You are given two reports by the government agency.  

Report 1:
To participate in federal student aid programs, postsecondary schools must be 1) certified by Education as eligible to participate in federal student aid programs, 2) accredited by a recognized accrediting agency— generally nongovernmental, nonprofit entities—and 3) authorized by the state in which the school is physically located. (See table 1.) FSA is responsible for ensuring that schools with access to federal student aid are eligible and capable of properly administering federal student aid funds, according to standards established by Education and authorized by the Higher Education Act. These standards include requirements for schools related to communication, personnel, policies, procedures and reporting, and adequate checks and balances in a system of internal controls, among others. FSA is also responsible for conducting ongoing financial oversight of schools that receive federal student aid. This includes reviewing annual financial statement audits to assess a school’s financial responsibility and providing additional oversight to schools that do not meet financial responsibility standards outlined in the Higher Education Act. Schools that participate in federal student aid programs generally are required to submit annual compliance audits. The compliance audit provides information that FSA can use to assess the school’s administration of federal student aid programs and to identify schools that require additional oversight because they do not fully comply with federal student aid administrative requirements. The OIG is required to assess the quality of school compliance audits and selects a sample to review each year. The OIG reviews the audit documentation to ensure that it supports the auditor’s opinions and that the audit results are reliable. According to agency guidance, FSA staff should refer compliance audits to the OIG for a quality review if they have any concerns about the quality of the audits. Both FSA and OIG officials stated that the OIG has primary responsibility for issues related to audit quality. When a school first applies to be certified to administer federal student aid, FSA will either approve the school for provisional certification— generally for 1 year—or deny certification (see fig. 1). Once a school is approved for initial certification and applies for recertification, FSA will provisionally or fully recertify the school, or deny certification. According to FSA procedures, FSA uses provisional certification for initial, or first time, applicants, as well as schools that are applying for recertification. Provisional certification is the only approval status available to new schools. In addition, FSA may decide to recertify a school provisionally if it determines that a school has not fully complied with federal student aid requirements. FSA prohibits provisionally certified schools from opening new campus locations or offering new programs without approval from FSA, and provisionally certified schools that are denied recertification have a less substantive appeals process than fully certified schools. Further, recertified schools in provisional status are subject to more FSA oversight than schools that are fully certified. FSA procedures allow for some discretion in determining for how long to certify a school. Provisional recertification generally lasts 1 to 3 years, while full recertification generally lasts 4 to 6 years. Education’s FSA regional staff draw information from a variety of sources during the certification process to assess a school’s capability to administer federal student aid. According to FSA documents, regional staff are to review information collected from schools and third parties, such as annual compliance audits conducted by independent auditors, among other information sources. FSA staff responsible for different functional areas, such as financial and compliance audits, accreditation status, and student loan default rates, compile and review information on schools, according to FSA procedures. FSA officials told us that these staff meet to discuss any potential program eligibility issues and to ensure that all information relevant to a school is considered before making a certification decision. FSA’s certification procedures outline some of the key information that regional staff should assess, some of which is relevant to both initial and recertification decisions, and some of which is specific to each type of certification process (see fig. 2). Documents and policies provided by schools: FSA regional staff are directed to review documents submitted by schools, including school catalogs, and certain school policies—such as admissions and student refund policies—that are relevant to assessing administrative capability. Proof of accreditation: School accreditors are responsible for applying and enforcing standards to help ensure that the education offered by schools is of sufficient quality to achieve program objectives. Accreditation of schools, which generally includes a site visit, takes place on a cycle that may range from every few years to as many as 10 years. Proof of state authorization: States are responsible for authorizing schools to offer postsecondary education and respond to student complaints. The process for approving schools varies from state to state and may include on-site visits. Audited financial statements: FSA regional staff are directed to review information in audited financial statements to assess schools’ financial health. Schools are required to have annual audited financial statements issued by an independent certified public accountant or a government auditor. Self-reported school data: FSA regional staff are instructed to review data on continual student enrollment in eligible academic programs and student withdrawal rates. Pre-certification review and school outreach: FSA staff are responsible for contacting school personnel to verify the school’s application information and discuss relevant policies, procedures, and other materials relevant to administering federal student aid. FSA visits to newly certified schools: After schools first apply and are provisionally certified, Education requires FSA regional staff to contact them within 3 months and schedule an on-site school visit. Schools cannot administer federal student aid until they are certified, so FSA has limited information on how newly certified schools are administering federal student aid programs. School visits provide FSA with an opportunity to collect additional information about a provisionally certified school’s ability to administer federal student aid. Some FSA regional staff we interviewed told us that on-site visits to newly certified schools provide valuable first-hand information about whether these schools are administering federal student aid in accordance with program requirements. If FSA regional staff find that a school is having difficulties administering federal student aid, FSA procedures direct regional staff to assist schools by providing clarification and guidance on federal student aid policies, recommending additional training for school officials, and helping schools develop a plan to track and report on their corrective actions, among other things. Compliance audits: FSA staff are directed to review information in compliance audits to determine if schools are complying with specific federal student aid requirements. Generally, compliance audits are required to be conducted annually by an independent auditor, and submitted with the school’s audited financial statements. Program reviews: FSA regional staff are also responsible for conducting program reviews, usually on site, which evaluate school compliance with federal requirements and can provide more in-depth information on schools than compliance audits, according to some FSA staff we interviewed. Generally, FSA selects schools for program reviews that it considers to be at risk for noncompliance, according to Education documents. FSA conducts approximately 250 to 300 program reviews per year, according to FSA documentation. FSA staff from all four of our selected regional offices told us they consider results from any recent program review in decisions about recertification and noted that such information, when available, is valuable for assessing schools’ administrative capability. Education data: FSA regional office staff are also directed to review data on student loan default rates. From calendar years 2006 through 2017, FSA approved most schools applying for certification to receive federal student aid, according to Education data. From 2006 through 2017, FSA approved 89 percent of schools new to administering federal student aid for provisional certification and denied 11 percent of schools overall (see fig. 3). Denial rates for initial certification were 11 percent for public and for-profit schools and 14 percent for nonprofit schools. For more information on 2006-2017 school certification outcomes by year, see appendix I. FSA regional staff responsible for reviewing school applications told us that schools are denied initial certification for issues such as a lack of accreditation, not offering eligible programs for federal student aid, or not meeting other statutory eligibility requirements. For example, FSA staff said that for-profit and vocational schools that apply for initial certification are required to provide an eligible program continuously for 2 years prior to their initial application. FSA staff may also advise schools that do not meet basic eligibility requirements not to apply, which could result in fewer initial certification denials overall. In addition, FSA staff said they often work with schools to address compliance problems, for example, by providing guidance on revising school policies that do not meet requirements, so that the schools are able to meet FSA’s certification requirements. From 2006 through 2017, 76 percent of schools applying for recertification were fully recertified, 21 percent were provisionally recertified, and 3 percent were denied recertification. Sixty-six percent of for-profit schools were fully recertified, 28 percent were provisionally recertified, and 6 percent were denied. In comparison, 86 percent of public schools were fully recertified, 14 percent were provisionally recertified, and fewer than 1 percent were denied. Nonprofit schools had rates similar to public schools, with 80 percent fully recertified, 18 percent provisionally recertified, and 2 percent denied (see fig 4). FSA staff from all four of our selected regional offices told us that they typically deny recertification when a school no longer meets eligibility requirements, such as losing accreditation, or when there is significant evidence of serious issues or massive wrongdoing, such as fraud. For example, managers in one regional office told us they denied recertification for a school because they had evidence that the school was accepting students without valid high school diplomas and referring them to diploma mills to boost enrollment. Staff in two FSA regional offices told us that they can also choose to fully recertify a school for shorter periods of time if they uncover issues related to administrative capability. For example, one regional staff member told us that when they found a school’s default rate for one federal student loan program had been high for the prior 3 years, the regional office decided to shorten the school’s full recertification period from 6 to 4 years, to allow FSA staff to review the school again sooner. FSA staff from all four of our selected regional offices told us that they provisionally certify schools for a variety of reasons, including when a school submits a late compliance audit or when a recent compliance audit indicates that a school could potentially have significant problems. Generally, schools in provisional certification status are subject to additional monitoring by FSA compared to schools that have been fully certified. For example, Education officials said that if they have concerns about a provisionally certified school’s student withdrawal rate, they can add provisional conditions requiring the school to submit monthly enrollment rosters for review. Staff in two FSA regional offices told us that in other cases, if they have concerns about how a school is administering federal student aid or suspected fraud, they can put a school on provisional status and conduct a program review to collect more detailed information on compliance with federal requirements. Education data also show that most schools remain in provisional status the first time they are recertified—62 percent from 2006 to 2017. In contrast, FSA staff fully recertified over three-quarters of schools that applied for recertification a second time during the same time period (see table 2). For more information on first and second recertification outcomes by school sector, see appendix II. We found that FSA generally relies on compliance audits as the only annual on-site review to determine how schools applying for recertification administer federal student aid. The audits provide direct information collected by independent auditors from school visits and file reviews examining how schools administer federal student aid and comply with program requirements. For example, OIG audit guidance directs auditors to check whether schools are distributing federal student aid to eligible students and accurately calculating student loan amounts. FSA officials and staff from all four of our selected regional offices said that compliance audits are a key source of information they use to assess a school’s administrative capability. Officials from Education’s OIG said that the quality of information in compliance audits varies substantially and depends on the auditor. The OIG has found quality problems in some