Weather Service director retires after audit finds misallocation of millions

The head of the National Weather Service retired last week after an internal investigation found that the agency had reallocated millions of dollars without required congressional approval.

The National Oceanic and Atmospheric Administration and its mother agency, the Department of Commerce, began investigating the Weather Service's budget last year. They found that senior officials had improperly taken funds from some programs to cover the costs of forecasting activities and employee salaries.

The Weather Service's financial office "operated outside the bounds of acceptable financial management," Commerce Deputy Secretary Rebecca Blank wrote in a memo.

"The fact that the Team did not find any evidence of fraud or [personal] financial gain does not lessen the severity of the misconduct," she continued. "The actions of the employees involved are contrary to the high standards and appropriate behavior which Secretary [John] Bryson and I expect from Department of Commerce employees."

The review became public after months of speculation. The issue came to light earlier this year when an employee asked NWS Director Jack Hayes in a conference call about a budget "problem" totaling $50 million to $100 million (Greenwire, Feb. 27). Less than two weeks ago, Rep. Paul Broun (R-Ga.) chided NOAA for dragging its feet on the top-level review of the reallocation (E&E Daily, May 18).


Some mystery remains: NOAA officials did not release the amount misappropriated. The agency also did not release the 60-page report, which officials said is in the process of being redacted.

When asked about the amount misappropriated, NOAA spokesman Scott Smullen said only that the agency was asking Congress for the authority to reprogram $36 million for the current fiscal year. Of that, $26 million would go to forecasting activities and staff, while $9 million would complete an upgrade to the agency's radars.

Assuming similar shortfalls existed in fiscal 2010 and 2011, that would mean the Weather Service improperly reprogrammed about $70 million. NOAA officials said none of the money was used on inappropriate items, just in different categories than originally budgeted.

"The investigation found no evidence of corruption or personal financial gain in these actions," Smullen said. "We do not believe any money was moved out of the National Weather Service."

NOAA Administrator Jane Lubchenco wrote in a memo that she first took action last fall when she received a preliminary report from the inspector general of Commerce. At that time, she replaced the Weather Service's chief financial officer -- then Robert Byrd -- with the CFO of the National Marine Fisheries Service. She and Blank then began an investigation led by senior officials, who received guidance from the IG.

That investigative team found, among other things, that the Weather Service used accounting techniques that made detection of budget movement difficult. It also found NOAA's oversight lacking, reporting that "existing budget controls failed to prevent [NWS employees] from engaging in questionable financial practices," according to Lubchenco's memo.

NOAA will contract with an outside accounting firm to review the Weather Service's funding movements over the past six years.

"I have been assured that none of the local forecasts and warnings -- life- and property-saving services provided by NWS on a daily basis -- was jeopardized by the misconduct," Lubchenco wrote in the memo. "I consider NOAA's responsibility to provide these services to the nation to be one of NOAA's most important missions."

'Impeccably honest people'

Hayes, the Weather Service director, did not mention the audit when he announced his retirement in a message to employees Friday. But he alluded to the budget problems that have plagued the agency in recent years.

"It isn't always smooth but I can tell you that our Nation's leaders care deeply about you and your abilities to accomplish the mission," Hayes wrote. "I have done my best these past five years to manage the many challenges with the kind of honor and dedication you expected of me."

Hayes faced what he has called in the past a "structural deficit" that made it difficult to cover all the agency's expenses, including the salaries of the labor-heavy organization. In a conference call with employees earlier this year, he said the deficit created a "very difficult challenge."

The audit reported the alleged structural deficit as new information that came up in interviews with Weather Service employees. Lubchenco has directed the agency's acting chief financial officer to "examine each program office" to determine whether such a deficit exists.

But Dan Sobien, president of the National Weather Service Employees Organization, said he is suspicious about the audit's implication that NOAA was unaware of the reprogramming. He cited a meeting he attended where NOAA's CFO mentioned the Weather Service's structural deficit.

Hayes and Byrd, he said, are "impeccably honest people."

"I don't think the whole story is being told here. I think that they're covering for a lot of people who knew, and Jack was the fall guy," Sobien said. "If you want to fault them for something, it's that they didn't have the guts to go to their superiors and say, 'We need more money.'"

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