NSF & Congress
Dr. Christine C. Boesz
National Science Foundation
Before the VA, HUD, and Independent Agencies
Subcommittee of the Committee on Appropriations
May 15, 2002
Madam Chair, Senator Bond, and distinguished members of the Subcommittee,
I am Dr. Christine Boesz, Inspector General at the National Science
Foundation (NSF). I appreciate the opportunity to appear before
you today. As you know, NSF continues to be an innovative agency
dedicated to maintaining American leadership in the discovery and
development of new technologies across the frontiers of scientific
and engineering research and education. NSF has had an extraordinary
impact on scientific and engineering knowledge, laying the groundwork
for technological advances that have shaped our society and fostered
the progress needed to secure the Nation's future. Because the
scientific enterprise and its underlying basic research are everchanging,
NSF continuously faces new challenges. Consequently, my office
is working closely with NSF management to identify and address
issues that are important to the success of the Agency. Today I
would like to provide an update on the status of NSF's progress
in three areas critical to its success: post-award management,
workforce planning, and large facilities management.
NSF's primary mission is to fund extramural research and education
activities that will advance science and engineering. Over ninety-five
percent of NSF's FY 2002 budget is in support of these activities,
which are funded primarily through grants and cooperative agreements.
The Agency's scientific directorates and offices have a shared
responsibility with the Office of Budget, Finance, and Award Management
to oversee the financial and programmatic management of these awards.
Because of its enormous impact on NSF's daily operations, for the
past two years I have identified award administration as one of
NSF's top ten management challenges.
In addition, during the most recent annual audit of NSF's financial
statements, our external auditors identified, as a reportable condition,
weaknesses in NSF's internal controls over the financial aspects
of post-award management.
The auditors found that, while NSF has a robust system of award
management over its pre-award and award phases, it needs to develop
a more rigorous, risk-based monitoring program for the post-award
phase. In addition, NSF needs to significantly improve its current
policies and procedures for the valuation and tracking of its assets,
including facilities and equipment held and maintained by other
NSF management agrees that award administration is one of NSF's
top management challenges, but disagrees that it should be classified
as a reportable condition for the purposes of financial statement
reporting. Nevertheless, NSF is working to continuously improve
its business processes by refining its award management procedures
to include a more structured, risk-based monitoring element. Further,
NSF is taking steps to improve its oversight of assets for which
it holds title.
In support of these efforts, my office is currently conducting
a review of best practices in grant award administration to assist
NSF in addressing this audit finding and meeting its management
challenge. We are looking at organizations in both the public and
private sectors that dispense and administer financial assistance
awards, and we plan to issue our report by the end of the year.
In addition, we will continue to assess NSF's overall progress
in developing a more effective post-award management system.
Despite an increasing workload and a budget that has grown from
$1 billion to $5 billion over the past 20 years, the number of
full-time equivalent positions (FTEs) at NSF has remained relatively
static. In addition, NSF, like much of government, is vulnerable
to a wave of retirements in key areas. Because of these concerns,
I identified workforce planning and training as another management
challenge for NSF.
The strategic management of human capital is a major component
of the President's Management Agenda and has been identified
by the Government Accounting Office (GAO) as posing a significant
risk government-wide. Last year, this Subcommittee requested that
my office analyze the adequacy of the agency's staffing and management
plans in light of the efforts to expand NSF's budget over the next
five years. In response to that request, my office has performed
a review of NSF's workforce planning activities.
NSF's workforce planning to date, like that of most Federal agencies,
has largely been confined to stating broad goals and standards.
It falls short of an actionable plan, which requires specific objectives,
clearly assigned responsibilities, well-defined milestones for
discrete actions, and practical measures of effectiveness for accountability.
However, NSF is in the process of contracting for a multi-year
business analysis of its operations that will include a human capital
management plan component identifying its future workforce requirements.
