National Aeronautics and Space Administration FY 2009 Performance and Accountability Report Guide to NASA’s Performance and Accountability Report The National Aeronautics and Space Administration’s (NASA) Fiscal Year 2009 (FY 2009) Performance and Accountability Report (PAR) provides a description of NASA’s performance in achieving its long-term Strategic Goals, multi-year Outcomes, and Annual Performance Goals (APGs). This includes performance information and financial statements, as well as NASA’s management challenges and NASA’s plans and efforts to overcome them. This is a report to the American people on NASA’s progress toward its Strategic Goals. NASA’s FY 2009 PAR meets relevant U.S. government reporting requirements (including the Government Performance and Results Act of 1993, the Chief Financial Officers Act of 1990, and the Federal Financial Management Improvement Act of 1996). For FY 2009, NASA’s consolidated PAR is organized as follows: Management’s Discussion and Analysis (MD&A) The MD&A highlights NASA’s overall performance, including programmatic, financial, and management activities. This section also includes NASA’s organization, and describes its processes for assessing and rating performance, and its system of management controls (the organization, policies, and procedures) that help program and financial managers achieve results and safeguard the integrity of their programs. Detailed Performance The Detailed Performance section provides more in-depth information on NASA’s progress toward achieving milestones and goals as defined in the Agency’s Strategic Plan. It also includes plans for correcting performance mea- sures that NASA did not achieve this year and a status of actions from the FY 2008 Performance Improvement Plan. The list of Outcomes and Annual Performance Goals (APGs) for FY 2009 are available in the FY 2009 Performance Plan Update, submitted with NASA’s FY 2010 Budget Estimates.1 Financials The Financials section includes the Agency’s financial statements, the audit results submitted by independent accountants in accordance with government auditing standards, and Agency responses to the audit findings. Other Accompanying Information (OAI) The OAI includes the Inspector General’s statement on NASA’s management and performance challenges, the status of the Agency’s follow-up actions on the findings of the Inspector General’s audits, an Improper Payments Information Act (IPIA) assessment, a summary of financial statement audit and management assurances, and Missions at a Glance, providing more details about flight missions mentioned in the PAR. NASA’s PAR is produced by the Office of Program Analysis and Evaluation, with contract support by The Tauri Group. If you have questions about NASA’s PAR, please email [email protected]. 1NASA’s FY 2010 Budget Estimates can be found at www.nasa.gov/pdf/345225main_FY_2010_UPDATED_final_5-11-09_ with_cover.pdf. Message from the Administrator November 16, 2009 I am pleased to present NASA’s Performance and Accountability Report for FY 2009. This report presents NASA’s progress toward achieving the challenging mis- sion of space exploration, scientifi c discovery, and aeronautics research as outlined in our Strategic Plan. The performance and fi nancial information presented in this report highlights our efforts to manage taxpayer dollars responsibly, while adhering to NASA’s core values of Safety, Integrity, Teamwork and Excellence. One of our most exciting accomplishments this year was the fourth and fi nal Hubble Space Telescope orbiting observatory servicing mission. The crew of the Space Shuttle Space Transportation System-125 conducted fi ve spacewalks to extend the life of the orbiting observatory and replace aging science instruments. Hubble has given our Nation and the world an unprecedented glimpse into the universe for nearly 20 years and the recent servic- ing mission ensures that Hubble will continue to provide that unique point-of-view for years to come. This year, NASA launched missions to observe and better understand the Moon, search for new worlds, and help us understand Earth’s climate systems. Our aeronautics program announced a clean-fuel prize, and won a presti- gious award for its work in aviation safety. The International Space Station doubled our permanent human presence in space, and our Space Shuttle program safely fl ew fi ve successful missions. NASA makes every effort to ensure that performance data are subject to the same attention to detail as is devoted to our scientifi c and technical research. With this in mind, I can provide reasonable assurance that the performance data in this report is reliable and complete. Any data limitations are documented explicitly in the report. In addition, NASA accepts the responsibility of accounting for and reporting on its fi nancial activities. In FY 2009, NASA resolved one of the two prior year internal control material weaknesses. The