 

parts, systems, or components; and other 

activities needed to preserve or maintain the 

asset. M&R, as distinguished from capital 

improvements, excludes activities directed 

toward expanding the capacity of an asset 

or otherwise upgrading it to serve needs different from, or significantly greater than, its 

current use. Deferred maintenance and repairs (DM&R) are M&R activities that were 

not performed when they should have been 

or were scheduled to be and which, therefore, are put off or delayed for a future period. DM&R reporting enables the Government to be accountable to citizens for the 

proper administration and stewardship of 

its assets. Specifically, DM&R reporting assists users by providing an entity’s realistic 

estimate of DM&R amounts and the effectiveness of asset maintenance practices the 

entities employ in fulfilling their missions.

Facilities, Buildings and Other Structures

It is NASA’s policy to ensure that NASAowned and operated assets are properly 

aligned with the NASA mission and are safe, 

environmentally sound, affordable, the right 

type and size, and in acceptable operating 

condition. NASA’s facilities and equipment 

are maintained in the most cost effective 

fashion to minimize risk to processes and 

products, protect the safety and health of 

personnel and the environment, protect 

and preserve capabilities and capital investments, provide quality work places for 

NASA employees, and enable the Agency’s 

mission. Estimates reported herein include 

DM&R for all facilities on-site or off-site 

that are owned, leased, occupied, or used 

by NASA (NASA Programs or Contractors) 

including heritage assets without regard to 

capitalization thresholds or depreciation status. NASA does not assess DM&R on general land parcels.

Equipment

Pursuant to the cost/benefit considerations 

provided in SFFAS No. 6 and SFFAS No. 

42, NASA has determined that it is not cost 

beneficial to report DM&R on personal property (capital equipment).

Defining and Implementing M&R Policies

NASA uses a Deferred Maintenance parametric estimating method (DM method) in 

order to conduct a consistent condition assessment of its facilities, buildings and other 

structures (including heritage assets). This 

method measures NASA’s current real property asset condition and documents real 

property deterioration. The DM method produces both a cost estimated of DM&R, and 

a Facility Condition Index (FCI). Both measures are indicators of the overall condition 

of NASA’s facilities. The facilities condition 

assessment methodology involves an independent, rapid visual assessment of nine 

different systems within each facility to include: structure, roof, exterior, interior finish-
Financials

NASA FY 2015 Agency Financial Report Page 111

es, heating, ventilating and air conditioning 

(HVAC) systems, electrical, plumbing, conveyance, and program support equipment. 

The DM method is designed for application 

to a large population of facilities; results are 

not necessarily applicable for individual facilities or small populations of facilities. 

Ranking and Prioritizing M&R Activities

NASA typically prioritizes the M&R activities for health, safety, life safety, fire detection and protection, and environmental requirements. NASA also prioritizes the M&R 

projects with a priority on mission critical 

facilities, followed by mission support, then 

Center support. The evaluation of the facility conditions by building type indicates that 

NASA continues to focus M&R activities on 

direct mission-related facilities and infrastructure. 

Factors Considered in Determining Acceptable Condition Standards

NASA applies industry accepted codes and 

standards or equipment manufacturer’s recommendations to all facilities related work. 

The standard of condition depends on the 

intended use, the mission criticality, utilization or health and safety aspects of that use. 

Changes from Prior Year

As of September 30, 2015, $2.3 billion of 

DM&R was estimated to be required to return real property assets to an acceptable 

operating condition. This is an overall decrease of $27 million from September 30, 

2014. The decrease in the DM&R estimate 

can be attributed to NASA’s repair by replacement program. 

Deferred Maintenance and Repair Costs

(In Millions of Dollars) 2015 2014

Asset Category

 General PP&E - Real Property $ 2,320 $ 2,343

 Heritage Assets - Real Property 6 10

Total Deferred Maintenance and 

Repair Costs $ 2,326 $ 2,353 
Financials

Page 112 NASA FY 2015 Agency Financial Report

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Financials

NASA FY 2015 Agency Financial Report Page 113

NASA OFFICE OF INSPECTOR GENERAL 

SUITE 8U37, 300 E ST SW 

WASHINGTON, D.C. 20546-0001 

November 13, 2015 

TO: Charles F. Bolden, Jr. 

Administrator 

David P. Radzanowski 

Chief Financial Officer 

SUBJECT: Audit of the National Aeronautics and Space Administration’s Fiscal Year 2015 

Financial Statements (Report No. IG-16-006; Assignment No. A-15-004-00)

Dear Administrator Bolden and Mr. Radzanowski: 

The Office of Inspector General contracted with the independent public accounting firm 

CliftonLarsonAllen LLP (CLA) to audit NASA’s fiscal year (FY) 2015 financial statements. CLA 

performed the audit in accordance with the Government Accountability Office’s Government 

Auditing Standards and the Office of Management and Budget’s Bulletin No. 15-02, “Audit 

Requirements for Federal Financial Statements.”

This audit resulted in an unmodified opinion on NASA’s FY 2015 financial statements (see attached 

Enclosure). An unmodified opinion means the financial statements present fairly, in all material 

respects, the financial position and results of NASA’s operations in conformity with U.S. generally 

accepted accounting principles. 

CLA also reported on NASA’s internal control and compliance with laws and regulations. For 

FY 2015, CLA identified two significant deficiencies: (1) accounting and reporting of Agency-wide 

asbestos-related cleanup costs and (2) information technology configuration management. CLA 

also reported noncompliance with the Single Audit Act, as amended. 

CLA is responsible for the enclosed report and the conclusions expressed therein. Accordingly, we 

do not express an opinion on NASA’s financial statements, internal control over financial reporting, 

or compliance with certain laws and regulations, including but not limited to the Federal Financial 

Management Improvement Act of 1996. 
Financials

Page 114 NASA FY 2015 Agency Financial Report

2 

In fulfilling our responsibilities under the Chief Financial Officers Act of 1990, we provided 

oversight, coordination, and technical support to CLA and NASA personnel. We also monitored the 

progress of the audit, reviewed CLA’s reports and related documentation, inquired of CLA’s 

representatives, and ensured the firm met contractual requirements.

We appreciate the courtesies extended to our team during the audit. Please contact Jim Morrison, 

Assistant Inspector General for Audits, if you have any questions about the enclosed reports. 

Sincerely, 

Paul K. Martin

Inspector General

Enclosure 
Financials

NASA FY 2015 Agency Financial Report Page 115

CliftonLarsonAllen LLP

www.cliftonlarsonallen.com

INDEPENDENT AUDITORS’ REPORT

National Aeronautics and Space Administration:

Administrator

Inspector General

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of the National 

Aeronautics and Space Administration (NASA), which comprise the consolidated balance sheet 

as of September 30, 2015, and the related consolidated statements of net cost and changes in 

net position, and the combined statement of budgetary resources for the year then ended, and 

the related notes to the consolidated financial statements (collectively referred to as financial 

statements).

Management’s Responsibility for the Financial Statements

NASA management is responsible for the preparation and fair presentation of these financial 

statements in accordance with accounting principles generally accepted in the United States of 

America (U.S.); and this includes the design, implementation, and maintenance of internal 

control relevant to the preparation and fair presentation of financial statements that are free from 

material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We 

conducted our audit in accordance with auditing standards generally accepted in the U.S.; the 

standards applicable to financial audits contained in Government Auditing Standards, issued by 

the Comptroller General of the United States; and Office of Management and Budget (OMB)

Bulletin No. 15-02, Audit Requirements for Federal Financial Statements (OMB Bulletin 15-02).

Those standards and OMB Bulletin 15-02 require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free from material 

misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditors’ 

judgment, including the assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments, the auditor 

considers internal control relevant to the entity’s preparation and fair presentation of the 

financial statements in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 

entity’s internal control. Accordingly, we express no such opinion. An audit also includes 

evaluating the appropriateness of accounting policies used and the reasonableness of
Financials

Page 116 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

significant accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a 

basis for our audit opinion.

Opinion on the Financial Statements

In our opinion, the financial statements referred to above present fairly, in all material respects, 

the financial position of NASA as of September 30, 2015 and its net cost, changes in net 

position, and budgetary resources for the year then ended, in accordance with accounting 

principles generally accepted in the U.S.

Other Matters

Prior Year Financial Statements

NASA’s financial statements as of and for the year ended September 30, 2014, were audited by 

other auditors, whose Independent Auditors’ Report dated November 14, 2014 expressed an 

unmodified opinion on those financial statements.

Required Supplementary Information

Accounting principles generally accepted in the U.S. issued by the Federal Accounting 

Standards Advisory Board (FASAB) require that NASA’s Management Discussion and Analysis 

(MD&A) in the Agency Financial Report (AFR), and Required Supplementary Information (RSI)

and Required Supplementary Stewardship Information (RSSI) following the notes to the 

financial statements, be presented to supplement the financial statements. Such information, 

although not a part of the financial statements, is required by FASAB, who considers it to be an 

essential part of financial reporting for placing the financial statements in an appropriate

operational, economic, or historical context. We have applied certain limited procedures to the 

MD&A and other RSI in accordance with auditing standards generally accepted in the U.S., 

which consisted of inquiries of management about the methods of preparing the information and 

comparing the information for consistency with management's responses to our inquiries, the 

financial statements, and other knowledge we obtained during our audit of the financial 

statements. We do not express an opinion or provide any assurance on the MD&A, RSI, and 

RSSI because the limited procedures do not provide us with sufficient evidence to express an 

opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a 

whole. All other sections referred to in the AFR table of contents, exclusive of the Independent 

Auditors’ Report, Financial Statements and Notes, MD&A, RSI, and RSSI, is presented for 

purposes of additional analysis and is not a required part of the financial statements. This 

information has not been subjected to the auditing procedures applied in the audit of the 

financial statements, and accordingly, we do not express an opinion or provide any assurance 

on it.
Financials

NASA FY 2015 Agency Financial Report Page 117

INDEPENDENT AUDITORS’ REPORT (Continued)

Report on Internal Control over Financial Reporting and on Compliance and Other 

Matters, Based on an Audit of Financial Statements Performed in Accordance 

with Government Auditing Standards

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered NASA’s internal 

control over financial reporting (internal control) to determine the audit procedures that are 

appropriate in the circumstances for the purpose of expressing our opinion on the financial 

statements, but not for the purpose of expressing an opinion on the effectiveness of NASA’s

internal control. Accordingly, we do not express an opinion on the effectiveness of NASA’s 

internal control. We did not test all internal controls relevant to operating objectives as broadly 

defined by the Federal Managers’ Financial Integrity Act of 1982.

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to 

prevent, or detect and correct, misstatements on a timely basis. A material weakness is a 

deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable 

possibility that a material misstatement of NASA’s financial statements will not be prevented, or 

detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination 

of deficiencies, in internal control that is less severe than a material weakness, yet important 

enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph 

of this section and was not designed to identify all deficiencies in internal control that might be 

material weaknesses or significant deficiencies and therefore, material weaknesses or 

significant deficiencies may exist that were not identified. Given these limitations, during our 

audit we did not identify any deficiencies in internal control that we consider to be material 

weaknesses. However, we did identify two deficiencies in internal control, listed below and 

described in Exhibit A, which we consider significant deficiencies:

•

•

Accounting and Reporting for Asbestos-Related Cleanup Costs

Information Technology Configuration Management

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether NASA’s financial statements are free 

from material misstatement, we performed tests of its compliance with certain provisions of 

laws, regulations, contracts, and grant agreements, noncompliance with which could have a

material effect on the financial statements and related disclosures. However, providing an

opinion on compliance with those provisions was not an objective of our audit, and accordingly, 

we do not express such an opinion.

The results of our tests disclosed one instance of noncompliance, which is required to be 

reported in accordance with Government Auditing Standards or OMB Bulletin 15-02. This

noncompliance matter is listed below, and described in Exhibit B:

• Non-Compliance with the Single Audit Act (amended 1996) and Title 2 of the Code of 

Federal Regulations, Uniform Administrative Requirements, Cost Principles, and Audit 

Requirements for Federal Awards
Financials

Page 118 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

Compliance with FFMIA Requirements

Under the Federal Financial Management Improvement Act (FFMIA), we are required to report 

whether the financial management systems used by NASA comply substantially with FFMIA 

Section 803(a) requirements. To meet this requirement, we performed tests of compliance with 

the (1) Federal financial management systems requirements, (2) applicable Federal accounting 

standards, and (3) the United States Standard General Ledger (USSGL) at the transaction level. 

However, providing an opinion on compliance with FFMIA was not an objective of our audit, and 

accordingly, we do not express such an opinion. The results of our tests of FFMIA Section 

803(a) requirements disclosed no instances in which NASA’s financial management systems 

did not substantially comply with (1) Federal financial management systems requirements, (2) 

applicable Federal accounting standards, or (3) the USSGL at the transaction level.

Management’s Responsibility for Internal Control and Compliance

Management is responsible for (1) evaluating the effectiveness of internal control over financial 

reporting based on criteria established under the Federal Managers’ Financial Integrity Act 

(FMFIA), (2) providing a statement of assurance on the overall effectiveness on internal control 

over financial reporting, (3) ensuring NASA’s financial management systems are in substantial 

compliance with FFMIA requirements, and (4) complying with other applicable laws, regulations, 

contracts, and grant agreements.

Auditors’ Responsibilities

We are responsible for: (1) obtaining a sufficient understanding of internal control over financial 

reporting to plan the audit, (2) testing whether NASA’s financial management systems comply 

substantially with the FFMIA requirements referred to above, and (3) testing compliance with 

certain provisions of laws, regulations, contracts, and grant agreements which could have a 

material effect on the financial statements.

We did not evaluate all internal controls relevant to operating objectives as broadly established 

by the FMFIA, such as those controls relevant to preparing statistical reports and ensuring 

efficient operations. We limited our internal control testing to testing controls over financial 

reporting. Because of inherent limitations in internal control, misstatements due to error or fraud, 

losses, or noncompliance may nevertheless occur and not be detected. We also caution that 

projecting our audit results to future periods is subject to risk that controls may become 

inadequate because of changes in conditions or that the degree of compliance with controls 

may deteriorate. In addition, we caution that our internal control testing may not be sufficient for 

other purposes.

We did not test compliance with all laws, regulations, contracts, and grant agreements

applicable to NASA. We limited our tests of compliance to certain provisions of laws,

regulations, contracts, and grant agreements which could have a material effect on the financial 

statements. However, providing an opinion on compliance with those provisions was not an 

objective of our audit, and accordingly, we do not express such an opinion. We caution that 

noncompliance may occur and not be detected by these tests and that such testing may not be 

sufficient for other purposes. Also, our work on FFMIA would not necessarily disclose all 

instances of noncompliance with FFMIA requirements.
Financials

NASA FY 2015 Agency Financial Report Page 119

INDEPENDENT AUDITORS’ REPORT (Continued)

Status of Prior Year’s Control Deficiencies 

The fiscal year (FY) 2014 Independent Auditors’ Report dated November 14, 2014 did not 

identify any material weaknesses or significant deficiencies in internal control over financial 

reporting, or instances of noncompliance with tested provisions of laws, regulations, contracts,

and grants.

Purpose of the Report on Internal Control Over Financial Reporting and the Report on 

Compliance and Other Matters

The purpose of the Report on Internal Control Over Financial Reporting and the Report on 

Compliance and Other Matters sections of this report is solely to describe the scope of our 

testing of internal control and compliance and the result of that testing, and not to provide an 

opinion on the effectiveness of NASA’s internal control or on compliance. These reports are an 

integral part of an audit performed in accordance with Government Auditing Standards in 

considering NASA’s internal control and compliance. Accordingly, these reports are not suitable 

for any other purpose.

Management’s Response to Findings 

Management’s response to the findings identified in our report is presented in Exhibit C.

• We have met with certain NASA management officials to review their response and 

some additional information they provided, and we still maintain that these findings are 

significant deficiencies or reportable noncompliance matters, as defined by professional 

standards.

CliftonLarsonAllen LLP

Calverton, Maryland

November 13, 2015
Financials

Page 120 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

1. Accounting and Reporting for Asbestos-Related Cleanup Costs

The Federal Accounting Standards Advisory Board (FASAB) has issued a variety of technical 

communications beginning in 1998 relating to the accounting for environmental liabilities. 

FASAB Technical Release (TR) 02, Determining Probable and Reasonably Estimable for 

Environmental Liabilities in the Federal Government, set the tone for additional rules and 

guidance in future years for all environmental liabilities. TR 02 notes that federal agencies 

should make “every effort ..... to develop an estimate ” of its environmental liabilities. It goes on 

to note the following – “The fact that an agency does not have a department wide 

comprehensive study completed does not exempt an agency from making its best effort to 

estimate a liability for financial statement purposes, or for recognizing a liability for that portion 

of its obligation that can be estimated.” NASA is applying TR 02 principles in its accounting for 

its environmental liabilities, except with respect to asbestos, resulting in an environment liability 

of $1.4 billion at September 30, 2015. NASA has yet to complete its study of asbestos, but that 

should not prevent NASA from making its best effort to estimate a full liability for the abatement 

of asbestos.

Since 2006, the FASAB provided additional rules and specific implementation guidance for the 

recognition and measurement of Asbestos-related cleanup costs to further clarify previously 

issued pronunciations in the accounting standards. In 2006, the FASAB issued Technical 

Bulletin (TB) 2006-1, Recognition and Measurement of Asbestos-Related Cleanup Costs, (TB 

2006-1). This TB made reference to FASAB TR 02 referred to above. In 2010, the FASAB 

issued Technical Release 10, Implementation Guidance on Asbestos Clean Up Costs 

Associated with Facilities and Installed Equipment (TR 10).

Even though TR 10 was issued in 2010, in order to provide federal agencies even more time 

(since 2006) to gather the information necessary to comply with the requirements, the 

implementation of TR 10 was delayed until fiscal year (FY) 2013. TR 10 provides federal 

agencies with a variety of methodologies for estimating asbestos-related cleanup costs for each 

real property or group of real properties, as follows:

1. A property-specific cost estimate based on survey data (most accurate, if available); or

2. An extrapolation of historical cost or cost estimates for asbestos cleanup of similar real 

property(ies); or

3. A cost model used for an individual real property or group of similar real properties and 

information from industry-specific cost estimation publications or standardized cost 

factors developed for each state; or

4. Other reasonable methodology.

Many federal agencies implemented this guidance in estimating the asbestos-related cleanup 

costs in FY 2013. In contrast, faced with the difficulties involved in coordinating the efforts of 

various offices at different operating locations throughout the United States, NASA relied on the 

following provision of TR 10 “[i]f the information ... is either not available or not sufficient to 

support assumptions in lieu of actual data, yet the existence of asbestos has been identified ..., 

then the removal of asbestos may be considered probable but not reasonably estimable at that 

time. The existence of asbestos and a statement that such an estimate cannot be made should 

be disclosed in the notes to the financial statements. The agency should estimate and recognize 

any other identifiable costs (e.g., asbestos survey).” As such, in FYs 2013 and 2014, NASA 

quantified and reported only the minimum identifiable costs required by TR 10 – those of 
Financials

NASA FY 2015 Agency Financial Report Page 121

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

completing site-specific inventories (surveys) of asbestos, and gathering reliable cost estimates 

regarding the removal of asbestos at its 14 operating locations.

In 2015, NASA continued to use this basic methodology and did not make any substantial 

attempts to develop a process to gather the information necessary to be able to implement the 

full intended breadth of the requirements, to record an estimate of the anticipated future costs of 

the removal and disposal (abatement) of asbestos containing material at various NASA 

properties. At September 30, 2015, NASA’s reported liability of $22 million is substantially the 

same amount as that recorded in both FYs 2014 and 2013 (the required implementation date of 

TR 10). NASA has taken this approach since FY 2013 based on its continued assessment that 

data was not sufficient to make a more reasonable estimate of the full cost of the asbestos 

abatement.

However, during our audit we concluded that sufficient information has been available for NASA 

to make a reasonable estimate of its future asbestos abatement costs at September 30, 2015. 

FASAB No. 5, Accounting for Liabilities in the Federal Government, provides guidance for

agencies to develop estimates of types of liabilities in preparing their financial statements. Such 

guidance allows management to make assumptions in developing estimates with the 

information available at a point in time, and adjust such estimate in future years when actual or 

more extensive information becomes available. We do not believe management has used all 

information available to make a reasonable estimate of the full liability for the abatement of 

asbestos. 

NASA engaged a variety of contractors over several years to conduct surveys in order to 

identify asbestos contamination in its old buildings. Based on these surveys, NASA identified 

substantial instances of asbestos at each of its 14 operating locations across the U.S., which 

currently comprise 46 million square feet in 1,727 buildings. During our site visits to three NASA 

operating locations, our engineers who specialize in the evaluation of asbestos abatement, 

conducted interviews with NASA personnel and inspected a sample of the asbestos surveys 

available for three buildings at one of the visited locations. Our engineers concluded that the 

existing survey information could serve as an excellent starting point for quantifying the 

asbestos abatement liability for financial accounting and reporting purposes. In order to prove 

this point, our engineers used RSMeans, which is an established and widely recognized cost 

estimation tool in the industry, and estimated the asbestos abatement costs for those buildings 

at September 30, 2015 to be approximately $1.6 million. 

The total estimated abatement cost we calculated for just three buildings (360,225 square feet) 

we examined at one operating location was $1.6 million, compared to NASA’s current cost 

estimate for surveys assigned to all of that operating location’s buildings with asbestos 

containing material (121 buildings with 4,034,941 square feet) of $1.4 million. Our estimate 

equates to $4.40 per square foot for asbestos removal versus NASA’s estimate of $0.34 per 

square foot for asbestos surveys. Applying the $4.40 square footage factor to all facilities with 

asbestos would result in a potential liability of $225 million. However, as provided for in 

professional accounting standards, assumptions in developing estimates with the information 

available at a point in time are allowed, with the expectation that such estimates would be 

adjusted in future years when actual or more extensive information becomes available. 

Accordingly, using other data and information available during our audit, we estimated NASA’s 
Financials

Page 122 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

asbestos abatement liability to be approximately $144 million, which we believe would be more 

representative of the initial liability needed for all of NASA’s operating locations. 

We therefore suggested that NASA adjust its financial statements by $122 million, representing 

our estimated asbestos liability of $144 million versus the aforementioned $22 million that is 

reflected in the accompanying financial statements at September 30, 2015. NASA chose not to 

record this additional estimated liability ($122 million) in its FY 2015 financial statements. Since 

this estimated understatement of NASA’s liabilities at September 30, 2015 was not material to 

the financial statements as a whole, we did not modify our opinion on NASA’s FY 2015 financial 

statements.

Based on our audit work, we concluded that NASA has not proactively attempted to apply the 

guidance set forth in the standards issued since FY 2006, especially the specific guidance 

provided in TR 10 issued in FY 2010, to obtain the data necessary to estimate and recognize 

asbestos abatement costs. We believe this data could be provided by the operating locations 

from their site-specific asbestos surveys, similar to the data that we obtained from one operating 

location during our site visit. The survey information could be further enhanced with data 

gathered from NASA’s procurement office and actual abatement projects that have been 

conducted annually at some or all of NASA’s operating locations. NASA Headquarters 

management personnel have not adequately considered, obtained, and utilized information from 

those operating locations who reported to us that they could estimate the asbestos abatement 

costs using their surveys. 

As demonstrated above, there is information available at NASA, at a minimum, to develop a 

cost model for groups of similar real properties with substantial amounts of asbestos. This 

approach is compliant with the methodologies set forth in TR 10, and is consistent with the 

methodologies used by other Federal agencies for the same purpose. 

After we brought this matter to the attention of management and provided proposed solutions, 

NASA prepared a preliminary action plan that details how NASA will improve its asbestos 

liability estimation process, in order to record a liability, which reflects NASA’s estimate for 

asbestos abatement at its operating locations, by September 30, 2016.

We have classified this matter as a significant deficiency in internal control pursuant to the 

American Institute of Certified Public Accountants (AICPA) Clarified Statements on Auditing 

Standards (AU-C). AU-C Section 265, Communicating Internal Control Related Matters in an 

Audit establishes standards and provides guidance on communicating matters related to an 

entity's internal control over financial reporting identified in an audit of financial statements. The 

Standard notes that “The severity of the deficiency or combination of deficiency in internal 

control depends not only on whether a misstatement has actually occurred but also on:

•

•

the magnitude of the potential misstatement resulting from the deficiency or deficiencies,

and

whether there is a reasonable possibility that the entity's controls will fail to prevent, or

detect and correct, a misstatement of an account balance or disclosure. A reasonable

possibility exists when the chance of the future event or events occurring is more than

remote.”

The Standard further states that significant deficiencies “may exist even though the auditor

has not identified misstatements during the audit.”
Financials

NASA FY 2015 Agency Financial Report Page 123

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

As noted above, since FY 2013 when TR 10 was effective, NASA had not yet implemented an 

effective, robust process to obtain the necessary information to be able to adequately recognize 

and measure the cost of abating its substantial instances of asbestos at any of its 14 operating 

locations across the United States. Accordingly, this matter has been classified as a significant 

deficiency in internal control, meriting the attention by those charged with governance of NASA.

Recommendations:

We recommend that NASA management develop and then implement a comprehensive plan to 

record and report liability estimate for the asbestos-related cleanup costs at all operating 

locations, as follows: 

1. NASA Headquarters personnel should obtain and review all completed asbestos surveys, 

as well as any documented asbestos removal costs, and coordinate with the operating 

locations to understand the information and develop a methodology for estimating 

asbestos removal costs. NASA should use one or more of the following methodologies 

outlined in TR 10 for determining, estimating, and recognizing asbestos cleanup costs:

a) A property-specific cost estimate based on survey data (most accurate, if 

available); or

b) An extrapolation of historical cost or cost estimates for asbestos cleanup of similar 

real property(ies); or

c) A cost model used for an individual real property or group of similar real properties 

and information from industry-specific cost estimation publications or standardized 

cost factors developed for each state; or

d) Other reasonable methodologies.

2. Benchmark with other federal agencies that have already implemented the standards 

relating to the accounting for asbestos and determine if and how those practices could be 

applied at NASA.

3. Document the newly established policies and procedures for fiscal year 2016, including 

the reviews that need to take place to ensure consistency of treatment between the 

various operating locations.

4. Provide adequate tools to facilitate the exchange of asbestos-related information between 

the NASA operating locations and the NASA Headquarters.

5. Implement an annual process that requires all operating locations to gather and review 

location-specific information, such as completed asbestos surveys and actual costs 

incurred to remove asbestos, including site preparation and disposal costs. 

6. Implement an agency wide procurement policy to request contractors to break out the 

asbestos site preparation, abatement, and removal costs in the bids that they submit for 

such projects. Otherwise, request each operating location to obtain such information from 

local contractors with asbestos abatement experience. 

7. For the period during which costs of actual abatement projects are not readily available, 

work with the procurement office to develop NASA’s own estimates to use as a 
Financials

Page 124 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

benchmark for securing contracts to perform future asbestos abatement projects, and use 

such amounts in developing NASA’s asbestos liability estimate.

8. To the extent that data specific to the operating locations is not available, utilize industry 

standards and tools (i.e. RSMeans) available to develop asbestos cleanup cost 

estimates.

9. Provide for the accrual estimate to be updated annually to reflect new information 

obtained from asbestos abatement projects, other industry data sources, and updated or 

newly performed asbestos surveys.

