The NASA Office of Inspector General (OIG) contracted with the
independent certified public accounting firm of PricewaterhouseCoopers,
LLP to audit NASA’s financial statements as of, and for the year ended,
September 30, 2001. The contract required that the audit be performed
in accordance with generally accepted government auditing standards,
Office of Management and Budget (OMB) Bulletin 01-02, “Audit
Requirements for Federal Financial Statements,” and the General
Accounting Office/President’s Council on Integrity and Efficiency
“Financial Audit Manual.” PricewaterhouseCoopers produced three
reports:
The “Report of Independent Accountants” discusses
PricewaterhouseCoopers’ disclaimer on NASA’s consolidated and combined
financial statements as of, and for the year ended, September 30, 2001. The disclaimer resulted primarily from NASA’s inability to provide in a
timely manner fully supported documentary evidence to substantiate the
accuracy and the classification of amounts reported as obligations,
expenses, property, plant, and equipment, and materials. The report is
available on the OIG web site at:
http://www.hq.nasa.gov/office/oig/hq/igfy01fsaudit.pdf
The “Report of Independent Accountants on Internal Control” identified a
material weakness involving NASA’s lack of adequate controls to
reasonably assure that property and materials are presented fairly in
the financial statements. Specifically, NASA did not provide sufficient
documentation for amounts capitalized to the International Space
Station, and the Agency needs to improve the controls surrounding
classification and accounting treatment of contractor-held property and
inventory items. In addition, PricewaterhouseCoopers identified five
reportable conditions involving the operational effectiveness of NASA’s
financial management processes, the process of estimating environmental
liability, and three conditions involving the NASA Automated Data
Processing Consolidation Center. The report is available on the OIG web
site at:
http://www.hq.nasa.gov/office/oig/hq/lrreport022602.pdf
The “Report of Independent Accountants on Compliance with Laws and
Regulations” discusses how PricewaterhouseCoopers performed tests of
compliance with certain provisions of laws and regulations,
noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. The report also discusses
certain other laws and regulations specified in OMB Bulletin No. 01-02,
including the requirements referred to in the Federal Financial
Management Improvement Act (FFMIA). The results disclosed instances in
which NASA’s financial management systems did not substantially comply
with Federal financial management systems requirements and applicable
Federal accounting standards. The report is available on the OIG web
site at:
http://www.hq.nasa.gov/office/oig/hq/opinion022602.pdf
In connection with the contract, the NASA OIG reviewed PricewaterhouseCoopers’ reports and selected related work papers and inquired of their representatives. The OIG review, as differentiated from an audit in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do
not express, opinions on NASA’s financial statements or conclusions
about the effectiveness of internal control or conclusions on whether
NASA’s financial management systems substantially complied with the
FFMIA or conclusions on compliance with laws and regulations. PricewaterhouseCoopers is responsible for the auditor’s reports and the conclusions expressed in the reports. However, although the OIG quality control review is ongoing, to date we have identified no instances where PricewaterhouseCoopers did not comply, in all material respects, with generally accepted government auditing standards.
For more information, please contact Mr. Alan J. Lamoreaux, Assistant
Inspector General for Audits, at (202) 358-1232.
