& WASHINGTON (Reuters) - The head of the National Weather Service has retired unexpectedly after an internal investigation found that agency employees improperly shifted millions of dollars in budget resources to weather service offices around the country.&

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As a result of the investigation, agency officials have now asked Congress permission to redirect some $36 million in spending in the 2012 budget to local weather forecasting and equipment upgrades, Scott Smullen, a spokesman for the National Oceanic and Atmospheric Administration (NOAA), said on Tuesday.

Government investigators had earlier found weather service employees had moved around millions of dollars to cover expenses and shortfalls within the agency without notifying Congress, according to a memo released last week from the Department of Commerce, which oversees NOAA and the weather agency.

Investigators did not specifically say why the money was shifted from some agency programs to weather service offices or why lawmakers' approval was not sought. Weather forecasts and warnings were never at risk, the findings said.

Jack Hayes, who led the National Weather Service (NWS) for nearly five years, stepped down on Friday. In a note to staff, Hayes said the choice to leave was difficult but something he had been planning for some time.

Neither Hayes nor a statement from NOAA announcing his replacement mentioned the weather service controversy.

An internal investigation found mismanagement of budget resources but concluded that there was no evidence of fraud or that anyone gained financially. The findings also concluded inadequate supervision of financial staff.

"The failure of senior officials both inside and outside the NWS to respond appropriately and in a timely fashion to the repeated complaints regarding the questionable financial transactions is unacceptable," Deputy Commerce Secretary Rebecca Blank wrote in a memorandum on the investigation.

MONEY SENT AROUND THE NATION

U.S. Representative Olympia Snowe has said in a statement that senior NWS financial management misdirected millions of dollars from certain accounts to 122 weather offices nationwide.

NOAA has asked Congress to reprogram, or redirect, the funds in the budget so they can be used for local weather warnings and forecasts as well as to upgrade a radar system used to detect storms, the memo said.

Hayes, a former U.S. Air Force colonel, had earlier worked at NOAA and helped lead the National Ocean Service's response to Hurricane Katrina in 2005 before leaving to head a specialized weather agency at the United Nations, according to an agency biography no longer on NOAA's website but still available elsewhere online. He returned to NOAA in 2007.

Separately, the Commerce Department Inspector General found in a report earlier this month that NOAA paid about $43.8 million to contractors in award fees or extensions without proper justification.

Those contracts involved a range of work from flood and drought forecasting to scientific and technical data support, according to that report, dated May 18.

The weather service, part of the Commerce Department, provides national and local forecasts, including information on hurricanes and other storms.

(Editing by Philip Barbara)

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