of the compliance audits it selects—based on auditor and school risk factors—for its annual quality control reviews. Because the OIG selects higher risk audits to review, its reviews are more likely to detect problems, and OIG officials said they cannot make any conclusions about the overall prevalence of quality problems in compliance audits. However, our analysis of OIG quality review data found that of the 739 compliance audits reviewed by the OIG from fiscal years 2006 through 2017, the OIG passed 23 percent (173) and failed 59 percent (436). An additional 18 percent (130) passed with deficiencies. For example, across the 41 compliance audits it reviewed in fiscal year 2016, the OIG identified 264 quality deficiencies with the auditor’s work, according to our analysis of quality reviews provided by the OIG. The most frequently cited issues in these 41 audits were: reporting (24 audits), such as lack of evidence that the auditor tested whether the school correctly reported student enrollment status; student eligibility (20 audits), such as lack of evidence that the auditor verified student school attendance; and administrative capability (19 audits), such as lack of evidence that the auditor determined whether the accreditor had been notified about a change in school ownership within 10 days. FSA officials also identified quality issues with the compliance audits of some schools. FSA headquarters officials and staff we interviewed in several regional offices said they have seen schools with significant program review findings that had not been identified in annual compliance audits. FSA staff said they have referred some compliance audits to the OIG for quality reviews when they have had questions about the thoroughness of an audit. We also found a couple of examples in our review of school certification documents in which the findings identified in a school’s compliance audit were different from the findings identified by FSA in a program review of the same school covering the same time period. In one case, FSA staff said they probably would have fully recertified the school if they had relied solely on the compliance audit. Instead, they used the program review to determine that the school should be provisionally recertified. Compliance audits and program review findings are based on a sample of student records, and FSA staff said some differences in findings might be explained by differences in the records reviewed. FSA and OIG officials cited several issues that can affect the quality of compliance audits. FSA and OIG officials we interviewed said that some auditors conducting compliance audits have insufficient training in federal student aid, which contributes to audit quality problems. OIG staff also said that even if an auditor meets the general training hour requirements for auditors, the training content may not be relevant for federal student aid audits. In addition, FSA and OIG officials said some schools— particularly smaller schools—tend to hire less experienced auditors in order to save money, often resulting in poor quality audits. FSA officials in most selected regional offices said that additional training on federal student aid for auditors who are new to or unfamiliar with federal student aid could help improve audit quality. FSA and the OIG recently have taken steps to address audit quality and the information available to FSA staff when making certification decisions. These efforts include: Training for auditors: The OIG has taken steps to enhance training offered to auditors of schools’ administration of federal student aid and is exploring opportunities to provide additional training. In December 2017, the OIG and the American Institute of Certified Public Accountants cosponsored training for auditors on the OIG’s 2016 revised guide for audits of for-profit schools, and other topics related to auditing federal student aid. The training included discussion of common audit quality issues and areas of highest risk. According to an OIG official, about 200 auditors attended, and after the event, the American Institute of Certified Public Accountants and the OIG posted a recording of the training to their websites to make it available to additional auditors. In addition, OIG officials said they maintain an email account—listed on the OIG website—through which auditors can ask questions and receive responses. In March 2018, the OIG posted frequently asked questions and answers to the website. Timeliness of OIG quality reviews: Both FSA and OIG officials said that the OIG has recently renewed efforts to issue compliance audit quality reviews more quickly, after several years in which staffing shortages and other issues led to some delayed quality reviews. Guidance to schools on selecting an auditor: OIG officials said that at the 2017 FSA training conference for school financial aid staff, they presented to more than 400 participants about factors schools should consider when hiring an auditor. For example, they suggested that schools verify the licenses of certified public accountants, ask about the types of engagements an auditing firm has conducted, request and check references, check for any actions that may have been taken against a firm, and ask whether the auditor has been subject to a previous review by the OIG or another agency. FSA officials said they expected to invite the OIG to present at future FSA conferences, and OIG officials said they were seeking additional opportunities to share information on auditor selection with schools, including a planned presentation to an association of postsecondary schools. FSA working group: FSA recently established a working group to update its guidance to FSA staff on how to coordinate with the OIG to address compliance audits with quality problems. Among other topics, the working group has consulted with the OIG about how schools are made aware of the OIG’s findings regarding the quality of their audits. FSA officials said that OIG officials have provided input and feedback on FSA’s proposed changes to the guidance. Audit guide revisions: In addition, OIG and FSA staff told us they expected the OIG’s 2016 revisions to the for-profit school audit guide to improve the quality of compliance audits for those schools. They said that because the revised guide clarified some issues that were confusing to auditors in the previous guide issued in 2000, auditors might be better able to implement the guidance. The audit guide revisions include more testing and reporting requirements, clarified procedures, and guidance on issues such as fraud reporting and coordinating financial and compliance audits. The 2016 revisions first applied to audits for fiscal years beginning after June 30, 2016, and FSA began receiving those audits at the end of 2017. In addition, although the OIG’s 2016 revisions only apply to audits of for-profit schools, FSA officials said they planned to establish a working group to consider improvements to audit guidance for public and nonprofit schools. FSA and OIG efforts to address audit quality could help ensure that compliance audits provide accurate and reliable information on school administrative capability for Education’s recertification decisions. We provided a draft of this report to Education for review and comment. Education’s Office of Inspector General provided technical comments, which we considered and incorporated as appropriate. Education did not provide other comments on the report. We are sending copies of this report to the appropriate congressional committees; the Secretary of Education; and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (617) 788-0534 or emreyarrasm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. In addition to the contact named above, Michelle St. Pierre (Assistant Director), Kristy Kennedy (Analyst-in-Charge), Edward Bodine, Marissa Jones, and Mark Ward made significant contributions. Also contributing to this report were Susan Aschoff, Deborah Bland, Nagla’a El-Hodiri, Monika Gomez, Sheila R. McCoy, Jessica Orr, Mimi Nguyen, John Mingus, Rhiannon Patterson, Monica Savoy, Benjamin Sinoff, and Rosemary Torres Lerma.

 

 Report 2:
Cybersecurity incidents continue to impact federal entities and the information they maintain. According to OMB’s 2018 annual FISMA report to Congress, agencies reported 35,277 information security incidents to DHS’s U.S. Computer Emergency Readiness Team (US-CERT) in fiscal year 2017. As shown in figure 1, these incidents involved threat vectors, such as web-based attacks, phishing attacks, and the loss or theft of computer equipment, among others. These incidents and others like them can pose a serious challenge to economic, national, and personal privacy and security. The following examples highlight the impact of such incidents: In March 2018, the Department of Justice reported that it had indicted nine Iranians for conducting a massive cybersecurity theft campaign on behalf of the Islamic Revolutionary Guard Corps. According to the department, the Iranians allegedly stole more than 31 terabytes of documents and data from more than 140 American universities, 30 U.S. companies, and 5 federal government agencies, among other entities. In March 2018, a joint alert from DHS and the Federal Bureau of Investigation stated that, since at least March 2016, Russian government actors had targeted U.S. government entities and critical infrastructure sectors, including the energy, nuclear, water, aviation, and critical manufacturing sectors. In June 2015, the Office of Personnel Management reported that an intrusion into its systems had affected the personnel records of about 4.2 million current and former federal employees. Then, in July 2015, the agency reported that a separate but related incident had compromised its systems and the files related to background investigations for at least 21.5 million individuals. The federal approach and strategy for securing information systems is prescribed by federal law and policy. FISMA sets requirements for effectively securing federal systems and information. In addition, the Federal Cybersecurity Enhancement Act of 2015 requires protecting federal networks through the use of federal intrusion prevention and detection capabilities. Further, Executive Order 13800, Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure, directs agencies to manage cybersecurity risks to the federal enterprise by, among other things, using the NIST Framework for Improving Critical Infrastructure Cybersecurity (cybersecurity framework). FISMA was enacted to improve federal cybersecurity and clarify government-wide responsibilities. The law is intended to provide for improved oversight of federal agencies’ information security programs. Specifically, the law provides a comprehensive framework for ensuring the effectiveness of information security controls over information resources that support federal operations and assets. The law is also intended to ensure the effective oversight of information security risks, including those throughout civilian, national security, and law enforcement agencies. FISMA assigns OMB and DHS oversight roles in ensuring federal agencies’ compliance with the law. Among other things, FISMA requires OMB to develop and oversee the implementation of policies, principles, standards, and guidelines on information security in federal agencies, except with regard to national security systems. The law also assigns OMB the responsibility of requiring agencies to identify and provide information security protections commensurate with assessments of risk to their information and information systems. The law further requires DHS to administer the implementation of agency information security policies and practices for non-national security information systems, in consultation with OMB, by developing, issuing, and overseeing implementation of binding operational directives; monitoring agency implementation of information security policies and practices; and convening meetings with senior agency officials to help ensure their effective implementation of information security policies and practices, among other things. FISMA assigned to NIST the responsibility for developing standards and guidelines that include minimum information security requirements. To this end, NIST has issued several publications to provide guidance for agencies in implementing an information security program. For example, NIST Special Publication (SP) 800-53 provides guidance to agencies on the selection and implementation of information security and privacy controls for systems. FISMA also assigns to the head of each executive branch agency, responsibility for providing information security protections commensurate with the risk and magnitude of harm resulting from unauthorized access, use, disclosure, disruption, modification, or destruction of information systems used or operated by an agency or by a contractor of an agency or other organization on behalf of an agency. The law also delegates to the agency chief information officer (CIO), or comparable official, the authority to ensure compliance with FISMA requirements. The CIO is responsible for designating a senior agency information security officer whose primary duty is information security. In addition, the law requires agencies to develop, document, and implement an agency-wide information security program to secure federal information systems. Specifically, these information security programs are to provide risk-based protections for the information and information systems that support the operations and assets of the agency. Further, FISMA requires agencies to comply with DHS binding operational directives, OMB policies and procedures, and NIST federal information processing standards. FISMA also has reporting requirements for OMB and federal agencies. Specifically, OMB is to report annually, in