INFORMATION 

TECHNOLOGY

HUD Needs to 

Improve Key Project 

Management Practices 

for Its Modernization 

Efforts

Report to Congressional Committees

June 2013

GAO-13-455

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-455, a report to 

congressional committees

June 2013

INFORMATION TECHNOLOGY 

HUD Needs to Improve Key Project Management 

Practices for Its Modernization Efforts

Why GAO Did This Study

HUD relies extensively on IT to carry 

out its mission of strengthening 

communities and ensuring affordable 

housing and has reported that efforts 

are under way to modernize its aging, 

duplicative, and poorly integrated 

systems. Committee report language 

mandated GAO to evaluate the

implementation of project management 

practices for HUD’s IT modernization 

efforts. The objective was to identify 

the extent to which the department 

implemented key project management 

practices for the FHA Transformation 

and NGMS modernization efforts. GAO 

assessed project management artifacts 

for 9 FHA Transformation and 5 NGMS 

projects in the areas of project

planning (charters, work breakdown 

structures, and project management 

plans), requirements management 

(requirements management plans and 

traceability matrixes), and acquisition 

planning (acquisition strategies) 

against best practices. GAO also 

interviewed officials. 

What GAO Recommends

GAO recommends that HUD establish 

a plan of action to fully implement best 

practices, provide needed project 

management expertise, and improve 

the development and use of its project 

management framework and 

governance structure. In written 

comments, HUD concurred with the 

recommendations to improve its 

framework and governance, but did not 

concur with the entirety of the 

recommendation to develop a plan of 

action, and contended that the need for 

project management expertise did not 

follow from the premises established in 

the draft report. GAO maintains that 

these actions are necessary as 

discussed in this report. 

What GAO Found

The Department of Housing and Urban Development (HUD) has taken initial 

steps toward applying key project management practices in the areas of project 

planning, requirements management, and acquisition planning for its Federal 

Housing Administration Transformation (FHA Transformation) Initiative to 

address performance gaps in housing insurance programs and its Next 

Generation Management System (NGMS) to improve management of its 

affordable housing programs. However, HUD has not yet fully implemented any 

of these practices in executing and managing the information technology (IT) 

projects associated with these efforts. Specifically, while the department had 

developed project management artifacts such as charters and requirements 

management plans, none of these documents included all of the key details that 

could facilitate effective management of its projects such as full descriptions of 

the work necessary to complete the projects, cost and schedule baselines, or 

prioritized requirements, among other things. Department officials attributed 

these deficiencies to a lack of project management expertise. The table below 

summarizes GAO’s assessment of key practices for these modernization efforts. 

GAO Assessment of Key Project Management Practices, as of April 2013

Source: GAO analysis of HUD data.

Key: ●: Artifact developed and contained essential information. ◐: Artifact developed but lacked 

essential information. ○: Artifact not yet developed. 

Because HUD has not taken these foundational steps to fully define its 

modernization efforts, the department is not well positioned to successfully 

manage or execute the associated projects. These incomplete documents limit 

the department’s ability to fully understand the work to be completed or 

accurately report project progress. A major reason for these information 

deficiencies is HUD’s inadequate development and use of its project 

management framework, which did not ensure the quality or completeness of 

artifacts developed. Specifically, the framework did not always include essential 

guidance and, in other cases, the projects did not always implement the 

guidance provided. Further, the governance structure did not consistently 

operate as intended to provide adequate oversight to ensure compliance with key 

project management practices. As a result, the department increases the risk of 

continuing to inadequately apply project management practices and may not be 

positioned to effectively manage or report progress of its key modernization 

efforts. Fully implementing effective project management practices is critical for 

the success of these two modernization efforts and others under way or planned. 

View GAO-13-455. For more information, 

contact Valerie C. Melvin at (202) 512-6304 or 

melvinv@gao.gov.