10. Provide for the annual revision of the newly implemented policies and procedures until 

the process fully matures. 
Financials

NASA FY 2015 Agency Financial Report Page 125

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

2. Information Technology Configuration Management

Background 

The Government Accountability Office (GAO) has stated that protecting government computer 

systems has never been more important because of the complexity and interconnectivity of 

systems (including Internet and wireless), the ease of obtaining and using hacking tools, the 

steady advances in the sophistication and effectiveness of attack technology, and the 

emergence of new and more destructive attacks. Furthermore, the boundary lines between 

internal and external networks are diminishing as a result of increased interconnectivity. 

Contributing to government organizations security program weaknesses are GAO cited 

challenges such as maintaining software with the current versions and latest security patches to 

protect against known vulnerabilities. 

To address these issues throughout the government after the Office of Personnel Management 

breach reported in FY 2015, the Office of Management and Budget (OMB) required Federal 

agencies to further improve Federal cybersecurity and protect systems against evolving threats. 

The United States Chief Information Officer (CIO) launched a 30-day Cybersecurity Sprint on 

June 12, 2015, instructing Federal agencies to immediately take a number of steps to further 

protect Federal information and assets and improve the resilience of Federal networks. In 

addition, agencies were required to patch critical vulnerabilities immediately since the vast 

majority of cyber intrusions exploit well known vulnerabilities that are easy to identify and 

correct.

Configuration Management Conditions

NASA relies extensively on Information Technology (IT) system controls to initiate, authorize, 

record, process, summarize, and report financial transactions in the preparation of its financial 

statements. Internal controls over these operations are essential to ensure the integrity, 

confidentiality, and reliability of critical data while reducing the risk of errors, fraud, and illegal 

acts.

Financial applications rely on the protections provided by configuration controls to ensure 

application controls can be effective. IT controls provide reasonable assurance that information 

system resources are authorized, and systems are configured and operated securely as 

intended. Inadequate configuration controls over IT financial environments could lead to 

unauthorized individuals using system weaknesses to circumvent security controls to read, 

modify, or delete critical or sensitive information and programs. Such weaknesses seriously 

diminish the reliability of information produced by all of the applications supporting the IT 

financial environment and increase the risk of fraud and misstatement. 

NASA’s networks support workstations, servers, utilities, software tools, routers, databases, and 

communications that provide connectivity, availability, and integrity to NASA’s financial system 

and its users. We found that NASA did not have an effective process for monitoring, detecting, 

and remediating known vulnerabilities. In addition, NASA did not have compensating controls to 

lessen the risk of compromise or to mitigate the risk of unsupported software, unpatched 

systems, and default settings and passwords. Alleviating these risks represent essential 

components of an effective configuration management program. Accordingly, such 

compensating controls cannot be relied upon for an extended period of time and the following 

core weaknesses should be addressed immediately: 
Financials

Page 126 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

a) Patch Management - We found that patches and fixes for critical and high severity 

vulnerabilities pertaining to the IT financial environment were not applied timely. The 

longer the known vulnerability is exposed on the network, the greater the risk that the 

vulnerability can be exploited. A significant number of critical and high severity 

vulnerabilities were noted but were not mitigated within the 30 – 90 day period required 

by NASA policy and National Institute of Standards and Technology (NIST) 

requirements.

b) Configuration Weaknesses and Default Passwords - We found that operating 

systems and applications were poorly configured with default settings, which placed the 

financial systems and supporting network at unnecessary risk of unauthorized access, 

alteration, or destruction.

c) Unsupported Software - We found unsupported software that is no longer fully 

maintained by the software vendors, which exposes NASA to vulnerabilities that cannot 

be fully mitigated. Unsupported or outdated software versions expose NASA systems to 

known vulnerabilities for an extended period of time.

NASA did not appropriately document, approve or include compensating controls in the system 

security plan to address the noted vulnerabilities. In addition, NASA did not provide an 

adequate rationale for how its compensating controls provide an equivalent security.

OMB Circular A-130, Appendix III, Security of Federal Automated Information Resources, states 

that Agencies shall implement and maintain a program to assure that adequate security is 

provided for all agency information collected, processed, transmitted, stored, or disseminated in 

general support systems and major applications. 

NIST Special Publication 800-53, Security and Privacy Controls for Federal Information

Systems and Organizations, Revision 4, security control: SI-2 Flaw Remediation, states that an 

organization must “[i]dentify information systems affected by announced software flaws, 

including potential vulnerabilities resulting from those flaws, and report this information to 

designated organizational personnel with information security responsibilities. Security-relevant 

software updates include, for example, patches, service packs, hot fixes, and anti-virus 

signatures. Organizations also address flaws discovered during security assessments, 

continuous monitoring, incident response activities, and system error handling. Organizations 

take advantage of available resources such as the Common Weakness Enumeration (CWE) or 

Common Vulnerabilities and Exposures (CVE) databases in remediating flaws discovered in 

organizational information systems. By incorporating flaw remediation into ongoing configuration 

management processes, required/anticipated remediation actions can be tracked and verified.”

In addition, NIST Special Publication 800-18 Rev. 1 states “Compensating security controls are 

the management, operational, or technical controls employed by an agency in lieu of prescribed 

controls in the low, moderate, or high security control baselines, which provide equivalent or 

comparable protection for an information system. Compensating security controls for an 

information system will be employed by an agency only under the following conditions: 
Financials

NASA FY 2015 Agency Financial Report Page 127

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

i. the agency selects the compensating controls from the security control catalog in NIST 

SP 800-53; 

ii. the agency provides a complete and convincing rationale and justification for how the 

compensating controls provide an equivalent security capability or level of protection for 

the information system; and 

iii. the agency assesses and formally accepts the risk associated with employing the 

compensating controls in the information system. The use of compensating security 

controls must be reviewed, documented in the system security plan, and approved by 

the authorizing official for the information system.”

By not effectively implementing and enforcing a configuration management program that 

addresses serious security weaknesses, there is an increased risk financial information may be 

inadvertently or deliberately misused, which may result in improper information disclosure, 

manipulation, or theft. Additionally, inappropriate or unnecessary changes may be made to key 

financial information systems, which could result in the compromise of financial information.

We have classified these matters collectively as a significant deficiency in internal control 

pursuant to the American Institute of Certified Public Accountants Clarified Statements on 

Auditing Standards (AU-C). AU-C Section 265, Communicating Internal Control Related Matters 

in an Audit, establishes standards and provides guidance on communicating matters related to 

an entity's internal control over financial reporting identified in an audit of financial statements. 

The Standard notes that “[t]he severity of the deficiency or combination of deficiencies in 

internal control depends not only on whether a misstatement has actually occurred but also on:

•

•

the magnitude of the potential misstatement resulting from the deficiency or deficiencies,

and

whether there is a reasonable possibility that the entity's controls will fail to prevent, or

detect and correct, a misstatement of an account balance or disclosure. A reasonable

possibility exists when the chance of the future event or events occurring is more than

remote.”

The Standard further states that significant deficiencies “may exist even though the auditor

has not identified misstatements during the audit.”

In the context of our review of NASA’s systems, our evaluation of whether a significant 

deficiency exists is not that we were actually able to access NASA’s financial applications and 

manipulate NASA’s financial records. Instead, our tests of controls were concerned with 

whether controls provide reasonable assurance that configuration management controls are 

operating effectively to prevent unauthorized changes to network components that support 

NASA’s financial systems.

We have provided NASA’s management with a separate limited distribution report that further 

details the vulnerabilities in NASA’s systems. Due to the sensitivity of the matters noted, we 

have not discussed those matters in this report.
Financials

Page 128 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT A

Significant Deficiencies

September 30, 2015

Recommendations:

We recommend that NASA continue to analyze and prioritize remediation efforts to accomplish 

security and control objectives with a focus on these key tasks that include, but are not limited 

to:

1. Implement improved mechanisms to continuously identify and remediate security 

deficiencies on the NASA network infrastructure that supports financial systems.

2. Implement an improved patch and configuration management program to address 

security deficiencies identified during our evaluation of NASA’s applications and network 

infrastructures.

3. Develop and implement a strategic plan to address outdated technology which are no 

longer supported by the vendor.
Financials

NASA FY 2015 Agency Financial Report Page 129

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT B

Non-Compliance with Laws and Regulations

September 30, 2015

Non-Compliance with the Single Audit Act (amended 1996) and Title 2 of the Code of 

Federal Regulations, Uniform Administrative Requirements, Cost Principles, and Audit 

Requirements for Federal Awards

NASA management had not taken adequate steps to ensure that the responsibilities set forth 

under the Single Audit Act (amended 1996) and Title 2 of the Code of Federal Regulations,

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards (Uniform Guidance), were assigned within NASA’s organizational structure, and are 

being acted upon in a timely manner. 

Specifically, policies and procedures, including the NASA Federal Acquisition Regulation 

Supplement (NFS), were not properly designed to achieve compliance with all facets of the 

Single Audit Act (pursuant to the Office of Management and Budget (OMB) Circular No. A 133, 

Audits of States, Local Governments, and Non-Profit Organizations), and had not been 

subsequently updated to comply with the newly issued Uniform Guidance. For example, we 

noted that NASA is not adequately monitoring its grantees’ single audit reports and has not 

implemented the structures and data gathering mechanisms necessary to achieve compliance 

with the Single Audit Act and the Uniform Guidance § 200.110, Effective/applicability date, and 

Section 200, Subpart F.

We did not find evidence that NASA personnel determined that all its grantees that met the 

requirements, had single audits performed pursuant to the requirements in the Uniform 

Guidance and, accordingly, submitted such audits to the Federal Audit Clearinghouse (FAC) in 

a timely manner. In addition, we did not find evidence that NASA management actively reviewed 

the FAC to identify whether the single audit reports of all its grantees contained findings that 

might have implications for NASA’s grants. NASA management’s review of the FAC is only 

performed during the pre-award risk assessment of its grant applicants. FAC reviews after the 

award phase have been delegated and are being performed in a limited manner as further 

described below.

NFS 1842.7301, “NASA External Audit Follow-up System,” section (d)(2), requires the NASA 

Office of Inspector General (OIG) to report single audit findings and questioned costs on

NASA’s direct awards to NASA for issuance of management decisions. The OIG’s compilation 

of the findings on NASA’s direct awards is a management role that fulfils only one facet of 

management’s responsibilities, whereas other facets of management’s responsibilities related to 

grantee compliance and monitoring are not being performed. By way of example, the OIG does 

not monitor whether specific grantees have submitted their single audit reports when they are 

due. Also, the OIG does not monitor those high risk grantees that did not have NASA’s direct 

awards tested as part of their single audits. Accordingly, follow up action on single audit findings 

and questioned costs was only performed on those grantees that have actually filed single audit 

reports in the FAC with findings on NASA’s direct awards, but only when it was initiated by the 

NASA OIG.

Even though the Uniform Guidance § 200.513, Responsibilities, requirement for grant making 

organizations to assign a Single Audit Accountable Official and Key Management Single Audit 

Liaison has been in place since December 2013, NASA did not name and communicate the 

names of these officials to OMB until September 2015.
Financials

Page 130 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT B

Non-Compliance with Laws and Regulations

September 30, 2015

Accordingly, NASA is not in compliance with the Single Audit Act (amended 1996) and Title 2 of 

the Code of Federal Regulations, Uniform Administrative Requirement, Cost Principles, and 

Audit Requirements for Federal Awards (Uniform Guidance). This situation has caused NASA’s 

resources to be at risk as follows:

•

•

•

•

Awardees may not be receiving single audits.

Single audits may not be completed in a timely manner, which delays the oversight 

conducted for those awards and the corrective actions to address any internal controls 

deficiencies that were identified in the audit and the recovery of any questioned costs.

NASA management may not have ensured that corrective actions resulting from all 

single audits performed have indeed been implemented or that questioned costs are 

recoverable. Without such timely follow-up, those awardee internal control weaknesses 

may continue and result in other unallowable costs.

NASA may continue to award grants to those awardees that are not complying with the 

Single Audit Act. This situation continues to place those funds at risk.

Recommendations:

We recommend that NASA’s management take appropriate and immediate steps to comply with 

the requirements of the Single Audit Act and the related Uniform Guidance, 2 CFR § 200.513, 

Responsibilities. To begin to ensure that proper oversight is implemented, NASA must update 

its policies and procedures, including the NFS to require that NASA management perform the 

following regulatory oversight of its grants program:

1) Annually determine which grantees should be obtaining a single audit, and implement a 

system to monitor the timely receipt and review of the required audits.

2) Provide technical advice and counsel to auditees and auditors.

3) Follow-up on audit findings and questioned costs to ensure that the recipient takes 

appropriate and timely corrective action in accordance with the Uniform Guidance, and 

NASA management is timely and properly concluding on the adequacy of such actions, 

including whether the identified questioned costs are truly unallowable. As noted above, 

the existing processes are being initiated by the NASA OIG.

4) Evaluate annually whether a compliance supplement should be developed and 

submitted to OMB to provide guidance to auditors regarding specific NASA compliance 

requirements where noncompliance may have a direct and material effect on NASA’s 

programs. After a compliance supplement has been submitted to OMB, then provide 

OMB annual updates to the compliance supplement and work with OMB to ensure that 

the compliance supplement focuses the auditor to test the compliance requirements 

most likely to cause improper payments, fraud, waste, abuse or generate audit findings 

for which NASA will take sanctions. 

5) With respect to the required Single Audit Accountable Official and the Key Management 

Single Audit Liaison:

a) Clearly identify the responsibilities of each role, 

b) Offer the necessary training and support to the individuals assigned to these 

roles, and 

c) Inform OMB of any changes in those assigned to each role.
Financials

NASA FY 2015 Agency Financial Report Page 131

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT C

Management’s Response to Independent Auditors’ Report

September 30, 2015

National Aeronautics and Space Administration

Headquarters

Washington, DC 20546-0001

November 13, 2015 

Reply to Attn of: Office of the Chief Financial Officer

TO: Inspector General

FROM: Chief Financial Officer

SUBJECT: Management Response to Report of Independent Auditors

I am pleased to accept your audit report on the Consolidated Financial Statements of the 

National Aeronautics and Space Administration (NASA) for FY 2014 and FY 2015. The 

Agency’s efforts and achievements toward improved financial management are clearly 

reflected in the audit opinion. For the fifth year in a row, NASA has received an unmodified 

“clean” opinion on its financial statements with no reported material weaknesses. Further, 

NASA continues to be in substantial compliance with the Federal Financial Management 

Improvement Act. 

NASA’s independent auditors (CliftonLarsonAllen (CLA)) reported two significant 

deficiencies related to 1) NASA’s accounting and reporting for asbestos-related cleanup costs,

and 2) Information Technology (IT) configuration management. The auditors also reported a 

non-compliance with the Single Audit Act. NASA concurs with the Single Audit Act noncompliance and has already implemented actions to remediate this finding. However, NASA 

does not concur with the auditor’s classification of the two significant deficiencies for the 

reasons cited below. 

Accounting and Reporting for Asbestos-related Cleanup Costs

NASA is in compliance with the accounting standards cited by CLA relative to estimating 

asbestos-related cleanup costs. NASA has identified real properties that reasonably contain 

asbestos, determined the type and quantity of asbestos in many of those buildings and facilities, 

and determined that sufficient or supportable cost information is not available to reasonably 

estimate an Agency-wide asbestos-related cleanup cost. Therefore, in compliance with Federal 

Accounting Standards Advisory Board (FASAB) guidance for situations in which the existence 

of asbestos is probable and the remediation costs are not be reasonably estimable at that time, 

NASA has recognized the anticipated cost of conducting future studies necessary to develop a 

reasonable estimate.

NASA management is ultimately responsible for all costs reported in its financial statements, and 

must be satisfied with the underlying assumptions used to develop those estimates before recording 

any amounts to those statements. The assumptions necessary for the independent auditor to develop 

its estimate do not meet NASA management’s requirements for a fully supported financial 

statement estimate, including the ability to withstand audit scrutiny over time. 
Financials

Page 132 NASA FY 2015 Agency Financial Report

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT C

Management’s Response to Independent Auditors’ Report

September 30, 2015

Consequently, NASA has determined there is not a reasonable basis for recording CLA’s

recommended adjustment to its FY 2015 financial statements, and we do not concur that the 

accrued liability for asbestos-related cleanup cost is misstated. Therefore, NASA does not agree 

with CLA’s classification of a significant deficiency in internal controls over financial 

reporting for asbestos cleanup costs. 

NASA plans to continue pursuing reasonable measures to improve the estimate as reasonable 

and sufficient information is developed or identified. NASA appreciates the work and insights 

provided by the independent auditor on this matter, as it will assist in our efforts to review the 

asbestos cleanup cost estimation methodology in FY 2016.

Information Technology Configuration Management 

NASA acknowledges that CLA has identified opportunities for improvement within MSFC's 

overall vulnerability management program. NASA has taken these findings seriously and has 

already addressed a substantial portion of the findings, while others NASA was aware of and 

had accepted the risk based on business need and compensating controls. While NASA does 

not dispute the general results of CLA’s findings, NASA disagrees with the conclusion 

regarding the significance of these findings in terms of the likelihood that NASA’s 

comprehensive set of controls would fail to prevent, or detect and correct, a misstatement of an 

account balance or disclosure on a timely basis.

CLA relied on the general Common Vulnerability Scoring System (CVSS) in their assessment 

of risk without considering the specific context of NASA’s network architecture, inherent 

compensating controls, and overall monitoring and detection capabilities. CLA’s conclusions 

are non-specific to NASA’s environment and are based primarily on the general concept of 

exploiting a vulnerability and then moving laterally to compromise the financial system. 

However, CLA did not document specific paths from a vulnerability to the financial system, 

and did not adequately consider the probability of this occurring based on NASA’s 

compensating controls. 

Significant defense-in-depth controls are deployed to further protect the financial system. 

CLA’s conclusion did not adequately consider NASA’s implementation of NIST standards 

such as SP 800-54 Border Gateway Protocol Security, SP 800-94 Guide to Intrusion Detection 

and Prevention Systems (IDPS) and SP 800-53 Security and Privacy Controls in reaching their 

overall conclusion. 

The layers of security that NASA has in place, when viewed comprehensively, provide a 

framework of internal controls (preventative and detective) that provide reasonable assurance 

that a security event will be detected and mitigated through the normal course of business.

Furthermore, NASA has a comprehensive series of financial internal controls including 

transaction reviews and approvals, monthly reconciliations, and account relationship 

monitoring activities that provide further decrease the likelihood that a misstatement of the 

financial statements will be prevented or detected. 

In conclusion, in assessing the likelihood that an entity’s controls will fail to prevent, or detect 

and correct, a misstatement of an account balance or disclosure it is important to consider the 

entirety and specifics of the control environment. CLA has not provided supporting rationale 
Financials

NASA FY 2015 Agency Financial Report Page 133

INDEPENDENT AUDITORS’ REPORT (Continued)

EXHIBIT C

Management’s Response to Independent Auditors’ Report

September 30, 2015

that adequately considers NASA’s network and application controls nor our financial internal 

controls in reaching their conclusion. 

I appreciate the efforts and leadership of NASA’s OIG and of the auditors throughout the audit 

of NASA’s financial statements and related internal controls over financial reporting. Please 

convey my sincere appreciation and thanks to your team for the professionalism and 

cooperation exhibited during this audit. 

Concur: 
Financials

Page 134 NASA FY 2015 Agency Financial Report

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NASA FY 2015 Agency Financial Report

Other Information

Page 135

Office of Inspector General Letter on NASA’s Top Management and 

Performance Challenges..................................................................................137

FY 2015 Inspector General Act Amendments Report.18

Background.18

NASA’s Audit Follow-Up Program.18

FY 2015 Audit Follow-Up Results.18

Improper Payments Information Act (IPIA) Assessment.18

Recapture Audit................................................................................................199

Do Not Pay Initiative.........................................................................................201

Schedule of Spending.20

Freeze the Footprint.20

Summary of Financial Statement Audit and Management Assurances.20

Image Caption: NASA astronaut Scott Kelly shared this photograph on social media, taken from the International Space Station on Sept. 10, 2015. (Credit: NASA)
Page 136 NASA FY 2015 Agency Financial Report

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Other Information

NASA FY 2015 Agency Financial Report Page 137

NASA OFFICE OF INSPECTOR GENERAL 

SUITE 8U37, 300 E ST SW

WASHINGTON, D.C. 20546-0001

November 5, 2015 

TO: Charles F. Bolden, Jr. 

Administrator 

SUBJECT: 2015 Report on NASA’s Top Management and Performance Challenges

Dear Administrator Bolden, 

As required by the Reports Consolidation Act of 2000, this memorandum provides our views of the 

top management and performance challenges facing NASA for inclusion in its fiscal year (FY) 2015

Agency Financial Report.

In deciding whether to identify an issue as a top challenge, we considered its significance in relation 

to the Agency’s mission; its susceptibility to fraud, waste, and abuse; whether the underlying causes 

are systemic in nature; and the Agency’s progress in addressing the challenge. We previously 

provided a draft copy of our views to NASA officials and considered all comments received when 

finalizing this report. Management comments can be found in Appendix A of the enclosure. 

Looking to 2016, we identified the following as the top management and performance challenges 

facing NASA: 

 Space Flight Operations in Low Earth Orbit: Managing the International Space Station and 

the Commercial Cargo and Crew Programs 

 Positioning NASA for Deep Space Exploration: Developing the Space Launch System, Orion 

Capsule, and associated Ground Systems, and Mitigating Health and Performance Risks for 

Extended Human Missions 

 Managing NASA's Science Portfolio 

 Ensuring the Continued Efficacy of the Space Communications Networks 

 Overhauling NASA's Information Technology Governance 

 Securing NASA's Information Technology Systems and Data 

 Managing NASA's Aging Infrastructure and Facilities 

 Ensuring the Integrity of the Agency's Contracting and Grants Processes 
Other Information

Page 138 NASA FY 2015 Agency Financial Report

ii

During the coming year the NASA Office of Inspector General will conduct audit and investigative 

work that focuses on NASA’s continuing efforts to meet these challenges. Please contact Jim 

Morrison, Assistant Inspector General for Audits, if you have any questions. 

Sincerely, 

Paul K. Martin 

Inspector General 

cc: Dava Newman

Deputy Administrator

Robert Lightfoot

Associate Administrator 

Lesa Roe 

Deputy Associate Administrator

Michael French 

Chief of Staff

Enclosure – 1 

 
Other Information

NASA FY 2015 Agency Financial Report Page 139

2015 Top Management and Performance Challenges 1 

NASA’s Top Management and Performance 

Challenges, November 2015

NASA’s ability to sustain its ambitious exploration, science, and aeronautics programs continues to be 

driven in large measure by whether the Agency is able to adequately fund such high-profile initiatives as 

its commercial cargo and crew programs, Space Launch System rocket and Orion capsule, James Webb 

Space Telescope, and the personnel and infrastructure associated with these and other projects. 

In October 2015, NASA and the rest of the Federal Government began another fiscal year without a 

full-year appropriation. This uncertainty about funding levels, while inconvenient for some NASA 

programs, may be significantly disruptive to others – most prominently the Agency’s efforts to use 

American corporations to transport astronauts to the International Space Station (ISS or Station) instead 

of paying the Russian space agency upwards of $75 million per person.1

 Accordingly, we believe the 

principal challenge facing NASA leaders in fiscal year (FY) 2016 will be to effectively manage the 

Agency’s varied programs in an uncertain budget environment. 

In addition to this overarching challenge, NASA managers face a myriad of project- and facility-specific 

challenges. This annual report provides the Office of Inspector General’s (OIG) independent assessment 

of the top management and performance challenges facing the Agency, which we organize under the 

following topics: 

















Space Flight Operations in Low Earth Orbit: Managing the International Space Station and the 

Commercial Cargo and Crew Programs 

Positioning NASA for Deep Space Exploration: Developing the Space Launch System, Orion 

Capsule, and associated Ground Systems, and Mitigating Health and Performance Risks for 

Extended Human Missions 

Managing NASA’s Science Portfolio 

Ensuring the Continued Efficacy of the Space Communications Networks

Overhauling NASA’s Information Technology Governance 

Securing NASA’s Information Technology Systems and Data

Managing NASA’s Aging Infrastructure and Facilities

Ensuring the Integrity of the Agency’s Contracting and Grants Processes 

In deciding whether to identify an issue as a top challenge, we considered the significance of the 

challenge in relation to NASA’s mission; whether its underlying causes are systemic in nature; the 

challenge’s susceptibility to fraud, waste, and abuse; and the Agency’s progress in addressing the 

challenge. We have not listed the challenges in priority order. 

 

1 The Office of Inspector General is conducting a follow-up audit examining the status of NASA’s Commercial Crew Program 

and as part of that review will examine the effects of funding reductions on NASA’s plans to begin commercial crew launches 

by late 2017. 
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Page 140 NASA FY 2015 Agency Financial Report

2015 Top Management and Performance Challenges 2 

Finally, the eight challenges described in this report track in most major respects to the seven challenges 

identified in our November 2014 report. For presentation purposes, we divided last year’s challenge of 

“Managing NASA’s Human Space Exploration Programs” into two separate challenges – crewed space 

flight in low Earth orbit and human exploration in deep space – to focus on the programs associated 

with each of these separate but related challenges. 

Space Flight Operations in Low Earth Orbit – Managing 

the International Space Station and the Commercial 

Cargo and Crew Programs 

NASA has been operating the ISS in low Earth orbit, an orbit with an altitude of less than 1,200 miles 

above the Earth, for more than 15 years and plans to extend Station operations until at least 2024.2

 

Over the past decade, the Agency has entered into contracts worth billions of dollars with private 

companies to develop commercial transportation systems to supply the ISS with cargo and end U.S. 

dependency on Russia for crew transportation. 

The International Space Station 

The result of an international effort to build and 

operate a permanently crewed space station in low 

Earth orbit, the ISS is a unique technological 

achievement and a key part of NASA’s plans to send 

humans to Mars. Specifically, the Agency utilizes the 

ISS as a research platform to study and develop 

countermeasures to mitigate a variety of risks 

associated with human travel and long-term habitation 

in space. In addition to NASA research, the Station 

serves as a laboratory for other Government agencies 

and private entities to conduct scientific 

research in fields such as health and medicine, 

robotics, manufacturing, and propulsion. 

In August 2015, the Senate endorsed NASA’s proposal to extend Station operations until at least 2024.3

 

As NASA moves forward with this plan, it faces the challenge of ensuring a spacecraft originally designed 

and tested for a 15-year life span will continue to operate safely and economically for an additional 

11 years. Moreover, as it prepares to send astronauts deeper into space for extended periods of time, 

NASA must continue to be strategic in how it utilizes the Station’s limited research capabilities.

 

2 NASA has asked The Boeing Company, the primary ISS support contractor, to examine the feasibility of extending Station 

operations until 2028. 

3 U.S. Commercial Space Launch Competitiveness Act, S1297 114th Congress, first session, August 4, 2015. As of October 

2015, the House of Representatives had not passed similar legislation extending Station operations. 
Other Information

NASA FY 2015 Agency Financial Report Page 141

2015 Top Management and Performance Challenges 3 

ISS Costs 

The United States has invested almost $81 billion in the ISS over the last 22 years.4 In FY 2015, NASA’s 

annual cost to operate the Station – including for on-orbit vehicle operations, research, crew 

transportation, and cargo resupply missions – was almost $3 billion. The Agency projects this figure will 

increase to $4 billion by 2020. In May 2014, the U.S. House of Representatives Committee on 

Appropriations noted that “in order for the Station to remain a sustainable long-term program, NASA 

must continue to seek and implement cost savings measures with the goal of reducing the ISS 

operations budget or, at a minimum, slowing the growth in such budget.”5

 However, several factors 

may make it difficult for NASA to accomplish this goal. 