consultation with DHS, on the effectiveness of agency information security policies and practices, including a summary of major agency information security incidents and an assessment of agency compliance with NIST standards. Further, the law requires agencies to report annually to OMB, DHS, certain congressional committees, and the Comptroller General of the United States on the adequacy and effectiveness of their information security policies, procedures, and practices, as well as their compliance with FISMA. The Federal Cybersecurity Enhancement Act of 2015, among other things, sets forth authority for enhancing federal intrusion prevention and detection capabilities among federal entities. The act contains several provisions for DHS and OMB. Specifically, the act requires that DHS deploy, operate, and maintain capabilities to prevent and detect cybersecurity risks in network traffic traveling to or from an agency’s information system. DHS is to make these capabilities available for use by any agency. In addition, the act requires DHS to improve intrusion detection and prevention capabilities, as appropriate, by regularly deploying new technologies and modifying existing technologies. The act also requires OMB and DHS, in consultation with appropriate agencies, to review and update government-wide policies and programs to ensure appropriate prioritization and use of network security monitoring tools within agency networks, and to brief appropriate congressional committees. In May 2017, the President signed Executive Order 13800, which sets policy for managing cybersecurity risk as an executive branch enterprise. Specifically, it outlines actions to enhance cybersecurity across federal agencies and critical infrastructure to improve the nation’s cyber posture and capabilities against cybersecurity threats. To this end, the order states that the President will hold executive agency heads accountable for managing agency-wide cybersecurity risk and directs each executive agency to use the NIST cybersecurity framework to manage those risks. The cybersecurity framework, which provides guidance for cybersecurity activities, is based on five core security functions: Identify: Develop an organizational understanding to manage cybersecurity risk to systems, people, assets, data, and capabilities. Protect: Develop and implement appropriate safeguards to ensure delivery of critical services. Detect: Develop and implement appropriate activities to identify the occurrence of a cybersecurity event. Respond: Develop and implement appropriate activities to take action regarding a detected cybersecurity incident. Recover: Develop and implement appropriate activities to maintain plans for resilience and to restore capabilities or services that were impaired due to a cybersecurity incident. According to NIST, these five functions should be performed concurrently and continuously to address cybersecurity risk. In addition, when considered together, they provide a high-level, strategic view of the life cycle of an organization’s management of cybersecurity risk. Within the five functions are 23 categories and 108 subcategories that include controls for achieving the intent of each function. Appendix II provides a description of the cybersecurity framework categories and subcategories of controls. In February 2013, we reported that the government had issued a variety of strategy-related documents that addressed priorities for enhancing cybersecurity within the federal government, as well as for encouraging improvements in the cybersecurity of critical infrastructure within the private sector. However, we noted that no overarching cybersecurity strategy had been developed that articulated priority actions, assigned responsibilities for performing them, and set time frames for their completion. Accordingly, we recommended that the White House Cybersecurity Coordinator in the Executive Office of the President develop an overarching federal cybersecurity strategy that included all key elements of the desirable characteristics of a national strategy. These characteristics would include, among other things, milestones and performance measures for major activities to address stated priorities; cost and resources needed to accomplish stated priorities; and specific roles and responsibilities of federal organizations related to the strategy’s stated priorities. Since that time, the executive branch has made progress toward outlining a federal strategy for confronting cyber threats. For example, in September 2018, we reported that recent executive branch initiatives that identify cybersecurity priorities for the federal government provide a good foundation toward establishing a more comprehensive strategy. Nevertheless, we pointed out that additional efforts were needed to address all of the desirable characteristics of a national strategy that we recommended. Specifically, recently issued executive branch strategy documents did not include key elements of desirable characteristics that can enhance the usefulness of a national strategy as guidance for decision makers in allocating resources, defining policies, and helping to ensure accountability. For example, these strategy documents did not generally include: milestones and performance measures to gauge results; resources needed to carry out the goals and objectives; and clearly defined roles and responsibilities for key agencies, such as DHS, the Department of Defense, and OMB. Ultimately, we determined that a more clearly defined, coordinated, and comprehensive approach to planning and executing an overall strategy would likely lead to significant progress in furthering strategic goals and lessening persistent weaknesses. Subsequent to our September 2018 report, the President issued the National Cyber Strategy on September 20, 2018. The strategy builds upon Executive Order 13800 and describes actions that federal agencies and the administration are to take to, among other things, secure federal information systems. For example, the strategy states that the administration is expected to further enable DHS to secure federal department and agency networks, to include ensuring that DHS has appropriate access to agency information systems for cybersecurity purposes and can take and direct action to safeguard systems. In addition, the strategy states that the administration plans to continue with its existing efforts underway to transition agencies to shared services and infrastructure and that DHS is to have appropriate visibility into those services and infrastructure to improve cybersecurity posture. DHS’s Network Security Deployment (NSD) division manages cybersecurity programs that are intended to improve the cybersecurity posture of the federal government. Among these programs, NCPS provides a capability to detect and prevent potentially malicious network traffic from entering agencies’ networks. In addition, the Continuous Diagnostics and Mitigation (CDM) program provides tools to agencies intended to identify and resolve cyber vulnerabilities on an ongoing basis. Operated by DHS’s US-CERT, NCPS is intended to detect and prevent cyber intrusions into agency networks, analyze network data for trends and anomalous data, and share information with agencies on cyber threats and incidents. Deployed in stages, this system, operationally known as EINSTEIN, has provided increasing capabilities to detect and prevent potential cyberattacks involving the network traffic entering or exiting the networks of participating federal agencies. Table 1 provides an overview of the EINSTEIN deployment stages to date. In January 2016, we reported the projected total life-cycle cost of the program was approximately $5.7 billion through fiscal year 2018. In addition, according to the Federal CIO, Congress appropriated $468 million in fiscal year 2017 and $402 million in fiscal year 2018 for NCPS. In that report, we also noted that NCPS was partially, but not fully, meeting most of its stated system objectives. Although the system’s intrusion detection capabilities provided the ability to detect known patterns of malicious activity on agency networks, it was limited in its capabilities to identify potential threats using anomaly-based detection. We also reported that although DHS had developed metrics for measuring the performance of NCPS, the metrics did not gauge the quality, accuracy, or effectiveness of the system’s intrusion detection and prevention capabilities. The department had also identified needs for future capabilities, but had not defined requirements for the capability to detect threats entering and exiting cloud service providers. Further, DHS had not considered specific vulnerability information for agency information systems in making risk- based decisions about future intrusion prevention capabilities. Accordingly, we made nine recommendations to DHS to, among other things, enhance the NCPS capabilities for meeting its objectives and better define requirements for future capabilities. DHS agreed with each of our nine recommendations and indicated that it would take steps to address them. DHS’s CDM program provides federal agencies with tools and services that have the intended capability to automate network monitoring, correlate and analyze security-related information, and enhance risk- based decision making at agency and government-wide levels. These tools include sensors that perform automated scans or searches for known cyber vulnerabilities, the results of which can feed into a dashboard that, at an agency level, is intended to alert network managers and enable the agency to allocate resources based on the risk. Summary data from each participating agency’s dashboard is expected to be transmitted to the Federal Dashboard where the data can be used to inform decisions about cybersecurity risks across the federal government. There are four phases of CDM implementation: Phase 1—involves deploying products to automate hardware and software asset management, configuration settings, and common vulnerability management capabilities. According to the Cybersecurity Strategy and Implementation Plan, DHS purchased phase 1 tools and integration services for all participating agencies in fiscal year 2015. DHS plans to have all phase 1 tools deployed at participating agencies by the end of the second quarter of fiscal year 2019. Phase 2—intends to address privilege management and infrastructure integrity by allowing agencies to monitor users on their networks and to detect whether users are engaging in unauthorized activity. According to the Cybersecurity Strategy and Implementation Plan, DHS was to provide agencies with additional phase 2 capabilities throughout fiscal year 2016, with the full suite of CDM phase 2 capabilities delivered by the end of that fiscal year. However, according to the OMB FISMA Annual Report to Congress for Fiscal Year 2017, the CDM program began deploying Phase 2 tools and sensors during fiscal year 2017. DHS plans to have all phase 2 tools deployed at participating agencies by the end of fiscal year 2019. Phase 3—includes detection capabilities that are intended to assess agency network activity and identify any anomalies that may indicate a cybersecurity compromise. Full operating capability for phases 1, 2, and 3 is planned to be achieved by the end of fiscal year 2022. Phase 4—intends to provide tools to (1) protect data at rest, in transit, and in use; (2) prevent loss of data; and (3) manage and mitigate data breaches. According to CDM program officials, phase 4 has not been approved and no tools have been selected. An approach for protecting systems against cybersecurity compromise is for federal agencies to build successive layers of defense mechanisms at strategic points in their information technology infrastructures. This approach, commonly referred to as defense in depth, entails implementing a series of protective mechanisms so that if one mechanism fails to detect and prevent an attack, another will provide a backup defense. By utilizing defense in depth, federal agencies can reduce the risk of a successful cyberattack by implementing intrusion detection and prevention capabilities. NIST has developed guidelines for protecting agency information systems using intrusion detection and prevention capabilities. For example, NIST SP 800-53 recommends that agencies strategically deploy capabilities and perform monitoring of their systems to include observation of events occurring on their network and at the external boundary of their network. In addition, NIST SP 800-94 provides agencies with guidance in designing, implementing, configuring, securing, monitoring, and maintaining such capabilities. As part of their defense-in-depth approach and, as recommended by the NIST guidelines, agencies can deploy the following list of capabilities, among others, on their networks to detect and prevent an attack: Protecting email from intrusions: According to OMB, email, by way of phishing attacks, remains one of the most common threat vectors across the government. Methods for protecting email include encryption, false email alerts, and anti-spear-phishing training. Monitoring cloud services: Cloud vendors provide services to agencies, including Software as a Service, Platform as a Service, and Infrastructure as a Service. As agencies increasingly rely on cloud services, monitoring traffic to and from their cloud service providers helps to ensure that agencies detect malicious traffic. Using host-based intrusion prevention: Host-based intrusion prevention systems provide defense at an individual system or device level by protecting against malicious activities. Host-based capabilities include memory-based protection and application whitelisting. Monitoring external and internal traffic: Agencies can monitor external and internal traffic, including: encrypted traffic, traffic between