Artifact Description

FHA 

Transformation NGMS

Project charter

Formally authorizes a project and identifies 

high-level information ◐ ◐

Work breakdown 

structure

Defines the necessary work and provides a 

basis for cost and schedule estimates ○ ◐

Project 

management plan

Primary source for how to execute project 

objectives and measure progress ◐ ◐

Requirements 

management plan

Outlines processes and methods for 

developing and managing requirements ◐ ◐

Requirements 

traceability matrix

Provides the ability to follow a requirement 

from origin to implementation ◐ ◐

Acquisition 

strategy

Describes how the project will manage 

contracts in coordination with other processes. ◐ ◐
Page i GAO-13-455 HUD Information Technology

Letter 1 

Background 5

HUD Has Begun Applying Key Practices for Its Modernization 

Efforts but Has Been Hindered by Inadequacies in Its Project 

Management Framework and Governance 20

Conclusions 37

Recommendations for Executive Action 38

Agency Comments and Our Evaluation 39

Appendix I Objective, Scope, and Methodology 44

Appendix II Summary of HUD’s Transformation Initiative Information 

Technology Modernization Efforts 47

Appendix III Detailed Assessment of FHA Transformation and NGMS 

Project Management Documentation 48

Appendix IV Comments from the Department of Housing and Urban 

Development 67

Appendix V GAO Contact and Staff Acknowledgments 72

Tables

Table 1: Summary of FHA Transformation Projects Included in Our 

Study 11

Table 2: Summary of Next Generation Management System 

Projects Included in Our Study 15

Table 3: Summary of Key Project Management Practices for the 14 

FHA Transformation and Next Generation Management 

System Projects, as of April 2013 22

Table 4: HUD’s Seven Transformation Initiative IT Modernization 

Efforts 47

Contents 
Page ii GAO-13-455 HUD Information Technology

Table 5: Assessment of FHA Transformation and NGMS Project 

Charters 49

Table 6: Assessment of FHA Transformation and NGMS Work 

Breakdown Structures 53

Table 7: Assessment of FHA Transformation and NGMS Project 

Management Plans 55

Table 8: Assessment of FHA Transformation and NGMS 

Requirements Management Plans 59

Table 9: Assessment of FHA Transformation and NGMS 

Requirements Traceability Matrixes 62

Table 10: Assessment of FHA Transformation and NGMS 

Acquisition Strategies 65

Figures

Figure 1: Simplified HUD Organizational Structure Including FHA 

Transformation and NGMS Modernization Efforts 7

Figure 2: HUD’s Governance Structure for IT Investments 19
Page iii GAO-13-455 HUD Information Technology

Abbreviations

CMMI Capability Maturity Model Integration

FHA Federal Housing Administration 

HUD Department of Housing and Urban Development

IT information technology

LEAP Lender Electronic Assessment Portal

MFH multifamily housing

NGMS Next Generation Management System

OCIO Office of the Chief Information Officer

OCPO Office of the Chief Procurement Officer

OMB Office of Management and Budget

PMI Project Management Institute

PMBOK Project Management Body of Knowledge

PPM Project Planning and Management

SEI Software Engineering Institute

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Page 1 GAO-13-455 HUD Information Technology

441 G St. N.W.

Washington, DC 20548

June 12, 2013

The Honorable Patty Murray

Chairman

The Honorable Susan M. Collins

Ranking Member

Subcommittee on Transportation, Housing and Urban Development, 

and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Tom Latham

Chairman

The Honorable Ed Pastor

Ranking Member

Subcommittee on Transportation, Housing and Urban Development, 

and Related Agencies

Committee on Appropriations

House of Representatives

The Department of Housing and Urban Development (HUD) relies 

extensively on information technology (IT) to carry out its mission of 

creating strong, sustainable, inclusive communities and ensuring 

affordable housing. According to the department, in fiscal year 2012, IT 

systems supported HUD programs valued at more than $1 trillion.

1

However, the department has reported that its systems are overlapping, 

duplicative, not integrated, necessitate manual workloads, and employ 

antiquated, costly-to-maintain technologies. Further, as we and others 

have reported, the department has long experienced shortcomings in its 

 

1

HUD, Fiscal Year 2012 Budget Justifications for Estimates: Working Capital Fund (WCF) 

(Washington, D.C.: Feb. 14, 2011). 

 
 

Page 2 GAO-13-455 HUD Information Technology

IT management capability.2 For example, a 2010 assessment3 of the 

department’s IT environment concluded that HUD lacked sufficient 

capability to execute basic management functions, including project 

management,4 which inhibited effective IT operations and the successful 

delivery of IT solutions.