We believe the Agency’s estimate that it will cost between $3 and $4 billion annually to operate the 

Station is based on overly optimistic assumptions, and that for a number of reasons costs are likely to be 

higher. By late 2017, NASA hopes to be sending astronauts to the Station in commercially provided 

transportation systems and therefore included the costs of these services in its estimate. NASA based 

that estimate on the cost of a Russian Soyuz seat in FY 2016 – $70.7 million per seat for a total cost of 

$283 million per mission for four astronauts.6

 However, the Program’s independent Government cost 

estimates project significantly higher costs when NASA purchases flights from commercial companies 

rather than from Russia. Moreover, over the life of the Station the Agency’s international partners – the 

European Space Agency, Canada, Japan, and Russia – have contributed to operations and shared 

associated expenses by providing astronauts, ground facilities, launch vehicles, and other items and 

services. While the Canadians and Russians have indicated they intend to continue their participation 

through 2024, as of September 2015 the Europeans and Japanese had not yet committed to Station 

operations beyond 2020. Should they decide not to participate, NASA and the remaining partners will 

likely face higher costs. 

NASA also utilizes more than 30 contracts valued at approximately $39 billion to operate and maintain 

the ISS. This past year we examined whether NASA’s contract administration and oversight processes 

are sufficient to avoid incurring unnecessary costs on these contracts.7

 We found that over the past 

several years, NASA has taken steps to control costs, including openly competing and eliminating 

requirements from some of these contracts, and that between FYs 2011 – 2015 the ISS Program reduced 

costs by $1.8 billion. However, given the unique operating environment of the ISS and the inherent 

challenge of operating with a flat operations and maintenance budget of $1.3 billion beginning in 

FY 2018, it is unclear to what extent the Agency’s cost-reduction strategies will result in future cost savings.

ISS Research 

A significant amount of research aboard the ISS is related to understanding and mitigating the health 

and performance risks associated with human space travel. NASA’s Human Research Program is 

managing 25 such risks, and the Station is a suitable platform for conducting mitigation-related research 

for 23 of these risks. However, even with an extension of Station operations until 2024 NASA only 

 

4 This figure includes $49.7 billion for construction and program costs through 2014 and $30.7 billion for 37 supporting Space 

Shuttle flights, the last in July 2011. 

5 H. Rep. No. 113-448, Commerce, Justice, Science, and Related Agencies Appropriations Bill, 113th Cong. (2014). 

6 NASA purchased additional Soyuz seats for astronaut transportation to the ISS through 2018, with returns in 2019. The total 

cost was $490 million at approximately $82 million for each of the six seats. 

7 NASA OIG, “Audit of NASA’s Management of International Space Station Operations and Maintenance Contracts” (IG-15-021, 

July 15, 2015). 
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Page 142 NASA FY 2015 Agency Financial Report

2015 Top Management and Performance Challenges 4 

expects to have time to fully mitigate 11 of these risks. Although the Agency can use other research 

techniques such as ground-based analogs to develop risk-mitigation procedures, these methods do not 

provide the same advantages as an actual space environment. Accordingly, in a September 2014 report 

examining extension of the ISS we recommended NASA prioritize Station research to address the most 

important risks before Station operations end. NASA agreed and has taken responsive action.8

In August 2011, NASA signed a cooperative agreement with the Center for the Advancement of Science 

in Space (CASIS) to manage non-NASA research aboard the ISS. Pursuant to the agreement, NASA 

provides CASIS $15 million annually and the organization is expected to raise additional funds from 

private entities and encourage companies to self-fund research. Further progress on expanding ISS 

research depends on CASIS’s ability to attract private funding and encourage companies and other 

organizations to conduct research. In an April 2015 assessment of the group’s activities, the 

Government Accountability Office (GAO) reported that CASIS needs to establish better metrics for 

measuring program performance, including measurable targets.9

When we interviewed CASIS officials as part of our ISS extension audit, they told us that provisions in the 

agreement with NASA requiring researchers to assign patent licenses and data rights to the Government 

were deterring commercial stakeholders from conducting research on the ISS. To address this issue, 

NASA submitted proposed legislation to Congress in June 2013 that would allow researchers to retain 

“all rights in inventions made... during the conduct of [Station] activities.” As of October 2015, the 

legislation has not moved forward. 

While utilization of the ISS for research has increased over the past 6 years, several factors continue to 

pose limits to fully utilizing the Station. For example, until a seventh crew member is brought onboard 

NASA will not be in a position to maximize the amount of crew time dedicated to research on the 

Station.10 Moreover, the crew will devote substantial time in 2016 to reconfiguring the ISS to 

accommodate the commercial vehicles NASA hopes will be ready to transport astronauts beginning in 

late 2017.

Another key factor to maximizing research on the Station is developing a U.S. capability to transport 

cargo and crew. For many years, NASA used the Space Shuttle to ferry astronauts and materials to the 

Station – first for construction and then for resupply. With the Shuttle’s retirement in 2011, NASA has 

looked to a new model for transporting cargo and crew to low Earth orbit by working with U.S. 

corporations to develop privately-owned and operated transportation systems. Unlike with the Shuttle, 

NASA does not own these systems but rather purchases flights from the companies to carry NASA 

supplies and astronauts. We discuss the challenges associated with commercial transportation to the 

ISS below. 

 

8 NASA OIG, “Extending the Operational Life of the International Space Station Until 2024” (IG-14-031, September 18, 2014). 

9 GAO, “International Space Station: Measurable Performance Targets and Documentation Needed to Better Assess 

Management of National Laboratory” (GAO-15-397, April 27, 2015). 

10 Although the ISS is capable of supporting a seven-person crew, currently only six individuals can be on Station at one time to 

accommodate evacuation in case of an emergency. The Russian Soyuz capsule, currently the only vehicle transporting 

astronauts to the Station, has a three-person capacity and only two Soyuz capsules can be attached to the Station 

simultaneously. 
Other Information

NASA FY 2015 Agency Financial Report Page 143

2015 Top Management and Performance Challenges 5 

Commercial Cargo Transportation 

Between 2006 and 2008, NASA entered into a series of funded Space Act Agreements with Orbital 

Sciences Corporation (Orbital), Space Exploration Technologies Corporation (SpaceX), and other private 

companies to stimulate development of transportation systems capable of transporting cargo to the ISS. 

NASA selected two companies to ensure redundancy if one was unable to perform.11

In 2008, while development efforts were still underway, NASA awarded fixed-price contracts valued at 

$1.9 billion and $1.6 billion to Orbital and SpaceX, respectively, for a series of resupply missions to the 

ISS (Commercial Resupply Services or CRS-1 contracts). The contracted services include delivery of 

supplies and equipment (upmass) to the Station and, depending on the mission, return of equipment 

and experiments and disposal of waste (downmass) to Earth.12 Since signing the initial agreements, 

NASA has extended SpaceX’s contract into 2017 and issued task orders for three additional missions and 

Orbital’s contract into 2018 and added three missions. 13 As of June 2015, Orbital had completed two 

cargo resupply missions and received $1.6 billion from NASA, while SpaceX had completed six resupply 

missions and received $1.4 billion. 

Unfortunately, both companies have also experienced launch failures. In October 2014, Orbital’s third 

delivery mission failed during lift-off, causing the vehicle to crash near the launch pad and destroying 

the company’s Antares rocket and Cygnus spacecraft as well as all cargo aboard. The Virginia 

Commercial Space Flight Authority’s launch pad and supporting facilities at NASA’s Wallops Flight Facility 

on Virginia’s Eastern Shore also sustained $15 million in damage. In the aftermath of the failure, Orbital 

suspended its cargo resupply missions until completion of an investigation and acceptance by NASA of 

the company’s Return to Flight Plan. 

Similarly, in June 2015, SpaceX’s seventh resupply mission exploded shortly after takeoff from Cape 

Canaveral Air Force Station in Florida, resulting in a total loss of all cargo aboard. Like Orbital, SpaceX 

suspended resupply missions until completion of an investigation and acceptance by NASA of a Return 

to Flight Plan.

In a September 2015 report, we found Orbital’s Return to Flight Plan contains technical and operational 

risks and may be difficult to execute as designed and on the timetable proposed.14 First, Orbital will 

restart deliveries to the ISS initially by launching its capsule with an Atlas V rocket. Although the Atlas V 

has a strong flight record and is a suitable rocket for Orbital cargo deliveries, the company will be 

integrating its Cygnus capsule with the Atlas rocket for the first time. Second, Orbital must accelerate 

development of its modified Antares launch system, refitting it with new engines in order to meet its 

plans for two launches in 2016. This tight schedule does not include a test flight for the modified system 

and provides limited opportunities for qualification and certification testing. Third, although NASA has 

increased monitoring of Orbital’s milestone plan and engine testing for the modified Antares, the 

 

11 In addition, NASA barters with the Japan Aerospace Exploration Agency (JAXA) for cargo transportation on JAXA’s H-II 

Transfer Vehicle and can place a small amount of upmass on the Russian space agency’s Progress cargo vehicle. In the past, 

NASA sent cargo to the ISS on the European Space Agency’s Automated Transfer Vehicle, which made its final delivery to the 

ISS in July 2014. 

12 The SpaceX capsule returns to Earth intact and therefore can carry experiments and other cargo back to Earth. In contrast, 

Orbital’s capsule burns up upon reentry to Earth’s atmosphere and therefore removes only waste from the Station. 

13 As a result of these additions, contract values increased to more than $2 billion for each company. 

14 NASA OIG, “NASA’s Response to Orbital’s October 2014 Launch Failure: Impacts on Commercial Resupply of the 

International Space Station” (IG-15-023, September 17, 2015). 
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Page 144 NASA FY 2015 Agency Financial Report

2015 Top Management and Performance Challenges 6 

Agency has not conducted detailed technical assessments of the modified system and the associated 

qualification testing results. Finally, we believe Orbital’s plan to drop one of its five previously 

scheduled resupply flights and carry the promised cargo in four missions may disadvantage NASA by 

decreasing the Agency’s flexibility in choosing the type and size of cargo the company transports to the 

ISS, particularly given that NASA officials said they will limit the cargo on the first return flight to 

non-essential items. 

SpaceX’s failed mission was carrying 2,393 kilograms (kg) of cargo, including 676 kg of crew supplies, 

529 kg of science investigations, 526 kg of docking equipment, 461 kg of vehicle hardware, 166 kg of 

extravehicular activity equipment, and 35 kg of computer resources. Among the lost equipment was 

one of the adapters needed to dock the commercial spacecraft NASA hopes will begin transporting 

astronauts to the Station in late 2017 and replacement parts for the Station’s water purification system. 

The company has formed an Accident Investigation Board pursuant to its commercial space launch 

license and NASA is conducting an independent investigation through its Launch Services Program. 

Initial reports from SpaceX suggest failure of a support strut in the second stage liquid oxygen tank as 

the cause. We are conducting a review of NASA’s response to the SpaceX loss similar to our review of 

Orbital’s October 2014 launch failure. 

In addition to the Orbital and SpaceX failures, a Russian Progress cargo mission failed to reach the ISS in 

April 2015. According to NASA officials, despite three unsuccessful cargo resupply missions over 

8 months, the ISS crew is in no immediate danger of running out of food or water. Current projections 

indicate that even without further resupply, food supplies on Station will be sufficient until January 2016 

and water supplies until June 2016. 

With the exception of a Japanese resupply mission in August 2015 that delivered 4.5 tons of cargo to the 

ISS, NASA must rely on the Russian Progress until Orbital and SpaceX restart their cargo resupply flights. 

However, Russian rockets have carried an average of only 65 kg per flight on their past six missions. 

Moreover, in our judgment the Orbital and SpaceX launch failures have affected research abroad the ISS 

in three ways: (1) a reduction in available crew time due to a temporary delay in returning the Station’s 

crew complement to six, (2) the cost to regenerate the lost research, and (3) a delay in the return of 

experiments due to the suspension of flights by SpaceX, the only company using a capsule capable of 

returning experiments and other cargo to Earth from the Station. 

NASA is currently evaluating proposals from commercial companies for CRS-2, the multi-billion dollar 

follow-on resupply contract the Agency is expected to award in November 2015. According to NASA 

officials, the contractors selected will perform cargo resupply missions beginning as early as 2018 and 

continuing through 2024.

Commercial Crew Transportation 

Since retirement of the Space Shuttle, the United States has lacked a domestic capability to transport 

astronauts to the ISS. Instead, between 2012 and 2018 NASA will pay Russia $2.2 billion to ferry 

30 NASA astronauts and international partners to and from the Station at prices ranging from 

$47 million to almost $82 million per round trip. To address this lack of U.S. capacity, NASA has 

provided approximately $2.8 billion in funding since 2010 to U.S. commercial space flight companies to 

spur development of a crew transportation capability. NASA originally hoped commercial flights would 

be operating by 2016, but due to funding constraints, the Agency adjusted this goal to late 2017. 
Other Information

NASA FY 2015 Agency Financial Report Page 145

2015 Top Management and Performance Challenges 7 

As with the Commercial Cargo Program, NASA worked with private companies – Sierra Nevada 

Corporation, SpaceX, and The Boeing Company (Boeing) – using a combination of funded Space Act 

Agreements and contracts to develop commercial crew transportation capabilities. A fourth company, 

Blue Origin, is conducting developmental work under an unfunded Space Act Agreement with the Agency.

The fourth and final phase of NASA’s Commercial Crew Program began in September 2014 with the 

award of $6.8 billion in firm-fixed-price contracts to Boeing ($4.2 billion) and SpaceX ($2.6 billion) to 

complete development of and certification for operation of their space flight systems. In these 

contracts, NASA will provide Boeing and SpaceX with specific requirements for launch systems, 

spacecraft, and related ground support. The contracts include at least one crewed flight test with a 

NASA astronaut to verify that the fully integrated rocket and spacecraft system can launch, maneuver in 

orbit, and dock to the ISS, as well as validate that all systems are performing as expected. Once each 

company’s test program has been successfully completed and its system certified, they will conduct at 

least two and as many as six crewed missions to the Station. The spacecraft also will serve as a lifeboat 

for astronauts aboard the Station in case of an emergency. 

In 2012, NASA planned to transition from Space Act Agreements to firm-fixed-price contracts governed 

by the Federal Acquisition Regulation (FAR) for final design work, testing, evaluation, and certification of 

crew transportation systems. Thereafter, NASA planned to enter into individual FAR based contracts to 

acquire specific transportation services. However, in FY 2012 NASA received only $397 million for its 

Commercial Crew Program, less than half of its $850 million request. As a result, NASA revised its 

acquisition strategy and continued to rely on funded Space Act Agreements for the integrated design 

phase of the Commercial Crew Program rather than FAR-based contracts. This situation was further 

exacerbated in 2013 when the Program again received significantly less than requested – $525 million 

compared to the $830 million requested. Although the Commercial Crew Program received $696 million 

of $821 million requested in FY 2014, funding shortfalls in previous years contributed to delaying the 

expected completion date of the Program’s development phase from 2016 to 2017. 

In FY 2015, the Program received $805 million out of $848 million. Looking ahead to FY 2016, the NASA 

Administrator sent a letter to Congress in August 2015 attributing Program delays and the decision to 

pay Russia for six additional seats on upcoming Soyuz flights to funding shortfalls. He warned that 

failure to fund the Program at the requested levels could result in further delays. 

In a November 2013 audit report, we identified four challenges to NASA’s Commercial Crew Program: 

(1) unstable funding, (2) integration of cost estimates with the Program schedule, (3) providing timely 

requirement and certification guidance, and (4) space flight coordination issues with other Federal 

agencies.15 Since that time, the Agency has made progress in these areas by publishing a Funded Space 

Act Agreement Best Practices Guide that includes guidance for cost estimating under those types of 

agreements, closely tracking deviations and waivers of requirements, and establishing a tri-agency 

Launch and Entry Steering group to better coordinate with other Federal agencies involved in 

commercial launches. NASA expects to complete the last of the corrective actions to respond to the 

recommendations in our report by late 2015. In May 2015, we began a follow-on audit examining 

whether the Commercial Crew Program is meeting its planned cost and schedule goals and how it is 

managing risks and certification requirements. 

 

15 NASA OIG, “NASA’s Management of the Commercial Crew Program,” (IG-14-001, November 13, 2013). 
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 Positioning NASA for Deep Space Exploration: 

Developing the Space Launch System, Orion Capsule, 

and Associated Ground Systems, and Mitigating Health 

and Performance Risks for Extended Human Missions 

NASA’s long-term objective for its human exploration program is a crewed mission to Mars. To meet 

this challenging goal, the Agency must develop both more sophisticated rockets, capsules, and other 

hardware, and strategies to mitigate the risks posed by radiation and other space-born hazards that 

could prevent astronauts from performing their missions or affect their long-term health. In the shortto mid-term, successful development of the Space Launch System (SLS), the Orion Multi-Purpose Crew 

Vehicle (Orion), and related launch infrastructure while simultaneously addressing health and human 

performance risks to extended space flight are critical to helping achieve NASA’s human exploration 

goals beyond low Earth orbit. 

Developing the Space Launch System, Orion, and Related 

Ground Systems 

Although the NASA Authorization Act of 2010 set a goal for NASA to achieve operational capability for 

the SLS and Orion by December 31, 2016, NASA will not meet this timetable.16 Noting technical and 

funding uncertainties, NASA has adjusted its planning schedule to reflect an SLS launch readiness date of 

no later than November 2018, with the first crewed flight of Orion expected no later than 2023. 

NASA is using the Space Shuttle’s main engine, the RS-25, on the SLS and designing the vehicle with an 

evolvable architecture that can be tailored to accommodate longer and more ambitious missions. Initial 

versions of the SLS will be capable of lifting 70-metric tons and use an interim cryogenic propulsion 

stage to propel Orion around the Moon on its first exploration mission. Later versions will be designed 

to lift 130-metric tons and incorporate an upper stage to travel to deep space. Orion will be mounted 

atop the SLS and serve as the crew vehicle for up to six astronauts. NASA is developing the capsule using 

an existing contract with Lockheed Martin Corporation and basing its design on requirements for the 

crew exploration vehicle that was part of NASA’s predecessor Constellation Program.

 

16 The National Aeronautics and Space Administration Authorization Act of 2010, Pub. L. No. 111-267, 124 Stat. 2805. 

2015 Top Management and Performance Challenges 8 
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2015 Top Management and Performance Challenges 9 

 

On December 5, 2014, Orion flew its first test flight, 

launching without a crew from Cape Canaveral Air 

Force Station on a Delta rocket. The mission 

successfully completed a 4-hour, two-orbit trip around 

Earth. In September 2015, NASA approved the Orion 

Program's progression from formulation to 

implementation for a crewed mission after completing 

a review known as Key Decision Point C (KDP-C). As 

part of that process, NASA committed to a launch 

readiness date for Orion of no later than April 2023, 

about 20 months later than had been planned. Based 

on the new target date, NASA expects to spend more 

than $11 billion to launch the first crew on Orion. The 

Agency noted that although the 2023 date represents 

NASA’s readiness commitment, the Orion team will 

continue working toward the original launch date of 

2021. In a 2013 report, we examined the Orion 

Program and are currently conducting a follow-up 

review evaluating NASA’s management of the Program 

relative to achieving technical objectives, meeting 

milestones, and controlling costs.17

In addition to the SLS and Orion, NASA’s Ground 

Systems Development and Operations Program (GSDO) 

is modifying launch infrastructure at Kennedy Space Center formerly used for the Space Shuttle, 

including refurbishing the crawler transporter that will transport the SLS from the Center’s Vehicle 

Assembly Building to the launch pad and modifying the mobile launcher and tower (originally built for 

the Constellation Program’s Ares I rocket), the Vehicle Assembly Building, and Launch Pad 39B. This past 

year, we issued a report on the status of GSDO’s efforts.18 We found that GSDO has made steady 

progress on the major equipment and facilities modernization initiatives needed to launch SLS and 

Orion, but significant technical and programmatic challenges remain to meet a November 2018 launch 

date. For the most part, these challenges originate from interdependencies between the GSDO, SLS, 

and Orion Programs. In short, GSDO cannot finalize and complete its requirements without substantial 

input from the other two Programs, but NASA is still finalizing the requirements for those Programs. 

Specifically, GSDO must overcome (1) a short timeframe for performing verification and validation 

testing between the Mobile Launcher, Vehicle Assembly Building, and Launch Pad 39B; (2) receipt of 

data and hardware regarding Orion later than planned; (3) the potential that integrated operations for 

the first test flight (Exploration Mission 1) may take longer than expected; and (4) most significantly, 

delays associated with development of command and control software. Given the criticality of the 

software, we are conducting a separate review examining NASA’s management of GSDO’s software 

development effort.

17 NASA OIG, “Status of NASA’s Development of the Multi-Purpose Crew Vehicle (IG-13-022, August 15, 2013). 

18 NASA OIG, “NASA’s Launch Support and Infrastructure Modernization: Assessment of the Ground Systems Needed to Launch 

SLS and Orion” (IG-15-012, March 18, 2015). 
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At the time of our GSDO audit, the program was scheduled to complete a significant development 

milestone known as Critical Design Review in March 2015, several months before SLS (May 2015) and 

Orion (August 2015). The purpose of the Critical Design Review is to demonstrate a project’s design is 

sufficiently mature to proceed to full scale fabrication, assembly, integration, and testing and technical 

aspects are on track to meet performance requirements within identified cost and schedule constraints. 

In our judgment, given the many interdependencies between the Programs, a schedule that has GSDO 

completing Critical Design Review prior to the other two Programs increases the risk GSDO may 

experience schedule delays or be required to perform costly redesign work. 

Finally, coordinating and integrating development of the three individual Programs to meet a common 

milestone date presents a challenge, particularly since NASA historically has used a single program 

structure to manage similar efforts such as Apollo and the Space Shuttle. In lieu of central management, 

NASA established a cross-program integration structure that designates leaders from each Program to 

coordinate and align the Programs’ development schedules. It is too early to say whether these 

substantial coordination challenges will result in cost or schedule issues for the Exploration Mission 1 

launch. Moreover, new issues are likely to be uncovered during integration – the point at which most 

projects encounter technical problems that impact cost and schedule. Given these challenges, 

coordination efforts among the GSDO, SLS, and Orion Programs are essential to successfully meeting 

NASA’s human exploration goals on the schedule and at the funding levels promised. 

In order to decrease the risk that the GSDO Program will experience cost increases or schedule delays, 

we recommended the Associate Administrator for Human Exploration and Operations reevaluate 

allowing GSDO to complete Critical Design Review before the SLS and Orion Programs. NASA 

management concurred with our recommendation and indicated it had changed the dates of the 

Programs’ Critical Design Reviews so that the SLS and Orion reviews will precede the GSDO review. 

NASA should closely monitor the Programs to ensure any such risks identified during these reviews are 

mitigated so as to avoid significant cost increases or schedule delays. 

Funding uncertainties continue to challenge the SLS and its associated Programs. For example, the 

Orion Program anticipates receiving a flat budget of approximately $1.1 billion per year into the 2020s. 

Given this budget profile, NASA is using an incremental development approach under which it allocates 

funding to the most critical systems necessary to achieve the next development milestone rather than 

developing multiple systems simultaneously as is common in major spacecraft programs. Prior work by 

the OIG has shown that delaying critical development tasks increases the risk of future cost and 

schedule problems.19 Moreover, NASA Program officials admit that this incremental development 

approach is not ideal, but contend that it is the only feasible option given current funding levels. 

Mitigating Human Health and Performance Risks 

Space flight is an inherently risky endeavor. Apart from the tremendous engineering challenges in 

launching and returning astronauts safely to Earth, humans living in space experience a range of 

physiological changes that can affect their ability to perform necessary mission functions and, in the 

longer term, lead to cancers, damaged vision, reduced bone strength, and other harm to their health 

and wellbeing. NASA has identified 30 human health and performance risks and two concerns 

associated with space travel, including behavioral health and performance, inadequate food and 

 

19 NASA OIG, “NASA’s Challenges to Meeting Cost, Schedule, and Performance Goals” (IG-12-021, September 27, 2012) and 

“Status of NASA’s Development of the Multi-Purpose Crew Vehicle” (IG-13-022, August 15, 2013). 

2015 Top Management and Performance Challenges 10 
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2015 Top Management and Performance Challenges 11 

nutrition, space radiation, and vision impairments and intracranial pressure.20 And, although NASA has 

developed mitigation strategies to reduce the impact of most of the risks associated with travel in low 

Earth orbit, its plans to send humans deeper into space for extended periods of time will expose 

astronauts to new and increased hazards. With respect to human travel, the deep space environment 

differs from low Earth orbit in several important respects: (1) it likely poses risks that have not yet been 

identified (unknown risks), (2) ways to mitigate many of the known risks have yet to be developed, and 

(3) humans will not be able to communicate with Earth in real-time or return to Earth quickly in case of 

emergency. 

 

To further understand the risks to human health and 

performance associated with space travel, NASA and 

its partners are performing a variety of studies on 

Earth and on the ISS. For example, in March 2015 

NASA launched astronaut Scott Kelly on the first 

1-year U.S. mission to the ISS. NASA will compare 

health data taken from Scott Kelly with that of his 

twin brother and former astronaut, Mark Kelly, in the 

hope of advancing knowledge about the effects on 

the human body of longer duration habitation in 

space. 

In October 2005, NASA established the Human 

Research Program at the Johnson Space Center to 

focus Agency research investment on investigating 

and mitigating the highest risks to astronaut health and performance. The Program conducts basic, 

applied, and operational research with the goal of increasing understanding of and developing 

countermeasures for 23 of the human health and performance risks and the two concerns NASA has 

identified. In 2014, the Program completed a detailed schedule, known as the Path to Risk Reduction, 

setting forth the rate by which it expects to complete development of countermeasures for the 23 risks 

assigned to it. In February 2015, the Program reported that the majority of risks for ISS missions up to a 

year in duration could be mitigated to an acceptable level. However, more than half of the risks for a 

3-year planetary mission, such as a trip to Mars, remain unmitigated. 

In an October 2015 audit, we examined NASA’s efforts to manage the health and human performance 

risks posed by space exploration.21 Although NASA continues to improve its process for identifying and 

managing health and human performance risks associated with space flight, we believe that given the 

current state of knowledge, NASA’s risk mitigation schedule is optimistic and the Agency will not 

develop countermeasures for many deep space risks until the 2030s at the earliest. One of the major 

factors limiting more timely development of countermeasures is uncertainty about the mass, volume, 

and weight requirements of deep space vehicles and habitats. Moreover, even as NASA gains additional 

knowledge about those vehicles and habitats, and the effects of radiation and other space conditions on 

the human body, the Agency may be unable to develop countermeasures that will lower the risk to deep 

20 Concerns are issues the Agency has not yet accepted as risks. 

21 NASA OIG, “NASA’s Efforts to Manage Health and Human Performance Risks for Space Exploration” (IG-16-003, October 29, 

2015). 
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Page 150 NASA FY 2015 Agency Financial Report

space travelers to a level commensurate with Agency standards for low Earth orbit missions. 

Accordingly, the astronauts chosen to make at least the initial forays into deep space may have to 

accept a higher level of risk than those on missions to the ISS. We also found that NASA cannot 

accurately report the true costs of developing countermeasures for the identified risks. 

