To review the OIG’s audit oversight coverage of NASA, we obtained the 71 final reports from the Office of Audits as reported in the OIG’s semiannual reports to the Congress for fiscal years 2006 and 2007, which included 46 audits with statements of compliance with Government Auditing Standards and 25 reports without reference to compliance with auditing standards. For purposes of our review, we considered only those reports that stated compliance with Government Auditing Standards as audit reports and refer to the reports without such statements as nonaudit reports. We compared the contents of the 46 audit reports with the high- risk areas designated by us and with the management challenges identified by the NASA OIG to determine the audit coverage of these areas. We also analyzed the nature and scope of all 71 final reports and the resulting recommendations to determine the extent to which they addressed compliance with laws, regulations, and NASA policies and procedures; economy and efficiency; or the effectiveness of NASA’s programs and operations. To review the investigative coverage, we used the identification of closed cases reported by the OIG in semiannual reports for fiscal years 2006 and 2007. We also obtained the OIG’s strategic and annual audit plans covering the same 2-year period to determine if they contained goals and objectives to provide audit coverage of NASA’s program compliance with laws and regulations and program economy, efficiency, and effectiveness. We identified monetary and other audit and investigative accomplishments reported by the NASA OIG in semiannual reports to the Congress for fiscal years 2003 through 2007 in order to observe any long-term trends. We limited our review of the NASA OIG’s accomplishments to the results of audits and investigations reported to the Congress for this period and did not audit or otherwise verify the dollar amounts of the monetary accomplishments or potential savings to the government reported by the NASA OIG. We also obtained the semiannual reports issued by all 30 IGs appointed by the President and confirmed by the Senate to obtain the monetary accomplishments reported by those IGs during fiscal year 2007. We obtained the total budgetary resources of each OIG for fiscal year 2007 from the Office of Management and Budget (OMB) and compared the reported monetary accomplishments with budgetary resources to obtain a return on investment for each IG office. We obtained the total budgetary resources at the NASA OIG and the agency for fiscal years 2003 through 2007 from OMB in order to observe any long-range budgetary trends. We obtained additional information on staffing levels, resource distribution, and attrition rates from the OIG to identify staffing trends over this period. The attrition rates for NASA overall were verified by NASA management officials. We compared the total budgetary resources for fiscal year 2007 of the 30 IGs appointed by the President and confirmed by the Senate with the total budgetary resources of their respective agencies for the same year. We calculated a ratio for each OIG’s budget information as a percentage of its respective agency’s budget for comparative purposes. We obtained reports from the external reviews of the NASA OIG completed during fiscal years 2003 through 2007 to observe any long-term trends in OIG quality for both audits and investigations. Specifically, we obtained the audit peer review report of audit quality dated January 8, 2004, completed by the Department of Justice OIG, and the March 13, 2007, peer review report completed by the General Services Administration OIG. We also obtained the July 8, 2005, peer review report of the NASA OIG’s investigative quality completed by the Department of Transportation OIG. In addition, we obtained the report of investigation completed by the Integrity Committee of PCIE and ECIE, which addressed allegations of the NASA IG’s misconduct and appearance of a lack of independence. This investigative report was released in late March 2007 to the House Committee on Science and Technology, which has oversight responsibilities for scientific research and development at NASA and other nondefense agencies. We discussed the disposition of the investigation with the Integrity Committee. We met with the NASA IG and senior OIG staff at the beginning of our review regarding our scope and methodology. We conducted a series of interviews coordinated through the IG’s Executive Officer which included the Deputy Inspector General, the Counsel to the IG, the Assistant IG for Audits, the Assistant IG for Investigations, and the Assistant IG for Management and Planning. At the completion of our work we met with the NASA IG and senior OIG staff to discuss our report findings, conclusions, and recommendations. We conducted this performance audit from November 2007 through December 2008 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. NASA was established by the National Aeronautics and Space Act of 1958 to provide research into problems of flight within and outside Earth’s atmosphere and to ensure that the United States conducts activities in space devoted to peaceful purposes for the benefit of mankind. On January 14, 2004, the