For fiscal years 2010 and 2011, HUD invested in developing and 

modernizing its systems through funding provided by the department’s 

Transformation Initiative.5 The department has been pursuing seven IT 

modernization efforts under this initiative, the two largest of which are the 

Federal Housing Administration Transformation (FHA Transformation) 

Initiative to address performance gaps in housing insurance programs 

and the Next Generation Management System (NGMS) to improve 

management of the department’s affordable housing programs. To 

provide oversight and inform decision making, Congress established 

limitations on funding for the Transformation Initiative IT modernization 

efforts and required the department to submit expenditure plans that 

 

2

GAO, Information Technology: HUD Needs to Strengthen Its Capacity to Manage and 

Modernize Its Environment, GAO-09-675 (Washington, D.C.: July 31, 2009); HUD 

Management: HUD’s High-Risk Program Areas and Management Challenges, 

GAO-02-869T (Washington, D.C.: July 24, 2002); HUD Management: Progress Made on 

Management Reforms, but Challenges Remain, GAO-02-45 (Washington, D.C.: Oct. 31, 

2001); Single-Family Housing: Current Information Systems Do Not Fully Support the 

Business Processes at HUD’s Homeownership Centers, GAO-02-44 (Washington, D.C.: 

Oct. 24, 2001); HUD Information Systems: Immature Software Acquisition Capability 

Increase Project Risks, GAO-01-962 (Washington, D.C.: Sept. 14, 2001); and HUD, HUD 

Transformation Initiatives IT Expenditure Plan (Washington, D.C.: Feb. 2011), and U.S. 

Department of Housing and Urban Development: IT Current State Assessment (January 

2011).

3

HUD, U.S. Department of Housing and Urban Development: IT Current State 

Assessment (January 2011). 

4

Project management is the application of knowledge, skills, tools, and techniques to 

project activities to meet project requirements. A project is a temporary endeavor 

undertaken to create a unique product, service, or result. 

5

The Transformation Initiative represents a strategy for reforming the way the department 

does business and comprises four components: (1) research, evaluation, and program 

metrics; (2) program demonstrations; (3) technical assistance and capacity building; and 

(4) information technology. Funding for this initiative comes from the department’s 

authority to set aside up to 1 percent from specified accounts. 
 

Page 3 GAO-13-455 HUD Information Technology

satisfied statutory conditions before fully obligating the available funds.6

We were required to review the department’s expenditure plans and, 

accordingly, have reported on the results of our assessments.

7

Concurrent with the modernization funding, the department also began 

implementing reforms to improve its IT management controls and guide 

its investments, including the establishment of a framework for planning 

and managing such projects.

Given the important role that HUD’s modernized systems are to have in 

supporting its mission, the Senate Report accompanying the 

department’s fiscal year 2012 appropriation, as approved by the 

Conference report, mandated us to evaluate the implementation of project 

management practices for its IT modernization efforts.8 In this regard, our 

specific objective was to identify the extent to which the department has 

implemented key project management practices for the FHA 

Transformation and NGMS modernization efforts.

To address this objective, we examined all of the 14 projects for FHA 

Transformation and NGMS that had been identified in the department’s 

 

6

The Consolidated Appropriations Act, 2010, Pub. L. No. 111-117 (Dec. 16, 2009), and 

Department of Defense and Full-Year Continuing Appropriations Act, 2011, Pub. L. No. 

112-10, § 2259, 125 Stat. 38, 197-98 (Apr. 15, 2011) required HUD to submit expenditure 

plans that satisfied sets of statutory conditions before portions of the Transformation 

Initiative funds were made available for IT modernization. Until the plans were submitted, 

HUD IT modernization expenditures were limited to 25 percent of the $122.5 million for 

fiscal year 2010 and 35 percent of the $114.1 million for fiscal year 2011. Additionally, 

Transformation Initiative appropriations are made available for obligation by the 

department through fiscal years 2012 and 2013, respectively. Among other statutory 

conditions, the plans were to identify functional and performance capabilities to be 

delivered, expected mission benefits, estimated life-cycle costs, and planned key 

milestones.

7

GAO, Information Technology: HUD's Fiscal Year 2011 Expenditure Plan Satisfies 

Statutory Conditions, GAO-12-654 (Washington, D.C.: May 24, 2012); Information 

Technology: HUD's Expenditure Plan Satisfies Statutory Conditions, and Implementation 

of Management Controls Is Under Way, GAO-11-762 (Washington, D.C.: Sept. 7, 2011); 

and Information Technology: HUD Needs to Better Define Commitments and Disclose 

Risks for Modernization Projects in Future Expenditure Plans, GAO-11-72 (Washington, 

D.C.: Nov. 23, 2010). 

