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National Weather Service chief steps down after probe finds agency misappropriated money

Editor's Note: This story has been updated to clarify that there were two separate reports - an internal inquiry into alleged misappropriation of funds at the National Weather Service and an external inspector general's report into alleged misappropriation at NOAA.

Updated at 12:49.m. ET Monday: The director of the National Weather Service has stepped down after an internal investigation concluded that the federal agency misappropriated millions in taxpayer dollars.

Jack Hayes retired on Friday, a day after the head of the weather service’s parent agency, the National Oceanic and Atmospheric Administration, issued a memo spelling out the results of an investigation into allegations of mismanagement of funds.

This follows on the heels of a separate external investigation into NOAA that says the administration misappropriated $43.8 million by giving bonuses and extensions to contractors without proper justification.

In the weather service inquiry, the memo by NOAA Administrator Jane Lubchenco said investigators found evidence that weather service employees at its headquarters inappropriately “reprogrammed” funds in 2010 and 2011 by moving millions of dollars in program accounts and redirecting them to 122 weather service offices across the country.

According to the memo:

“The Investigative Team found that NWS employees engaged in the reprogramming of NWS funds without Congressional notification during the years in question. These actions may be a violation of the Anti-Deficiency Act. The Team also found failure of management and oversight by NWS leadership. In addition, the Team found significant problems with budget and financial controls at the National Weather Service and that Departmental financial and management controls were ineffective at detecting or preventing this inappropriate reprogramming.

Importantly, the Team did not find any evidence that any NWS employee committed fraud or received personal financial gain through their actions. This fact does not excuse, or reduce the seriousness of the employees’ actions.”

NOAA announced on Friday that Hayes was retiring and that Laura Furgione has been named acting assistant administrator of the weather service.

The investigative report recommends that weather offices be fully funded, that supervisory structure of NWS be restructured to provide additional oversight, and that the budget process be reformed to allow staff to raise substantive concerns about prioritization and long-term planning.

“The deeply troubling revelation that senior staff at the National Weather Service, which provides indispensable storm and weather forecasting, have been conducting improper and potentially illegal transfers of taxpayers’ money is unacceptable,” Sen. Olympia Snowe, the ranking member of Oceans, Atmosphere, Fisheries and Coast Guard subcommittee, said in a statement Friday.

“I am further alarmed that the investigative report raises fundamental concerns that the core operations of the National Weather Service are underfunded, and that the current process in the Department of Commerce is broken, as it ‘did not encourage questioning or provide independent channels for reporting dubious budget decisions,’” Snowe stated.

NOAA spokesman Scott Smullen said in a statement:

“NOAA and department leadership will continue to work with the Inspector General’s office and members of Congress to ensure that processes are put in place to restore proper oversight, that funds are properly reprogrammed, and that all individuals responsible for these unauthorized transactions are held accountable.

“In addition, Commerce leadership is initiating department-wide actions to bring more rigor and transparency to the budget formulation and execution process at the sub-bureau level, as well as provide more training to managers on how to address complaints in a timely and appropriate manner."

Separately, an Office of the Inspector General report released May 18 said NOAA paid nearly $44 million in award fees or contract extensions without proper justification.

NOAA officials could not, for example, provide written explanation for why they paid $303,000 in awards on a $10 million contract to upgrade personnel and equipment for a satellite operations control center, the report says.

An $80 million contract for the National Weather Service's river, flood and drought forecasting specified that the contract, which consisted of a base period of five years, had to be evaluated annually. But the board assigned to evaluate the contract never met, the report says, nor had a chairperson been assigned.

Even so, auditors found that all five of the one-year extensions, totaling $40 million, were approved.

Of the nine contractors, NOAA gave eight high ratings, which allowed contractors to reap "substantial award fees," the report says. As a result, auditors concluded that NOAA's pay system "provided little incentive for contractors to excel in executing their contracts."

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