Commerce audit pans NOAA restructuring

A plan to reorganize administrative services at the National Oceanic and Atmospheric Administration is based on shaky advice, a Commerce Department audit has found.

In a report dated March 7 and made public Thursday, Commerce Inspector General Johnnie Frazier says a consultant's study recommending the changes lacks adequate supporting documentation and should not be the sole basis for NOAA's decision to restructure.

The consulting firm, Booz Allen Hamilton Inc., projected in February 2004 that NOAA could save $19.1 million by eliminating its regional finance and administration service centers and realigning their staff under eight functional managers.

"Although Booz Allen's reports indicate extensive data gathering, we had many concerns with the support for the findings, recommendations and assumptions contained in those reports," Frazier wrote in a memo accompanying his audit.

Frazier said auditors were not able to validate the projected cost savings and productivity gains or assess the validity of the recommendation, despite reviews of both interim and final reports and interviews with Booz Allen officials who conducted the study. The company's explanation of its methodology is attached to the audit, but Frazier said that it, too, is inadequate.

Booz Allen officials disagreed with the findings. "We cooperated fully with the inspector general's investigation into this matter, and stand behind the work we delivered to NOAA," a company spokesman said Thursday.

Since 1983, NOAA has served its customers in Commerce field organizations through five administrative support centers located in Boulder, Colo., Kansas City, Mo., Norfolk, Va., Seattle, Wash., and Washington, D.C. They handle finance, budget, acquisitions, grants management, workforce management, facilities, logistics, information technology, and environmental compliance and safety.

NOAA plans to shift from a mix of functional, geographical and business-line service delivery approaches to a predominantly functional approach. It appointed a seven-member transition team in September 2004.

The director's office in Boulder already has been reorganized, according to Rep. Mark Udall, D-Colo. "I'd strongly discourage them from proceeding without congressional approval, which is required by law," Udall said in a statement Wednesday.

NOAA did not immediately respond to a request for comment.

In a February memo to Frazier, Commerce Deputy Undersecretary John Kelly Jr. downplayed Booz Allen Hamilton's role, saying that NOAA had based its decision on several studies. Kelly acknowledged that the consultants faced "significant challenges" in data collection, benchmarking and analysis, but contended that the changes already implemented provide a solid foundation for strengthening management and improving service delivery.