8

This mandate is contained in the Senate Appropriations Committee report, S. Rep. No. 

112-83, at 141-42 (2011), as approved by the conference committee in the Explanatory 

Statement, H.R. Conf. Rep. No. 112-284, at 286 (2011), accompanying the Consolidated 

and Further Continuing Appropriations Act, 2012, Pub. L. No. 112-55, 125 Stat. 552, 691-

92 (Nov. 18, 2011). 
 

Page 4 GAO-13-455 HUD Information Technology

fiscal year 2011 expenditure plan. We assessed these projects against 

key IT management practices9 in the areas of (1) project planning, (2) 

requirements management, and (3) acquisition planning.10 As part of our 

analysis, we reviewed HUD project management documentation for the 

14 FHA Transformation and NGMS projects, including charters, work 

breakdown structures (which define the necessary work and provide a 

basis for cost and schedule estimates), project management plans, 

requirements management plans and traceability matrixes (which provide 

the ability to follow a requirement from origin to implementation), and 

acquisition strategies. We assessed whether this documentation was 

consistent with project management practices identified by the Project 

Management Institute (PMI) and the Software Engineering Institute (SEI), 

and best practices we previously identified for cost estimating and project 

schedules.11 We also attended the department’s project management 

meetings to observe how the identified practices were being applied. In 

addition, we interviewed responsible HUD officials, including FHA 

Transformation and NGMS management officials, procurement officials, 

and responsible IT officials. Appendix I provides additional details 

regarding our objective, scope, and methodology.

We conducted this performance audit from June 2012 to June 2013 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 objective. We believe that 

 

9

Project Management Institute: A Guide to the Project Management Body of Knowledge 

(PMBOK® Guide), Fourth Edition, Project Management Institute, Inc. (PMI), 2008. 

Copyright and all rights reserved. Material from this publication has been reproduced with 

the permission of PMI; Software Engineering Institute/Carnegie Mellon, Capability Maturity 

ModeI® Integration (CMMI®) for Development, Version 1.3, CMU/SEI-2010-TR-033 

(Hanscomb AFB, Massachusetts: November 2010) and CMMI® for Acquisition, Version 

1.3, CMU/SEI-2010-TR-032 (Pittsburgh, Pa.: November 2010); GAO, Best Practices for 

Project Schedules—Exposure Draft, GAO-12-120G (Washington, D.C.: May 30, 2012)

and Cost Estimating and Assessment Guide: Best Practices for Developing and Managing 

Capital Program Costs, GAO-09-3SP (Washington D.C.: Mar. 2, 2009).

10These three areas were based on HUD’s recent implementation of project management 

practices and the important role planning activities have on executing and managing IT 

projects. 

11SEI, CMMI® for Acquisition and CMMI® for Development; PMI, PMBOK® Guide (see 

footnote 9); GAO-12-120G; and GAO-09-3SP. 
 

Page 5 GAO-13-455 HUD Information Technology

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objective.

To accomplish its mission, HUD administers community and housing 

programs that benefit millions of households each year. Among other 

things, the department provides affordable rental housing opportunities 

and helps homeless families and chronically homeless individuals and 

veterans. The department also administers mortgage insurance programs 

for single-family housing, multifamily housing, and health care.

HUD relies on five main organizational components to carry out its 

mission. Of these, two components have lead responsibility for improving 

access to housing and are the business owners for related IT 

modernization efforts:12

• Housing/Federal Housing Administration (FHA): Programs within 

this office are responsible for contributing to building healthy 

communities, maintaining and expanding housing opportunities, and 

stabilizing credit markets in times of economic disruption. This office 

also regulates certain aspects of the housing industry. For example, 

the department currently reports that it provides insurance on loans 

made by its approved lenders for 4.8 million single-family mortgages 

and 13,000 multifamily projects, including manufactured homes and 

hospitals. The FHA Transformation modernization effort is managed 

within this office.

• Public and Indian Housing: Programs within this office are 

responsible for creating opportunities for residents’ self-sufficiency 

and economic independence. Toward this end, this office currently 

oversees a housing choice voucher program to subsidize housing for 

approximately 2.1 million low-income, elderly, and disabled families; a 

public housing program that subsidizes about 1.3 million housing units 

for vulnerable low-income families; and block grants and guarantee 

programs for Native American groups. The NGMS modernization 

effort is managed within this office.