workstations and servers on the network, and direct connections to outside entities such as universities. Monitoring traffic helps to ensure that agencies detect malicious activity. Using security information and event management: A security information and event management capability produces real-time alerts and notifications of significant security events. Security alerts and notifications can provide the agency with better situational awareness regarding possible intrusion activity. According to inspectors general, agency CIOs, and OMB reports on federal information security practices, many agencies were not effectively implementing the federal government’s approach and strategy to securing information systems as of fiscal year 2017. Agencies’ inspectors general determined that most of the 23 civilian CFO Act agencies did not have effective agency-wide information security programs. They also reported that agencies did not have effective information security controls in place, leading to deficiencies in internal control over financial reporting. In addition, the CIOs demonstrated that, during fiscal years 2016 and 2017, most agencies had not met all targets for the cybersecurity CAP goal for improving cybersecurity performance. Further, based on FISMA metrics reported for fiscal year 2017, OMB determined that 13 of the 23 agencies were managing risks to their enterprise, while the other 10 agencies were at risk of ineffectively identifying, protecting, detecting, responding to, and if necessary, recovering from cyber intrusions. Figure 2 summarizes agencies’ efforts to implement the government’s approach and strategy for securing information systems as of fiscal year 2017. Appendix III includes a table that provides an additional overview of the effectiveness of each agency’s implementation of the government’s approach and strategy to securing information systems. Inspectors general determined that more than half of the 23 civilian CFO Act agencies did not have effective agency-wide information security programs as of fiscal year 2017. Further, in agency financial statement audit reports for fiscal year 2017, inspectors general reported that, despite improvements being made in information security practices, most of the civilian CFO Act agencies continued to exhibit deficiencies in information security controls. As a result of these deficiencies, inspectors general reported material weaknesses or significant deficiencies in internal control over financial reporting. FISMA requires inspectors general to determine the effectiveness of their respective agencies’ information security programs. To do so, FISMA reporting instructions direct inspectors general to provide a maturity rating for agency information security policies, procedures, and practices related to the five core security functions established in the NIST cybersecurity framework, as well as for the agency-wide information security program. The ratings used to evaluate the effectiveness of agencies’ information security programs are based on a five-level maturity model, as described in table 2. According to this maturity model, Level 4 (managed and measurable) represents an effective level of security. Therefore, if an inspector general rates the agency’s information security program at Level 4 or Level 5, then that agency is considered to have an effective information security program. For fiscal year 2017, the inspectors general for 6 of the 23 civilian CFO Act agencies reported that their agencies had an effective agency-wide information security program. More specifically, for the 5 core security functions, most inspectors general reported that their agency was at Level 3 (consistently implemented) for the identify, protect, and recover functions, and at Level 2 (defined) for the detect and respond functions, as shown in figure 3. Inspectors general report on the effectiveness of agencies’ information security controls as part of the annual audits of the agencies’ financial statements. The reports resulting from these audits include a description of information security control deficiencies related to the five major control categories defined by the Federal Information System Controls Audit Manual (FISCAM)—access controls, configuration management, segregation of duties, contingency planning, and security management. The reports also identify the inspectors general’s designation of information security as a significant deficiency or material weakness in internal control over financial reporting systems. For fiscal year 2017, inspectors general continued to identify information security control deficiencies in each of the five major control categories across the 23 civilian CFO Act agencies. The number of agencies with deficiencies in the access control and contingency planning information security control categories decreased between fiscal years 2016 and 2017, according to the inspectors general. Nevertheless, the inspectors general reported that agencies continued to exhibit deficiencies in these two control categories. In addition, the number of agencies with deficiencies in the security management and segregation of duties control categories increased from the prior year. The number of agencies reported as having deficiencies in the configuration management control category remained the same. Figure 4 shows the number of agencies that reported deficiencies in each of the information security control categories for fiscal years 2016 and 2017. Overall, inspectors general for the 23 civilian CFO Act agencies reported progress in agencies’ information security practices for fiscal year 2017. Specifically, during that time, 17 inspectors general designated information security as either a significant deficiency (11) or material weakness (6) in internal control over financial reporting systems for their agencies. This is a decrease from the previous fiscal year when 19 inspectors general designated information security as a significant deficiency (12) or material weakness (7). Reporting instructions contained in the fiscal year 2017 FISMA metrics directed CIOs to assess their agencies’ progress toward achieving outcomes that strengthen federal cybersecurity. To do this, CIOs evaluated their agencies’ performance in reaching targets for specific FISMA reporting metrics. According to the reporting instructions, certain metrics were selected to represent the administration’s cybersecurity CAP goal. These selected metrics allowed CIOs to evaluate their agencies progress in meeting targets for that goal. The cybersecurity CAP goal for fiscal years 2015 through 2017 was to improve cybersecurity performance by having an ongoing awareness of information security, vulnerabilities, and threats impacting the operating information environment; ensuring that only authorized users have access to resources and information; and implementing technologies and processes that reduce the risk of malware. The cybersecurity CAP goal consisted of three priority areas with a total of nine performance indicators. Each of the nine performance indicators had an expected level of performance, or target, for implementation. Table 3 shows the three priority areas and related performance indicators and targets of the cybersecurity CAP goal for fiscal years 2015 through 2017. According to agency CIO assessments for fiscal year 2017, 6 of the 23 agencies met all 9 targets for the cybersecurity CAP goal. More specifically, 8 agencies met all four targets for the information security continuous 16 agencies met the two targets for the identity, credential, and access management priority area; and 17 agencies met all three targets for the anti-phishing and malware defense priority area. In addition, CIOs reported that agencies were making progress in meeting the targets for the nine performance indicators for fiscal years 2016 and 2017, with increases in the number of agencies meeting the targets within each of the three priority areas. However, although the number of agencies that met the targets in individual priority areas showed a net increase, not all agencies maintained their status. For example, the CIO for one agency reported meeting all three targets for the anti-phishing and malware defense priority area in fiscal year 2016, but reported that the agency only met two of the three targets in fiscal year 2017. Figure 5 shows the number of agencies that reported meeting each of the targets within the individual cybersecurity CAP goal priority areas for fiscal years 2016 and 2017. Although the CIOs for only six agencies reported meeting each of the targets associated with all nine performance indicators for the three cybersecurity CAP goal priority areas, the CIOs at an additional eight agencies reported meeting each target for two of the three priority areas. Specifically, one CIO reported that its agency met each of the targets for the (1) information security continuous monitoring and (2) identity, credential, and access management priority areas; another CIO reported that its agency met each of the targets for the (1) information security continuous monitoring and (2) anti-phishing and malware defense priority areas; and the CIOs at six other agencies met each of the targets for the (1) identity, credential, and access management and (2) anti-phishing and malware defense priority areas. In fiscal year 2018, the President’s Management Agenda replaced the three cybersecurity-focused CAP goal priority areas with updated performance indicators, most of which are to be met by 2020: 1. the manage asset security priority area is similar to the information security continuous monitoring priority area from the previous CAP goal and has a focus on understanding the assets and users on agency networks. In addition to hardware asset and software asset management, this priority area includes performance indicators for authorization and mobile device management. 2. the limit personnel access priority area focuses on issues of access management. This area includes performance indicators for using automated access management and managing access for privileged network and high-impact system users. The privileged network access management performance indicator is a continuation of the identity, credential, and access management priority area of the previous cybersecurity CAP goal. Therefore, agencies are expected to complete this metric by the end of the fiscal year 2018 FISMA reporting year. 3. the protect networks and data priority area, which is similar to the anti-phishing and malware defense priority area from the previous cybersecurity CAP goal, has three new performance indicators: intrusion detection and prevention, exfiltration and enhanced defenses, and data protection. Appendix IV describes the updated cybersecurity-focused CAP priority areas and performance indicators in more detail. In Executive Order 13800, the President directed OMB, in coordination with DHS, to assess and report to the executive branch on the sufficiency and appropriateness of federal agencies’ processes for managing cybersecurity risks. For these risk management assessments, OMB leveraged the FISMA metrics reported by agency CIOs and inspectors general for fiscal year 2017. The metrics addressed domains that correspond with the five core security functions identified in the cybersecurity framework. Table 4 lists these domains and their relationship to the core functions. Based on OMB’s evaluation of these domains, agency risk management processes related to the five core security functions and overall agency enterprise fell into one of the following three rating categories: managing risk: required cybersecurity policies, procedures, and tools are in use and the agency actively manages cybersecurity risks; at risk: some essential policies, processes, and tools are in place to mitigate overall cybersecurity risk, but significant gaps remain; and high risk: key fundamental cybersecurity policies, processes, and tools are either not in place or not deployed sufficiently. For fiscal year 2017, OMB reported that not all agencies were managing risk. When considering each of the five core security functions, OMB reported that most of the 23 agencies were at risk or at high risk with regard to the identify and protect core security functions. Less than half of the 23 agencies were at risk with regard to the detect, respond, and recover core security functions. Overall, OMB determined that 13 agencies were managing risk and that the remaining 10 agencies were at risk of not effectively identifying, protecting, detecting, responding to, and if necessary, recovering from cyber intrusions. Figure 6 shows OMB’s risk management assessment ratings by core security function across the 23 agencies for fiscal year 2017. DHS and OMB, as required by law and policy, have taken various actions to facilitate the agencies’ use of intrusion detection and prevention capabilities to secure federal systems. For example, DHS has developed an intrusion assessment plan, deployed NCPS to offer intrusion detection and prevention capabilities to agencies, and is providing tools and services to agencies to monitor their networks through its CDM program. However, NCPS still had limitations in detecting certain types of traffic and agencies were not sending all appropriate traffic through the system. Further, CDM was behind at meeting planned implementation dates, and agencies have requested additional training and guidance for these services. OMB has taken steps to improve upon agencies’ capabilities, but has not completed a policy and strategy to do so, or fully reported on its assessment of agencies’ capabilities. The Federal Cybersecurity Enhancement Act of 2015 requires DHS, in coordination with OMB, to develop and implement an intrusion assessment plan to proactively detect, identify, and remove intruders in agency information systems on a routine