While it may be premature to attempt a meaningful assessment of
future workforce planning at NSF, due to the imminent launch of
the Agency's ambitious business analysis initiative, I can offer
some preliminary conclusions. I believe that the Agency's proposed
business analysis, if diligently conducted by the contractor and
properly overseen by NSF, represents a comprehensive and rigorous
approach to reviewing NSF's primary operations and the human resources
needed to staff them. It has the potential to generate an actionable
plan that will help NSF identify and meet its current and future
workforce needs, as well as plan ways to head off future problems.
The ultimate value of the initiative, of course, will be determined
by the validity of the findings of the business analysis and the
actions that NSF takes pursuant to them. Given NSF's investment
in time and resources, I look forward to substantial, concrete
results that will improve the agency's business processes, including
workforce planning and management.
Large Facilities Management Plan
NSF's management of large facility projects is another issue that
I have identified as one of the Agency's top ten management challenges.
In response to the President's Budget Blueprint, increased
scrutiny from the Office of Management and Budget (OMB) and the
Congress, and recommendations from my office, NSF developed a Facilities
Management and Oversight Plan (Plan) last fall.
As part of its implementation, the Plan calls for significantly
upgrading the current procedures and guidelines for oversight and
management of large facility projects. The implementation has been
slower than originally anticipated, and recruitment of a new Deputy
Director for Large Facility Projects is now expected to be completed
this summer. However, despite the delay, I am encouraged by recent
progress. Last month, members of the team charged with drafting
the new guidelines and procedures briefed my office on their progress,
and I am pleased to see NSF is on track for full implementation
later this year.
To assist NSF in carrying out this plan, we have identified additional
ways that NSF can enhance its policies and procedures to provide
a more robust facilities management system.
During our audit of the Major Research Equipment (MRE) appropriation
account, which was requested by this Subcommittee, we found several
areas that NSF needs to address to continue improving its management
and oversight for large projects and facilities. My office issued
a report responding to your request earlier this month. We found
that questionable practices discovered during our audit of the
Gemini project have occurred in other MRE-funded projects as well.
NSF's existing policies and procedures have led the Agency to apply
funding sources inconsistently among these projects and fail to
account for each project's total cost.
As a result of these findings, we have recommended that NSF revise
its financial management policies and procedures to ensure that
it identifies the full cost of major research equipment and facilities
and improves its administration of MRE accounts. NSF should be
able to incorporate these improvements into its current efforts
to implement the large facilities Plan.
Finally, the MRE account provides funding for two distinctly different
types of projects: those that invest in state-of-the-art, scientific
tools for research and the development of new knowledge and ideas;
and those that support the investment in mission critical property,
plant, and equipment (PP&E) owned by NSF. The latter provide
the facilities and logistical means for a broad range of science
endeavors, primarily in NSF's Polar Programs. Both types of projects
require effective management, i.e., planning, budgeting, construction
oversight, and risk management, to ensure that these multimillion-dollar
projects proceed on schedule, stay within budget, and perform as
expected. Both also require full-cost accounting in accordance
with Federal accounting standards.
But funding these types of projects from a single appropriation
account creates a situation where the replacement, renovation,
and upkeep of assets critical to the safety and health of researchers
and their support personnel could potentially compete with new
scientific tools for limited funding. In updating its large facilities
policies and procedures, therefore, NSF should (1) plan and prioritize
the mission critical PP&E projects separately from the development
and construction of research tools and (2) distinguish their different
funding sources, to avoid possible negative impact on the broad
range of programs these assets support. More specific accounting
will reduce confusion about how funds are being allocated, improve
the accuracy of budget planning, and allow more effective monitoring
of the use of funds.
I am pleased to see NSF addressing large facility management through
the development of this Plan. As the guidelines and procedures
are fully developed and implemented, my office will continue to
assess this critical area and recommend further enhancements where
necessary. We share the same goal - efficient and effective management
of these large and complex projects - and I look forward to assisting
NSF in realizing this goal.
Madam Chair, this concludes my statement. I would be happy to
answer any questions you or other members of the subcommittee may
have, or to elaborate on any of the issues that I have addressed