WASHINGTON -- Government and private auditors testified Wednesday that NASA has operated for years with an antiquated accounting system, making it almost impossible to track how billions of public dollars are spent.
Since 1990, the General Accounting Office, Congress's investigative arm, warned lawmakers the space agency was headed for trouble without a modern financial management system.
Yet for five years, the Arthur Andersen accounting firm gave the agency a clean bill of health.
Last year, Price Waterhouse Coopers took over as NASA's independent auditor and determined the agency could not accurately account for expenses, property, equipment and materials.
It took staffers on the House Science Committee to identify a $644 million misstatement in NASA's 1999 budget statement.
The irony, Arthur Andersen has been indicted in connection with the Enron scandal, was not lost on those at Wednesday's hearing.
"Is NASA the government's Enron?" asked Rep. Stephen Horn, R-Calif., chairman of the House subcommittee on government efficiency, financial management and intergovernmental relations.
Half-joking, Horn asked whether there had been any document shredding at NASA.
"Not to my knowledge," was the somber answer from Alan Lamoreaux, NASA Assistant Inspector General for Audits.
Patrick McNamee, a Price Waterhouse Coopers partner, declined to second-guess Arthur Andersen's auditing practices.
Gregory Kutz, GAO director of financial management and assurance, testified Andersen's work did not meet professional audit standards.
Paul Pastorek, NASA's newly appointed general counsel, did not dispute the audit findings.
"It is undeniable. NASA has financial management problems," Pastorek said.
NASA Administrator Sean O'Keefe is determined to restore the agency's credibility with Congress, auditors and the public by improving its financial management performance, Pastorek said.
The core of a $835 million new integrated management system could be in place by June 2003 with the final pieces in place by 2005, two years earlier than previously projected, Pastorek said.
Unlike other NASA hearings, which often draw standing-room only crowds, Wednesday's hearing was sparsely attended, and for most of the session Horn was the only lawmaker present.
Throughout the 1990s, the space agency has been hounded by cost overruns and schedule delays as it developed the International Space Station, its most ambitious engineering project since the Apollo program.
The cost overruns are directly linked to the agency's inability to accurately manage its finances, said Allen Li, a GAO director.
"If you don't know what you have in the bank, you can't predict how much money you will have or need for expenses in the future," Li said.
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