Furthermore, NASA’s management of crew health risks could benefit from increased efforts to integrate 

expertise from all relevant disciplines. While many life science specialists attempt to utilize the range of 

available expertise both inside and outside the Agency, NASA lacks a clear path for maximizing expertise 

and data at both the organizational and Agency level. For example, NASA has no formalized 

requirements for integrating human health and research among life sciences subject matter experts nor 

does it maintain a centralized point of coordination to identify key integration points for human health. 

Moreover, integrating the experiences of NASA’s engineering and safety efforts would benefit the 

outside life sciences community. The lack of a coordinated, integrated, and strategic approach may 

result in more time consuming and costly efforts to develop countermeasures to the numerous human 

health and performance risks associated with deep space missions. 

According to NASA’s Space Flight Human System Standards, the human system should be viewed as an 

integral part of overall vehicle design. In other words, the standards of the human system should be 

centrally incorporated into vehicle design, mission architecture, countermeasures, and research. 

Several senior Agency officials we met with noted that although NASA has traditionally and successfully 

operated with a vehicle-centered design focus, a shift to a more human-centered design is necessary for 

Mars and other exploration class missions. While Agency officials agreed that a shift in the Agency’s 

focus is required, they offered little insight into how NASA would effectively utilize human-centered 

design for long-term decision making in mission planning and vehicle design. However, many Agency 

officials pointed to astronaut input in the configuration of the Orion capsule in areas such as seating 

placement and lighting options. 

Long duration missions will likely expose crews to health and human performance risks for which NASA 

has limited effective countermeasures. Accordingly, for these missions NASA will have to determine the 

level of risk that is acceptable and clearly communicate the Agency’s decisions to astronauts, Congress, 

and the public. Moreover, NASA needs to continue to explore whether its current health care model for 

astronauts is sufficient to meet both the long-term health needs of the astronaut community and the 

research needs of the Agency. 

Managing NASA’s Science Portfolio

With a relatively constant annual budget of approximately $5 billion since FY 2009, NASA’s Science 

Mission Directorate (SMD) oversees more than 100 projects and programs in various phases of 

development and operation. However, throughout its history NASA has struggled with accurately 

estimating the amount of time and money required to complete these projects. The resulting cost and 

schedule overruns have, in turn, led to challenges in the project development process, diverted funding 

from other projects, and reduced the number and scope of projects the Agency can undertake. For 

example, in September 2011 NASA rebaselined the largest program in SMD’s portfolio – the James 

Webb Space Telescope (JWST) – increasing its life-cycle budget from $4.96 billion to $8.84 billion and 

delaying its launch 4 years from June 2014 to October 2018. Consequently, in FY 2012 NASA moved 

$156 million from other SMD projects and the Cross Agency Support account to help cover the cost 

increases. In addition, several other missions including the Wide-Field Infrared Survey Telescope were 

postponed to make additional funding available for JWST. 

2015 Top Management and Performance Challenges 12 
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2015 Top Management and Performance Challenges 13 

Over the years, studies have identified several root causes for NASA’s challenges in producing accurate 

cost and schedule estimates. In 2012, we conducted an extensive review examining NASA’s project 

management practices in an effort to identify the primary challenges the Agency faces achieving its cost, 

schedule, and performance goals.22 This review identified four factors that appear to present the 

greatest challenges to successful project outcomes at NASA: a culture of optimism; underestimating 

technical complexity; funding instability; and limited opportunities for project managers’ development. 

NASA itself and other outside groups have pointed to these and additional factors such as inadequate 

risk assessments, inadequate reserves, and changes in project scope (design/content). 

While some root causes are outside the Agency’s control, NASA has developed tools to help improve the 

fidelity of its cost and schedule estimates. To this end, since 2006 NASA has incorporated progressively 

more sophisticated estimating techniques into Agency policy, culminating in 2009 with formal adoption 

of a Joint Cost and Schedule Confidence Level (JCL) requirement. 

A JCL analysis generates a representation of the likelihood a project will achieve its objectives within 

budget and on time. The process uses software tools and models that combine cost, schedule, risk, and 

uncertainty to evaluate how expected threats and unexpected events affect a project’s cost and 

schedule. To generate this data, project managers develop comprehensive project plans, inputs, and 

priorities that integrate costs, schedules, risks, and uncertainties. NASA officials contend that gathering 

this data encourages better communication among project personnel; improves cost, schedule, risk, and 

uncertainty analyses; and fosters an understanding of how project elements impact one another. 

Accordingly, a JCL analysis not only establishes the basis for proposing project and program budgets, but 

may improve project planning and provide stakeholders the rigor and documentation to better justify 

funding requests. Since 2009, NASA has completed a JCL analysis for 22 projects with a combined price 

tag of more than $49 billion. 

We examined NASA’s JCL process in a September 2015 audit report.23 Based on our review of these 

22 projects, it appears the JCL policy is having a positive impact on NASA’s historical challenges with cost 

and schedule fidelity. That said, the process is relatively new, still evolving, and not a one-stop solution 

to solving all root causes of cost overruns and schedule delays. Specifically, the process has inherent 

limitations in that, like any estimating practice, it does not fully address the issue of predicting 

“unknown/unknowns” or address some of the root causes of NASA’s project management challenges 

such as funding instability and underestimation of technical complexity.24 

We also identified varied expectations and understandings among Agency stakeholders about the 

JCL process, ranging from those who see JCL as a multifunctional tool that can significantly improve cost 

and schedule management to others who view it as just another task projects must complete before 

moving into the development phase. There were also issues with the quality of some JCL cost, schedule, 

and risk data inputs for several of the projects we reviewed. In-depth assessments of 9 of the 

22 projects revealed 5 projects that had significant weaknesses in project scheduling, risk assessment, 

and cost estimating. Remedying these weaknesses would improve the overall accuracy of JCL analyses. 

 

22 NASA OIG, “NASA’s Challenges to Meeting Cost, Schedule, and Performance Goals” (IG-12-021, September 27, 2012). 

23 NASA OIG, “Audit of NASA’s Joint Cost and Schedule Confidence Level Process” (IG-15-024, September 29, 2015). 

24 “Unknown/unknowns” are future situations that are impossible to predict. 
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2015 Top Management and Performance Challenges 14 

Moreover, the effectiveness and consistency of the process NASA uses to review projects’ JCL analyses 

could be improved. For example, the extent and type of review varied widely from project to project. 

We attributed this inconsistency to a lack of formal guidance, inadequate training for review board 

members, and inconsistent expectations among the review board chairs regarding how projects should 

consider and incorporate the results of board reviews. We also found training for project personnel 

could be improved. 

As of August 2015, 10 of the 22 projects for which NASA performed a JCL analysis – all SMD projects –

have launched.25 As shown in Table 1, four of the projects came in under budget, one met its budget, 

and five exceeded their budgets.26 However, only two of the overruns exceeded 10 percent. 

Table 1: Projects with JCLs Completed That Have Launched

Baseline Development Cost 

(millions of dollars)

Actual Development Cost 

(millions of dollars) Project Percent Change

MSLa $1,720 $1,769 3% 

SOFIAb 1,118 1,120 0 

MMS 857 877 2 

LDCM 588 503 (14)

MAVEN 567 472 (17)

GPMc 519 484 (7)

SMAP 486 479 (1)

OCO-2d 249 329 32

LADEE 168 188 12

NuStar 110 116 6 

Source: NASA OIG analysis. 

a MSL development cost reflects project rebaseline after October 2009 launch date was missed. In 2006, NASA baselined 

development costs at $969 million. 

b SOFIA development cost reflects the project’s second rebaseline value. Historical development cost estimates are difficult 

for comparative purposes due to changing programmatic milestones. However, in 1997 NASA estimated costs for the project 

to reach its Operational Readiness Review of $265 million. 

c GPM development cost reflects the project’s rebaseline value. NASA descoped the project and set the initial baseline at 

$555 million with a launch date of July 2013. The Project was further descoped and rebaselined to launch in February 2014. 

d OCO-2 baseline development cost reflects initial Agency Baseline Commitment, which for comparison purposes is analogous 

to the other projects listed in the table.

The JWST – the scientific successor to the Hubble Space Telescope – is SMD’s largest and most 

expensive program and is expected to be the premier space-based observatory of the next decade when 

it is launched aboard an Ariane 5 launch vehicle provided by the European Space Agency in October 

2018. The observatory is designed to help understand the origin of the first stars and galaxies in the 

universe, the evolution of stars, the formation of stellar systems, and the nature of celestial objects in 

our own solar system. JWST consists of a 25-square-meter mirror composed of 18 smaller mirrors, an 

 

25 The 10 projects are: Global Precipitation Measurement (GPM); Lunar Atmosphere and Dust Environment Explorer (LADEE); 

Landsat Data Continuity Mission (LDCM); Mars Atmosphere and Volatile EvolutioN (MAVEN); Magnetospheric Multiscale 

Mission (MMS); Mars Science Laboratory (MSL); Nuclear Spectroscopic Telescope Array (NuStar); Orbiting Carbon 

Observatory-2 (OCO-2); Soil Moisture Active Passive (SMAP); Stratospheric Observatory for Infrared Astronomy (SOFIA). 

26 The JCL analyses for MSL, SOFIA, and GPM were performed in connection with rebaselines rather than initial estimates. 
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2015 Top Management and Performance Challenges 15 

integrated science instrument module that houses the telescope’s four instruments, and a tennis-court 

size sunshield. JWST’s instruments are designed to work primarily in the infrared range of the 

electromagnetic spectrum, allowing for unprecedented observing capability.27 

JWST has faced significant challenges meeting cost, 

schedule, and performance goals throughout its 

development life cycle. Program cost estimates in the 

late 1990s and early 2000s ranged from $1 billion to 

$3.5 billion, with an expected launch date between 

2007 and 2011. However, following a change in the 

launch vehicle and revisions to other requirements, in 

2005 NASA estimated life-cycle costs at $4.5 billion 

with a launch date in 2013. A year later, an 

independent review team reported that although the 

Program was technically sound, funding reserves 

were too low, phased too late in development, and 

insufficient to support such a complex Program. The 

review team also reported that a 2013 launch date 

was not achievable. In 2009, NASA rebaselined JWST 

with a life-cycle cost estimate of $4.9 billion and 

a June 2014 launch date. 

 

Unfortunately, it soon became clear that neither this cost estimate nor the 2014 launch date were 

attainable. At the request of Congress, NASA commissioned another independent review and in 

October 2010 this panel reported that while JWST’s technical performance was “commendable and 

often excellent,” the Program’s budget and contingency funding reserve was severely understated and 

improperly phased, Program management was ineffective, and the Program could not meet its cost and 

schedule commitments.28 Subsequently, NASA restructured the JWST Program, and in September 2011 

established a revised baseline life-cycle cost estimate of $8.84 billion and an October 2018 launch date. 

Out of 48 milestones the JWST Program planned to complete in FY 2015, 44 were completed and 

4 deferred to next year. This is an improvement over the previous year, which saw 11 of 36 tasks 

deferred to FY 2015. Significant accomplishments include integration of several instruments on the 

Integrated Science Instrument Module, which completed vibration, acoustics, and electromagnetic 

compatibility and electromagnetic interference testing; integration of major telescope structural 

components; and delivery of one of the five sunshield membrane layers from the manufacturer. Though 

not unanticipated, unexpected issues have arisen during integration and testing that require time and 

money to address. In particular, the cryo-cooler, a compressor designed to keep JWST’s Mid-Infrared 

Instrument at its operating temperature of minus 267 Celsius, remains on the critical path.29 However, 

the Program is maintaining funded schedule reserve above the established plan. In the next year, the 

27 The electromagnetic spectrum is the full range of frequencies from radio waves to gamma rays. 

28 Independent Comprehensive Review Panel, “James Webb Space Telescope (JWST) Independent Comprehensive Review 

Panel (ICRP): Final Report” (October 29, 2010).

29 The term “critical path” describes sequential tasks in a program’s development schedule. Any significant slippage of tasks in 

the critical path would delay development efforts, launch date and most likely increase the project’s cost.
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2015 Top Management and Performance Challenges 16 

Program plans to concentrate on completing the three main components of the observatory 

(instruments, telescope, spacecraft) and continue integration and testing of major components, which 

may reveal new challenges managers will have to address for the mission to successfully launch on time 

and within its current budget. 

We will continue to monitor NASA’s use of the JCL process as it manages ongoing science projects. 

In addition, we recently opened an audit examining NASA’s management of its Earth Science mission 

portfolio to assess whether it is achieving established goals and priorities and meeting stakeholder needs.

Ensuring the Continued Efficacy of the Space 

Communications Network 

NASA’s satellites and other spacecraft are significantly more sophisticated than their predecessors, 

capable of acquiring huge amounts of data and employing rudimentary artificial intelligence to make 

autonomous decisions. However, even after decades of space flight one key requirement has not 

changed – spacecraft must be able to communicate with Earth to receive commands from human 

controllers and to return scientific data for study. To meet this need and provide communications, 

navigation, and transmission of scientific data to space flight missions NASA operates the Space 

Communications and Navigation (SCaN) Program. 

SCaN is comprised of three networks: (1) the Near Earth Network, which covers low Earth orbit and 

portions of geosynchronous and lunar orbit; (2) the Space Network, which controls the Tracking and 

Data Relay Satellites (TDRS) through a network of geographically diverse ground systems; and (3) the 

Deep Space Network, which covers NASA communications beyond low Earth orbit, including planetary 

exploration missions to Mars and beyond. Without SCaN services, NASA could not receive data 

transmissions from its satellites and robotic missions or control such missions from Earth, and space 

hardware worth tens of billions of dollars would be little more than orbital debris. While NASA has 

provided these services for over 30 years, many of its current satellite communications systems are 

aging and increasingly difficult to repair. 

In 2006, NASA initiated the SCaN Program to create an integrated Agency-wide space communications 

and navigation architecture. The evolution of the integrated system will take place in phases. With a 

planned FY 2016 budget of $632 million, the Near Earth, Space, and Deep Space Networks initially will 

remain independent. In the interim, SCaN is investigating different approaches to equipment 

commonality and adding new capabilities that extend the functionality of each Network. SCaN also 

manages the Spectrum Program for NASA and is deeply involved in this issue with other space-faring 

nations. The Spectrum Program ensures all NASA activities comply with national and international laws 

applicable to the use of the electromagnetic spectrum. Nearly every endeavor NASA undertakes 

requires communications or data transfer via the electromagnetic spectrum. 

We are examining each of the major aspects of the SCaN Program and in March 2015 issued the second 

audit in this series, which focused on NASA’s Deep Space Network.30 Established in 1963 to provide 

communications for NASA robotic missions operating outside of Earth orbit, the Network provides deep 

space missions with the tracking, telemetry, and command services required to control and maintain 

spacecraft and transmit science data. Although the Network primarily services NASA missions, it also 

 

30 NASA OIG, “NASA’s Management of the Deep Space Network” (IG-15-013, March 26, 2015). 
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NASA FY 2015 Agency Financial Report Page 155

2015 Top Management and Performance Challenges 17 

supports missions by the Agency’s international partners and because of its importance, NASA has 

designated the Network as NASA Critical Infrastructure.31 During FY 2015, the Deep Space Network 

supported more than 30 missions, including the flyby of Pluto by NASA’s New Horizons mission.

To allow for continuous communication with spacecraft traveling through deep space, the Deep Space 

Network operates communications complexes in three locations: Goldstone, California; Madrid, Spain; 

and Canberra, Australia (see Figure 1), with one 70-meter antenna and multiple 34-meter antennas at 

each location for around-the-clock coverage. NASA pays operating costs for all three sites and has 

contracts with Spanish and Australian government entities to manage day-to-day operations for the 

foreign sites and with the Jet Propulsion Laboratory (JPL), a federally funded research and development 

center operated pursuant to contract by the California Institute of Technology, for the Goldstone site. 

Figure 1: Locations of Primary Deep Space Network Communications Complexes

 

31

Source: NASA OIG representation of Deep Space Network information.

Much of the Deep Space Network’s hardware is more than 30 years old, costly to maintain, and requires 

modernization and expansion to ensure continued service for existing and planned missions. Accordingly, 

in 2009 management proposed an upgrade project to build new antennas and transmitters between 

2009 and 2025. Moreover, the Network has significant information technology (IT) and physical 

infrastructure components it must protect against compromise from cyber attack, espionage, and 

terrorism. To this end, the JPL, Madrid, and Canberra agreements require each contractor to follow 

specified Federal and NASA security policies. 

 NASA Critical Infrastructure are operations, functions, physical assets, or information technology resources essential to the 

success of the Agency's mission. NASA considers the Deep Space Network Critical Infrastructure because of its high public 

visibility, importance to the accomplishment of NASA missions, high dollar value, and the difficulty of replacing the Network 

in a reasonable amount of time. 
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2015 Top Management and Performance Challenges 18 

We found that although the Deep Space Network is meeting its current operational commitments, 

budget reductions have challenged the Network’s ability to maintain these performance levels and 

threaten its future reliability. Specifically, in FY 2009 the Network implemented a plan to achieve 

$226.9 million in savings over 10 years and use most of those savings to build new antennas and 

transmitters. However, in FY 2013 the SCaN Program reduced the Network’s budget by $101.3 million, 

causing management to delay upgrades, close antennas, and cancel or re-plan tasks. In addition, SCaN 

officials are considering additional reductions for the Network in FY 2016 that could further delay 

maintenance and upgrade tasks. Finally, despite these reductions the Network has not revised life-cycle 

cost estimates for the upgrade project or performed a detailed funding profile beyond FY 2018, making 

it difficult to effectively plan and justify funding for the project and the Network’s future commitments. 

If budget reductions continue, the Network faces an increased risk that it will be unable to meet future 

operational commitments or complete the upgrade project on schedule. 

We also found that NASA, JPL, and the Deep Space Network have significantly deviated from Federal and 

Agency policies, standards, and governance methodologies for the security of the Network’s IT and 

physical infrastructure. For example, the Network’s system security categorization process did not 

consider all Network mission functions, vulnerability identification, and mitigation practices and the 

IT security configuration baseline application did not comply with Federal and Agency policy. Further, 

required physical security controls were missing or inconsistently implemented at the three Complexes, 

procedures to assign security level designations did not comply with NASA policy, required facility 

security assessments had not been completed, and security waivers or other risk acceptance 

documentation were not consistently in place. As a result, the Network’s IT and physical infrastructure 

may be unnecessarily vulnerable to compromise. 

Finally, NASA has not required the Madrid contractor to provide detailed cost support for contract 

expenses on a timely basis or ensured the Defense Contract Audit Agency performs incurred cost audits 

of the Madrid and Canberra contracts on a routine basis. Consequently, NASA cannot ensure 

approximately $37 million in annual payments made to these contractors is allocable, allowable, and 

reasonable. 

We made 12 recommendations, including that NASA develop a realistic, accurate, and transparent 

budget that supports the Network’s ability to provide communication services; ensure the Network 

follows established IT security policies, standards, and governance methodologies; develop a strategy 

for implementing evolving IT and physical security policies at JPL through means that minimize 

time-consuming negotiation of formal contract modifications; ensure physical security requirements are 

implemented consistently across the Network Complexes; and improve oversight of the foreign 

contracts. Management concurred with our recommendations and described planned corrective 

actions. The Agency has completed corrective actions for three of the recommendations and continues 

to work to implement the recommendations related to improving IT and physical security. 

Issued in April 2014, our first SCaN audit focused on the Space Network.32 In that report, we found key 

components of the Network were not meeting planned cost, schedule, and performance goals, and that 

taken together the delays and cost growth increased the risk the Network would be unable to continue 

to provide adequate communication services to NASA missions and its customers. 

 

32 NASA OIG, “Space Communications and Navigation: NASA’s Management of the Space Network” (IG-14-018, April 29, 2014). 
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2015 Top Management and Performance Challenges 19 

NASA is upgrading the Space Network through the Space Network Ground Segment Sustainment (SGSS) 

Project, with the goal of implementing a modern ground system that will enable delivery of high quality 

services while significantly reducing operations and maintenance costs. To complement the ground 

system, NASA maintains the TDRS fleet of satellites that transmit the tracking, data, voice, and video 

services from the ground station to the ISS, NASA’s space and Earth science missions, other Federal 

agencies, and commercial users. The Space Network is in the process of upgrading and replenishing 

failing satellites, many of which are operating well beyond their planned lives. 

At the time of our audit, NASA’s baseline commitment 

for the SGSS Project was $862 million and the 

scheduled completion date was June 2017. We found 

the Project could cost $329 million more than this 

commitment and the schedule for completion slip 

more than 18 months. Consistent with our finding, in 

June 2015 NASA’s Agency Program Management 

Council approved a new agency baseline commitment 

of $1.2 billion and a Project completion date of 

September 2019.

We also reported that because of budget reductions 

and the loss of other expected revenue, in FY 2016 

the Space Network would not have sufficient funding 

to meet all planned service commitments. Although 

NASA agreed to provide free access to Space Network 

services for some customers beginning in FY 2014 in 

exchange for their contributions to the development 

of two satellites several years earlier, the Agency 

failed to adequately plan for the resulting loss of 

approximately $70 million per year in revenue. Consequently, the Space Network projected a 

$63 million budget shortfall in FY 2016 and even larger estimated shortfalls in subsequent years. 

However, as the Agency worked through the FY 2016 budget process, the Network received a budget 

that will allow it to meet its obligations. Finally, as we had reported in a prior audit, we found that NASA 

had not kept current the rate it charges customers for use of the Space Network and, as a result, may be 

absorbing costs for services used by other Federal agencies and commercial customers.33 The Agency 

has since updated the rate and put a policy in place to ensure periodic reviews of the rate. 

We opened the third audit in our SCaN series in April 2015. In this audit, we are examining how NASA’s 

Near Earth Network, which provides science missions in low Earth orbit with tracking, telemetry, and 

command services needed to control spacecraft and transmit data, is managing risks and adjusting 

capabilities to meet current and future requirements within its cost, schedule, and performance goals. 

The Network operates antennas and transmitters at four locations: Wallops Flight Facility, Virginia; 

White Sands Complex, New Mexico; Alaska Satellite Facility, Fairbanks, Alaska; and the U.S. McMurdo 

Antarctic Station. By 2017, the Near Earth Network will increase its capacity to support human space 

flight activities associated with the SLS and Orion Programs by operating new antennas in Florida. To 

meet increasing demand for communications services, the Network procures communications and 

navigation services from commercial communications providers. Specifically, the Network obtains 

 

33 NASA OIG, “Review of NASA’s Tracking and Data Relay Satellite System” (IG-10-023, September 21, 2010). 
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2015 Top Management and Performance Challenges 20 

about half of its services using commercial providers for ground stations in Australia, Chile, Germany, 

Norway, South Africa, and Sweden, and it is not clear whether NASA’s reliance on commercial providers 

is less expensive than using Government-owned services. At the same time, the Network’s assets are 

aging, located in extreme environments, and require maintenance and modernization to ensure 

continued services for existing and planned missions. And, similar to our audit of the Deep Space 

Network, we believe that the Near Earth Network may face IT security risks. 

We plan to complete our series of audits on the SCaN Program with a review of Spectrum Management 

and a capping report on the overall Program. 

Overhauling NASA’s Information Technology 

Governance 

NASA spends more than $1.5 billion annually on a portfolio of IT assets that includes approximately 

500 information systems the Agency uses to control spacecraft, collect and process scientific data, and 

enable its personnel to collaborate with colleagues around the world. IT plays an integral role in every 

facet of Agency operations, and hundreds of thousands of individuals, including NASA personnel, 

contractors, members of academia, and the public rely on NASA IT systems daily. 

IT governance is a process for designing, procuring, and protecting IT resources. Because IT is intrinsic 

and pervasive throughout NASA, the Agency’s IT governance structure directly affects its ability to attain 

its strategic goals. For this reason, effective IT governance must balance compliance, cost, risk, security, 

and mission success to meet the needs of internal and external stakeholders. However, for more than 

2 decades NASA has struggled to implement an effective IT governance approach that appropriately 

aligns authority and responsibility commensurate with the Agency’s overall mission. Since at least 1990, 

the OIG and GAO have highlighted a series of challenges stemming from the limited authority of NASA’s 

Chief Information Officer (CIO), decentralization of Agency IT operations, ineffective IT governance, and 

shortcomings in IT security. 

In a June 2013 audit, we examined whether NASA’s Office of the Chief Information Officer (OCIO) has 

the organizational, budgetary, and regulatory framework needed to effectively meet the Agency’s varied 

missions.34 We found the decentralized nature of NASA’s operations and its longstanding culture of 

autonomy hinder its ability to implement effective IT governance. The CIO had limited visibility and 

control over a majority of the Agency’s IT investments, operated in an organizational structure that 

marginalizes the authority of the position, and could not enforce security measures across NASA’s 

computer networks. Moreover, the IT governance structure in place at the time was overly complex and 

did not function effectively. As a result, Agency managers tended to rely on informal relationships 

rather than formalized business processes when making IT-related decisions. While other Federal 

agencies were moving toward a centralized IT structure under which a senior manager has ultimate 

decision authority over IT budgets and resources, NASA continued to operate under a decentralized 

model that relegated decision making about critical IT issues to numerous individuals across the Agency, 

leaving such decisions outside the purview of the NASA CIO. As a result, NASA’s current IT governance 

model weakens accountability and does not ensure that IT assets across the Agency are cost effective 

and secure. 

 

34 NASA OIG, “NASA’s Information Technology Governance” (IG-13-015, June 5, 2013). 
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2015 Top Management and Performance Challenges 21 

With mission critical assets at stake and in an era of shrinking budgets, NASA must take a holistic 

approach to managing its portfolio of IT systems. To overcome the barriers that have resulted in the 

inefficient and ineffective management of the Agency’s IT assets, we made a series of recommendations 

to overhaul NASA’s IT governance structure by centralizing IT functions and establishing the Agency CIO 

as the top management official responsible for the Agency’s entire IT portfolio. This would include 

empowering the CIO to approve all IT procurements over a monetary threshold that captures the 

majority of IT expenditures and making the CIO a direct report to the NASA Administrator. We also 

recommended the Administrator reevaluate the relevancy, composition, and purpose of NASA’s primary 

IT governance boards in light of the changes made to the governance structure and require the use of 

reconstituted governance boards for all major IT decisions and investments. Finally, we suggested the 

NASA Administrator reevaluate the resources of the OCIO to ensure that the Office has the appropriate 

number of personnel with the appropriate skills. 

Effective implementation of the recommendations will require a cultural shift and significant changes to 

the Agency’s IT management decision-making regime, including the realignment of authority and 

responsibilities. NASA management has acknowledged the need for change and in our view is taking a 

considered approach in implementing corrective action. To date, NASA has made the Agency CIO a 

direct report to the NASA Administrator and completed an organizational assessment to determine if 

the OCIO has the appropriate number of personnel with the proper capabilities. In addition, 

IT Governance was the subject of the first Business Services Assessment under NASA’s Technical 

Capabilities Assessment Team (TCAT) process.35 The Assessment took nearly 7 months to complete and 

addressed many of the issues discussed in our report. For example, the Assessment reviewed the 

IT governance board framework including the relevancy, composition, and purpose of existing IT boards. 