basis. The act also requires that the plan be updated, as necessary. In December 2016, DHS documented its Intrusion Assessment Plan. In the plan, DHS outlined tools, platforms, resources, and ongoing work that the department provides, and that are intended to help agencies detect, identify, and remove intruders on their networks and systems. The intrusion assessment plan also outlines a defense-in-depth strategy, which utilizes multiple layers of cybersecurity and deploys multiple capabilities in combination, to secure agencies’ networks and information systems. For example, the plan calls for DHS to implement NCPS to provide a perimeter defense for the networks of federal civilian executive branch agencies, while the agencies are to deploy their own intrusion detection and prevention capabilities inside their networks. DHS submitted its intrusion assessment plan to OMB in January 2017. The Federal Cybersecurity Enhancement Act of 2015 also requires DHS to deploy, operate, and maintain a capability to detect cybersecurity risks and prevent network traffic associated with such risks from transiting to or from an agency information system. In addition, the act requires that DHS make regular improvements to intrusion detection and prevention capabilities by deploying new technologies and modifying existing technologies. Further, the act requires agencies to use this capability on all information traveling between their information systems and any information system other than an agency information system. DHS developed NCPS, operationally known as EINSTEIN, to provide the capabilities to detect and prevent potentially malicious network traffic from entering agency networks. Consistent with recommendations we made to DHS in January 2016, DHS has taken actions to improve these capabilities and has other actions underway. For example, the department determined that enhancing NCPS’s current intrusion detection approach to include functionality that would detect deviations from normal network behavior baselines would be feasible. In addition, according to DHS officials, the department was operationalizing functionality intended to identify malicious activity in network traffic otherwise missed by signature-based methods. determined that developing enhancements to current intrusion detection capabilities to facilitate the scanning of Internet Protocol Version 6 (IPv6) traffic would be feasible. According to DHS officials, the department has developed plans to fully support IPv6 for several of its NCPS intrusion detection capabilities. Further, the department has developed implementation schedules and begun roll-out of the enhancements. updated the tool it uses to manage and deploy intrusion detection signatures to include a mechanism to clearly link signatures to publicly available, open-source information. developed clearly defined requirements for detecting threats on agency internal networks and at cloud service providers to help better ensure effective support of information security activities. According to DHS officials, the department was also continuing pilot activities with cloud service providers to enhance protections of agency assets. developed processes and procedures for using vulnerability information, such as data from the CDM program as it becomes available, to help ensure the department is using a risk-based approach for the selection/development of future NCPS intrusion prevention capabilities. Nevertheless, NCPS continues to have known limitations in its ability to identify potential threats. For example: NCPS does not have the ability to effectively detect intrusions across multiple types of traffic. Specifically, DHS determined that developing enhancements to current intrusion detection capabilities to facilitate the scanning of traffic related to supervisory control and data acquisition (SCADA) control systems would not be feasible. However, according to DHS officials, the department is exploring capabilities that are intended to provide critical, cross-sector, real-time visibility into critical infrastructure companies that utilize SCADA systems. In addition, DHS determined that the scanning of encrypted traffic would not be feasible. Nevertheless, according to its officials, the department performed research on potential architectural, technical, and policy mitigation strategies that could provide both the protection and situational awareness for encrypted traffic. The department has actions under way to continue its research in this area. DHS does not always explicitly ask agencies for feedback or confirmation of receipt of NCPS-related notification. While the department had drafted a standard operating procedure related to its incident notification process, the policy did not instruct DHS analysts specifically to include a solicitation of feedback from agencies within the notification. Further, US-CERT could not provide any information regarding the timetable for when these procedures would take effect. Metrics for NCPS, as provided by DHS, do not provide information about how well the system is enhancing government information security or the quality, efficiency and accuracy of supporting actions. Without the deployment of comprehensive measures, DHS cannot appropriately articulate the value provided by NCPS. While the department had taken actions to develop new measures, these measures did not provide a qualitative or quantitative assessment of the system’s ability to fulfill the system’s objectives. NSD did not provide guidance to agencies on how to securely route their information to their Internet service providers. Without providing network routing guidance, NSD has no assurance that the traffic it sees constitutes all or only a subset of the traffic the customer agencies intend to send. As shown in table 5, as of October 2018, the department had implemented five of the nine recommendations and was in the process of implementing the remainder. However, until DHS completes implementation of the remaining recommendations, the effectiveness of NCPS’s intrusion detection and prevention capabilities may be hindered. In addition, the 23 civilian CFO Act agencies had implemented NCPS capabilities to varying degrees. In a March 2018 report, OMB reported that 21 (about 91 percent) of the 23 agencies had implemented the first two iterations of the NCPS capabilities. In addition, 15 (about 65 percent) of the 23 agencies had implemented all three NCPS capabilities, as shown in table 6 below. However, agencies did not route all network traffic for all information traveling between their information systems and any information system other than an agency information system through NCPS sensors. For example, officials at 13 of 23 agencies stated that not all of their agency external network traffic flowed through NCPS. To illustrate, officials at one agency estimated that 20 percent of their external network traffic did not flow through the system. In addition, 4 of the agencies in our review previously cited several challenges in routing all of their traffic through NCPS intrusion detection sensors, including capacity limitations of the sensors, agreements with external business partners that use direct network connections, interagency network connections that do not route through Internet gateways, use of encrypted communications mechanisms, and backup network circuits that are not used regularly. NSD officials stated that agencies are responsible for routing their traffic to the intrusion detection sensors, and DHS does not have a role in that aspect of NCPS implementation. As a result, potential cyberattacks may not be detected or prevented for a portion of the external traffic at federal agencies. As noted above, we previously recommended that DHS work with agencies to better ensure the complete routing of information to NCPS sensors. The Federal Cybersecurity Enhancement Act of 2015 requires DHS to include, in the efforts of the department to continuously diagnose and mitigate cybersecurity risks, advanced network security tools to improve the visibility of network activity and to detect and mitigate intrusions and anomalous activity. According to DHS officials, the department is addressing the requirement to improve the visibility of network activity by including advanced network security tools as a part of CDM phase 3. In April 2018, we testified that DHS had previously planned to provide 97 percent of federal agencies with the services they needed for CDM phase 3 in fiscal year 2017. In addition, according to OMB’s annual FISMA report for fiscal year 2017, the CDM program was to continue to incorporate additional capabilities, including phase 3, in fiscal year 2018. However, DHS now expects initial operational capabilities to be in place for phase 3 in fiscal year 2019. The department has awarded contracts of approximately $3.26 billion to support its Dynamic and Evolving Federal Enterprise Network Defense (also known as DEFEND) aspect of the CDM program, which is to include phase 3. DEFEND also is to provide coverage for existing agency deployments. According to DHS documentation, the task orders associated with DEFEND are to be issued between the second quarter of fiscal year 2018 and the second quarter of fiscal year 2024. FISMA requires that DHS provide operational and technical assistance to agencies in implementing policies, principles, standards, and guidelines on information security. Toward this end, DHS has available training and guidance related to the implementation of the capabilities of NCPS (i.e., EINSTEIN) and CDM. Specifically: According the DHS officials, the department offers training and guidance to agencies on EINSTEIN 1 implementation. For example, DHS established a program in which the Software Engineering Institute will provide training and mentoring to agencies looking to enhance their understanding of, and proficiency with, the EINSTEIN 1 capability (e.g., network traffic information). NCPS program officials stated that agencies can use this service, which is available at no charge to them, on an unlimited basis as long as the requests relate to EINSTEIN 1. According to the officials, training and guidance related to EINSTEIN 2 and EINSTEIN 3 Accelerated is limited because DHS intentionally restricts the amount of data provided to agencies. According to DHS officials, the department also offers training and guidance to assist agencies with the implementation and use of resources associated with the CDM program, including webinars, guides, and computer-based training. The DEFEND contracts that the department awarded also include a mechanism for agencies to procure specialized tailored training, such as on the use of CDM tools. The department also offers customer advisory forums every other month that agencies are invited to attend. According to CDM program officials, the program’s governance, among other topics, is commonly discussed during these forums. Further, the department provides agencies with guidance, such as various governance documents, best practices, and frequently asked questions, through a web portal that is made available by OMB. In addition, US-CERT offers the CDM training program, which is to provide CDM implementation resources. Nevertheless, most agencies told us that they wanted DHS to provide more training and guidance as it relates to their implementation of the capabilities made available by NCPS and CDM. Specifically, Officials from 16 of 23 agencies reported that they wanted to receive additional training on NCPS capabilities. For example, officials at 5 agencies stated that they would like to receive training related to using network traffic information, understanding alerts, or implementing capabilities for cloud services. The officials also stated that they wanted training specific to agency security personnel. Officials from 19 of 23 agencies stated that they wanted to receive additional guidance related to NCPS’s capabilities, but not all of the 19 provided specific details. For example, officials from at least 3 agencies stated that they wanted additional guidance such as, “how to” documents, descriptions of architecture details, or guidance documents that explain NCPS’s capabilities so that agencies can gauge the gap between the security that the system provides and the security being provided by their own agency’s capabilities. Officials from 21 of 23 agencies reported that they wanted to receive additional training on implementing CDM at their agencies. For example, officials from 7 agencies suggested that additional training on the use of the tools would be beneficial. Officials from 22 of 23 agencies stated that they wanted additional guidance as it relates to CDM implementation. For example, officials from one agency stated that they would like examples of best practices and successful deployments. These requests for additional training and guidance demonstrate that agencies are either unaware of the available training and guidance, or that the training may not meet their needs. Until DHS coordinates with agencies to determine if additional training and guidance are needed, agencies may not be able to fully realize the benefits of the capabilities provided by the NCPS and CDM programs. Although OMB took steps to report on agencies’ implementation of intrusion detection and prevention capabilities, it did not report on all required actions. For example, the office did not submit DHS’s intrusion plan to Congress as required by the Federal Cybersecurity Enhancement Act of 2015. In addition, OMB provided various reports to Congress that described agencies’ intrusion detection and prevention capabilities, but the reports did not always include all information required by the act. Further, OMB developed a draft policy and strategy that were intended to improve agency capabilities, but it had not finalized these documents. The Federal Cybersecurity