 

12The other three components are Fair Housing and Equal Opportunity, Community 

Planning and Development, and Government National Mortgage Association (also known 

as Ginnie Mae). 

Background 
 

Page 6 GAO-13-455 HUD Information Technology

In addition, to support these organizational components, the department 

relies on various administrative offices to provide guidance and tools. 

These include the department’s Office of the Chief Information Officer 

(OCIO) and the Office of the Chief Procurement Officer (OCPO). Through 

coordination with the organizational components, OCIO manages IT 

resources and provides support for the department’s infrastructure, 

security, and ongoing projects. This office also provides project 

management guidance and technical expertise to modernization efforts.13

For its part, OCPO is responsible for obtaining contracted goods and 

services required by the department to meet its strategic objectives. This 

office is involved with initiating acquisition actions upon request by the 

organizational components.

Further, HUD’s Deputy Secretary is responsible for managing the 

department’s daily operations, annual operating budget, and 

approximately 8,900 employees. As part of this role, the Deputy Secretary 

conducts biweekly meetings with stakeholders to discuss the Secretary’s 

priorities. During these meetings, the scope, milestones, risks, and status 

of action items related to priority issues are discussed. The FHA 

Transformation and NGMS modernization efforts are designated as 

priority and each has its own biweekly meeting.

A simplified view of the department’s housing organization structure and 

the offices responsible for FHA Transformation and NGMS is provided in 

figure 1.

 

13In 2009 HUD developed a plan to reorganize its OCIO to better align with departmental 

needs. In January 2013 the department received final approval and is expecting to 

implement the new structure by September 2013. 
 

Page 7 GAO-13-455 HUD Information Technology

Figure 1: Simplified HUD Organizational Structure Including FHA Transformation 

and NGMS Modernization Efforts

According to the fiscal year 2014 President’s Budget request for HUD, 

$285.1 million is expected to be spent on IT investments. HUD’s IT 

environment consists of multiple systems that, among other things, are 

intended to help the department coordinate with lending institutions to 

insure mortgages, collect and manage state and local housing data, 

process applications for community development, and issue vouchers 

that provide access to subsidized housing. In particular, the department’s 

housing programs rely on systems for processing and managing these 

business operations. For example, systems within the Office of Housing 

are expected to process mortgage insurance applications, bill and collect 

premiums, pay claims, manage receivables and other assets, track 

delinquencies and defaults, and support staff in providing counseling to 

first-time home buyers and existing homeowners. Additionally, Public and 

Indian Housing programs that use systems are intended to process 

vouchers for different rental assistance programs, as well as to support 

Overview of HUD’s IT 

Environment 
 

Page 8 GAO-13-455 HUD Information Technology

the processing of applications for, and the management of, more than 50 

grant programs administered by the department.

However, HUD’s current IT environment has not effectively supported its 

business operations because its systems are overlapping and duplicative, 

not integrated, necessitate manual workloads, and employ antiquated 

technologies that are costly to maintain. For example, the department 

reported from 2008 to 2012 that its IT environment consisted of:14

• Over 200 information systems, many of which perform the same 

function and, thus, are overlapping and duplicative. Specifically, 

different systems perform the same task to separately support grants 

management, loan processing, and subsidies management.

• Stovepiped, nonintegrated systems that result in identical data 

existing in multiple systems. For example, two organizational 

components store about 80 percent of similar data in separate 

databases that provide information on rental assistance participants.

• Manual processing for business functions due to a lack of systems to 

support these processes. For example, specific NGMS projects are 

intended to replace existing ad hoc analyses performed in 

spreadsheets and databases with systems that automate and 

standardize those functions.

• Antiquated technology (15- to 30- years old) and complex systems 

that are costly to maintain. For example, the department relies on 

different programming languages and operating systems, which 

requires specialized skills to operate and maintain.