The associated recommendations included creating a senior-level IT Council and eliminating the existing 

IT Management and Business Systems Management Boards. Agency officials have directed the CIO to 

develop an implementation plan to address the results of the Assessment. NASA anticipates completing 

corrective action to address all the recommendations in our report by January 2016. Within the next 

18 months, we plan to open a follow-up audit to examine whether the changes the Agency implements 

have improved its IT governance process. 

Securing NASA’s Information Technology Systems 

and Data 

The large number of NASA networks and websites coupled with the Agency’s statutory mission to share 

scientific information present unique IT security challenges. For FYs 2013 and 2014, NASA reported 

3,413 computer security incidents resulting in the installation of malicious software on or unauthorized 

access to Agency computers. These incidents included individuals testing their skills to break into NASA 

systems, well-organized criminal enterprises hacking for profit, and intrusions that may have been 

sponsored by foreign intelligence services seeking to further their countries’ objectives. Moreover, 

NASA’s vast connectivity with outside organizations – most notably nongovernmental entities such as 

educational institutions and research facilities – offers cybercriminals a larger target than most other 

Government agencies. From October 2013 through June 2015, NASA reported the following trends: 

 

35 TCAT was tasked with establishing a more efficient Agency operating model that maintains critical capabilities and meets 

current and future mission needs.
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Page 160 NASA FY 2015 Agency Financial Report







Incidents related to unauthorized access have increased primarily due to lost and stolen 

equipment. 

Incidents related to installation of malicious software have declined; however, they continue to 

represent the largest type of incidents at the Agency. Phishing campaigns continue to be the 

most significant method of attack for incidents related to installation of malicious software.36 

Agency websites are constantly scanned to identify vulnerabilities and exploit weaknesses. 

NASA manages approximately 1,200 publicly accessible web applications, or about half of all publicly 

accessible, nonmilitary Federal Government websites, to share scientific information with the public, 

collaborate with research partners, and provide Agency civil servant and contractor employees with 

remote access to NASA networks.37 Hundreds of these web applications are part of IT systems NASA 

characterizes as high- or moderate-impact, meaning that a security breach could result in the loss of 

sensitive data or seriously impair Agency operations. 

In June 2015, the Office of Personnel Management disclosed that it had been the target of a data breach 

targeting millions of sensitive civil servant and contractor personnel records. Federal officials described 

this as among the largest breaches of Government data in history. In light of this event and to further 

improve Federal cybersecurity, the Office of Management and Budget launched a 30-day Cybersecurity 

Sprint, requiring Federal agencies to patch critical vulnerabilities, tighten access for privileged users, and 

increase the use of multi-factor authentication. We plan to review the results of NASA’s efforts in our 

next annual Federal Information Security Management Act (FISMA) evaluation. We also are planning to 

open audits examining security over NASA’s information systems and critical infrastructure. 

NASA must also ensure that its IT systems and associated components are regularly safeguarded, 

assessed, and monitored to protect against inevitable attacks on those systems. To assist in this effort, 

NASA completed a series of initiatives over the past 2 years to address IT security concerns, including 









modernizing and expanding continuous monitoring and network penetration testing; 

deploying intrusion detection systems across mission, corporate, and research networks; 

increasing web application security scanning; and 

implementing intrusion prevention systems. 

While the completion of these initiatives improves NASA’s security posture, as we have reported in our 

last four annual FISMA evaluations, NASA officials have not developed an Agency-wide risk management 

process specific to information security. Risk management is a comprehensive process that requires an 

organization to describe the environment in which risk-based decisions are made to access, respond to, 

and monitor risk over time. Ongoing monitoring is a critical part of an agency’s risk management 

program. 

 

36 Phishing refers to the use of deceptive computer-based means to trick individuals into disclosing sensitive personal 

information. In a phishing attack, an attacker creates a website or e-mail that looks as if it is from a well-known organization 

like a credit card company or financial institution. 

37 NASA’s publicly accessible web applications consist mainly of websites, but also include web-based login portals and 

administrative systems that provide authorized personnel remote access to Agency IT resources. 

2015 Top Management and Performance Challenges 22 
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2015 Top Management and Performance Challenges 23 

Over the past 5 years, the OIG has issued 19 audit reports containing 75 recommendations designed to 

improve NASA’s information security program. In a 2014 report, we examined NASA’s efforts to identify 

and assess vulnerabilities on its publicly accessible web applications and mitigate the most severe 

vulnerabilities before hackers exploit them.38 Reducing the Agency’s extensive web “footprint” is one of 

the more effective ways NASA can reduce the threat of cyber-attacks. To this end, the OCIO and Center 

IT security officials are working to reduce NASA’s web presence by eliminating unused and duplicative 

web applications and moving Agency websites to a public cloud-computing environment.39 NASA 

developed an inventory of all publically available web applications maintained by NASA Headquarters 

and Centers and identified vulnerabilities through automated scanning coupled with manual testing. In 

addition, during the 15-month period ending March 2014, NASA reduced the number of its publicly 

accessible web applications by 15 percent. 

While NASA’s ongoing efforts to reduce its web presence and to identify and scan for vulnerabilities on 

its publicly accessible web applications have improved Agency IT security, the Agency’s remaining 

1,200 publicly accessible web applications continue to present a large target for hackers. NASA needs to 

close remaining security gaps, strengthen program oversight, and further reduce the number of publicly 

accessible web applications. To address security concerns over publicly accessible applications under 

development or in testing mode, NASA plans to deploy an enterprise web application firewall in May 2016. 

In a review completed in 2014, we evaluated NASA’s management of smartphones, tablets, cell phones, 

and AirCards.40 These mobile devices pose security threats because of their size, portability, constant 

wireless connection, physical sensors, and location services. Further, the diversity of available devices, 

operating systems, carrier-provided services, and applications present additional security challenges. 

We found that although NASA began enforcing security requirements on all smartphones and tablets 

that connect to NASA’s e-mail systems in September 2013, the Agency still needed to implement a 

technical tool to mitigate risks when those devices connect to NASA systems other than e-mail. The 

Agency is still reviewing various technical tools and plans to complete corrective action in FY 2016. 

In an August 2012 audit, we examined the effectiveness of NASA’s Security Operations Center (SOC) in 

managing the Agency’s computer security incident detection and handling program to prevent 

unauthorized cyber intrusions into Agency networks.41 NASA consolidated its previously Center-based 

computer security incident detection and response programs into the SOC in November 2008 in an 

effort to improve its capability to detect and respond to evolving threats posed by increasingly 

sophisticated cyber-attacks. Located at Ames Research Center, the SOC provides centralized, 

continuous monitoring of computer network traffic entering and leaving NASA Centers and includes an 

information system for Agency-wide coordination, tracking, and reporting of IT security incidents. In 

general, we found that the SOC has improved NASA’s computer security incident handling capability by 

providing continuous incident detection coverage for all NASA Centers. However, NASA still needs to 

improve overall SOC availability and plans to complete related corrective actions by September 2016. 

 

38 NASA OIG, “Security of NASA’s Publicly Accessible Web Applications” (IG-14-023, July 10, 2014). 

39 A public cloud-computing environment consists of a third-party IT service provider (e.g., Amazon) that delivers services such 

as website hosting or data storage to consumers over the Internet. 

40 NASA OIG, “NASA’s Management of its Smartphones, Tablets, and Other Mobile Devices” (IG-14-015, February 27, 2014). An 

AirCard is a device that provides the user with access to wireless broadband cellular services. 

41 NASA OIG, “Review of NASA’s Computer Security Incident Detection and Handling Capability,” (IG-12-017, August 7, 2012). 
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2015 Top Management and Performance Challenges 24 

In our March 2015 report on NASA’s Deep Space Network, we found that NASA’s SOC was not 

adequately integrated into JPL’s computer network operations.42 Although JPL is required to report 

computer security incidents on its network to the NASA SOC, we found NASA lacks the ability to verify 

the accuracy or completeness of JPL’s reporting. Further, we found JPL has network connections that 

NASA is not monitoring because JPL and NASA have not come to an agreement on plans for 

comprehensive monitoring. As a result, NASA lacks the ability to monitor a large portion of JPL network 

traffic – which may be destined for or originate from Network associated components – for suspicious 

activity, provide timely assistance in the event of an incident, and ensure its information systems and 

data are fully protected. The Agency agreed to take action on our recommendation to ensure the NASA 

SOC has appropriate oversight at JPL to support NASA's Agency-wide incident management program by 

February 2016.

In addition to our audit work, the OIG expends substantial resources investigating IT security issues. 

OIG investigators have conducted more than 100 investigations of breaches of NASA IT networks over 

the past 5 years and helped to secure convictions of hackers operating from such wide-ranging locations 

as Australia, England, Italy, Nigeria, Portugal, Romania, and Turkey. In one notable example, an 

OIG investigation recently resulted in an Estonian national accused of directing an Internet fraud scheme 

pleading guilty to hacking-related charges associated with operating a sophisticated Internet fraud 

scheme that infected more than four million computers located in over 100 countries. The malware 

secretly altered the settings on infected computers, enabling the individual and others to digitally hijack 

Internet searches and re-route computers to specific websites and advertisements. In another case, 

OIG agents successfully investigated an insider threat involving a former contract employee who illegally 

accessed and attempted to destroy NASA systems. 

Managing NASA’s Aging Infrastructure and Facilities

NASA controls approximately 5,000 buildings and structures with an estimated replacement value of 

more than $35 billion, making the Agency among the larger Federal Government property holders. 

More than 80 percent of the Agency’s facilities are 40 or more years old and thus beyond their design 

life. NASA strives to maintain these facilities in an efficient operational status, and when not 

operational, in sufficient condition not to pose a safety hazard. However, NASA has not been able to 

fully fund required maintenance for its facilities and in 2015 estimated its deferred maintenance costs at 

$2.3 billion. 

The OIG has dedicated substantial resources over the last 5 years to examining NASA’s infrastructure 

challenges.43 This past year we added to this body of work with reports on Plum Brook Station and 

 

42 NASA OIG, “NASA’s Management of the Deep Space Network” (IG-15-013, March 26, 2015). 

43 NASA OIG, “NASA’s Independent Verification and Validation Program” (IG-14-024, July 16, 2014); “Audit of NASA’s 

Environmental Restoration Efforts” (IG-14-021, July 2, 2014); “NASA’s Management of Energy Savings Contracts” (IG-13-014, 

April 8, 2013); “Review of NASA’s Explosives Safety Program” (IG-13-013, March 27, 2013); “NASA’s Environmental 

Remediation Efforts at the Santa Susana Field Laboratory” (IG-13-007, February 14, 2013); “NASA’s Efforts to Reduce 

Unneeded Infrastructure and Facilities” (IG-13-008, February 12, 2013); “NASA’s Plans to Modify the Ares I Mobile Launcher 

in Support of the Space Launch System” (IG-12-022, September 25, 2012); “NASA’s Infrastructure and Facilities: An 

Assessment of the Agency’s Real Property Leasing Practices” (IG-12-020, August 9, 2012); “NASA’s Infrastructure and 

Facilities: An Assessment of the Agency’s Real Property Master Planning” (IG-12-008, December 19, 2011); “NASA 

Infrastructure and Facilities: Assessment of Data Used to Manage Real Property Assets” (IG-11-024, August 4, 2011); “NASA’s 

Hangar One Re-Siding Project” (IG-11-020, June 22, 2011); and “Audit of NASA’s Facilities Maintenance” (IG-11-015, 

March 2, 2011). 
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2015 Top Management and Performance Challenges 25 

NASA’s Pressure Vessel and Pressurized Systems Program.44 As in our prior work, in both reports we 

found infrastructure that requires substantial resources to maintain and, in several instances, is 

significantly underutilized. 

Plum Brook Station, located about 50 miles west of NASA’s Glenn Research Center in Sandusky, Ohio, is 

home to several unique space-related test facilities, including the Space Power Facility (SPF), an 

environmental simulation chamber used to test hardware in a simulated space or planetary 

environment. However, a majority of Plum Brook’s test facilities are underutilized and the level of use 

and funding they receive depends on whether individual NASA programs or external customers choose 

to perform testing there rather than at other NASA or private facilities. Over the past 10 years, Plum 

Brook has eliminated approximately 1.3 million square feet of buildings and structures from its property 

inventory. However, it continues to maintain several major testing facilities – most prominently the SPF 

and the Spacecraft Propulsion Research Facility (B-2), the world’s largest thermal vacuum chamber that 

is also capable of testing rocket engines. Of these facilities, only the SPF has a full slate of testing 

planned over the next several years. In contrast, Plum Brook’s Hypersonic Tunnel Facility and Cryogenic 

Components Laboratory have not been utilized for at least 4 years while a third facility – the Combined 

Effects Chamber designed for large-scale liquid hydrogen experiments – is unusable in its current 

condition. As of February 2015, NASA had not identified any customers for these three facilities. 

Moreover, although NASA’s Solar Electric Propulsion Project plans to perform testing in the B-2 vacuum 

chamber in 2015, future utilization of the facility’s rocket testing capabilities is uncertain. While NASA 

officials told us the B-2 could be used to test the SLS’s upper stage rockets, such testing would require 

$15 million in basic refurbishment to the facility – costs the SLS Program or any other potential customer 

would be expected to cover in addition to potentially significant program-specific test costs. 

To conduct its space and science operations, NASA uses a variety of pressure vessels and pressurized 

systems (PVS) such as storage tanks, cylinders, and piping that deliver compressed gas or liquid under 

significant pressure. Because of the nature of these gasses and liquids and how they are used, PVS may 

fail and cause harm to people, facilities, and the surrounding environment if not properly operated and 

maintained. NASA has experienced PVS failures in the past that resulted in loss of mission, injury, and 

property damage. 

As of February 2015, NASA managed 10,109 active PVS and spent approximately $22 million annually to 

inspect and maintain these systems. Most PVS failures occur when a vessel or piping wall fails or 

ruptures because the internal pressure of the material inside exceeds the strength of the wall. Similar to 

the skin of a balloon that progressively grows thinner as inflated and weaker after multiple 

inflation-deflation cycles, over-pressurization or repeated pressurization and depressurization can 

gradually weaken the skin or walls of PVS, eventually leading to failure. Internal or external corrosion 

and physical damage (scratches, dings, and dents) can also increase the risk of PVS failure. 

We found NASA Centers could benefit from stronger oversight and clarification of policies and 

procedures to ensure reliable operation of their PVS, which in turn could reduce risk to personnel and 

facilities. Specifically, NASA policy and standards for the management, operation, inspection, and 

maintenance of PVS are intentionally written at a fairly high level and do not contain specific guidance 

 

44 NASA OIG, “Audit of NASA’s Requirements for Plum Brook Station” (IG-15-014, April 23, 2015); “Review of NASA’s Pressure 

Vessels and Pressurized Systems Program” (IG-15-019, June 30, 2015). 
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2015 Top Management and Performance Challenges 26

regarding the application of national consensus codes and standards or the level of experience, 

education, and training sufficient to qualify an individual to serve as a Center Pressure Systems 

Manager. In addition, NASA’s Office of Safety and Mission Assurance did not provide adequate 

oversight of Center PVS Programs. 

We also found multiple issues of concern at each of the Centers we visited, including corrosion on a 

large number of PVS, inadequate inventory and property controls, and unclear assignment of Pressure 

Systems Manager roles and responsibilities. For example, at Langley Research Center we identified 

significant corrosion on high pressure piping and components, ground water penetration, and 

obstructed piping and systems in an underground utility corridor that contains high pressure steam 

piping, electrical conduit, and fiber optic communication lines (as shown in figure 2). If a rupture were 

to occur in this corridor, the resulting damage could cause power and communications outages that 

would impact Center operations. In our judgment, NASA’s PVS Program could be improved by 

establishing clear lines of communication for resolving issues, implementing corrosion prevention and 

mitigation programs, and evaluating and providing the PVS Programs sufficient resources to meet 

Center mission goals and objectives. 

Figure 2: High Pressure Lines in a Langley Research Center Utility Corridor 

Source: NASA OIG. 

Given the disparity between the Agency’s infrastructure and its mission-related needs, as well as the 

likelihood of continued constrained budgets, it is imperative NASA move forward aggressively with its 

infrastructure assessment and reduction efforts. To achieve this goal, the Agency will need to move 

away from its longstanding “keep it in case you need it” mindset and overcome historical incentives for 

the Centers to build up and maintain unneeded capabilities. In addition, NASA officials need to manage 

the concerns of political leaders about the impacts eliminating or consolidating facilities will have on 

Centers’ missions, their workforces, and the local communities. Moreover, abrupt changes in the 

strategic direction of the Nation’s space policy by the President, Congress, and NASA will continue to 

add an element of uncertainty regarding the missions the Agency will pursue and therefore the facilities 

it will need to achieve those missions. 
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As we noted in our February 2013 report on underused facilities, NASA’s best efforts to address its 

infrastructure challenges may ultimately be insufficient to overcome the cultural and political obstacles 

that have impeded past efforts to reduce Agency infrastructure.45 Accordingly, an outside process 

similar to the Department of Defense’s Base Realignment and Closure Commission may be necessary to 

make the difficult but necessary decisions.

In 2014, NASA embarked on an effort to strategically address the technical capabilities required to 

support Agency goals. Referred to as the Technical Capabilities Assessment Team (TCAT) and 

championed by the NASA Associate Administrator, this effort aims to provide NASA leadership with the 

information needed to make informed decisions about investing and divesting to ensure the Agency has 

the right mix of people and assets to carry its mission forward. Personnel from all 10 NASA Centers and 

4 Mission Directorates, as well as the senior managers responsible for executing the decisions, 

participated in the process. 

As of September 2015, TCAT has assessed 18 technical capabilities, including Mission Operations and 

Propulsion, and issued 11 formal decisions. As a result of these decisions, the Agency has excessed 

some aircraft, eliminated internal microgravity flight operations, and updated several external and 

internal memorandums of agreement. Agency decision-makers are considering what additional actions 

to take based on TCAT’s work.

We plan to open a review early in 2016 examining the impact of TCAT and the status of the Agency’s 

other strategic infrastructure initiatives.

Ensuring the Integrity of the Contracting and Grants 

Processes 

Approximately 74 percent of NASA’s $17.6 billion FY 2014 budget was spent on contracts to procure 

goods and services, and the Agency awarded another $868 million in grants and cooperative 

agreements. Accordingly, NASA managers face the ongoing challenge of ensuring the Agency pays 

contractors in accordance with contract terms and receives fair value for its money, and that grants and 

cooperative agreements are administered appropriately and recipients are accomplishing stated goals. 

For its part, the OIG seeks to assist NASA by examining Agency-wide procurement processes; auditing 

individual contracts, grants, and cooperative agreements; and investigating potential misuse of Agency 

contract and grant funds. 

During the past year, the OIG continued to uncover fraud and other problems related to NASA contracts. 

For example: 



 

The OIG and the Internal Revenue Service investigated the validity of consulting fees charged to 

a NASA contract. The investigation identified a tax evasion scheme whereby the Chief Executive 

Officer (CEO) of a NASA contractor used the consulting fees as a vehicle to avoid paying taxes on 

large portions of his personal income. Ultimately the CEO pled guilty to making false statements 

on a Federal income tax return, was sentenced to 3 years in Federal prison, and agreed to make 

$294,300 in restitution and pay $99,000 directly to NASA. 

45 NASA OIG, “NASA’s Efforts to Reduce Unneeded Infrastructure and Facilities” (IG-13-008, February 12, 2013). 
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2015 Top Management and Performance Challenges 28 

 The CEO of another NASA contractor agreed to pay $4.5 million to settle civil claims relating to 

his involvement in a fraudulent scheme whereby he created a front company to obtain contracts 

through the Small Business Administration’s Section 8(a) Program. The Section 8(a) Program 

allows qualified small businesses to receive sole-source and competitive-bid contracts set aside 

for minority-owned and disadvantaged small businesses. The CEO was also criminally 

prosecuted for the scheme and received a 72-month prison sentence and ordered to forfeit 

$6.1 million.

Given NASA’s continued reliance on contractors to provide essential services, the Agency will remain 

susceptible to contract fraud schemes at any stage of the procurement and acquisition process. Typical 

schemes involve collusion among bidders, employers, and contractors; corrupt payments in the form of 

bribes and kickbacks; bid manipulation; failure to meet contractual specifications; substitution of 

products or materials of lesser quality than specified in the contract; use of counterfeit, defective, or 

used parts in an attempt to increase profits or comply with contract time schedules; submission of false, 

inflated, or duplicated invoices; making false claims regarding a contractor’s abilities or level of 

experience; establishing fictitious vendors; and conflicts of interest. Government-wide spending 

reductions may result in additional exposure to fraud, as fewer opportunities will undoubtedly result in 

enhanced competition among contractors and reduced top-line and bottom-line growth. Given its 

potential susceptibility, NASA must ensure proper controls are utilized to mitigate the risk of falling 

victim to contract fraud and must strive to proactively identify potential fraud that deprives the Agency 

of critically-needed funds that would otherwise be utilized to finance its initiatives. 

The OIG’s audit work during the past year illustrated that NASA has work to do to improve its 

multibillion dollar contracting and procurement operations. For example, NASA can improve its 

utilization of Blanket Purchase Agreements (BPA) which are a simplified method of acquiring goods and 

services and establish terms and conditions (including prices) between a Federal agency and vendors for 

commonly used goods and services. NASA uses two types of BPAs: General Services Administration 

(GSA) schedule agreements that incorporate the terms and conditions of an underlying GSA contract, 

and NASA-specific agreements to purchase items, such as copier paper, and services, such as 

engineering research support.46 In FYs 2011 and 2012, NASA obligated more than $248 million through 

5,529 BPA orders. In a December 2014 audit, we found that by not consistently seeking price reductions 

on orders, establishing single- rather than multiple-award agreements without appropriate justification, 

and failing to perform required annual reviews to ensure established BPAs still represent the best value 

to the Government, NASA contracting officials failed to maximize competition and missed potential cost 

savings.47 We also found deficiencies in NASA’s use of GSA schedule agreements and NASA-specific 

agreements issued by Goddard Space Flight Center’s Advanced Manufacturing Branch. In our judgment, 

the Branch missed opportunities to obtain lower costs by not seeking greater competition. 

We also continue to work with NASA to improve the Agency’s practices relating to cost-type contracts. 

More than half of the $15.6 billion NASA spent in FY 2013 acquiring goods and services was associated 

with cost-type contracts pursuant to which NASA reimburses contractors for allowable costs they incur 

producing or delivering the contracted goods or service. Cost-type contracts pose a financial risk to 

NASA because they do not promise delivery of a good or service at a set price. 

 

46 GSA schedule BPAs follow procedures defined by Federal Acquisition Regulation Subpart 8.4, “Federal Supply Schedules,” 

and NASA-specific BPAs follow Part 13, “Simplified Acquisition Procedures.”

47 NASA OIG, “NASA’s Use of Blanket Purchase Agreements,” (IG-15-009, December 16, 2014). 
Other Information

NASA FY 2015 Agency Financial Report Page 167

2015 Top Management and Performance Challenges 29 

To mitigate the risk involved with the use of cost-type contracts, Federal regulation requires contractors 

to submit annual cost data – commonly referred to as an incurred cost proposal – for review and 

potential audit. Audits of incurred cost proposals assess whether costs contractors charge the 

Government are properly applied to the contracts, sufficiently supported, and allowable. NASA 

generally has 6 years to recover any unallowable costs from the date an adequate incurred cost 

proposal is submitted. The Defense Contract Audit Agency (DCAA) performs incurred cost audits for 

NASA under a reimbursable agreement and estimates it has a 6-year backlog of more than 

19,000 proposals awaiting review, including 1,153 proposals related to NASA contracts, about 

39 percent of which predate 2009. In an effort to reduce this backlog, in 2012 DCAA changed its 

methodology for determining which proposals to select for incurred cost audits. 

In an audit issued in December 2014, we found NASA is at increased risk of paying unallocable, 

unallowable, and unreasonable incurred costs and of losing the opportunity to recoup improper costs 

because Agency contracting officers rely too heavily on DCAA’s incurred cost audit process.48 Under its 

new, risk-based methodology, DCAA has significantly decreased the number of contractor proposals it 

audits in an effort to reduce its 6-year backlog of incurred cost proposals awaiting review. However, 

NASA contracting officers generally wait for a DCAA audit and do not perform additional oversight to 

ensure the appropriateness of contractor costs. Meanwhile, the Agency has not strengthened its 

internal controls to account for the significant reduction in DCAA oversight of Agency cost-type 

contracts. In addition, NASA’s reliance on DCAA is inhibiting the Agency’s efforts to timely close out 

awards, which further delays the identification of questionable costs and limits availability of excess 

funds for other uses. 

Moreover, similar to findings in several previous audits our work this year found instances in which final 

award-fee scores and payments were not supported by the written evaluations. For example, in our 

audit of ISS contracts we identified a contract for which the award-fee evaluations did not support the 

overall award-fee scores.49 Specifically, in two consecutive award-fee periods the written performance 

evaluation stated, “Contractor performance did not meet expectations in the Cost Control Factor”; rated 

the Factor as a “significant weakness” due, in part, to a significant cost overrun; and noted, “There were 

no strengths identified in this area.” Nevertheless, the contractor received a rating of “satisfactory” for 

the Cost Control Factor in both performance periods. Overall, we questioned between $500,000 and 

$700,000 of award-fee payments made on ISS contracts between October 2012 and February 2014. 

NASA also faces the ongoing challenge of ensuring the grant and cooperative agreement funds the 

Agency distributes each year are administered appropriately and that recipients are accomplishing 

stated goals. NASA awards approximately $850 million in grants and cooperative agreements annually 

to facilitate research and development and to fund scholarships, fellowships, and stipends to students 

and teachers, as well as research by educational institutions or other nonprofit organizations. The 

OIG conducted several audits during the past year to examine NASA’s management of grants and 

cooperative agreements. In one review, NASA awarded cooperative agreements worth a combined 

$8.08 million to the Wise County Clerk of Circuit Court (Wise County) in Wise, Virginia, in 2008 and 2014 

to support the Agency’s DEVELOP National Program. DEVELOP is a capacity building program that seeks 

to address environmental management and public policy issues through interdisciplinary research 

projects that apply NASA Earth observations to community concerns around the globe. DEVELOP 

 

48 NASA OIG, “Costs Incurred on NASA’s Cost-Type Contracts,” (IG-15-010, December 17, 2014). 

49 NASA OIG, “Audit of NASA’s Management of International Space Station Operations and Maintenance Contracts,” (IG-15-021, 

July 15, 2015). 
Other Information

Page 168 NASA FY 2015 Agency Financial Report

participants conduct applied science research projects under the guidance of science advisors from 

NASA and partner organizations. Projects funded through the Wise County agreements include a study 

of the weather in southwest Virginia, an aerosol climatology project, and using data obtained by NASA’s 

Gravity Recovery and Climate Experiment Mission to help water managers in North Africa measure 

ground water storage. 

Although Wise County satisfied the overall performance goals and objectives of its cooperative 

agreements with NASA, we identified substantial deficiencies in the County’s management of award 

funds that caused us to question the total amount of the awards.50 Specifically, for the 2008 

cooperative agreement, Wise County improperly combined cooperative agreement revenues and 

expenditures with those relating to other County business in its accounting records. As a result, the 

County’s accounting system could not identify transactions by award, impairing the audit trail required 

to ensure the County spent cooperative agreement funds appropriately. In addition, the County failed 

to disclose in required financial reports unexpended funds and improperly retained and used those 

funds to pay for activities carried out pursuant to subsequent agreements. Moreover, we identified 

$65,446 in unallocable, unallowable, or unsupported expenses, including tuition payments for courses 

not related to DEVELOP and extermination fees. We also found $165,325 in award funds Wise County 

spent outside approved budget periods. Further, without prior NASA approval, Wise County 

reprogrammed $540,000 of the 2014 award budget for program support purposes, reducing the amount 

of funds available for actual research projects. 

