Optimistic to a Fault
Another of NASA’s defining characteristics, which was identified as a contributing factor to the Columbia disaster in 2003 by the Columbia Accident Investigation Board, is its propensity for being overly optimistic about challenges, coupled with an unwillingness to hear bad news. This, the board said in its report on the accident, leads to bad communication and system breakdowns — because, eventually, even NASA employees aren’t sure what’s happy talk and what’s the truth. This characteristic is evident in the finance organization, too.
For years, the GAO and NASA’s own inspector general had warned of material weaknesses in both the new IFMP system and the finance department. In its most recent evaluation of the system, published in early November 2003, the GAO said the system didn’t give project-cost estimators the full-cost accounting information they needed; didn’t properly account for contractor-held property or accounts payable; and improperly processed accrued costs and obligations. The GAO pointed out that the new core financial module hadn’t been fully tested, and in some cases processed transactions incorrectly. In a rebuttal letter accompanying the report, NASA deputy administrator Frederick Gregory “respectfully disagreed” with every point the GAO made. (Gregory’s rebuttal implies that by October, NASA had already addressed all of the problems that, in fact, ended up causing the $565 billion in year-end adjustments.)
“With most other [government agencies] with which we work, it’s not a debate about the facts,” says Kutz. “It’s about the solutions. If you look at this [November] report, you will notice that [NASA] disagrees with everything we said. I think that says a lot there. We can’t even agree with them about what the facts are.”
Such institutionalized denial may have created a situation in which one hand of NASA doesn’t know what the other is doing. In his rebuttal letter, Gregory said the agency had implemented the system’s full-cost accounting capability as of October 1, 2003. Shortly thereafter, “IFMP management” told the GAO that the capability would be functioning at the end of October. As of the end of March 2004, the system, says Ciganer, was “about 75 percent there.”
Another glaring example of this disconnect can be found in Brown’s written response to the Senate Commerce Committee in September 2003 during her confirmation as NASA CFO, just days before the fiscal year-end close. Prior to her confirmation, she had been deputy CFO in charge of financial management, and was deeply involved in the rollout of the core financial module in June 2003. In her statement, Brown declared that “[w]ith my leadership, the agency is currently on track to…have fiscal-year 2003 financial statements audited by November 15, which is two months earlier than required.” Brown claims that when she wrote those words, she was unaware of the full extent of the reporting problems that would result in NASA filing its financial statements two months late. However, she says that when she testified in September, she was aware that patches and workarounds for problems identified back in June hadn’t even arrived from SAP yet. Given that knowledge, her predictions of an early audit opinion were, at best, extremely optimistic.