Additionally, HUD engaged contractors to conduct an assessment of the 

department’s environment. This assessment, issued in January 2011, 

concluded that unclear reporting relationships hindered the enforcement 

of IT policies; contractor performance information was not used to inform 

 

14HUD, Fiscal Year 2013 Target Enterprise Architecture Version 7.0 (November 2012); 

FY2012 Information Technology Strategic Portfolio Review, Version 1.1 (Washington, 

D.C.: May 2012); U.S. Department of Housing and Urban Development: IT Current State 

Assessment (January 2011); HUD Transformation Initiatives IT Expenditure Plans, 

submitted April 2010, September 2010, February 2011, and December 2011; and

Strategic Portfolio Review FY 2009 (Washington, D.C.: June 2008). 
 

Page 9 GAO-13-455 HUD Information Technology

management decisions; technical standards were lacking or not enforced; 

and data management practices did not support business needs.15

Through the Transformation Initiative’s IT component, HUD has begun 

addressing challenges to its environment and modernizing its systems. In 

this regard, the department initiated seven IT modernization efforts, of 

which FHA Transformation and NGMS are the two largest.16 For fiscal 

years 2010 and 2011, the department reported that the Transformation 

Initiative funding made available for FHA Transformation and NGMS was 

$58.5 and $41.1 million, respectively.17 (See later discussion in this report 

regarding costs associated with the 14 projects in our study.)

FHA Transformation was initiated to improve the department’s 

management of insurance programs through the development and 

implementation of a modern financial services IT environment18 that is 

expected to improve loan endorsement processes, collateral risk 

capabilities, and fraud prevention. In August 2009, HUD published the 

FHA Office of Housing Information Technology Strategy and 

Improvement Plan,

19 which identified and prioritized 25 IT areas with 

performance gaps for its single-family housing, multifamily housing 

development and rental assistance, health care facilities programs, and 

enterprise applications. In May 2010, FHA Transformation began 

planning and executing modernization efforts aimed at addressing the 

gaps identified in the plan. Specifically, the modernization initiative is 

intended to implement technology within the following four functional 

areas aimed at addressing changes in FHA’s business model, operating 

environment, and components of the loan life cycle:

 

15HUD, U.S. Department of Housing and Urban Development: IT Current State 

Assessment (January 2011).

16See app. II for descriptions of HUD’s seven IT modernization efforts. 

17HUD, HUD Transformation Initiatives Information Technology Fiscal Year 2011 

Expenditure Plan (Washington, D.C.: December 2011). 

18This environment is expected to provide case management for the life cycle of a loan 

and capture data from the loan origination and underwriting processes. 

19HUD, FHA Office of Housing Information Technology Strategy and Improvement Plan,

(Aug. 13, 2009). 

HUD’s Transformation 

Initiative IT Modernization 

Efforts 
 

Page 10 GAO-13-455 HUD Information Technology

• Infrastructure and legacy migration: Provide a scalable 

infrastructure to support rules engines, analytics, and reporting 

systems, as well as a mechanism for transferring legacy applications 

to the new platform. Specifically, the Federal Financial Services 

Platform project is intended to provide hardware and standard 

software to support case management and migration of legacy 

applications (e.g., the Computerized Homes Underwriting Reporting 

System) for all lines of business.

• Borrower/collateral risk management and fraud monitoring:

Provide tools for analyzing, monitoring, and managing emerging 

issues and trends in the housing market, including borrower and 

collateral risk, appraisals, and fraud, as it relates to the FHA portfolio. 

For example, the Legacy Application Transformation project is 

expected to implement a software service tool that aggregates data to 

identify emerging issues and trends in borrower risk and fraud by 

analyzing the accuracy and validity of verified assets, income, and 

employment on individual loans. Other projects within this functional 

area include business process reengineering and a pilot designed to 

automate and streamline the multifamily housing underwriting 

process. Using the new infrastructure, an automated underwriting tool 

is expected to be deployed to expand the capabilities for processing 

loan applications for insurance programs and replace current systems 

(e.g., the Development Application Processing System).

• Counterparty management:20 Provide applications for improved 

performance and compliance of lenders and appraisers through more 

proactively identifying risk trends and improving loan file review 

techniques. Specific projects include the Lender Electronic 

Assessment Portal, a web-based automated delivery of electronic 

applications and storage of lender application data that assists with 

reviewing new lender applications and requests for annual 

recertification to participate in FHA programs. Future plans call for 

replacing seven legacy applications.

• Portfolio analysis: Provide tools intended to augment risk monitoring 

and management; enhance predictive analytics; provide timely and 

flexible reporting; and deliver more accurate, detailed information to 

 

20Counterparties are the persons or institutions engaging in a transaction. HUD uses the 

term counterparty to refer to lenders and other participants in its programs. 
 

