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National Aeronautics and Space Administration
Office of Inspector General
Washington, D.C. 20546

June 13, 2003

RELEASE 2003-038: INTEGRATED FINANCIAL MANAGEMENT PROGRAM CORE 
FINANCIAL MODULE CONVERSION TO FULL COST ACCOUNTING

The audit report "Integrated Financial Management Program (IFMP) Core
Financial Module Conversion to Full Cost Accounting" (IG-03-015) has 
been posted to the NASA Office of Inspector General Web site at:  
http://www.hq.nasa.gov/office/oig/hq/ig-03-016.pdf
    
The Core Financial Module is the backbone of the IFMP, which is 
intended to provide the NASA-wide fully integrated accounting system 
that the Agency now lacks.  A primary objective of the IFMP is to 
support the Agency's Full Cost Initiative, developed in response to 
NASA requirements and Federal law such as the Federal Financial 
Management Improvement Act of 1996.  We performed the audit of the
Core Financial Module to determine whether it would support full cost
accounting by the October 1, 2003, target. 


Results of Audit

The Core Financial Module software, which has been installed at six 
NASA Centers, has the capability to accomplish full cost accounting.  
However, NASA must first resolve several extraordinarily complex 
accounting and costing issues involving the allocation of service and 
general and administrative costs, civil service costs, and unassigned 
costs.  Once the accounting and costing issues are resolved, NASA has 
to configure the IFMP software to reflect the changes.  For NASA to 
meet the October 1, 2003, target for full cost accounting, the 
accounting and costing issues must be resolved and the software 
configuration must be completed in about 3 months following the June
23 installation of the module at the remaining NASA Centers.  If
those tasks are not completed by October 1, 2003, the Agency faces a
high risk that it will be unable to use IFMP to report full cost
accounting data until fiscal year 2005.  Additionally, a substantial
delay in the availability of full cost accounting data could extend
the implementation date of the Agency's overall Full Cost Initiative.

Recommendations

We recommended that the NASA Deputy Chief Financial Officer revise
the IFMP plans to include:  (1) timeframes and milestones for
completing steps implementing full cost accounting, (2)
identification of the personnel and other resources necessary to
perform the steps within the established timeframes, and (3) senior
management approval and support of these additional procedures.


Management's Response

Management concurred with the recommendation and formed the Full Cost 
Policy and Operations Team, which has identified timeframes, 
milestones, and resources for completing the steps necessary to 
implement full cost accounting and to address the cost issues 
identified in the report.  In addition, NASA has appointed a
full-time Director of Full Cost to manage the full cost
implementation process. The Agency plans to have all phases of full
cost accounting implemented by October 1, 2003.  We consider the
planned action responsive to the recommendation.


To comment on this report, please send e-mail to
igrelease{at}hq.nasa.gov 

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