NASA’s parallel human spaceflight initiatives are struggling with budget uncertainties that increase risk as the agency alters oversight and acquisition strategies to lower costs, according to the latest annual assessment from its independent Aerospace Safety Advisory Panel (ASAP).

The agency’s declining annual budget, $17.7 billion and facing further erosion from a looming March 1 sequester, is the “elephant in the room,” according to the nine-member panel’s 2012 appraisal.

“It is time for all stakeholders to reach a consensus on what the nation is attempting to accomplish in human spaceflight and then fund that effort adequately and consistently,” concludes the 44-page report delivered to the House and Senate leadership as well as NASA Administrator Charles Bolden on Jan. 9. “This disconnect is seen by the ASAP as a major risk driver in human spaceflight.”

The safety panel, established by Congress in 1968 in the aftermath of the Apollo 1 fire that claimed the lives of three astronauts, focused much of its anxiety on the rapidly unfolding Commercial Crew Program (CCP), initiated in 2010 to develop competing services to transport astronauts to and from the International Space Station by 2017. Skeptical lawmakers have appropriated just more than half of the funding requested by the White House — $769 million versus $1.401 billion — prompting NASA to embrace flexible Space Act Agreements to manage the effort instead of traditional Federal Acquisition Regulation contracts.

Now in its third round of development, the CCP has initiated a complex certification process, so far involving SpaceX, Boeing and Sierra Nevada, which briefed plans this week to use their own pilots for early test flights. The ASAP finds the option troubling because of the potential to mask hardware and operational risks that may surface later as the private operators transition into station missions and orbital flights with commercial passengers.

“Separating the level of safety demanded in the system from the unique and hard-earned knowledge that NASA possesses introduces new risks and unique challenges to the normal precepts of public safety and mission responsibility,” according to the report. The panel — chaired by retired Navy Vice Adm. Joseph Dyer and comprising former astronauts, military aviators and safety experts — pledged further inquiry.

The ASAP was also troubled by budget pressures on the traditionally contracted development of the Orion/Multipurpose Crew Vehicle, its Space Launch System heavy-lift rocket and associated ground systems at the Johnson, Marshall and Kennedy space centers. The Obama administration has directed NASA to prepare for the human exploration of a yet-to-be-selected asteroid by 2025 with the new spacecraft and eventual human missions to Mars.

The panel found NASA’s Washington headquarters shouldering the integrator role but prepared to share the responsibilities with the field centers and even delegate lower-level risk management back to its contractor team. The responsibility is traditionally held by a NASA “lead center” and supported by an integration contractor.

The in-house approach violates a traditional check-and-balance system of oversight and management, and “therefore, opens a path for considerable unanticipated and unknown risk to enter the system,” according to the ASAP.