In another example, NASA procurement officials awarded a 1-year cooperative agreement valued at 

$1.4 million to the City of New Orleans in September 2011 to provide fire protection services to the 

Michoud Assembly Facility (Michoud). NASA subsequently modified the agreement, increasing its value 

to $2.1 million and extending the period of performance through March 31, 2013. In April 2013, NASA 

and the City entered into an interagency agreement valued at $8.5 million for fire protection services 

through March 31, 2018. Our review of the cooperative agreement awarded to the City of New Orleans 

found that NASA did not have an adequate system of controls in place to ensure proper administration 

of the cooperative agreement for fire protection services at Michoud.51 The City received approval from 

NASA to bill for services using the costs set forth in its proposed award budget, which were calculated 

using the highest rate of pay for positions at the Michoud Fire Station with an additional 15 percent 

indirect cost rate. An analysis comparing the actual payroll costs for the personnel who staffed the Fire 

Station with the quarterly invoiced amount determined that the Agency had overpaid the City by 

$185,621 for the period January 17, 2012, through April 16, 2012. Subsequent analysis found that NASA 

had overpaid the City by as much as $1.07 million over the six quarters invoiced under the cooperative 

agreement. 

NASA also did not verify that the City of New Orleans performed required tests and inspections or 

consistently staffed the Michoud Fire Station with the number of personnel specified in the cooperative 

agreement. Without establishing and implementing oversight procedures and adequately documenting 

the City’s performance, NASA had little assurance that the objectives of the cooperative agreement 

were accomplished. 

 

50 NASA OIG, “Audit of NASA’s Cooperative Agreements Awarded to Wise County Circuit Court,” (IG-15-022, July 16, 2015). 

51 NASA OIG, “Audit of NASA’s Cooperative Agreement Awarded to the City of New Orleans,” (IG-15-018, June 29, 2015). 

2015 Top Management and Performance Challenges 30 
Other Information

NASA FY 2015 Agency Financial Report Page 169

2015 Top Management and Performance Challenges 31 

Over the past 5 years, the OIG has conducted 41 grant fraud investigations resulting in 5 indictments, 

7 prosecutions, $967,000 in recoveries, and $22.9 million in civil settlements. For example, an ongoing 

investigation determined a university in West Virginia billed administrative costs as direct costs, charged 

costs that were not allowable, and misused Federal funds and property acquired with Federal funds. 

The university has agreed to a $2.3 million civil settlement. 

Given the large sums of money at stake, we intend to continue to monitor NASA’s administration of its 

contracts, grants, and cooperative agreement awards as we work with the Agency to develop solutions 

to address the deficiencies identified in our reports. 
Other Information

Page 170 NASA FY 2015 Agency Financial Report

Appendix A

2015 Top Management and Performance Challenges 32

APPENDIX A: MANAGEMENT COMMENTS

October 28, 2015

TO: Inspector General

FROM: Administrator

SUBJECT: Agency Response to Office of Inspector General Memorandum “NASA’s

2015 Top Management and Performance Challenges”

Thank you for the opportunity to review and comment on “NASA’s 2015 Top Management 

and Performance Challenges.” This product, along with those issued in conjunction with

the audits and investigations conducted by your office, provides valuable perspective into,

and insight and oversight of the programs, projects, and activities that NASA is entrusted to 

execute. The senior leadership and I appreciate and recognize the efforts of your office as a 

key partner in driving efficiency and effectiveness across NASA’s wide-ranging, ambitious, 

and challenging portfolio.

While the challenges outlined in this year’s memorandum are closely aligned with those 

highlighted in 2014, I am pleased to note that you no longer report Space Act Agreements as

an element of the contracting and grants challenge. I believe this small but important step is

an indication of NASA’s commitment to addressing the top management and performance 

challenges facing the Agency.

Please find as an enclosure, NASA’s response to the one overarching and eight specific 

challenges articulated in your 2015 Top Management and Performance Challenges 

memorandum.

If you have any questions regarding NASA’s response to the 2015 Top Management and 

Performance Challenges, please contact Paul Roberts on (202) 358-2260.

Charles F. Bolden, Jr.

Enclosure

2015 Top Management and Performance Challenges | 32
Other Information

NASA FY 2015 Agency Financial Report Page 171

Appendix A

MANAGEMENT’S RESPONSE

TO THE OFFICE OF INSPECTOR GENERAL’S MEMORANDUM ON

“NASA’s 2015 TOP MANAGEMENT AND PERFORMANCE CHALLENGES”

Overarching Challenge: 

Effective Management of NASA’s Varied Programs in an Uncertain Budget Environment 

NASA shares the OIG’s concerns about the challenges that come with managing our programs in 

an uncertain budget environment. As the OIG notes, several of NASA’s largest development 

programs have acquisition strategies that are highly sensitive to fluctuations in funding from year 

to year. Given the lack of additional available funding, and to be effective stewards of taxpayer 

dollars, it is imperative that programs and projects be delivered within their cost and schedule 

baselines. We believe the steps NASA has taken in response to the recommendations from the 

OIG, as outlined in this letter, are important components of that work. 

In addition, NASA has implemented significant changes over the past several years to improve 

the fidelity of our cost estimates when a project is confirmed at Key Decision Point (KDP)-C and 

to provide surveillance of contractor performance through improved Earned Value Management 

(EVM) capabilities. In addition to responding to the OIG’s recommendations with regards to our 

Joint Cost and Schedule Confidence Level (JCL) capabilities, we have also made significant 

progress over the past year implementing recommendations issued by the Government 

Accountability Office (GAO) in their 2012 report1

 on EVM. I am pleased to report that based on 

specific actions taken by NASA with respect to these recommendations, the GAO closed all 

remaining recommendations in September 2015. 

 

Specific Management and Performance Challenges: 

Space Flight Operations in Low Earth Orbit: Managing the International Space Station 

and the Commercial Cargo and Crew Programs 

The International Space Station: In January 2014, the Administration and NASA announced 

the extension of the operations and utilization of the International Space Station (ISS) until at 

least 2024. In August, the U.S. Senate passed the Commercial Space Launch Competitiveness 

Bill by unanimous consent. Among the issues dealt with in this bill related to commercial space 

launch, it extends operation of the ISS to 2024. However, the House and Senate versions are 

different and remain to be reconciled before final passage an enactment. ISS extension to 2024 

allows NASA to continue to make progress toward the goals of the ISS, specifically: 1) 

extending human spaceflight beyond low-Earth orbit (LEO); 2) enabling the development of the 

commercial market in LEO; 3) conducting research to benefit humanity in areas such as 

medicine, physical and life sciences, and Earth and space sciences; and 4) providing the basis for 

exploration international partnerships. Of the ISS International Partners, the U.S., Russian, and 

 

1 GAO Report: “NASA: Earned Value Management Implementation across Major Spaceflight Projects Is Uneven” 

(GAO-13-22; November 19, 2012)

2015 Top Management and Performance Challenges | 33

Enclosure 
Other Information

Page 172 NASA FY 2015 Agency Financial Report

Appendix A

2 

Canadian space agencies have committed to supporting the ISS until at least 2024, and the 

Japanese and European Space Agencies are moving toward the same commitment. 

NASA and its international partners have conducted extensive operational and maintenance 

analyses to determine the appropriate level of spares, maintenance cycles, and logistics necessary 

to maintain the ISS on-orbit platform to at least 2024. The partnership has also conducted 

structural and performance analyses to ensure that the ISS is structurally viable to at least 2028. 

System upgrades needed to operate the ISS to at least 2024, including docking systems and new 

lithium ion batteries for the electrical power system, are already under development. Larger 

external equipment and spares, such as the lithium ion batteries, are planned to launch on the 

Japanese HII Transfer Vehicle (HTV) prior to its retirement. Occasional failures of external 

hardware are to be expected, and NASA prepares for these with on-orbit spares and spacewalk 

preplanning. In response to faster-than-expected degradation of the solar arrays, NASA is 

assessing a variety of options to improve power generation/balance in the out years. 

NASA has partnered with the Center for the Advancement of Science in Space (CASIS) to 

advance the development of the commercial market in LEO through development activities 

across private industry including pharmaceuticals, material sciences, biomedicine, and earth 

science. CASIS continues to expand its development activities and has now filled its 50 percent 

allocation of National Laboratory resources on the ISS. 

As of 2015, CASIS is utilizing its 50 percent of the ISS resources dedicated to the National Lab 

and has filled the pipeline with a wide variety of commercial and other Government agency 

projects. Regarding metrics, it has always been NASA’s intent to implement target metrics once 

CASIS has developed enough of a track record to make the targets not only effective but also 

reasonable. FY 2016 marks the beginning of CASIS's fourth year at full staffing level, so it is a 

reasonable time to begin agreeing to targets with CASIS. 

Commercial Cargo Transportation: Despite the launch failures of both Orbital-ATK and 

SpaceX in the past year, the ISS remains well supplied with both consumables and research, 

thanks to a robust provisioning strategy. With the successful launch of the Japanese HTV-5 in 

August 2015, supplies onboard the ISS are in excellent shape to reach return-to-flight of both 

CRS companies. Orbital-ATK has procured two Atlas V launch vehicles that will fly two 

enhanced Cygnus missions prior to resuming flights on the upgraded Antares rocket, scheduled 

for June 2016. Both Orbital-ATK and NASA have completed investigations into the October 

2014 failure, and Orbital-ATK has a plan in place to resume launches from Wallops Flight 

Facility with its new Antares launch vehicle configuration. While SpaceX’s failure report is not 

yet complete, they have indicated that they are nearing being able to return to flight. Both CRS 

companies should be delivering cargo in the next few months, as well as disposing of trash and 

returning vital science results to Earth. 

The ISS program is currently in the process of procuring additional commercial cargo 

transportation services. Once actual costs for transportation beyond the current Commercial 

Resupply Services (CRS) contract are known through the procurement process, the ISS will 

update its budget requests accordingly. Contracted commercial crew costs have already been 

incorporated into the ISS FY 2016 President’s Budget request. 

2015 Top Management and Performance Challenges | 34
Other Information

NASA FY 2015 Agency Financial Report Page 173

Appendix A

3 

Commercial Crew Transportation: NASA has largely addressed the four challenges identified 

by the OIG regarding the Commercial Crew Program. “Unstable Funding” is, and will continue 

to be, an ongoing challenge mostly outside of NASA's control. NASA believes that it has 

addressed the remaining three commercial crew challenges. Also, the Agency looks forward to 

continuing to work with the OIG during the new audit initiated earlier this year. 

Positioning NASA for Deep Space Exploration: Developing the Space Launch System, 

Orion Capsule, and Associated Ground Systems, and Mitigating Health and Performance 

Risks for Extended Human Missions 

Developing the Space Launch System, Orion Capsule, and Associated Ground Systems: 

Exploration Systems Development (ESD) continues to make steady and sustained progress in 

preparing the Orion crew vehicle, the Space Launch System (SLS), and Exploration Ground 

Systems (EGS) to support deep space exploration. NASA recognizes the challenges of pursuing 

concurrent development of these three foundational programs. Therefore, and in addition to the 

comprehensive and rigorously reviewed development activities at the program level, ESD has 

made technical and programmatic integration a top focus for the enterprise. At the program 

level, all three programs have reached the level of technical and programmatic maturity needed 

to establish their Agency Baseline Commitments. These commitments were made based on the 

programs’ demonstrated progress to date, including the successful test flight of Orion, SLS 

hardware, and GSDO systems and processes on Exploration Flight Test 1 (EFT-1) in December 

2014; successful testing of the booster and engine that will power SLS on its maiden flight on 

Exploration Mission 1 (EM-1); and modernization of facilities at Launch Complex 39 (LC-39) at 

the Kennedy Space Center. These and many other hardware and testing milestones validated the 

designs, plans, and processes that were reviewed during the programs’ preliminary design 

reviews. A single Standing Review Board (SRB) provided an independent Agency assessment 

during these reviews, and the same SRB also supported the enterprise-level integrated review 

that looked specifically at all technical and cross-program related issues. At both the program 

and integrated reviews, though forward work requiring attention was noted in a number of areas, 

the SRB validated the overall program and enterprise approach to both program-level and crossprogram integration and noted that the process continues to mature. 

In addition to the review work by the programs, enterprise, and SRB (and noting the leveraging 

of the capabilities of the NASA Engineering and Safety Center and Independent Verification and 

Validation [IV&V] Center on an issue-by-issue basis), the GAO and OIG have conducted over 

thirteen focused audits of ESD programs, after which nearly all recommendations were 

concurred upon and either have already been or will be implemented at the appropriate 

time. Integration will continue to be a primary focus across the enterprise, both near term, as the 

three programs complete their critical design reviews (SLS in July 2015; Orion in September 

2015; and EGS in December 2015) and the enterprise-wide integration review in 2016, and long 

term, through preparation for integrated testing, integration, and operations leading to first flight 

on EM-1 and beyond. Funding instability and uncertainty (both in terms of total dollars and 

timing of full-year appropriations) remains a critical challenge to success, resulting in limited 

options to accelerate or modify our development approach. In summary, challenges remain as 

Orion and SLS begin large-scale hardware production and testing, and preparation continues for 

2015 Top Management and Performance Challenges | 35
Other Information

Page 174 NASA FY 2015 Agency Financial Report

Appendix A

4 

integration at KSC. However, based on substantial and independent review of all aspects of 

enterprise operations, NASA is confident that the proper designs and processes are in place to 

overcome these challenges, and that SLS, Orion, and EGS will form the core of the Agency’s 

exploration capability for decades to come.

Mitigating Health and Performance Risks for Extended Human Missions: The successful 

mitigation of human system risks for space flight is essential for NASA to conduct long duration 

space missions in and beyond LEO. This mitigation approach requires the integration of human 

health and performance, engineering, mission management and policy disciplines to enable the 

safe conduct of human space flight missions and the protection of the long-term health of 

astronauts. The Human Exploration and Operations Mission Directorate (HEOMD), Office of 

the Chief Health and Medical Officer (OCHMO), and the Human Health and Performance 

Directorate (HHPD) at the Johnson Space Center (JSC) have worked diligently for the past 

decade to achieve an integrated approach to human health in space that incorporates the human 

system into spacecraft design and operations, following an occupational health model, as 

recommended by the National Academies of Science, Engineering, and Medicine. The Health 

and Medical Technical Authority has promulgated health standards and evidenced-based risk 

management, which address integrated space health risks that drive spacecraft design as well as 

the Human Research Program’s (HRP) research and development (R&D) priorities and 

investments. 

Ensuring the Continued Efficacy of the Space Communications Networks 

NASA’s Space Communications and Navigation (SCaN) Program enters its tenth year focused 

on its mission of creating the integrated Agency-wide space communications and navigation 

architecture necessary to assure continued efficacy of the Agency’s space communication 

networks. As NASA’s missions require larger and larger amounts of data delivered reliably and 

accurately, SCaN continues its evolution of the integrated system. The SCaN Network 

Integrated Project is currently in pre-phase A, working towards full integration of all three 

networks. The Near Earth Network (NEN), Space Network (SN) and Deep Space Network 

(DSN) initially will remain independent. In the interim, SCaN is adding new capabilities that 

extend the functionality of the networks and will be incorporated into the integrated architecture. 

During FY 2016, SCaN will continue addressing the critical challenges that must be met in order 

to meet NASA’s requirements for space communications and navigation necessary for the 

success of all space missions, specifically: 







Completing a new generation of communication satellites (the Tracking and Data Relay 

Satellites [TDRS] project) to the Space Network fleet. 

Upgrading Space Network ground infrastructure through the Space Network Ground 

Segment Sustainment (SGSS) Project. 

Upgrading the deep space communication capability through the Deep Space Aperture 

Enhancement Project (DAEP). 

2015 Top Management and Performance Challenges | 36
Other Information

NASA FY 2015 Agency Financial Report Page 175

Appendix A

5 

To address these issues in FY 2015, SCaN accomplished the following: 







TDRS-L transitioned into full operations as part of the Tracking and Data Relay Satellite 

System. 

The NEN AS-3 11-meter antenna entered operations at the University of Alaska 

Fairbanks Station. 

The first DAEP antenna, DSS-35, also entered operations. 

SCaN will continue to address these challenges in FY16, with the addition of the 

following: 





Upgrading NASA NEN ground antenna capabilities. 

Completion of development of the TDRS-M satellite, and storage pending 

availability of a launch vehicle. 

SCaN also manages NASA’s Spectrum Management Program (SMP) and is deeply involved 

with other space-faring nations in this area. SMP ensures that all NASA activities comply with 

national and international laws applicable to the use of the electromagnetic spectrum. The 

program continues to address competing interests for use of the electromagnetic spectrum, 

including commercial broadband services, to assure necessary spectrum resources are available 

for NASA missions. In early FY 2016, SCaN’s SMP will participate in the State Department-led 

U.S. delegation to the International Telecommunication Union’s World Radio Communication 

Conference to negotiate the critical radiofrequency spectrum for NASA’s missions.

SCaN is responsible for coordinating between the U.S. and our international partners on the 

communication and navigation standards to assure cross-utilization of both ground infrastructure 

and spacecraft. This includes the critical issue of the development of optical communication 

standards, which represents a paradigm shift in space communications. Optical communication 

will make possible the transmission of a vastly increased amount of data, including video 

images, which will change how scientific data is managed and studied. SCaN continues to 

collaborate within NASA and with external partners on the development of this exciting new 

technology. The Laser Communication Relay Demonstration mission is now slated to launch in 

2017. 

Managing NASA’s Science Portfolio

The Science Mission Directorate (SMD) develops and implements an extensive portfolio of 

scientific projects and programs that are inherently complex and present unique challenges. Still 

SMD continues to develop and implement the cutting-edge missions necessary to advance 

science and produce the incredible discoveries for which NASA has long been recognized. 

The 2010 Science Plan for NASA’s Science Mission Directorate outlined the Agency’s efforts to 

revise and implement new policies to constrain mission costs and meet schedule goals. One of 

these measures included “Establishing confidence level-based mission life cycle budgets” – the 

Joint Cost and Schedule Confidence Level (JCL) requirement. As the recent OIG report2

 on the 

 

2 NASA OIG Report, “Audit of Joint Cost and Schedule Confidence Level Process” (IG-15-024; September 29, 

2015) 

2015 Top Management and Performance Challenges | 37
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Appendix A

6 

JCL process pointed out, the JCL policy is having a positive impact on NASA’s historical 

challenges with cost and schedule fidelity. 

NASA agrees with the OIG’s observation that “the JCL policy is having a positive impact on 

NASA’s historical challenges with cost and schedule fidelity” and recognizes that JCL is not a 

one-stop solution for addressing all cost and schedule challenges. NASA is undertaking 

numerous efforts aimed at continuous improvement of the JCL process, consistent with the 

recommendations of the recent OIG audit on the JCL process. These efforts include an ongoing 

scheduling initiative to strengthen NASA’s scheduling capabilities, a detailed training course for 

estimators/programmatic analysts that includes a significant JCL training component, and 

enhanced training of project managers and SRB chairs/members. 

In the specific case of the James Webb Space Telescope (JWST) which was re-baselined in 

2011, the GAO stated in its 2015 report3 “JWST project continues to report that it remains on 

schedule and budget with its overall schedule reserve currently above its plan.” SMD will 

continue to rigorously maintain practices to improve cost and schedule performance. 

SMD looks forward to working with the OIG on the recently opened audit examining NASA’s 

management of its Earth Science mission portfolio. 

Overhauling NASA’s Information Technology Governance

NASA’s Office of the Chief Information Officer (OCIO) has continued to address remediation of 

Information Technology (IT) Governance, initially identified in the OIG’s June 2013 report. 

Specifically, two of the eight OIG recommendations were implemented by NASA and closed by 

the OIG during FY 2015. 

 

In recognition of the importance of IT management in meeting NASA’s mission, senior 

leadership initiated the first-ever Business Services Assessment (BSA) of Information 

Technology across NASA. The BSA provided multiple recommendations to improve IT 

management and strengthen IT governance. As a result of the BSA recommendations, the 

Agency Mission Support Council (MSC) decided to: 1) Establish a senior leader/stakeholder IT 

Council as the top decision-making governing board; 2) Develop IT Strategic Sourcing guidance; 

3) Conduct an annual capital investment review for all NASA IT spending; 4) Conduct Center 

functional reviews to assess compliance and; 5) Strengthening the role of the Chief Information 

Officer (CIO). 

The MSC made these decisions to strengthen visibility and enable a stronger approval process 

for all NASA IT spending, which also fulfills the requirements of Federal Information 

Technology Acquisition Reform Act (FITARA). 

 

3 GAO Report: “James Webb Space Telescope: Project Facing Increased Schedule Risk with Significant Work 

Remaining” (GAO-15-483T; March 24, 2015)

2015 Top Management and Performance Challenges | 38
Other Information

NASA FY 2015 Agency Financial Report Page 177

The CIO expects to complete implementation of management actions in response to the OIG’s

2013 audit report in early 2016.

Securing NASA’s Information Technology Systems and Data

Advancing NASA’s IT Security posture in response to the ever-growing threats and attack 

vectors remains a priority for the Agency. Significant threats include stolen identity credentials, 

phishing, malware, and an aging IT infrastructure. Building upon the tools and capabilities 

already deployed, NASA is implementing an integrated approach through enhancements to 

continuous monitoring and mitigation, network intrusion detection and prevention, data loss 

detection and prevention, Personal Identity Verification (PIV)-based authentication, and 

developing a risk-based process to inform decisions at all levels. 

In FY 2015, NASA significantly improved the Security Operations Center (SOC) capabilities 

with enhanced intrusion detection systems (IDS), intrusion prevention, and strengthening 

security of the Agency Trusted Internet Connection (TIC) boundaries. Actions taken using the 

Department of Homeland Security’s (DHS) Cyber Hygiene Report have greatly reduced 

vulnerabilities on internet facing systems. An agency-wide effort to implement PIV 

authentication on both privileged and unprivileged accounts, has also contributed greatly to our 

security posture through strong user authentication. 

Priority actions in FY 2016 include: 1) implementing a National Institute of Standards and 

Technology (NIST) compliant risk management framework, to process and manage the volume 

of data being collected by tools and sensors; 2) deployment of DHS’ Continuous Diagnostics & 

Mitigation (CDM) enterprise services; 3) increasing in PIV usage; 4) implementing an antiphishing and secure mobile device management service; 5) planning budgets to replace ageing 

infrastructure and; 6) reducing NASA’s publically exposed IT infrastructure. Finally, we will 

focus on improving the speed of response to identified IT security vulnerabilities. 

We continue to work toward addressing all OIG recommendations and welcome their support in 

our work to maintain the security of all NASA’s information assets. 

Managing NASA’s Aging Infrastructure and Facilities 

NASA recognizes the challenges associated with managing its diverse and unique 

infrastructure. NASA continues to implement its strategy to reduce and modernize its 

infrastructure within available and anticipated budget levels. 

NASA continues to work to identify underutilized assets, consolidate capabilities into a suite of 

core facilities and dispose of facilities that are no longer needed. NASA has completed 

Technical Capability Assessment Team (TCAT) assessments. To assess technical capabilities, 

NASA has transitioned from TCAT to the enduring technical capability leadership model. 

NASA has established Technical Capability Leaders who report recommendations about core 

technical capabilities annually. These recommendations become input to the Agency’s annual 

Agency Strategy Implementation Planning meeting which establishes budget planning guidance 

2015 Top Management and Performance Challenges | 39
Other Information

Page 178 NASA FY 2015 Agency Financial Report

Appendix A

8 

for the next budget planning cycle. In one of the early capability reviews under this new process, 

NASA evaluated space environments test capabilities. As a result of the evaluation, NASA 

made divestment and consolidation decisions for a number of space environments test facilities. 

The facilities identified for disposal will be integrated into NASA’s five-year demolition plan. 

In 2015, NASA completed its Real Property Efficiencies Plan. This plan integrated the 

Agency’s building consolidation and disposal plans into a single integrated five-year plan 

focused on reducing the Agency’s building footprint within available resources. NASA will use 

this plan to manage square foot reduction efforts over the next five years. 

When major technical facilities have extended time periods between test programs, NASA 

moves the facility to an inactive status when practical. This allows NASA to minimize the 

annual operating costs. When a new test program is identified, the cost to bring the facility back 

on line, along with any costs to modify the facility to meet the new test requirements become the 

responsibility of the test program. This allows NASA to minimize operating expenses during 

extended inactive periods. 

NASA maintains a large inventory of pressure systems. NASA manages this inventory through 

an active pressure systems program which includes remaining life and risk assessments. The 

management program includes a community of practice of technical experts who share 

information and best practices. NASA is revising its pressure systems standard to provide more 

specific guidance in areas where no national standard exists. 

Ensuring the Integrity of the Agency’s Contracting and Grants Processes

NASA’s Office of Procurement (OP) appreciates the investigative and audit work cited by the 

OIG and acknowledges the importance of this effort, particularly where fraud is uncovered and 

process improvements can be made. 

NASA procurement is continuing to strengthen and improve contracting and grants processes 

throughout the Agency. For the areas identified by the OIG, OP published procurement 

guidance regarding Blanket Purchase Agreement (BPA) requirements specifically in the areas of 

requesting vendor price discounts and conducting annual reviews. We published contract 

administration guidance regarding the monitoring of incurred cost reportable audits that will 

strengthen our administration of contracts. 

We have strengthened training and issued policy guidance relative to the award-fee process and 

believe NASA’s approach to award fee is sound and compliant with the Federal Acquisition 

Regulation and statute. 

Finally, we continued to strengthen the management of grants through our issuance of a 

completely revised 2 CFR 1800 “Uniform Administrative Requirements, Cost Principles, and 

Audit Requirements For Federal Awards,” which implemented the requirements of 2 CFR 200 

and included revised new technology terms and conditions, and eliminated the allowance of a 

“fee” for assistance awards. 