Page 11 GAO-13-455 HUD Information Technology

decision makers. For example, the Portfolio Risk Reporting & 

Analytics project is intended to provide a web-based software service 

tool for modeling FHA program risks. While initial use of the software 

is to include receiving hard-copy reports from the third-party vendor, 

HUD also expects to deploy the tool within the department’s 

infrastructure in order for FHA employees to have access to reports 

and the analytics dashboard data electronically.

Overall leadership for FHA is provided by the Assistant Secretary for 

Housing/Federal Housing Commissioner, who chairs the modernization 

effort steering committee; the General Deputy Assistant Secretary for 

Housing; and the Director for the Office of Program Systems 

Management,21 who is the executive sponsor. The modernization effort 

also has a project management office that is responsible for executing 

and managing the associated projects. As of April 2013, FHA 

Transformation consisted of 10 projects, 9 of which were included in our 

study.22 Table 1 summarizes the 9 FHA Transformation projects that we 

assessed as part of our study.

Table 1: Summary of FHA Transformation Projects Included in Our Study

Project name Purpose

Capital Needs Assessment Develop a standard software template tool to be made available to all federal agencies 

administering housing programs to support capital needs assessments.

Federal Financial Services Platform Install and configure hardware and software for a new financial services IT environment. 

Healthcare Automated Lender Application 

Pilota Provide a modernized business process and systems capability to support the Office of 

Healthcare Programs’ loan origination and production processing for mortgage insurance 

for residential care facilities.

Legacy Application Transformationb Implement analytical tools to support the analysis of aggregate data to identify emerging 

issues and trends in borrower/collateral risk and fraud. 

 

21The Office of Program Systems Management is responsible for developing and 

enhancing the automated systems that support multifamily programs and for coordinating 

funding for multifamily systems contracts. This office is within the Office of Housing/FHA 

Office of Multifamily Housing Programs, which is responsible for the overall management, 

development, direction, and administration of the department’s multifamily housing 

programs.

22FHA Transformation’s tenth project—Loan Review—had not been identified as an active 

project at the start of our review, nor was it identified in the fiscal year 2011 expenditure 

plan. Thus, this project was not assessed in our study.
 

Page 12 GAO-13-455 HUD Information Technology

Project name Purpose

Lender Electronic Assessment Portal 

(LEAP) Automation of Lender Approval 

Workflow 

Develop tools that are intended to monitor lender performance and policy compliance, 

including identification of key performance characteristics, risk drivers, and comparative 

performance across lenders.

LEAP Institution Managerc Automate the manual process of reviewing and approving lender documentation for the 

annual recertification of lenders participating in FHA’s lender programs. 

Multifamily Housing (MFH) Development & 

Underwriting Business Process 

Reengineering/Automated Underwriting 

Solution

Automate the multifamily housing underwriting business process to streamline operations 

and increase effectiveness, efficiency, and risk management capabilities.

MFH Physical Inspections Alignment Enhance HUD’s Real Estate Assessment Center software systems to eliminate 

duplicative inspections performed by state housing agencies.

Portfolio Risk Reporting & Analytics Implement a web-based tool that provides reporting and analytics capabilities that allow 

FHA users to model risks associated with its portfolio of mortgages. 

Source: GAO analysis of HUD data.

a

FHA Transformation officials reported on February 21, 2013, that, as a result of reorganization, the 

pilot was expected to become part of the MFH Development & Underwriting Business Process 

Reengineering/Automated Underwriting Solution project.

b

This project was formerly named Emerging Trends Analysis.

c

This project was formerly named LEAP Recertification.

The NGMS modernization effort is intended to provide an integrated 

system with a seamless view of financial and program data currently 

warehoused in disparate data sources and a new set of monitoring, 

oversight, and software tools directed at ensuring that funds are used to 

assist affordable housing participants and reduce improper payment 

errors.23 In November 2011, the department used contractors to develop 

four prototype software tools aimed at demonstrating anticipated NGMS 

functionality for voucher programs.24 However, in July 2012, the 

department determined that the prototypes that had been developed 

would not address its business needs. As a result, the department 

initiated planning efforts to restructure the modernization effort and 

 

23HUD has been working toward reengineering business models and processes for its 

affordable housing assistance programs since 2004. Specifically, the department 

established initial requirements and a proposal for reengineering business models and 

processes across HUD’s rental housing assistance programs; however, the modernization 

effort was deferred due to competing priorities. After a feasibility study completed in 

November 2009, department officials decided to define requirements before developing a 

system. A business process reengineering effort completed in December 2011 identified 

four functional areas to be further explored through prototypes. 