Enhancement Act of 2015 requires OMB to submit the intrusion assessment plan developed by DHS to the appropriate congressional committees no later than 6 months after the date of enactment of the act. The act also required OMB to submit to Congress a description of the implementation of the intrusion assessment plan and the findings of the intrusion assessments conducted pursuant to the intrusion assessment plan no later than 1 year after the date of enactment of the act, and annually thereafter. Although DHS developed and documented an intrusion assessment plan, which described a defense-in-depth approach to security, OMB did not submit the plan to Congress, as called for in the act. Even though DHS submitted the plan to OMB in January 2017, OMB had not submitted it to Congress as of October 2018 (21 months after DHS submitted the plan and 28 months past the due date). On the other hand, OMB did submit its own reports to Congress which generally described elements of the implementation of DHS’s intrusion assessment plan and intrusion assessment findings. In September 2017, OMB issued its analysis of agencies’ implementation of intrusion detection and prevention capabilities, or more specifically, agencies’ implementation of the various versions of NCPS. In addition, the office’s annual FISMA report, issued most recently in March 2018, generally covered elements of the intrusion assessment plan. OMB personnel within the Office of the Federal CIO believed that these two reports, along with a process the office had initiated to validate incidents across the government, addressed the requirement for OMB to submit to Congress a description of the implementation of the intrusion assessment plan and the findings of the intrusion assessments conducted pursuant to the plan. However, the September 2017 and March 2018 reports did not address other elements described in DHS’s intrusion assessment plan. For example, OMB did not describe agency roles associated with segmenting their networks, identifying key servers based on threat and impact, ensuring all applications are appropriately tracked and configured, and categorizing and tagging data based on threat and impact. While OMB has provided important information to congressional stakeholders through its own reports, until it submits the plan and addresses all elements described in DHS’s intrusion assessment plan, it will continue to be remiss in providing timely and sufficiently detailed information regarding the intrusion assessment plan to congressional stakeholders to support their oversight responsibilities. The Federal Cybersecurity Enhancement Act of 2015 also required that OMB submit an analysis of agencies’ application of the intrusion detection and prevention capabilities to Congress no later than 18 months after the date of enactment of the act, and annually thereafter. OMB was to include a list of federal agencies and the degree to which each agency had applied the intrusion detection and prevention capabilities in this analysis. As discussed previously in this report, OMB issued its analysis of agencies’ implementation of intrusion detection and prevention capabilities in September 2017. However, the analysis did not include the degree to which agencies had applied the intrusion detection and prevention capabilities. For example, the analysis did not reflect that not all agencies were using this capability on all information traveling between their systems and any system other than an agency system, as required by the act. Until OMB includes the degree to which agencies have applied intrusion detection and prevention capabilities in its analysis, it cannot provide congressional stakeholders with an accurate portrayal of the extent to which the capabilities are detecting and preventing potential intrusions. The Federal Cybersecurity Enhancement Act of 2015 further required that the Federal Chief Information Officer, within OMB, submit a report to Congress no earlier than 18 months after the date of enactment, but no later than 2 years after that date, assessing the intrusion detection and intrusion prevention capabilities that DHS made available to agencies. The act required that the report address (1) the effectiveness of DHS’s system used for detecting, disrupting, and preventing cyber-threat actors, including advanced persistent threats, from accessing agency information and agency information systems; (2) whether the intrusion detection and prevention capabilities, continuous diagnostics and mitigation, and other systems deployed are effective in securing federal information systems; (3) the costs and benefits of the intrusion detection and prevention capabilities, including as compared to commercial technologies and tools, and including the value of classified cyber threat indicators; and (4) the capability of agencies to protect sensitive cyber threat indicators and defensive measures if they were shared through unclassified mechanisms for use in commercial technologies and tools. In a report issued in September 2018 (about 8 months past the required due date), the Federal Chief Information Officer provided Congress an assessment of intrusion detection and intrusion prevention capabilities across the federal enterprise. The report pointed out, among other things, that agencies did not possess or properly deploy capabilities to detect or prevent intrusions or minimize the impact of intrusions when they occur. In addition, the report acknowledged the need to improve the effectiveness of intrusion detection and intrusion prevention capabilities and stated that OMB would track performance through the CAP goal and annual FISMA reports. However, the report did not address all of the requirements specified in the act. For example, the report did not address whether DHS’s system (i.e., NCPS) was effective in detecting advanced persistent threats. In addition, the report did not include a comparison of the costs and benefits of the intrusion detection and prevention capabilities versus commercial technologies and tools, or the value of classified cyber threat indicators. Further, the report did not address the capability of agencies to protect sensitive cyber threat indicators and defensive measures. Until OMB updates the Federal CIO report to address all of the requirements specified in the act, it will continue to be remiss in providing timely and sufficiently detailed information, such as that related to costs and benefits, among other elements in the act, to congressional stakeholders to support their oversight responsibilities. In addition to OMB’s responsibilities in the Federal Cybersecurity Enhancement Act of 2015, OMB has initiated plans for further improving agencies’ intrusion detection and prevention capabilities. In response to a tasking in Executive Order 13800, the Director of the American Technology Council coordinated the development of a report to the President from the Secretary of DHS, the Director of OMB, and the Administrator of the General Services Administration, regarding the modernization of federal information technology (IT). The report, Report to the President on Federal IT Modernization, identified actions that OMB should take for (1) prioritizing the modernization of high-risk, high-value assets and (2) modernizing the Trusted Internet Connection (TIC) program and NCPS to improve protections, remove barriers, and enable commercial cloud migration. For example, OMB was to take the following actions subsequent to the December 13, 2017 report issuance date: Within 60 days: Update a TIC policy to address challenges with agencies’ perimeter-based architectures, such as the modernization of NCPS. In addition, introduce a “90 day sprint” during which approved projects would pilot proposed changes in TIC requirements. Within 90 days: Update the annual FISMA and CAP goal metrics to focus on those critical capabilities that were most commonly lacking among agencies and focus oversight assessments on high-value assets. Within 120 days: In conjunction with DHS, develop a strategy for optimally realigning resources across agencies to reduce the risk to high-value assets and respond to cybersecurity incidents for those assets. OMB has taken steps toward implementing several, but not all, of these actions. For example, it introduced a “90 day sprint” and, according to knowledgeable OMB staff, the outcomes of this action are directly informing changes in TIC requirements. In addition, OMB updated the annual FISMA and CAP goal metrics by including several metrics that focus on high-value assets. The updated FISMA and CAP goal metrics went into effect in April 2018. However, while OMB had taken steps toward updating the TIC policy and developing a strategy for optimally realigning resources, the policy and strategy were in draft and had not yet been finalized as of October 2018. The agency did not specify a time frame for finalizing the policy and strategy. Until OMB finalizes the TIC policy and the strategy for optimally realigning resources, the enhancements offered through the policy and strategy are unlikely to be realized. FISMA requires agencies to provide information security protections to prevent unauthorized access to their systems and information. Officials from the 23 selected agencies reported to us that they generally took steps to meet this requirement by augmenting the tools and services provided by DHS with their own intrusion detection and prevention capabilities. However, agencies did not consistently implement five key capabilities specified by DHS and NIST guidance. In addition, most of the agencies did not fully implement any of the phases of DHS’s CDM program that is intended to improve their capabilities to detect and prevent intrusions. Binding Operational Directive (BOD) 18-01 instructs agencies to enhance email security. These enhancements include enabling encrypted email transmission, ensuring that receiving mail servers know what actions the agency would like taken when an email falsely claims to have originated from the agency, and removing certain insecure protocols, among others. The final deadline for implementing all BOD 18-01 requirements was October 16, 2018. Additionally, NIST SP 800-53 Revision 4 recommends that security awareness training include training on how to recognize and prevent spear-phishing attempts. As of September 2018, only 2 of the 23 agencies reported implementing all of the email requirements. For the remaining 21 agencies: 9 agencies stated that their agency had plans to implement all enhancements by the October 2018 deadline, 1 agency was uncertain whether it would meet the deadline, and 11 stated they would not be able to meet the deadline. By contrast, the majority of agencies (22 of 23) reported that they had trained staff on spear-phishing exercises, as recommended by NIST SP 800-53 Revision 4. Officials at the remaining agency told us that the agency planned to have spear-phishing exercises in fiscal year 2019. Such training should help ensure that phishing will be a less effective attack vector against the majority of agencies. While agencies benefit from secure protocols and spear-phishing training, implementing the remaining BOD 18-01 email requirements would provide additional protection to agency information systems. NIST recommends that federal agencies deploy intrusion detection and prevention capabilities. These capabilities include monitoring cloud services, using host-based intrusion prevention systems, monitoring external and internal network traffic, and using a security information and event management (SIEM) system. However, in our semi-structured interviews of the 23 agencies, officials told us that they often had not implemented many of these capabilities. Such inconsistent implementation exposes federal systems and the information they contain to additional risk. As part of their continuing oversight efforts, OMB and DHS can use the information below to work with agencies to identify obstacles and impediments affecting the agencies’ abilities to implement these capabilities. NIST SP 800-53 Revision 4 states that agencies should monitor and control communications at the external boundary of the network. However, as of June 2018, fewer than half of the agencies that used cloud computing services were monitoring cloud traffic. Specifically: 10 of 22 agencies that used Infrastructure as a Service were monitoring inbound and outbound Infrastructure as a Service traffic, 7 of 21 agencies that used Platform as a Service were monitoring inbound and outbound Platform as a Service traffic, and 10 of 23 agencies that used Software as a Service were monitoring inbound and outbound Software as a Service traffic. Without monitoring traffic to and from cloud service providers, agencies risk a greater chance of malicious cloud activity detrimentally affecting agency information security. NIST SP 800-53 Revision 4 states that agency internal monitoring may be achieved by utilizing intrusion prevention capabilities. These capabilities include using host-based intrusion prevention systems to provide defense at an individual system or device level by protecting against malicious activities. Host-based capabilities include memory-based protection and application whitelisting. As of June 2018, officials at the 23 agencies reported the following to us: 16 agencies used host-based intrusion prevention capabilities, 15 agencies used memory-based protection, and 8 agencies used host-based application whitelisting. Until host-based intrusion protections are fully deployed, agencies will be at greater risk of malicious activity adversely affecting agency operations. NIST SP 800-53 Revision 4 also states that agencies should monitor and control communications at the external boundary of the network and at key internal boundaries (e.g., network traffic). NIST guidance also stated that an agency should deploy monitoring devices strategically within the network to detect essential information. However, the agencies in our review did not always monitor external and internal traffic. For example, of the 23 agencies: 5 reported that they were not monitoring inbound or outbound direct connections to outside entities. 