For these reasons, all NASA programs have carryover balances. Program Carryover Balances Vary Significantly

Carryover balances at the end of fiscal year 1995 for Human Space Flight and Science, Aeronautics, and Technology programs totaled $3.6 billion. NASA often discusses and analyzes carryover balances in terms of equivalent months of a fiscal year’s budget authority that will be carried into the next fiscal year. The carryover balances at the end of fiscal year 1995 ranged from the equivalent of 1 month for the Space Shuttle to 16 months for Academic Programs. Science programs such as MTPE, Space Science, and Life and Microgravity Sciences and Applications, fund grants to a much greater extent than the Space Station and the Space Shuttle. NASA Is Taking Actions to Analyze and Reduce Carryover Balances

Although carryover naturally occurs in the federal budget process, NASA officials became concerned that the balances were too high. NASA is taking actions to analyze and reduce these balances. NASA’s Comptroller will review justifications for carryover balances as part of the fiscal year 1998 budget development process. The study recommended that NASA implement thresholds for the amount of funds to be carried over from one fiscal year to the next. We compared the balances of individual Human Space Flight and Science, Aeronautics, and Technology programs to this 3-month threshold and found that at the end of fiscal year 1995, nine programs exceeded the threshold by a total of $1.3 billion. Table 4 compares individual program carryover amounts with the 3-month threshold at the end of fiscal years 1995, 1996, and 1997. Estimates of budget authority, obligations, and accrued costs of program activities will be specifically scrutinized to ensure that the timing of the budget authority to accrued costs is consistent with minimal, carefully justified balances of uncosted budget authorities at fiscal year end. The carryover referred to by the Comptroller is the equivalent of 8 weeks, or 15 percent, of the next fiscal year’s cost. The Comptroller stressed that he was not attempting to set a threshold for the appropriate level of carryover, but instead was setting a criteria beyond which there should be a strong justification for carryover. In fiscal years 1996 and 1997, the amounts requiring justification are estimated at $1.5 billion and $1 billion, respectively. We reviewed budget and cost plans and discussed carryover balances with NASA’s Chief Financial Officer; NASA’s Comptroller and his staff; and with financial management staff for the MTPE, Space Science, Space Station, Space Shuttle, and Aeronautics programs. We will also provide copies to others on request.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the extent of carryover budget balances for the National Aeronautics and Space Administration's (NASA) Mission to Planet Earth (MTPE) program and other NASA programs.

What GAO Found

GAO found that: (1) carryover balances in NASA's Human Space Flight and Science, Aeronautics, and Technology programs totalled $3.6 billion by the end of fiscal year (FY) 1995; (2) individual programs carried over varying amounts, ranging from the equivalent of 1 month to 16 months of FY 1995 new budget authority; (3) MTPE carried $695 million, or more than 6 months, of budget authority into FY 1996; (4) Under NASA's current budget and cost plans, these balances will be reduced in FY 1996 and 1997, but the actual reductions depend on the extent NASA's projected costs match the actual costs incurred and the amount of new budget authority received for FY 1997; (5) NASA officials are concerned that the current amounts are too high and are taking actions to reduce these balances; (6) a recent NASA study of carryover balances determined that the equivalent of 3 months of budget authority should be carried into the next fiscal year and recommended actions to bring NASA programs within that threshold, and also noted that the threshold needs to be studied over time to determine if it is appropriate; (7) applying the initial 3-month threshold to estimated carryover balances at the end of FY 1996 shows that 7 of the 11 Human Space Flight and Science, Aeronautics, and Technology programs have a total carryover of $1.1 billion beyond the threshold; (8) NASA's Comptroller intends to carefully scrutinize carryover amounts as part of the FY 1998 budget development process, and formally requested program managers to justify carryover balances that exceed amounts necessary to fund program costs for 8 weeks of the next fiscal year; (9) the 8 weeks was not a threshold for the appropriate level of carryover, but rather a criterion for identifying balances for review; (10) at the end of FY 1996, nine programs would need to justify $1.5 billion beyond the Comptroller's 8-week criterion; and (11) the three programs with the largest estimated balances requiring justification are Space Science with $558 million, MTPE with $435 million, and Life and Microgravity Sciences and Applications with $257 million.