2015 Top Management and Performance Challenges | 40
Other Information

NASA FY 2015 Agency Financial Report Page 179

Appendix B

2015 Top Management and Performance Challenges 41 

APPENDIX B: NASA RECIPIENTS

Office of the Administrator 

Administrator 

Deputy Administrator 

Associate Administrator

Deputy Associate Administrator 

Chief of Staff 

Senior Advisor to the Administrator for Strategy and Policy Implementation

White House Liaison

Administrator Staff Offices

Chief Financial Officer 

Chief Information Officer 

Chief Engineer 

Chief Health and Medical Officer 

Chief Safety and Mission Assurance 

Chief Scientist 

Chief Technologist 

General Counsel 

Associate Administrator for Communications 

Associate Administrator for Diversity and Equal Opportunity 

Associate Administrator for Education 

Associate Administrator for International and Interagency Relations 

Associate Administrator for Legislative and Intergovernmental Affairs 

Associate Administrator for Small Business Programs 

Mission Directorates

Associate Administrator for Aeronautics Research Mission Directorate 

Associate Administrator for Human Exploration and Operations Mission Directorate 

Associate Administrator for Science Mission Directorate 

Associate Administrator for Space Technology Mission Directorate

Associate Administrator for Mission Support Directorate 

Deputy Associate Administrator 

Assistant Administrator for Human Capital Management 

Assistant Administrator for Procurement 

Assistant Administrator for Protective Services 

Assistant Administrator for Strategic Infrastructure 

Executive Director, Headquarters Operations 

Executive Director, NSSC 

Director, NASA Management Office 
Other Information

Page 180 NASA FY 2015 Agency Financial Report

Appendix B

NASA Centers

Director, Ames Research Center 

Director, Armstrong Flight Research Center 

Director, Glenn Research Center 

Director, Goddard Space Flight Center

Director, Jet Propulsion Laboratory

Director, Johnson Space Center

Director, Kennedy Space Center 

Director, Langley Research Center

Director, Marshall Space Flight Center

Director, Stennis Space Center

2015 Top Management and Performance Challenges 42 
Other Information

NASA FY 2015 Agency Financial Report Page 181

FY 2015 Inspector General Act 

Amendments Report

Background 

The Inspector General Act Amendments of 1988 (P.L. 100-504), require that heads of 

Federal agencies submit semi-annual reports to Congress on the actions taken in 

response to Office of Inspector General (OIG) audit reports. Specifically, agency heads 

are required to report on: 

1. OIG reports containing monetary benefits (i.e., questioned costs or funds to be put 

to better use) for which: 









final management decisions were made during the reporting period;

final management decisions have been made, but final management action 

is still pending;

final management action was taken during the reporting period; 

no final management action was taken during the reporting period. 

2. OIG recommendations pending final management action more than one year after 

the issuance of the corresponding audit report. 

Additionally, the Office of Management and Budget (OMB) has issued specific “action 

requirements” to Federal agencies through their Circular No. A-50, “Audit Follow-up.” 

These requirements include that Federal agencies ensure that final management 

decisions on OIG audit recommendations are reached within six months after the 

issuance of an audit report and that corresponding corrective actions begin as soon as 

practicable. 

Finally, the Reports Consolidation Act of 2000 (P.L. 106-531), provides Federal agencies 

with the flexibility to annualize and consolidate semi-annual reports, such as this one, into 

the annual Agency Financial Report (AFR). 

The following definitions are provided for the purpose of enhancing the readability and 

utility of NASA’s FY 2015 Inspector General Act Amendments Report: 

Final Management Decision is reached when management evaluates the OIG’s 

findings and recommendations, and determines whether or not to implement a 

proposed recommendation. 

Final Management Action is the point in time when corrective action, taken by 

management in conjunction with a final management decision, is completed. 
Other Information

Page 182 NASA FY 2015 Agency Financial Report

Corrective Action consists of management’s planned or proposed remediation 

efforts intended to mitigate an audit finding. 

Questioned Costs are those identified by the OIG as being potentially 

unallowable because of either: a) a purported violation of law, regulation, contract, 

grant, cooperative agreement, or other device governing the incurrence of cost; b)

a finding that, at the time of the audit, such cost is not supported by adequate 

documentation, or; c) a finding that the cost incurred for the intended purpose is 

unnecessary or unreasonable.

Disallowed Costs are questioned costs that management has sustained or 

agreed should not be charged to the Government.

Funds to be Put to Better Use (FPTBU) are potential cost savings, identified by 

the OIG, that could be realized through the implementation of an audit 

recommendation. 

NASA’s Audit Follow-up Program 

NASA is firmly committed to ensuring timely and responsive final management decisions, 

along with timely and complete final management action, on all audit recommendations 

issued by the NASA OIG. To this end, NASA has implemented a comprehensive program 

of audit follow-up intended to ensure that audit recommendations issued by the OIG are 

resolved and implemented in a timely, responsive, and effective manner. NASA’s audit 

follow-up program is an integral component of the Agency’s integrated internal control 

framework, and is a key element in improving the overall efficiency and effectiveness of 

NASA’s programs, projects and operations. 

 

NASA’s Mission Support Directorate (MSD) is designated as the Agency’s office of 

primary responsibility for policy formulation, oversight, and functional leadership of 

NASA’s audit follow-up program. MSD implements audit follow-up program activities 

through an Agency-wide network of Audit Liaison Representatives (ALRs) who, in turn, 

are responsible for executing program activities at the Mission Directorate, Field Center 

and Headquarters Office levels. In conjunction with NASA’s network of ALRs, MSD 

provides the functional structure to support NASA’s audit follow-up program. The 

program leverages the Audit and Assurance Information Reporting System (AAIRS) to

track and monitor OIG audit reports and recommendations, as well as to support internal 

and external reporting of audit follow-up program activities. 

In accordance with requirements outlined in OMB Circular A-50, MSD monitors audit 

recommendations issued by the OIG to ensure that a final management decision is 

reached within six months of the issuance of a final audit report. A final management 

decision is reached when either: a) management agrees to implement corrective actions 

in response to an OIG audit recommendation or b) management determines that 

implementing a particular audit recommendation is imprudent, impractical, not cost 
Other Information

NASA FY 2015 Agency Financial Report Page 183

beneficial, etc. In those instances where agreement between the OIG and management 

cannot be reached, a final management decision (resolution) is achieved in conjunction 

with NASA’s Audit Follow-up Official (AFO), consistent with provisions of OMB Circular 

A-50. 

When a final management decision has been made to implement an audit 

recommendation, corrective action is pursued as rapidly as practicable. In some 

instances, the corrective action associated with a final management decision may span 

multiple fiscal years due to factors such as the complexity or cost of the planned corrective 

action; or unexpected delays in the formulation, review and approval of NASA policies, 

procedural requirements, or regulations. In these instances, MSD works with the OIG 

and respective Mission Directorate, Field Center, or Headquarters Office to ensure 

communication and coordination regarding necessary revisions to timelines and 

milestones associated with the implementation of these recommendations. 

FY 2015 Audit Follow-up Results 

The Inspector General Act Amendments of 1988 require that heads of Federal agencies 

report on corrective actions taken, or remain to be taken in response to OIG audit reports 

containing monetary benefits. 

The amendments also require that management report on those OIG recommendations 

for which a final management decision had been made in a prior reporting period, but 

final management action is still ongoing. 

In addition to the statutory reporting requirements delineated in the Inspector General Act 

Amendments of 1988, OMB Circular A-50, requires that final management decisions on 

OIG audit recommendations be made within six months of the issuance of a final audit 

report. NASA’s FY 2015 reporting in conjunction with the requirements of the Inspector 

General Act Amendments of 1988 and OMB Circular A-50, follows: 

1. OIG Audit Reports with Monetary Benefits 

During FY 2015, the OIG issued four audit reports1 to NASA containing monetary benefits

in the aggregate amount of $99 million. These four reports contain OIG identified 

questioned costs and FPTBU in the amounts of $5.6 million and $93.4 million, 

respectively (see Table 1).

 

1 “Audit of Cooperative Agreement with the City of New Orleans” (IG-15-018; June, 29, 2015);

“Audit of NASA’s Management of International Space Station Contracts” (IG-15-021; July 15, 2015); 

“Audit of NASA’s Cooperative Agreements Awarded to Wise County Circuit Court” (IG-15-022; July 16, 

2015); and “NASA’s Response to Orbital’s October 2014 Launch Failure: Impacts on Commercial 

Resupply of the International Space Station” (IG-15-023; August 17, 2015)
Other Information

Page 184 NASA FY 2015 Agency Financial Report

In addition to the monetary benefits reported during FY 2015, $9.9 million in monetary 

benefits identified by the OIG in audit reports2 issued in prior fiscal years (FY 2012 and 

FY 2014) required final management action at the beginning of FY 2015. These prior 

year monetary benefits consisted of $216,920 and $9.7 million in questioned costs and 

FPTBU, respectively. 

Total monetary benefits subject to final management action in FY 2015 were $108.8 

million, consisting of $5.8 million and $103 million in questioned costs and FPTBU, 

respectively. 

As of September 30, 2015, $108.8 million in OIG identified monetary benefit remains 

subject to final management action. Final management action with regards to $99 million 

of questioned costs and FPTBU identified in the OIG’s four audit reports issued in third 

quarter of FY 2015 is anticipated during the second quarter of FY 2016. Final 

management action associated with $216,920 in FY 2012 questioned costs and $9.7

million in FY 2014 FPTBU is anticipated during the first quarter of FY 2016. 

Audit Reports with Monetary Benefits 

(Questioned Costs and Funds Put to Better Use) 

For the Year Ended September 30, 2015

Funds to be Put To Better 

Questioned Costs Use 

Number of 

Reports 

Number of 

Category (Dollars) Reports (Dollars)

Beginning Balance: Audit reports with monetary 

benefits issued in prior years (FY 2012 & FY 2014) 

requiring final management action in FY 2015 (prior 

year carry-over)

 1ineL

1 $216,920 1 $9,653,020

 2ineL

Plus: Audit reports with monetary benefits 

issued during FY 2015 requiring final 

management action during FY 2015 

3 $5,562,827 2 $93,400,000

3 ineL

Total audit reports with monetary benefits (prior year 

and current year) requiring final management action in 

FY 2015 [line 1 + 2]

4 $5,779,747 3 $103,053,020 

 4ineL

Less: Audit reports with monetary benefits on 

which final management action was taken

during FY 2015 

0 $0 0 $0 

Ending Balance: Audit reports with monetary benefits 

pending final management action at the end of FY 

2015 [line 3- line 4] (carry-over into FY 2016) 

 5ineL

4 $5,779,747 3 $103,053,020

Table 1

 

2 “Audit of NASA Grants Awarded to the Philadelphia College Opportunity Resources for Education” (IG12-018; July 26, 2012) and “NASA’s Independent Verification and Validation Program” (IG-14-024; July 

16, 2014) 
Other Information

NASA FY 2015 Agency Financial Report Page 185

2. OIG Audit Recommendations Open More Than One Year After Report Issuance 

As of September 30, 2015, a total of 56 recommendations in 19 OIG audit reports remain

open, pending completion of final management action, more than one year since the 

issuance of the corresponding final audit reports (see Table 2). 

Although these 56 recommendations remain open more than one year after issuance of 

the respective audit reports, NASA management continues to aggressively pursue 

agreed-upon corrective actions intended to fully implement the OIG’s recommendations. 

In summarizing these 56 open, prior year recommendations, the following four broad

categories of the nature of outstanding corrective actions were identified: 

1) Policy Development/Revision (63 percent); 

2) Oversight/Monitoring/Program Review (30 percent) 

3) Remedy Questioned Costs (5 percent); and

4) Program/ Project Operations (2 percent) 

By way of comparison and perspective, as of September 30, 2014, 50 recommendations 

in 15 OIG audit reports were open, pending completion of final management action, more 

than one year after issuance of the corresponding audit reports. During the period FY 

2011 through FY 2015, the number of OIG recommendations pending completion of final 

management action, more than one year after issuance of the corresponding audit 

reports, at fiscal year-end, has ranged between 33 and 59. 
Other Information

Page 186 NASA FY 2015 Agency Financial Report

3 

100 

Summary of OIG Audit Reports Pending Final Management Action 

One Year or More After Issuance of a Final Report

(As of September 30, 2015)

Report No.

(Report Date) Report Title

No. of Recommendations

Open Closed Total

IG-12-013

(3/01/2012) 

Audit of NASA's Process for Transferring Technology to the Government 

and Private Sector 3 4 7 

IG-12-017

(8/08/2012) 

Review of NASA’s Computer Security Incident Detection and Handling 

Capability 2 1 3 

IG-12-018

(7/26/2012)

Audit of NASA Grants Awarded to the Philadelphia College Opportunity 

Resources for Education 3 5 8 

IG-13-006

(3/18/2013)

NASA’s Process for Acquiring Information Technology Security 

Assessment and Monitoring Tools 2 2 4 

IG-13-008

(2/12/2013) NASA’s Efforts to Reduce Unneeded Infrastructure and Facilities 2 3 5 

IG-13-015

 (6/05/2013) NASA’s Information Technology Governance 6 2 8 

IG-14-001

(11/13/2013) NASA’s Management of the Commercial Crew Program 1 3 4 

IG-14-003

(11/19/2013) NASA's Use of Award Fee Contracts 7 8 15

IG-14-009

(1/08/2014) 

NASA's Decision Process for Conducting Space Launch System Core 

Stage Testing at Stennis 3 1 4 

IG-14-010

(1/15/2014) NASA’s Strategic Sourcing Program 1 5 6 

IG-14-015

(2/27/2014) 

NASA’s Management of Its Smartphones, Tablets, and Other Mobile 

Devices 2 0 2 

IG-14-020

(6/05/2014) NASA’s Use of Space Act Agreements 4 3 7 

IG-14-021

(7/02/2014) Audit of NASA's Environmental Restoration Efforts 4 0 4 

IG-14-023

(7/10/2014) Security of NASA’s Publicly Accessible Web Applications 2 3 5 

IG-14-024

(7/16/2014) NASA’s Independent Verification and Validation Program 2 1 3 

IG-14-026

(7/22/2014) 

Audit of the Space Network’s Physical and Information Technology 

Security Risks 4 0 4 

IG-14-028

(8/04/2014)

Audit of NASA’s Cooperative Agreement with BioServe Space 

Technologies - University of Colorado at Boulder 1 2 3 

IG-14-030

(9/15/2014) NASA’s Efforts to Identify Near-Earth Objects and Mitigate Hazards 5 0 5 

IG-14-031

(9/18/2014) Extending the Operational Life of the International Space Station Until 2024 2 1 

19 Totals 56 44 

Table 2
Other Information

NASA FY 2015 Agency Financial Report Page 187

3. Final Management Decisions Not Made Within Six Months of a Report Date 

During FY 2015, the OIG issued 17 reports containing 187 recommendations which 

required a final management decision within six months of the respective final report 

dates. Final management decisions were made within six months of issuance of the 

corresponding audit reports on 185 (99 percent) of the OIG recommendations issued 

during FY 2015. Final management decisions on two recommendations in two OIG audit 

reports3 issued in late FY 2015 remain unresolved (final management decision pending) 

as of September 30, 2015. However, resolution of these two recommendations is 

anticipated during the first quarter of FY 2016.

Additionally, during FY 2015 final management decisions were made on two audit 

recommendations issued in a prior year (FY 2014) OIG report4. Resolution of one FY 

2014 recommendation was achieved during an April 1, 2015, AFO Resolution Meeting, 

during which the initial recommendation was closed in favor of issuing three alternative 

recommendations agreed to between management and the OIG. The remaining 

recommendation was resolved outside the AFO resolution process. As of September 30, 

2015, two of the three alternative recommendations remain open, pending completion of 

final management action which is targeted for the third quarter of FY 2016. No prior year 

final management decisions were outstanding as of September 30, 2015. 

For the five-year period ended September 30, 2015, 793 OIG audit recommendations 

were issued. Ninety-nine percent of final management decisions on these 

recommendations were made within six months of the issuance of the corresponding final

audit report date. 

4. Audit Recommendation Closure Efficiency 

During FY 2015, 176 OIG-issued audit recommendations (including 154 

recommendations issued in prior fiscal years) were closed based on responsive 

management action. Of these 176 recommendations: 







 

121 recommendations (69 percent) were closed within one year of issuance of the 

associated audit report;

29 recommendations (16 percent) were closed between one and two years of 

issuance of the associated audit report; and

26 recommendations (15 percent) were closed in excess of two years of issaunce 

of the associated audit report (see Table 3) 

3 “Audit of NASA’s Management of International Space Station Contracts” (IG-15-021; July 15, 2015) and 

“NASA’s Response to Orbital’s October 2014 Launch Failure: Impacts on Commercial Resupply of the 

International Space Station” (IG-15-023; September 17, 2015) 

4 “NASA’s Use of Award Fee Contracts” (IG-14-003; November 19, 2013) 
Other Information

Page 188 NASA FY 2015 Agency Financial Report

For comparative purposes, during FY 2014, 154 OIG-issued audit recommendations

(including 146 recommendations issued in prior fiscal years), were closed based on 

responsive management action. Twenty OIG recommendations (13 percent) were closed 

within one year of issuance of the associated audit report; 119 recommendations (77 

percent) were closed between one and two years of issuance of the associated audit 

report; and 15 recommendations (10 percent) were closed in excess of two years of 

issuance of the associated audit report. 

For the five-year period ended September 30, 2015, an average of 48 percent of OIGissued audit recommendations were closed within one year of issuance of the associated 

audit report; 40 percent were closed within two years of issuance of the associated audit 

report, and 12 percent were closed in excess of two years of issuance of the associated 

audit report. 

 

1

2

3

4

5

43%

63%

54%

13%

69%

40%

28%

38%

77%

16%

17%

9%

8%

10%

15%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FY201

FY201

FY201

FY201

FY201

Closed: <1 year after report Closed: >1 <2 years after report Closed: >2 years after report

Closure Efficiency: OIG Audit Recommendations

Fiscal Years 2011 - 2015

Table 3
Other Information

NASA FY 2015 Agency Financial Report Page 189

Improper Payments Information Act (IPIA)

Assessment

Improper Payments Information Act (IPIA) Assessment

The National Aeronautics and Space Administration (NASA) is dedicated to reducing fraud, 

waste, and abuse by adequately reviewing and reporting programs susceptible to improper 

payments in accordance with the Office of Management and Budget (OMB) Circular A-123 

Management’s Responsibility for Internal Control, Appendix C, Requirements for Effective 

Measurement and Remediation of Improper Payments. To improve the integrity of the Federal government’s payments and the efficiency of its programs and activities, Congress enacted the Improper Payments Information Act (IPIA) of 2002 (Public Law (P.L.) 107-300). The 

IPIA contains requirements in the areas of improper payment identification and reporting. It 

requires agency heads to annually review all programs and activities, identify those that may 

be susceptible to significant improper payments, estimate annual improper payments in susceptible programs and activities, and report the results of their improper payment activities. 

The Improper Payments Elimination and Recovery Act (IPERA) amended the IPIA and generally repealed the Recovery Auditing Act (Section 831, Defense Authorization Act, for FY 2001; 

P.L. 107-107). Subsequently, OMB issued Memorandum M-15-02, Issuance of Revised Parts 

I and II to Appendix C of OMB Circular A-123, modifying Circular A-123 Appendix C, Part I and 

Part II (which was issued in August 2006 as OMB Memorandum M-06-23). OMB Memorandum M-15-02 requires each Executive branch agency to: 

• 

• 

• 

• 

Review all of its programs and activities to identify those susceptible to significant improper payments. OMB defines significant improper payments as gross annual improper 

payments (i.e., the total amount of overpayments plus underpayments) in the program 

exceeding (1) both 1.5 percent of program outlays and $10,000,000 of all program or activity payments made during the fiscal year reported or (2) $100,000,000 (regardless of the 

improper payment percentage of total program outlays). 

Obtain a statistically valid estimate of the annual amount of improper payments in programs and activities for those programs that are identified as susceptible to significant 

improper payments. 

Implement a plan to reduce improper payments. 

Report estimates of the annual amount of improper payments in programs and activities 

and progress in reducing them.

The Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA), P.L. 

112-248, became law on January 10, 2013, and was designed to amend and improve on 

IPERA (Public Law No. 111-204). IPERIA requires agencies to determine improper payments, 
Other Information

Page 190 NASA FY 2015 Agency Financial Report

improve recovery of improper payments, and reinforces and accelerates the President’s “Do 

Not Pay” efforts as outlined in the OMB issued Memorandum M-13-20, Protecting Privacy 

while Reducing Improper Payments with the Do Not Pay Initiative. Additionally, OMB issued 

Memorandum M-15-02, Requirements for Effective Estimation and Remediation of Improper 

Payments, to assist agencies with IPERIA implementation. 

Furthermore, on January 29, 2013, the President signed into law the Disaster Relief Appropriations Act, (P.L. 113-2 (127 Stat. 4) (Act)), which provides aid for Hurricane Sandy disaster 

victims and their communities. This Act requires Federal agencies supporting Sandy recovery and other disaster-related activities to ensure sufficient internal controls are in place to 

prevent waste, fraud, and abuse of these funds. Section 904(b) of the Act provides that all 

programs and activities receiving funds under this Act shall be deemed to be “susceptible to 

significant improper payments” for the purposes of IPIA, notwithstanding IPIA section 2(a). 

This requires all Federal programs or activities receiving funds under this Act to be automatically considered susceptible to significant improper payments, regardless of any previous improper payment risk-assessment results, and are required to calculate and report an improper 

payment estimate. The OMB issued Memorandum M-13-07 Accountability for Funds Provided by the Disaster Relief Appropriations Act, to provide guidance for the Act.

The IPIA defines an improper payment as any payment that should not have been made or 

that was made in an incorrect amount (including overpayments and underpayments) under 

statutory, contractual, administrative, or other legally applicable requirements. It includes any 

payment to an ineligible recipient, any payment for an ineligible service, any duplicate payment, payments for services not received, and any payment that does not account for credit 

for applicable discounts. Moreover, when an agency’s review is unable to discern whether a 

payment is proper as a result of insufficient or lack of documentation, this payment must also 

be considered an improper payment. 

Throughout the past decade, NASA has diligently met IPIA compliance by executing OMBcompliant risk assessments, reviewing and updating NASA payment process documentation, 

selecting OMB-compliant statistical samples for testing, drafting comprehensive test procedures (as applicable), reporting results in the annual Agency Financial Report (AFR) formerly 

the Performance and Accountability Report (PAR), and documenting the IPIA review process 

and results. NASA has reviewed its programs annually and has not identified significant improper payments for any of its programs as evidenced by extensive improper payment results. 

NASA performed its FY 2015 IPIA review on FY 2014 disbursements; during this period, 

payments were made for Hurricane Sandy disaster relief funds. Therefore, for the FY 2015 

review, the Hurricane Sandy payments were tested and reported upon as required in OMB 

Memorandum M-13-07. 

Total payments related to the Hurricane Sandy project within the Construction of Facilities 

(CoF) program amounted to approximately $4.98 million in FY 2014. NASA performed an improper payment review of the project disbursements in accordance with Appendix C of OMB 

Circular A-123 and identified no improper payments. Although the testing performed found 
Other Information

NASA FY 2015 Agency Financial Report Page 191

that the program did not have improper payments, as defined by OMB A-123, Appendix C, 

NASA will continue to monitor payments and take appropriate corrective action should future 

improper payments be identified. 

Improper Payments Information Act Reporting Details

To conduct the FY 2015 IPIA assessment, NASA considered lessons learned from past IPIA 

assessments, including NASA’s OIG recommendations, and updated the prior year risk assessment methodology. In order to satisfy the IPIA requirements the following tasks and 

activities were executed:

• 

• 

• 

• 

Reviewed and updated the FY 2014 risk assessment of all Programs; 

Selected a statistically valid sample of payments for High Risk Programs (Hurricane Sandy Disaster Relief only);

Conducted a test of all transactions selected in the sample and extrapolated the results to 

make a valid estimate; and 

Reported on the details of testing and findings (for which there where zero identified) of 

the program. 

Risk Assessment

NASA’s risk assessment methodology was developed using criteria established for determining levels of risk and evaluating all major programs against this criteria. Risk factors included 

conditions related to financial processing and internal controls, internal and external monitoring and assessments, human capital risk, operating environment and volume of payments. 

In FY 2015, NASA performed a comprehensive qualitative and quantitative risk assessment 

to identify programs susceptible to a high risk of significant improper payments. NASA’s risk 

assessment methodology is illustrated in Table 1, along with a brief summary of steps and 

results. 
Other Information

Page 192 NASA FY 2015 Agency Financial Report

Table 1: NASA’s Risk Assessment Methodology and Results

Identify Programs Eligible 

for Assessment Validate Programs Identified Analyze Risk Conditions and Prepare Risk Assessment

• 

• 

• 

Identified – 112 programs encompassing $17.1B in FY 2014, 

some of which were combined, 

resulting in 91 distinct programs 

Estimated maximum error rate 

of program disbursements at 

12.5% 

Set materiality level for low risk 

programs at <$85M

• 

• 

Reviewed NASA budget 

submissions 

Cross-walked programs 

identified to budget documentation 

• 

• 

• 

• 

• 

• 

• 

• 

Evaluated FY 2014 audit 

reports, findings and recommendations 

Evaluated internal control 

review results 

Evaluated risk conditions 

including control environment, 

human capital risk, operating 

environment and volume of 

payments 

Reviewed Agency budget 

trends 

Updated risk assessment 

based on information gathered 

from NASA financial management reports and independent 

reviews 

Conducted survey using the 

OMB M-15-02 risk factors 

Populated risk assessment matrix with feedback from OMBbased risk factor questionnaire

No programs identified as high 

risk based on risk ratings

1. Identify Programs Eligible for Assessment 

To determine the scope of the Risk Assessment, NASA prepared a comprehensive list 

identifying 112 programs based on the FY 2014 total disbursements. NASA generated 

and provided the disbursement totals for each program from its financial management 

system. 

A review of the 112 programs, some of which were combined, yielded 91 programs1

eligible for assessment.

1

 The total number of distinct programs identified started at 112 and was reduced by 21 due to combining 5 

Education Mission programs, 17 Institution and Management programs and 2 Commercial Crew and Cargo programs into one program for each of the combined programs which brought the number to 91 programs. These 

programs were selected for consolidation based on analysis of the budget: the individual Education programs 

are historically too insignificant to meet the threshold for review; Institutions and Management programs have 

unique funding; and Commercial Crew and Cargo are combined under the aegis of Commercial Spaceflight. 
Other Information

NASA FY 2015 Agency Financial Report Page 193

Partnerships, Innovation and Commercial Space & 

Strategic Integration 

Small Business Innovative Research/Small Business 

Technology Transfer Resources 

Crosscutting Space Technology Development 

Exploration Technology Development

Programs Assessed (91 Combined Programs)

Aeronautics Strategy and Management

Aeronautics Test Program

Airspace Systems Program

Aviation Safety Program

Fundamental Aeronautics

Integrated Systems Research Program

Aeronautics Research Mission Directorate Institution 

Program - Reimbursable

Aeronautics Research Mission Directorate Programmatic 

Program - Reimbursable

Enhanced Use Lease - Construction & 

Environmental Compliance and Restoration

Environmental Compliance and Restoration - Construction & 

Environmental Compliance and Restoration

Exploration Construction of Facilities

Institutional Construction of Facilities - 

Construction & Environmental Compliance and Restoration

Science Construction of Facilities

Space Operations Construction of Facilities

Agency Information Technology Services 

Agency Management and Operations

Center Management and Operations

Congressionally Directed Items

Enhanced Use Lease - Cross Agency Support Programs

Environmental Compliance and Restoration - Cross Agency 

Support Programs

Innovative Partnership Program

Institutional Construction of Facilities - Cross Agency 

Support Programs

Aeronatuics Research Mission Directorate Institution - 

Reimbursable

Aeronatuics Research Mission Directorate Programmatic - 

Reimbursable

Canadian Atlantic Storm Program Institution Program - 

Reimbursable 

Canadian Atlantic Storm Program Institution- Reimbursable

Canadian Atlantic Storm Program Programmatic Program - 

Reimbursable

Canadian Atlantic Storm Program Programmatic - 

Reimbursable

Education Programmatic - Reimbursable

Exploration Systems Mission Directorate Institution - 

Reimbursable

Exploration Systems Mission Directorate Programmatic - 

Reimbursable

Independent Verification & Validation - Reimbursable

Space Technology Programmatic - Reimbursable

Science Mission Directorate Institution - Reimbursable

Science Mission Directorate Programmatic - 

Reimbursable

Space Operations Mission Directorate Institution - 

Reimbursable 

Space Operations Mission Directorate Programmatic - 

Reimbursable

Safety and Mission Success

Strategic Capabilities Assets Program

Education

Advanced Exploration Systems 

Commercial Cargo & Crew

Constellation System 

Exploration Ground Systems 

Exploration Technology Development Program 

Human Research 

Lunar Precursor Robotic Program

Orion Multi-Purpose Crew Vehicle 

Exploration Systems Mission Directorate Programmatic I Program - Reimursable

Space Launch System 

Institutions and Management

Applied Sciences Program 

Astrophysics Research 

Astrophysics Explorer 

Cosmic Origins 

Discovery 

Earth Science Multi-Mission Operations 

Earth Science Research 

Earth Science Technology Program 

Earth Systematic Missions

Earth System Science Pathfinder

Exoplanet Exploration 

Heliophysics Explorers Program 

Heliophysics Research 

James Webb Space Telescope 

Living with a Star

Lunar Quest Program 

Mars Exploration 

New Frontiers 

New Millennium 

Outer Planets 

Physics of the Cosmos 

Planetary Science Research 

Science Mission Directorate Institutional Program - 

Reimbursable

Science Mission Directorate Programmatic Program - 

Reimbursable

Solar Terrestrial Probes 

Technology 

21st Century Space 

Human Space Flight Operations 

nternational Space Station Program 

Launch Services 

Space Operations Mission Directorate Institutional 

Program - Reimbursable

Space Operations Mission Directorate Programmatic 

Program - Reimbursable

Rocket Propulsion Testing 

Space Communication and Navigation 

Space Shuttle Program 

Space Technology 
Other Information

Page 194 NASA FY 2015 Agency Financial Report

2. Validate Programs Identified 

All amounts identified via the disbursement file were confirmed as NASA Programs 

by reviewing the approved Agency budget, and matching identifying data from the 

accounting system to Programs officially recognized by NASA and Congress in the 

budget. 