President announced a new vision for space exploration endorsed by the Congress in the NASA Authorization Act of 2005 which includes a journey of exploring the solar system, returning astronauts to the moon in the next decade, and venturing to Mars and beyond. NASA comprises the Headquarters in Washington, D.C., nine field centers located throughout the country, and the Jet Propulsion Laboratory (JPL) operated for NASA by the California Institute of Technology. The NASA centers and JPL conduct NASA’s programs in exploration, discovery, and research and are led by four mission directorates at NASA Headquarters. (See table 1.) The NASA OIG was established by the IG Act to provide an independent office within NASA to conduct and supervise audits and investigations; provide leadership and coordination and recommend policies to promote economy, efficiency, and effectiveness; and prevent and detect waste, fraud, abuse, and mismanagement. The IG Act provides protections to IGs’ organizational independence through key provisions that require specified IGs, including the NASA IG, to be appointed by the President with the advice and consent of the Senate. This appointment is required to be without regard to political affiliation and is to be based solely on an assessment of the candidate’s integrity and demonstrated ability. Such presidentially appointed IGs can only be removed from office by the President who must communicate the reasons for removal to both houses of the Congress. The current NASA IG was appointed by the President on April 16, 2002, after Senate confirmation. In addition to the IG, the Deputy IG, and the Executive Officer, the OIG is organized into four offices to provide oversight of NASA, as shown in table 2. As a presidentially appointed IG, the NASA IG is a member of the PCIE, which together with the ECIE, operates a joint Integrity Committee that is empowered to investigate allegations of wrongdoing against IGs and certain members of their staff. The Inspector General Reform At of 2008, enacted on October 14, 2008, authorizes a new statutory Council of the Inspector General on Integrity and Efficiency which is to have its own Integrity Committee with powers similar to the PCIE and ECIE Integrity Committee and disestablishes the PCIE and ECIE effective on the earlier of the creation of the new Council, or 180 days after the passage of the Act. As of the date of this report the new Council has not yet been established, and the PCIE, ECIE, and their Integrity Committee continue operation. Since 1990, we have periodically reported on government operations that we have designated as high risk because of their greater vulnerabilities to fraud, waste, abuse, and mismanagement as well as challenges to economy, efficiency, or effectiveness. In January 2007, we identified 27 high-risk areas across the federal government. These included high-risk areas applicable to NASA that had been reported in prior high-risk reports. We specifically identified NASA’s contract management as a high-risk area because of weaknesses in NASA’s integrated financial management system. For example, we have reported that NASA’s contractor cost reporting process does not provide cost information that program managers and cost estimators need to develop credible estimates and compare budgeted and actual cost with the work performed. Also, NASA has lacked a modern financial management system to provide accurate and reliable information on contract spending and placed little emphasis on product performance, cost controls, and program outcomes. On a governmentwide basis, we also identified protecting the federal government’s information systems and strategic human capital management across the executive branch as high-risk areas. Beginning in 1997, the IGs were asked by congressional leaders to identify the 10 most serious management problems in their respective agencies. The request began a yearly process that continues in response to requirements established in the Reports Consolidation Act of 2000. This act calls for executive agencies, including NASA, to report their IGs’ lists of significant management challenges in their annual performance and accountability reports to the President, OMB, and the Congress. In fiscal years 2006 and 2007, the NASA OIG identified management challenges that included areas also identified in our high-risk reports and in the additional areas of financial management, space operations and exploration, and safety and security. The OIG has identified NASA’s Integrated Enterprise Management Program as key to improving NASA’s ability to provide reliable information to management, support compliance with federal requirements, and strengthen the internal control program to address continuing problems, such as NASA’s internal control weaknesses over property, plant, and equipment and materials. Regarding space operations and exploration, the OIG has identified the transition from the space shuttle to the next generation of space vehicles as a management challenge as NASA balances schedule and resource constraints while maintaining the capabilities required to fly the space shuttle and simultaneously developing the next generation of space vehicles.