11 reported that they were not persistently monitoring inbound encrypted traffic. 8 reported that they were not persistently monitoring outbound encrypted traffic. In addition, 13 agencies reported they were not using a network-based session capture solution. Of the 10 agencies that reported using this solution, officials from 2 agencies stated that they were not capturing workstation-to-workstation connections. Without thorough monitoring of external and internal traffic, agencies will have less assurance that they are aware of compromised or potentially compromised traffic within their network. NIST SP 800-53 Revision 4 states that agencies should establish enhanced monitoring capabilities. Such capabilities should include automated mechanisms that collect and analyze incident data for increased threat and situational awareness. According to NIST, a security information and event management (SIEM) system analyzes data from different sources and identifies and prioritizes significant events. Sources of data used by SIEM systems include logs from database systems, network devices, security systems, web applications, and workstation operating systems. Of the 23 agencies that we reviewed, 21 reported using a SIEM capability. Over half of the agencies employing a SIEM used one or more of their logs to match against known vulnerabilities and advanced persistent threats, as well as to create real-time alerts. For example, of the 21 agencies: 14 agencies reported collecting database logs, but only 7 agencies reported using the logs to match against known vulnerabilities and persistent threats and to create real-time alerts; 20 agencies reported collecting network logs, but only 13 agencies reported using them to match against known vulnerabilities and persistent threats and to create real-time alerts; 21 agencies reported collecting security logs, but only 13 reported using them to match against known vulnerabilities and persistent threats and to create real-time alerts; 15 agencies reported collecting web application logs, but only 9 agencies reported using them to match against known vulnerabilities and persistent threats and to create real-time alerts; and 13 agencies reported collecting workstation logs, but only 8 agencies reported using them to match against known vulnerabilities and persistent threats and to create real-time alerts. Only 5 agencies collected all 5 types of logs and used them to match against known vulnerabilities and persistent threats and to create real- time alerts. By not fully using SIEM capabilities, agencies will have less assurance that relevant personnel will be aware of possible weaknesses or intrusions. To further enhance their intrusion detection and prevention capabilities, the 23 civilian CFO Act agencies were in the process of implementing DHS’s CDM program. As previously discussed, Phase 1 of the program involves deploying products to automate hardware and software asset management, configuration settings, and common vulnerability management capabilities. Phase 2 intends to address privilege management and infrastructure integrity by allowing agencies to monitor users on their networks and to detect whether users are engaging in unauthorized activity. Phase 3 is intended to assess agency network activity and identify any anomalies that may indicate a cybersecurity compromise. As of June 2018, most agencies had not fully implemented any of the three phases. As shown in Figure 7, 15 agencies had partially implemented phase 1, 21 had partially or not yet begun to implement phase 2, and none of the agencies had fully implemented phase 3. Agencies’ implementation status has been affected, at least in part, due to delays in DHS’s deployment of the program phases. As a result, federal systems will remain at risk until the program is fully deployed. Many agencies have not effectively implemented the federal approach and strategy for securing information systems. For example, the inspectors general for 17 of the 23 selected agencies reported that their agencies had not effectively implemented their information security programs and had significant information security deficiencies associated with internal control over financial reporting. In addition, CIOs for 17 agencies reported not meeting all nine targets for the cybersecurity cross- agency priority goal. Further, OMB determined that that only 13 of the 23 agencies were managing risks to their overall enterprise, while the other 10 agencies were at risk. Until agencies more effectively implement the government’s approach and strategy, federal systems will remain at risk. DHS and OMB have initiatives underway that are intended to further improve agencies’ security posture. However, although DHS had provided training and guidance for NCPS and CDM, agencies expressed the need for more. In addition, OMB had also not finalized its policy and strategy aimed at addressing challenges with perimeter security and protecting high value assets, respectively. OMB had also not provided useful information to Congress, such as a description of agencies’ implementation of DHS’s intrusion assessment plan, the degree to which agencies are using NCPS, a complete analysis of agencies’ implementation of DHS’s intrusion assessment plan, or the costs and benefits of using commercial tools. Although agencies’ officials reported various efforts underway to enhance their agency’s intrusion detection and prevention capabilities, implementation efforts across the federal government were not consistent. OMB and DHS can use the information provided in this report to work with agencies to identify obstacles and impediments affecting the agencies’ abilities to implement these capabilities. We are making a total of nine recommendations, including two to DHS and seven to OMB. Specifically: The Secretary of DHS should direct the Network Security Deployment division to coordinate further with federal agencies to identify training and guidance needs for implementing NCPS and CDM. (Recommendation 1) The Secretary of DHS should direct the appropriate staff to work with OMB to follow up with agencies to identify obstacles and impediments affecting their abilities to implement intrusion detection and prevention capabilities. (Recommendation 2) The Director of OMB should submit the intrusion assessment plan to the appropriate congressional committees. (Recommendation 3) The Director of OMB should report on implementation of the defense- in-depth strategy described in the intrusion assessment plan, including all elements described in the plan. (Recommendation 4) The Director of OMB should update the analysis of agencies’ intrusion detection and prevention capabilities to include the degree to which agencies are using NCPS. (Recommendation 5) The Director of OMB should direct the Federal CIO to update her report to Congress to include required information, such as detecting advanced persistent threats, a comparison of the costs and benefits of the capabilities versus commercial technologies and tools, and the capability of agencies to protect sensitive cyber threat indicators and defense measures. (Recommendation 6) The Director of OMB should establish a time frame for finalizing the Trusted Internet Connections policy intended to address challenges with agencies’ perimeter-based architectures and issue it when finalized. (Recommendation 7) The Director of OMB should establish a time frame for finalizing the strategy for realigning resources across agencies to protect high- value assets and issue it when finalized. (Recommendation 8) The Director of OMB should direct the Federal CIO to work with DHS to follow-up with agencies to identify obstacles and impediments affecting their abilities to implement intrusion detection and prevention capabilities. (Recommendation 9) We provided a draft of this report to OMB and the 23 civilian CFO Act agencies, including DHS, covered by our review. In response, OMB provided comments via email, and DHS and three other agencies (the Department of Commerce, Social Security Administration, and U.S. Agency for International Development) provided written comments, which are reprinted in appendices V through VIII, respectively. The 19 remaining agencies (the Departments of Agriculture, Education, Energy, Health and Human Services, Housing and Urban Development, the Interior, Justice, Labor, State, Transportation, the Treasury, and Veterans Affairs; as well as the Environmental Protection Agency, General Services Administration, National Aeronautics and Space Administration, National Science Foundation, Nuclear Regulatory Commission, Office of Personnel Management, and Small Business Administration) stated via email that they had no comments. In its comments, which the OMB liaison provided to GAO via email on December 7, 2018, OMB did not state whether it agreed or disagreed with the seven recommendations that we made to it. Rather, according to the liaison, OMB agreed with the facts in our draft report, but found that the report did not reflect the agency’s rationale for not submitting the DHS intrusion assessment plan to Congress and a report on the implementation of the plan, as required by the Federal Cybersecurity Enhancement Act of 2015. The liaison stated that OMB is working closely with DHS to provide strategic direction in assessing gaps in, and modernizing, the manner in which intrusion detection and prevention capabilities are delivered to the federal government. Further, in a subsequent email on December 10, 2018, OMB said it believes the Federal CIO’s September 2018 report to Congress, along with data provided in OMB’s fiscal year 2017 FISMA report to Congress, achieves the outcomes sought by the Federal Cybersecurity Enhancement Act of 2015 and demonstrates OMB's continuous engagement with DHS across the evolution of the intrusion detection and prevention program. As stated in our report, we acknowledge that OMB has provided important information to congressional stakeholders through its reports. However, OMB’s reports did not cover all outcomes described in the act. For example, as we pointed out, these reports did not fully address implementation of the defense-in-depth strategy described in DHS’s intrusion assessment plan. In addition, although OMB reported on several elements required by the Federal Cybersecurity Enhancement Act of 2015, it did not report on all of the required elements. For example, the reports did not address whether DHS’s NCPS was effective in detecting advanced persistent threats. The reports also did not include a comparison of the costs and benefits of the intrusion detection and prevention capabilities versus commercial technologies and tools, or the value of classified cyber threat indicators. Further, the reports did not address the capability of agencies to protect sensitive cyber threat indicators and defensive measures. Accordingly, we maintain that our recommendations for OMB to report on required elements in the Federal Cybersecurity Enhancement Act of 2015 are warranted. In addition, OMB suggested that we revise our recommendations to the agency to include a shared responsibility with DHS to help drive desired outcomes. However, six of the seven recommendations we are making to OMB are related to specific OMB responsibilities cited in either the Federal Cybersecurity Enhancement Act of 2015 or the Report to the President on Federal IT Modernization. As such, we believe the recommendations are appropriately addressed to OMB. Furthermore, our recommendations do not prevent OMB from working with DHS to implement them. Our seventh recommendation to OMB—to work with DHS to follow up with agencies to identify obstacles and impediments affecting their abilities to implement intrusion detection and prevention capabilities—includes a shared responsibility with DHS. OMB also provided technical comments, which we incorporated into the report, as appropriate. Subsequent to providing initial comments on our draft report, OMB issued a memorandum intended to provide a strategy for realigning resources across agencies to protect high-value assets. This action addresses our recommendation 8, which called for the Director of OMB to establish a time frame for finalizing the strategy for realigning resources across agencies to protect high-value assets, and to issue the strategy when finalized. In its comments, DHS stated that it concurred with the two recommendations we made to the department. DHS stated that it expects to implement the recommendations in 2019. The Department of Commerce commented that the report was reasonable and that the department agreed with the findings and recommendations. In its comments, the Social Security Administration stated that protecting its networks and information is a critical priority. According to the agency, it continued to make improvements in fiscal year 2018, such as improvements and progress in securing applications, leveraging the cloud, managing its assets and vulnerabilities, strengthening its network and incident response capabilities, improving its security training, and enhancing the overall effectiveness of its cybersecurity program. Finally, the U.S. Agency for International Development commented that its inspector general had improved the agency’s capability maturity ratings for core security functions in fiscal year 2018. The agency also pointed out that it was the only selected agency in which fiscal year 2017 indicators of effectiveness in implementing the federal approach and strategy for securing information systems were all positive (as noted in Appendix III). We are sending copies of this report to appropriate congressional committees, the Director of OMB, the heads of the 23 civilian CFO Act agencies and their inspectors general, and other interested congressional parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact Gregory C. Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IX. The Federal Cybersecurity Enhancement Act of 2015, which was enacted December 18, 2015, included a provision for GAO to report on the effectiveness of the federal government’s approach and strategy for securing agency information systems, including intrusion detection and prevention capabilities. The objectives of our review were to assess: (1) the reported effectiveness of selected agencies’ implementation of the federal government’s approach and strategy to securing agency information systems; (2) the extent to which the Office of Management and Budget (OMB) and the Department of Homeland Security (DHS) have facilitated the use of intrusion detection and prevention capabilities to secure federal agency information systems; and (3) the extent to which selected agencies reported implementing intrusion detection and prevention capabilities. Selected agencies for our review were the 23 civilian agencies covered by the Chief Financial Officers Act of 1990 (CFO Act). We did not include the Department of Defense because the Federal Cybersecurity Enhancement Act of 2015 only pertains to civilian agencies. Because we focused our work on the 23 civilian agencies, results from these reviews are not generalizable to the entire federal government. To assess the reported effectiveness of agencies’ implementation of the federal government’s approach and strategy to securing agency information systems, we described the federal government’s approach and strategy by summarizing the Federal Information Security Modernization Act of 2014 (FISMA), Executive Order 13800, Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure, and the National Institute of Standards and Technology’s (NIST) Framework for Improving Critical Infrastructure Cybersecurity (cybersecurity framework). assessed the reported effectiveness of agencies’ implementation of the approach and strategy by reviewing annual reports from OMB and the inspectors general (IG) of the 23 civilian CFO Act agencies regarding the reported implementation of FISMA for fiscal year 2017. We described the IG reported maturity levels, including the Office of Inspectors General FISMA Reporting Metrics definition of “effectiveness.” These maturity levels are based on security domains aligned with the five core functions in NIST’s cybersecurity framework. We also summarized IG reported conclusions on the effectiveness of agencies’ information security programs for fiscal year 2017. reviewed the fiscal year 2016 and 2017 financial statement audit reports for each of the 23 civilian CFO Act agencies to identify the extent to which any significant deficiencies or material weaknesses related to information security over financial systems had been reported and to identify information security control weaknesses reported by the IGs. identified whether agencies had met the targets for the cybersecurity- focused cross-agency priority goal for fiscal years 2016 and 2017 by examining agency-reported performance metrics for fiscal years 2016 and 2017. evaluated OMB’s agency risk management assessment ratings to make a determination on how agencies were managing risk to their enterprise. These conclusions were based on FISMA metrics, and are aligned with the five core security functions defined in the cybersecurity framework. interviewed knowledgeable OMB officials and staff to obtain their views on the reported effectiveness of the federal government’s approach and strategy to securing agency information systems. To assess the extent to which OMB and DHS have facilitated the use of intrusion detection and prevention capabilities to secure federal agency information systems, we determined the extent OMB and DHS fulfilled their requirements described in the Federal Cybersecurity Enhancement Act of 2015 by collecting and reviewing artifacts from OMB and DHS and comparing them to the provisions outlined in the act. We also interviewed knowledgeable officials from OMB and DHS regarding their efforts to fulfill their requirements described in the act. determined the effectiveness of corrective actions taken by DHS to address nine previously reported recommendations we made in our report related to NCPS. Specifically, we collected appropriate artifacts and assessed the artifacts against the criteria used in that report, and determined the extent to which the actions taken by DHS met the intent of the recommendations, and we met with DHS staff responsible for the remediation activities and obtained their views of the status of actions taken to address the recommendations. held semi-structured interviews with knowledgeable officials from the 23 civilian CFO Act agencies. During these interviews, we obtained the agency’s views on whether they need more training and guidance from DHS for NCPS and CDM. We also interviewed knowledgeable officials and staff at DHS to obtain their views on how DHS had improved the intrusion detection and prevention capabilities it provides to federal agencies. We also interviewed DHS officials to obtain their views on the training and guidance that the department makes available to agencies. To assess the extent to which selected agencies reported implementing intrusion detection and prevention capabilities, we described the reported intrusion detection and prevention capabilities implemented by the 23 civilian CFO Act civilian agencies by summarizing implemented intrusion detection and prevention capability information obtained from the semi-structured interviews at the 23 civilian CFO Act agencies described above; identifying the extent to which the 23 civilian CFO Act agencies were in compliance with DHS’s binding operating directive (BOD) pertaining to enhanced email and web security (BOD 18-01) by collecting and summarizing Cyber Hygiene Trustworthy Email reports from the 23 agencies and determining the extent to which the agencies had taken required actions to implement the BOD. During the semi-structured interviews, we also obtained the agency’s views and experiences with other programs and services provided by DHS, including the extent to which agencies had implemented the tools offered by the department’s Continuous Diagnostics and Mitigation (CDM) program. To determine the reliability of submitted data and obtain clarification about agencies’ processes to ensure the accuracy and completeness of data used in their respective FISMA reports, we analyzed documents and conducted interviews with officials from 6 of the 23 civilian CFO Act agencies. To select these six agencies, we sorted agency fiscal year 2017 information technology budget data from highest to lowest amount and then divided the data into three tiers: high spending, medium spending, and low spending. We then randomly selected two agencies from each of the three tiers. The selected agencies were the Departments of Agriculture, Commerce, Housing and Urban Development, Transportation, and Veterans Affairs, and the U.S. Agency for International Development. While not generalizable to all agencies, the information we collected and analyzed about the six selected agencies provided insights into various processes in place to produce FISMA reports. Based on this assessment, we determined that the data were sufficiently reliable for the purposes of our reporting objectives. We conducted this performance audit from December 2017 to December 2018 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The National Institute of Standards and Technology established the cybersecurity framework to provide guidance for cybersecurity activities within the private sector and government agencies at all levels. The cybersecurity framework consists of five core functions: identify, protect, detect, respond, and recover. Within the five functions are 23 categories and 108 subcategories that define discrete outcomes for each function, as described in table 7. The federal approach and strategy for securing information systems is prescribed by federal law and policy, including the Federal Information Security Modernization Act of 2014 and the presidential executive order on Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure. Accordingly, federal reports describing agency implementation of this law and policy, and reports of related agency information security activities, indicated the effectiveness of agencies’ efforts to implement the federal approach and strategy. Table 8 summarizes the reported effectiveness of the 23 civilian Chief Financial Officers Act of 1990 agencies to implement the government’s approach and strategy to securing information systems. The President’s Management Agenda identifies cross-agency priority (CAP) goals to target areas where multiple agencies must collaborate to effect change. The agenda issued in fiscal year 2018 established an information technology modernization goal that includes a cybersecurity objective with specific priority areas and performance indicators. This cybersecurity-focused goal is intended to drive progress in the government’s efforts to modernize information technology to increase productivity and security. Figure 8 describes the 3 updated cybersecurity- focused cross-agency priority areas and 10 performance indicators. Each federal agency is expected to meet one of the 10 new performance indicators by the end of fiscal year 2018 and the remainder by 2020. In addition to the individual named above, Jeffrey Knott (assistant director), Daniel Swartz (analyst-in-charge), David Blanding, Chris Businsky, Kristi Dorsey, Di’Mond Spencer, Priscilla Smith, and Edward Varty made key contributions to this report. West Coile, Franklin Jackson, and Chris Warweg also provided assistance.

Question: Write a one-page summary of the report 1.

Answer: Education provided over $122 billion in grants, loans and work study funds to help students pay for college at about 6,000 schools in fiscal year 2017. Education is responsible for certifying that these schools are eligible for and capable of properly administering federal student aid funds. Schools are required to submit an annual compliance audit that provides information on schools' administrative capability, which Education considers in its school certification decisions. GAO was asked to review Education's process for certifying schools to receive federal student aid. This report examines (1) how Education certifies schools to administer federal student aid and how frequently schools are approved and denied certification; and (2) the role of compliance audits in the certification process and what, if any, steps Education has taken to address the quality of the audit information. GAO analyzed data on school certification outcomes for calendar years 2006-2017 (when GAO determined data were most reliable); reviewed data and reports summarizing Education's reviews of compliance audit quality for fiscal years 2006-2017; reviewed a non-generalizable sample of 21 school certification decisions from fiscal years 2015 and 2016, selected for a mix of decisions, school characteristics, and geographic regions; examined relevant federal laws, regulations, policy manuals and guidance; and interviewed Education officials. The Department of Education (Education) is responsible for evaluating a variety of information to determine whether a postsecondary school should be certified to administer federal student aid programs, and agency data show that it approves most schools that apply. Education procedures instruct regional office staff to review school policies, financial statements, and compliance audits prepared by independent auditors, among other things. Education can certify schools to participate in federal student aid programs for up to 6 years, or it can provisionally certify them for less time if it determines that increased oversight is needed—for example, when a school applies for certification for the first time or when it has met some but not all requirements to be fully certified. In calendar years 2006 through 2017, Education fully or provisionally approved most schools applying for initial or recertification to receive federal student aid (see figure). Note: Schools applying for certification for the first time and approved are placed in provisional certification. In deciding whether to certify schools, Education particularly relies on compliance audits for direct information about how well schools are administering federal student aid, and Education's offices of Federal Student Aid and Inspector General have taken steps to address audit quality. The Inspector General annually selects a sample of compliance audits for quality reviews based on risk factors, such as auditors previously cited for errors. In fiscal years 2006 through 2017, 59 percent of the 739 selected audits received failing scores. Audits that fail must be corrected; if not, the school generally must repay federal student aid covered by the audit. Because higher risk audits are selected for review, Inspector General officials said they cannot assess the overall prevalence of quality problems in compliance audits. These two Education offices have taken steps to improve audit quality. For example, the Inspector General offered additional training to auditors on its revised 2016 audit guide and provided guidance to schools on hiring an auditor, while Federal Student Aid created a working group to strengthen its procedures for addressing poor quality compliance audits. Education's efforts to address audit quality could help ensure that these audits provide reliable information for school certification decisions. GAO is not making recommendations in this report.