3. Prepare Risk Assessment 

The control environment, internal and external monitoring, human capital, operating 

environment and volume of payments risk conditions were analyzed during the risk 

assessment in conjunction with the following risk factors identified by OMB in M-15-02, 

Part I.A Section 9, Step 1b (pgs. 9 – 10): 

 

 

 

i. Whether the program or activity reviewed is new to the agency;

ii. The complexity of the program or activity reviewed, particularly with re- 

 spect to determining correct payment amounts;

iii. The volume (dollar value or amount) of payments made annually;

iv. Whether payments or payment eligibility decisions are made outside of 

 the agency;

v. Recent major changes in program funding, authorities, practices, or pr- 

 ocedures;

vi. The level, experience, and quality of training for personnel responsible 

 for making program eligibility determinations or certifying that payments 

 are accurate;

vii. Inherent risks of improper payments due to the nature of agency pro- 

 grams or operations;

viii. Significant deficiencies in the audit reports of the agency including, but 

 not limited to the Agency Inspector General or the Government

 Accountability Office (GAO) report audit findings, or other relevant 

 management findings that might hinder accurate payment certification; 

ix. Results from prior improper payment work; and

x. Other Risk Susceptible Programs, i.e. those programs determined by 

 OMB on a case by case basis to be susceptible to high risk of improper 

 payment.

NASA also reviewed pertinent improper payment related documents and reports, including 

the NASA OIG Report NASA’s Compliance with the Improper Payments Information Act for 

Fiscal Year 2014 (Report No. IG-15-015), the Agency’s FY 2014 OMB A-123, Appendix A, 

Internal Control over Financial Reporting Summary Report and NASA’s Executive Budget 

documents2

. Once this review and analysis was complete, the FY 2015 Risk Assessment 

2

 National Aeronautics and Space Administration FY 2013, FY 2012, FY 2011 and FY 2010 Budget Estimates
Other Information

NASA FY 2015 Agency Financial Report Page 195

was updated to reflect whether or not any NASA programs were found to be susceptible to 

significant improper payments. 

No programs were identified as susceptible to significant improper payments for FY 2015 

based upon NASA’s risk assessment methodology. However, per OMB M-15-02 and M-13-

07, one program/project, the Hurricane Sandy Disaster Relief Program, was deemed as being 

susceptible to a high risk of improper payment for all Federal programs or activities receiving 

funds under the Disaster Relief Act.

Statistical Sampling 

The Hurricane Sandy Disaster Relief Program was selected for testing because it was deemed 

as being susceptible to high risk of improper payment by OMB. NASA developed a statistically valid random sample of program payments, in accordance with OMB guidelines. NASA 

prepared a stratified, random sample to yield an estimate with a 90 percent confidence level 

with a margin of error of plus or minus 1.5 percent for the program. The sample was drawn 

from the universe of disbursements that occurred from October 1, 2013, through September 

30, 2014. The number of transactions and dollar value of the total population of Hurricane 

Sandy Disaster Relief Program – Construction of Facilities (CoF) and the sample is illustrated 

in Table 2. 

A random sample was selected for the Hurricane Sandy Disaster Relief Program – (CoF), 

identified as susceptible to high risk of significant improper payments. 

Table 2: Population and Sample Amounts by Program

Contracts Totals

Program Population Sample Population Sample

Hurricane Sandy Disaster 

Relief Program – (CoF)

Transactions 37 28 37 28

Dollar Amount $4,982,974 $4,938,867 $4,982,974 $4,938,867

Improper Payment Recording

As a result of the testing, NASA identified zero (0) improper payments. The table that follows is required for each agency that identified programs susceptible to significant improper 

payments or had programs that OMB deemed susceptible to significant improper payments. 

Therefore, NASA is reporting on the Hurricane Sandy Disaster Relief Program (CoF) that was 

deemed susceptible to significant improper payments by OMB.

Table 3 shows the projected reduction in improper payments for the program; because FY 

2014 is the first year that the Hurricane Sandy Disaster Relief measurements were conducted, 

the table does not contain prior year results. Accordingly, Table 3 displays results for the current year FY 2014 outlays (CY Outlays $), the error rate (CY IP%), dollars paid or projected to 
Other Information

Page 196 NASA FY 2015 Agency Financial Report

be paid improperly (CY IP$); the amount of overpayments (CY Overpayments $); the amount 

of underpayments (CY Underpayments $); and the projections for FY 2015 through FY 2017. 

Table 3: Improper Payment Reduction Outlook 

(A-136 Table 1)

($ in millions)

$

Program2013 Outlays2013 IP%2013 IP$2014 Outlays2014 IP%2014 IP$2014 Underpayment 2014 Overpayment $2015 Est. Outlays2015 Est. IP%2015 Est. IP$2016 Est. Outlays2016 Est. IP%2016 Est. IP$2017 Est. Outlays2017 Est. IP%2017 Est. IP$

Hurricane 

Sandy 

Disaster 

Relief 

Program –

(CoF)

n/a n/a n/a $4.98 0.00% $0 $0 $0 $10.02 0.00% $0 $0 0.00% $0 $0 0.00% $0

* NASA performed its Risk Assessment on FY 2014 disbursements. For FY 2015 reporting, the data reported for current year outlays occurred in FY 2014.

Improper Payment Root Cause Categories

Table 4 is required for each agency that identified programs susceptible to significant improper payments or had programs that OMB deemed susceptible to significant improper payments. Therefore, NASA is reporting on the Hurricane Sandy Disaster Relief Program (CoF) 

that was deemed susceptible to significant improper payments by OMB. 

Table 4: Improper Payments Root Cause Category Matrix by NASA Program 

(A-136 Table 2)

($ in millions)

Type of Improper Payment

Reason for Improper Payment Overpayments Underpayments

Program: Hurricane Sandy Disaster Relief Program (CoF)

Program Design or Structural Issue $0 $0

Inability to Authenticate Eligibility $0 $0

Failure to Verify:

Death Data $0 $0

Financial Data $0 $0

Excluded Party Data $0 $0

Prisoner Data $0 $0

Other Eligibility Data $0 $0

Administrative or Process Error 

Made by:

Federal Agency $0 $0

State or Local Agency $0 $0

Other Party $0 $0

Medical Necessity $0 $0

Insufficient Documentation to Determine $0

Other Reason $0 $0

TOTAL $0 $0
Other Information

NASA FY 2015 Agency Financial Report Page 197

Corrective Actions and Barriers

As illustrated below, an extrapolation of the payments over the entire universe resulted in $0 

of estimated improper payments with an estimate percentage of 0.00% during the period October 1, 2013, through September 30, 2014. Consequently, NASA is not required to submit 

a written corrective action plan; however, NASA will continue to monitor its program payment 

processes and related controls in FY 2016 to limit exposure to improper payments. While no 

corrective actions are currently required, there are no known statutory or regulatory barriers 

that might limit any such future actions. 

Table 5 below shows the total payments by population, sample amount, and annual estimate 

of improper payments (as applicable) by program.

Table 5: Population and Sample Amounts by Program

Transactions Dollars FY 2015 $ 

Estimate of

Improper Payments

FY 2015 % 

Estimate of

Program Population Sample Population Sample Improper Payments

Hurricane Sandy 

Program - (CoF) 37 28 $4,982,974 $4,938,867 $0 0.00%

Total 37 28 $4,982,974 $4,938,867 $0 0.00%

Internal Control Over Payments

Establishing and maintaining effective internal controls – including an internal control system 

that prevents improper payments from occurring and promptly detects and recovers any improper payments that are made – is a priority. NASA did not identify any programs or activities 

with improper payments exceeding statutory thresholds as determined under OMB Circular 

A-123 Appendix C. 

Accountability, Agency Information Systems and Other Infrastructure, and Barriers

Not applicable – no programs had improper payments exceeding statutory thresholds. 

Conclusion 

The results of the FY 2015 risk assessment process, along with NASA’s history of positive 

improper payment testing results, concluded that none of NASA’s programs were susceptible 

to a high risk of significant improper payments. However, NASA will continue to monitor payments and take appropriate corrective actions for any improper payments that may be identified in the future. NASA attributes much of the positive results to the centralized procurement 

and payment activities executed at the NASA Shared Services Center (NSSC). Centralized 

processing provides a sound internal control environment that mitigates the risk of improper 

payments across the Agency. 
Other Information

Page 198 NASA FY 2015 Agency Financial Report

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Other Information

NASA FY 2015 Agency Financial Report Page 199

Recapture Audit

On July 22, 2010, the President signed into 

Law the Improper Payment Elimination and 

Recovery Act (IPERA; Pub. L. No. 111-204). 

IPERA requires all Federal agencies to conduct payment recapture audits as part of its 

overall program to ensure effective internal 

controls over payments. NASA continues 

to perform recapture audits over fixed price 

contracts only, (excluding cost type contracts, grants and cooperative agreements) 

as part of its overall program to ensure effective internal control over payments. 

This approach is in accordance with the 

amended Office of Management and Budget (OMB) Circular A-123, Appendix C guidance, which allows agencies to make the 

determination to exclude certain programs 

and activities from the recapture audit if the 

Agency determines that recapture audits are 

inappropriate or not a cost-effective method 

for identifying and recovering improper payments. NASA employs the Defense Contract Audit Agency (DCAA) to perform auditing procedures on cost-type contracts. 

Performing a separate recapture audit on 

these cost type contracts would be duplicative and not cost-effective as determined 

in prior years. NASA does not consider it 

cost-effective to conduct payment recapture 

audits for cost type contracts or grants and 

cooperative agreements as these payments 

are made through our centralized procure to 

process, which provides reasonable assurance of proper payment. Additionally, OMB 

was notified of this decision in April 2007. 

NASA attributes much of the positive results 

of its improper payment program to the centralized procurement and payment activities executed at the NASA Share Services 

Center. Centralized processing provides a 

sound internal control environment that mitigates the risk of improper payments across 

the Agency, as such, grants and cooperative 

agreements are not included as part of its 

recapture audit efforts. 

In FY 2014, NASA awarded the contingency 

based Recapture Audit contract to an industry leading consultant. The Recapture Audit 

scope entailed the review of FY 2013 and FY 

2014 disbursements to identify and recover 

overpayments, duplicate payments, erroneous payments, lost credit memos, and internal transaction errors of NASA’s fixed price 

contracts. 

In addition to the Recapture Audit activities 

described above, the Agency conducted activities outside of the FY 2015 Agency Recapture Audit. Examples of such activities 

include Agency post-payment review/audits, 

single audit and self-reported overpayments.
Other Information

Page 200 NASA FY 2015 Agency Financial Report

Table 6: Improper Payment Recaptures with and without Audit Programs 

(A-136 Table 4)

($ in millions)

Overpayments Recaptured through Payment Recapture Audits Overpayments 

Recaptured outside of 

Payment Recapture 

Audits Contracts Total 

Program or activity 

(Type of Payment)*

mount IdentifiedFY13 & FY14**

A

ount Recaptured*** Am

Y Recapture Rate 

C

 + 1 Recapture Rate 

Target

CY

 + 2 Recapture Rate 

Target

CY

mount Identified –

FY13 & FY14

A

mount Recaptured

A

ount Identified**** Am

mount Recaptured

A

Fixed Price Contracts 0.14 0.13 93% 98% 98% 0.14 0.13 5.10 4.79

Travel N/A N/A N/A N/A N/A N/A N/A 0.01 0.01

Payroll N/A N/A N/A N/A N/A N/A N/A 0.07 0.07

Other N/A N/A N/A N/A N/A N/A N/A 0.01 0.01

* NASA’s Recapture Audit is performed by payment type instead of by Program or Activity.

** NASA performs the Recapture Audit on the previous year disbursements. For FY 2015 reporting, the data reported is for disbursements 

that occurred in FY 2013 and FY 2014.

*** The Amounts Recaptured are for recoveries identified in prior years but collected in FY 2014 and FY 2015.

**** Overpayments Recaptured outside of Payment Recapture Audits were identified or recaptured in FY 2014.

Table 7: Disposition of Funds Recaptured Through Payment Recapture Audits 

(A-136 Table 5)

($ in millions)

Program or Activity 

(Type of Payment) Amount Recaptured Payment Recapture 

Auditor Fees Original Purpose Office of Inspector General

Returned to 

Treasury

Fixed Price Contracts 0.129 0.023 0.101 0.00 0.005

Table 8: Aging of Outstanding Overpayments Identified in the Payment Recapture 

Audits

 (A-136 Table 6)

($ in millions)

Program or Activity 

(Type of Payment) Amount Outstanding 

(0-6 months)

Amount Outstanding 

(6 months to 1 year)

CY Amount Outstanding 

(over 1 year)

Fixed Price Contracts 0.01 0.00 0.00 

NASA has taken steps through Improper Payment Reviews and recapture audits to continue 

efforts already embedded in the control environment for reducing and recovering improper 

payments. The recapture audit process is monitored by the Office of the Chief Financial Officer to ensure compliance with NASA’s Recapture Audit Guidance. In addition, all collection 

and disbursement functions are centralized which ensures consistent application of the control environment and reduction of improper payments. There are no statutory or regulatory 

barriers limiting NASA’s ability to reduce improper payments. 
Other Information

NASA FY 2015 Agency Financial Report Page 201

Do Not Pay Initiative

Public Law 112-248, Improper Payments Elimination and Recovery Improvement Act of 2012 

established the Do Not Pay Initiative and directed the Office of Management and Budget 

(OMB) oversight of the program. OMB issued 

Memorandum M-13-20 dated August 16, 2013, 

Protecting Privacy while Reducing Improper 

Payments with the Do Not Pay Initiative providing guidance to help Federal agencies protect 

privacy while reducing improper payments with 

the Do Not Pay (DNP) Initiative.

NASA fully integrated into the Treasury’s DNP 

portal process on September 27, 2014. The 

DNP portal is used by NASA for the review of 

improper payments and utilizes the following 

data sources within the DNP portal: the Social 

Security Administration Death Master File (SSADMF) and the System for Award Management 

Exclusion Record-Private (SAM-EPLS).

The cumulative results of these monthly reviews 

reported in Table 7 are for the period of October 

2014 through August 2015. During this time period, there were 117,003 potential improper payments initially identified by Treasury with a dollar 

value of $12.002 billion. This initial volume was 

a result of Treasury’s sort criteria which compiled 

the data using the vendor name in SAM. NASA 

further refined that initial sort, validating the data 

using the Tax Identification Number (TIN), full 

name or address which resulted in the list being 

reduced to 22 potential improper payments with 

a dollar amount of $833,387. NASA then verified these were false positives and reported the 

information back to Treasury. The term false 

positive indicates items that were initially flagged 

but upon further review it was determined that 

they were in fact not improper payments. 

Additionally, prior to NASA’s integration into the 

DNP portal process its adjudication process 

reflected a three month lag with the collection 

and reporting of improper payments data. This 

lag time has been eliminated and at present the 

improper payments data being reported is the 

most current and accurate data available. 
Other Information

Page 202 NASA FY 2015 Agency Financial Report

Table 9: Implementation of the Do Not 

Pay Initiative to Prevent Improper Payments

 (A-136 Table 7)

Month

Number (#) 

of payments 

reviewed 

for possible 

improper 

payments 

Note 1

Dollars ($) 

of payments 

reviewed for 

possible 

improper 

payments 

Note 1

Number (#) 

of payments 

stopped

Dollars ($) 

of payments 

stopped

Number (#) 

of improper 

payments 

reviewed and 

determined 

accurate

Dollars ($) 

of improper 

payments 

reviewed and 

determined 

accurate

Oct 14

Nov 14

Dec 14

Jan 15

Feb 15

Mar 15

Apr 15

May 15

Jun 15

Jul 15

Aug 15

Totals 

11,620

9,877

11,358

8,465

9,602

10,801

10,705

10,625

11,650

11,535

10,765

117,003

1,102,677,042 

983,781,012 

1,897,147,847 

946,518,655

877,331,503 

1,259,058,310 

1,002,001,639 

92,836,982 

1,657,693,331 

1,062,245,244 

1,120,895,935 

12,002,187,500 

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

12

0

0

3

0

0

2

2

0

1

2

22

677,895 

0

0 

52,694 

0

0

3,360 

6,757 

0

5,000 

87,681 

833,387 

Number (#) 

of payments 

reviewed 

for possible 

improper 

payments 

Note 1

Dollars ($) 

of payments 

reviewed for 

possible 

improper 

payments 

Note 1

Number (#) 

of payments 

stopped

Dollars ($) 

of payments 

stopped

Number (#) 

of potential 

improper

 payments 

reviewed and 

determined 

accurate 

Note 1

Dollars ($) of 

potential 

improper 

payments 

reviewed and 

determined

 accurate

Note 1

Reviews with the 

IPERIA specified 

databases

Reviews with 

databases not 

listed in IPERIA

117,003 

N/A

12,002,187,500 

N/A

0 

N/A

0 

N/A

22 

N/A

833,387 

N/A

Note 1: All data is from October 2014 - August 2015. During this time period there were a total of 117,003 

potential improper payments initially identified by Treasury with a dollar value of $12.002 billion. This initial 

volume is a result of Treasury’s sort criteria which compiles the data using the vendor name in the System for 

Award Management (SAM). NASA further refined that initial sort, validating the data using the Tax Identification 

Number (TIN), full name and address which resulted in the list being reduced to 22 potential improper payments 

with a dollar amount $833,387. NASA then verified these were false positives and reported the information back 

to Treasury. 
Other Information

NASA FY 2015 Agency Financial Report Page 203

Schedule of Spending

The Schedule of Spending (SOS) presents an overview of how and where agencies are 

spending (obligating) money for the reporting period. The data used to populate the SOS 

is the same underlying data that is used to populate the Statement of Budgetary Resources 

(SBR). The SOS table presents budgetary data in general terms, but corresponds to amounts 

shown on the SBR. See table below:

Schedule of Spending Line Item Title Statement of Budgetary Resources Line Item Title

Total Resources Total Budgetary Resources

Total Amounts Agreed to be Spent Obligations Incurred

Total Spending Gross Outlays

USASpending.gov is a Federal Web site 

designed in accordance with the Federal 

Funding Accountability and Transparency Act 

of 2006. The information for this web site is 

gathered from the Federal Procurement Data 

System (FPDS) which contains information 

about Federal Contracts, and the Federal 

Assistance Awards Data System (FAADS) 

which contains information about Federal 

financial assistance such as grants, loans, 

insurance and direct subsidies. Information 

from these two systems is also captured 

by the Agency’s Financial System through 

Procurement Information Systems for 

Management (PRISM), which is an acquisition 

management system used by agencies 

Governmentwide. The Agency’s financial 

system is used to generate the SBR. 

(In Millions of Dollars) 2015 2014

Section I: What Money is Available to Spend?

Total Resources $ 22,175 $ 21,504

Less Amount Available but Not Agreed to be Spent 1,016 1,018

Less Amount Not Available to be Spent 88 133

Total Amounts Agreed to be Spent $ 21,071 $ 20,353

Section II: How was the Money Spent?

Space Operations

Personnel compensation and benefits $ 321 $ 325

Contractual services and supplies 3,231 3,472

Acquisition of assets 21 18

Grants and fixed charges 25 21

Other — 2

Total Spending 3,598 3,838

Science

Personnel compensation and benefits $ 305 $ 306

Contractual services and supplies 3,996 3,700

Acquisition of assets 27 46

Grants and fixed charges 570 556

Other — 3

Total Spending 4,898 4,611
Other Information

Page 204 NASA FY 2015 Agency Financial Report

(In Millions of Dollars) 2015 2014

Section II: How was the Money Spent? (ctd.)

Exploration

Personnel compensation and benefits $ 464 $ 450

Contractual services and supplies 4,241 3,219

Acquisition of assets 60 61

Grants and fixed charges 67 65

Other — 1

Total Spending 4,832 3,796

Aeronautics

Personnel compensation and benefits $ 193 $ 188

Contractual services and supplies 289 263

Acquisition of assets 22 22

Grants and fixed charges 32 30

Other — — 

Total Spending 536 503

Safety, Security and Mission Services

Personnel compensation and benefits $ 1,239 $ 1,224

Contractual services and supplies 3,417 3,403

Acquisition of assets 80 65

Grants and fixed charges 31 29

Other 26 35

Total Spending 4,793 4,756

Education

Personnel compensation and benefits $ 8 $ 7

Contractual services and supplies 22 22

Grants and fixed charges 81 84

Total Spending 111 113

Office of Inspector General

Personnel compensation and benefits $ 31 $ 31

Contractual services and supplies 6 6

Other 1 1

Total Spending 38 38 

Space Technology

Personnel compensation and benefits $ 114 $ 124

Contractual services and supplies 367 399

Acquisition of assets 4 7

Grants and fixed charges 33 30

Total Spending 518 560

Construction and Environmental Compliance and Restoration

Personnel compensation and benefits $ — $ —

Contractual services and supplies 208 192

Acquisition of assets 327 298

Other 7 —

Total Spending 542 490

Other

Personnel compensation and benefits $ 19 $ 18

Contractual services and supplies 1,072 925

Acquisition of assets 11 11

Grants and fixed charges 2 2 

Other — —

Total Spending 1,104 956

Total Spending $ 20,970 $ 19,661

Section III: Who did the Money go to?

Federal $ 1,353 $ 1,319

Non-Federal 19,718 19,034

Total Amounts Agreed to be Spent $ 21,071 $ 20,353
Other Information

NASA FY 2015 Agency Financial Report Page 205

Freeze the Footprint

The National Aeronautics and Space Administration (NASA) is committed to the goal of reducing 

the total square footage of its domestic office and 

warehouse inventory compared to its FY 2012 

baseline. This reduction in square footage contributes to reducing the costs associated with real 

property in accordance with Section 3 of the Office of Management and Budget (OMB) Memorandum-12-12, Promoting Efficient Spending to Support Agency Operations and OMB Management 

Procedures Memorandum 2013-02, the “Freeze 

the Footprint” policy implementation guidance. 

NASA continues to meet its national responsibilities, fully leveraging retained assets to increase 

their functionality in support of mission success 

while disposing of unneeded Federal real estate, 

increasing the use of under-utilized assets, minimizing operating costs, and improving efficiency. 

NASA has implemented several initiatives that 

complement the goals of the Freeze the Footprint 

policy including recapitalization, enhanced Center 

master planning, capital investment program planning, sustainability policies, construction of facilities, and disposal. NASA evaluates its real property, both through the Master Planning process 

and through periodic special studies to identify facilities that are no longer needed. Center master 

plans identify requirements for new construction 

as well as buildings that can be demolished. Consolidations, renovations and new construction aim 

to utilize space and energy more efficiently in all 

classes of NASA buildings. 

NASA has an active demolition program. Since 

2004, NASA has disposed of more than 1.4 million 

square feet of office and warehouse space. This 

demolition program has been an important tool 

in eliminating nonessential facilities. NASA has 

reduced maintenance and utility costs by consolidating functions previously performed in these disposed facilities into new, smaller facilities. Studies 

conducted by NASA on its new consolidated facilities validate measurable savings in utility costs 

over the buildings that they have replaced.

NASA will continue identifying, implementing and 

executing facility efficiency and effectiveness 

through management, development and operational strategies that reduce life cycle cost and risk 

while ensuring safety and mission success. 

Freeze the Footprint Baseline Comparison FY 2012 

Baseline

FY 2014 Change 

(FY 2012 Baseline - FY 2014)

Square Footage (SF in Millions) 15.714 15.408 (0.306)

Reporting of O&M Costs – Owned and Directly 

Leased Buildings

FY 2012 

Baseline

FY 2014 Change 

(FY 2012 Baseline - FY 2014)

Operation and Maintenance Costs ($ in Millions) $ 95 $ 79 $ (16)
Other Information

Page 206 NASA FY 2015 Agency Financial Report

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Other Information

NASA FY 2015 Agency Financial Report Page 207

Summary of Financial Statement Audit and 

Management Assurances

The following tables summarize the Agency’s FY 2015 Financial Statement Audit and Management Assurances. Table 1 summarizes the status of prior year—FY 2014 material weaknesses identified, if any by the Financial Statement Auditor. Table 2 summarizes the status 

of prior year material weaknesses, if any identified by NASA Management.

Table 1: Summary of Financial Statement Audit

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning 

Balance New Resolved Consolidated Ending Balance

None 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0

 Table 2: Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA 2)

Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

None 0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA 2)

Statement of Assurance Unqualified

Material Weaknesses Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

None 0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA 4)

Statement of Assurance Systems conform 

Non-Conformances Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

None 0 0 0 0 0 0

Total Non-Conformances 0 0 0 0 0 0

Compliance with Federal Financial Management Improvement Act (FFMIA)

Agency Auditor

1. System Requirements No lack of substantial compliance noted No lack of substantial compliance noted

2. Accounting Standards No lack of substantial compliance noted No lack of substantial compliance noted

3. USSGL at Transaction Level No lack of substantial compliance noted No lack of substantial compliance noted
Other Information

Page 208 NASA FY 2015 Agency Financial Report

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NASA Armstrong Flight Research Center currently flies an F-15D Eagle aircraft for research support and 

pilot proficiency. NASA research support aircraft are commonly called chase planes and fill the role of escort 

aircraft during research missions. Chase pilots are in constant radio contact with research pilots and serve as 

an “extra set of eyes” to help maintain total flight safety during specific tests and maneuvers. (Credit: NASA/Jim 

Ross)

Taking a Closer Look at NASA’s Orion Spacecraft After Successful Flight Test. (Credit: NASA)

Artist concept of NASA’s Space Launch System (SLS) 70-metric-ton configuration launching 

to space. (Credit: NASA)
NASA Headquarters

Washington, DC 20546