successful resolution of the prior year material weakness in Financial Systems, Analyses, and Oversight resulted from improvements achieved through rigorous adherence to the Comprehensive Compliance Strategy, NASA’s framework for ensuring compli- ance with Generally Accepted Accounting Principles and other fi nancial requirements. The Agency also continued to make signifi cant progress on NASA’s one remaining material weakness–Controls over Legacy Property, Plant and Equipment (PP&E), related to valuation of legacy assets. The Agency believes it has now achieved compliance with the applicable updated accounting standard issued in October 2009 with respect to this class of assets. However, due to the fact that the new standard was issued subsequent to the end of the fi scal year, the material weakness in Controls over Legacy PP&E continues, as such, I am unable to provide reasonable assurance that this report’s fi nancial data is entirely reliable and fully complete. The Agency’s efforts to address this weakness are discussed in the Statement of Assurance section of this report. During my confi rmation hearing, I spoke at length about challenge and leadership. I believe that NASA is an exceptional resource for this Nation, and have set a challenge for myself, as the new Administrator, to fi nd innovative ways to use NASA’s missions to enhance our nation’s educational, scientifi c and technological capacity. I look forward to leading the Agency through this exciting time of transition. Charles F. Bolden, Jr. Administrator I II NASA FY 2009 PERFORMANCE AND ACCOUNTABILITY REPORT Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Welcome to NASA . MD&A-1 Our Mission, MD&A-1 NASA’s Organization, MD&A-1 NASA’s Workforce, MD&A-3 Shared Values, Shared Results, MD&A-3 Budgeting for Performance: NASA’s FY 2009 Budget, MD&A-4 Proud to Serve the Nation: American Recovery and Reinvestment Act, MD&A-4 Managing and Measuring NASA’s Performance, MD&A-7 Performance Results . MD&A-7 Summary of NASA’s Performance, MD&A-8 FY 2009 Cost Toward Strategic Goals, MD&A-9 Performance Highlights, MD&A-9 Other Agency Successes, MD&A-18 Human Capital Management, MD&A-18 Inspiring Young and Diverse Scientists, MD&A-18 Verifi cation and Validation of NASA’s Performance Data, MD&A-19 Financial Results . MD&A-21 Financial Highlights, MD&A-21 Results of Operations, MD&A-21 Sources of Funding, MD&A-23 Balance Sheet, MD&A-24 Assets, MD&A-24 Liabilities, MD&A-25 Net Position, MD&A-25 Limitations of the Financial Statements, MD&A-25 Systems, Controls, and Legal Compliance . MD&A-27 Management Assurances: Administrator’s Statement of Assurance, MD&A-27 NASA’s Material Weaknesses and Non-Conformances, MD&A-30 Remediation Program for Continuing Material Weaknesses, MD&A-30 The Offi ce of Inspector General’s FY 2009 Management Challenges, MD&A-31 The Government and Accountability Offi ce’s (GAO) High Risk List, MD&A-31 Looking Forward . MD&A-33 DETAILED PERFORMANCE Measuring NASA’s Performance. DP-1 A Reader’s Guide to NASA’s Detailed Performance Data, DP-1 Additional Information, DP-2 Strategic Goal 1, DP-3 Strategic Goal 2, DP-6 III Sub-Goal 3A, DP-9 Sub-Goal 3B, DP-19 Sub-Goal 3C, DP-24 Sub-Goal 3D, DP-30 Sub-Goal 3E, DP-37 Sub-Goal 3F, DP-43 Strategic Goal 4, DP-47 Strategic Goal 5, DP-52 Strategic Goal 6 DP-55 Cross-Agency Support Programs: Education, DP-59 Cross-Agency Support Programs: Agency Management and Operations, DP-64 NASA’s Uniform and Efficiency Measures, DP-71 NASA’s Performance Improvement Plan Update for FY 2008, DP-78 FINANcIAlS Message from the Office of the chief Financial Officer . .F-1 Introduction to the Principal Financial Statements . F-2 limitations of the Financial Statements, F-2 Financial Statements, Notes, and Supplemental Information . F-3 letter from the Acting Inspector General on the Audit . F-47 Report of the Independent Auditors . F-49 Report on Internal control . F-51 Report on compliance with laws and Regulations . F-60 Management’s Response to Independent Auditor’s Report . F-62 OthER Accompanying INFORMAtION Office of Inspector General letter on NASA’s Most Serious Management and Performance challenges . OAI-1 NASA’s Most Serious Management and Performance challenges, OAI-2 Transitioning from the Space Shuttle to the Next Generation of Space Vehicles, OAI-2 Managing Risk to People, Equipment, and Mission, OAI-3 Financial Management, OAI-5 Acquisition and Contracting Processes, OAI-6 Information Technology (IT) Security, OAI-10 Improper Payments Information Act (IPIA) Assessment . OAI-13 Improper Payment compliance, OAI-13 Improper Payments Information Act Reporting Details, OAI-14 Description of Population and Sample Data, OAI-16 Recovery Audit, OAI-18 FY 2009 Inspector General Act Amendments Report . OAI-19 Background, OAI-19 NASA’s Audit Follow-up Program, OAI-19 FY 2009 Audit Follow-up Results, OAI-20 Summary of Financial Statement Audit and Management Assurances .