ES, IG-98-037, NASA Science Research Institutes

NASA SCIENCE RESEARCH INSTITUTES
IG-98-037

Executive Summary

Introduction
In 1995, NASA's Zero Base Review identified the concept of science research institutes as a potentially beneficial approach to maintain or improve the quality of science research despite organizational streamlining. The strategy involved "privatization" of a portion of the Agency's science programs into several science research institutes. Under its Science Institute Plan, NASA intended to select universities, not-for-profit organizations, and consortia to operate 11 institutes under competitively awarded contracts or cooperative agreements to conduct research to support the missions of selected NASA Centers. Although NASA announced in June 1996 that its efforts to create the institutes were being discontinued, in 1997 the Agency established the following science research institutes through the award of cooperative agreements:

National Center for Microgravity Research on Fluids and Combustion (the Microgravity Research Center) at Lewis Research Center,
Institute for Global Change Research and Education at Marshall Space Flight Center,
Research Institute for Advanced Computer Science at Ames Research Center, and
National Space Biomedical Research Institute (the Biomedical Research Institute) at Johnson Space Center.
The first three institutes were established through cooperative agreements with the Universities Space Research Association (USRA) in Columbia, Maryland. The cooperative agreement for the fourth institute is with the Baylor College of Medicine in Houston, Texas. Appendix B contains details on each cooperative agreement award.

Objective
The overall objective was to evaluate the policies, procedures, and practices that NASA used in establishing science research institutes and centers. ⁽¹⁾ Appdneix A contains additional details on objectives, scope, and methodology.

Results of Audit
NASA generally followed Office of Management and Budget (OMB) policies and procedures and Agency guidance on the use of cooperative agreements in establishing the science research institutes. NASA's Johnson Space Center established the Biomedical Research Institute in conformity with OMB and NASA guidance. However, three other centers2 paid management fees to the USRA on three cooperative agreements that will total about $1.54 million over a 5-year period. NASA did not have policy for the authorization, justification, and approval of the use of management fees on cooperative agreements. As a result, USRA was able to obtain Government reimbursement for otherwise unallowable costs charged to the cooperative agreements.

Recommendations and Management's Response
This report contains a recommendation aimed at controlling the payment of management fees on cooperative agreements with non-profit organizations. Management did not concur with the recommendations in a draft of this report and provided additional information that we agreed was a sufficient basis for deleting one recommendation and revising the remaining recommendation. We request additional management comments on the revised recommendations.

FOOTNOTES

1. The Microgravity Research Center and the Biomedical Research Institute were the initial science research institutes established when audit field work began. The Institute for Global Change Research and Education and the Research Institute for Advanced Computer Science were created after field work began.

2. Lewis Research Center, Marshall Space Flight Center, and Ames Research Center.

Introduction	In 1995, NASA's Zero Base Review identified the concept of science research institutes as a potentially beneficial approach to maintain or improve the quality of science research despite organizational streamlining. The strategy involved "privatization" of a portion of the Agency's science programs into several science research institutes. Under its Science Institute Plan, NASA intended to select universities, not-for-profit organizations, and consortia to operate 11 institutes under competitively awarded contracts or cooperative agreements to conduct research to support the missions of selected NASA Centers. Although NASA announced in June 1996 that its efforts to create the institutes were being discontinued, in 1997 the Agency established the following science research institutes through the award of cooperative agreements: National Center for Microgravity Research on Fluids and Combustion (the Microgravity Research Center) at Lewis Research Center, Institute for Global Change Research and Education at Marshall Space Flight Center, Research Institute for Advanced Computer Science at Ames Research Center, and National Space Biomedical Research Institute (the Biomedical Research Institute) at Johnson Space Center. The first three institutes were established through cooperative agreements with the Universities Space Research Association (USRA) in Columbia, Maryland. The cooperative agreement for the fourth institute is with the Baylor College of Medicine in Houston, Texas. Appendix B contains details on each cooperative agreement award.
Objective	The overall objective was to evaluate the policies, procedures, and practices that NASA used in establishing science research institutes and centers. ⁽¹⁾ Appdneix A contains additional details on objectives, scope, and methodology.
Results of Audit	NASA generally followed Office of Management and Budget (OMB) policies and procedures and Agency guidance on the use of cooperative agreements in establishing the science research institutes. NASA's Johnson Space Center established the Biomedical Research Institute in conformity with OMB and NASA guidance. However, three other centers2 paid management fees to the USRA on three cooperative agreements that will total about $1.54 million over a 5-year period. NASA did not have policy for the authorization, justification, and approval of the use of management fees on cooperative agreements. As a result, USRA was able to obtain Government reimbursement for otherwise unallowable costs charged to the cooperative agreements.
Recommendations and Management's Response	This report contains a recommendation aimed at controlling the payment of management fees on cooperative agreements with non-profit organizations. Management did not concur with the recommendations in a draft of this report and provided additional information that we agreed was a sufficient basis for deleting one recommendation and revising the remaining recommendation. We request additional management comments on the revised recommendations.