24The prototypes included the Financial Management, Portfolio Management, and 

Dashboard Releases and Online Recertification. 
 

Page 13 GAO-13-455 HUD Information Technology

expand the scope to include all Public and Indian Housing lines of 

business.

HUD has reported that the aim of the restructured effort is to enhance the 

department’s affordable housing program, improve end-user satisfaction, 

streamline complex business processes, and integrate disparate IT 

systems into a common, modernized platform.25 The department intends 

for NGMS to support efforts to improve HUD’s financial accountability by 

more accurately quantifying budgetary data resources, measuring 

program effectiveness, and justifying the agency’s budget formulations 

and requests. NGMS is expected to help department personnel reduce 

improper payments by identifying anomalies in operating costs, reserves, 

and subsidy payments. Once implemented, NGMS is intended to provide 

staff with a new set of monitoring, oversight, and analysis tools to ensure 

that allocated federal funds are used efficiently to assist affordable 

housing participants. The department is taking an incremental approach 

to developing NGMS and expects to deliver initial functionality by August 

2013. NGMS system and software development projects are designed to 

support four functional areas:

• Financial management: Provide automated processes for budget 

forecasting and formulation and cash management based on real-time 

data that are expected to allow the department to anticipate cash flow 

needs through precise scenarios and disburse funds on the basis of 

project and tenant records, eliminating reconciliations. For example, 

the Budget Forecasting and Formulation project is intended to 

develop a solution that will include forecasting functionality, data 

aggregation, and analytics to support the budget development 

process for Public and Indian Housing programs such as vouchers, 

administrative fees, family self-sufficiency, mainstream vouchers, and 

housing assistance programs. In addition, this functional area is 

expected to migrate data from HUD’s Central Accounting and 

Program system and utilize information gathered from Public Housing 

Authorities regarding subsidized housing programs through an 

interface with the department’s New Core system.

 

25HUD, Exhibit 300 Budget Year 2014: Next Generation Management System 

(Washington, D.C.: April 29, 2013). Exhibit 300s are business cases submitted to the 

Office of Management and Budget as part of the budget process each fiscal year. 
 

Page 14 GAO-13-455 HUD Information Technology

• HUD operations: Provide a single point of access to data and 

information to improve efficiency and reduce administrative burden 

through a New Data Collection system that is expected to replace 

legacy systems (e.g., Public and Indian Housing Information Center) 

and provide new functionality for subsidized housing programs, 

geospatial data on physical housing, real-time occupancy information, 

and energy conservation measures for properties. In the interim, the 

Portfolio and Risk Management Tool project is expected to provide 

aggregated data about Public Housing Authorities through a standard 

business intelligence solution and is expected to expand its use to 

partner operations in the future.

• Partner operations: Expand the department’s operations system to 

provide a web-based single point of access for gathering consistent 

and accurate information from families and landlords to be used in the 

operation of public housing and voucher programs administered by 

Public Housing Authorities.

• Business support: Provide expanded access and use of NGMS IT 

solutions; grant HUD and program participants better access to 

information and technical assistance through a central point of access 

with live help and self-paced guides; and develop the necessary 

infrastructure and processes to enable timely and accurate answers to 

end users’ inquiries.

Overall leadership for NGMS is provided by the General Deputy Assistant 

Secretary for Public and Indian Housing, who is the executive sponsor 

and chair of the modernization effort steering committee. The 

modernization effort also has a project management office that is 

responsible for executing and managing the associated projects. As of 

April 2013, NGMS consisted of six projects, of which five were included in 

our study.26 Table 2 summarizes the NGMS projects that we assessed.

 

26When the department determined that the developed NGMS prototypes would not 

address business needs, we adjusted our study to include Affordable Housing Data 

Architecture and Portfolio and Risk Management Tool, which were two additional projects 

that replaced the prototype efforts. Another project for NGMS—HUDCAPS Migration—had 

not been identified as an active project at the start of our review, nor was it identified in the 

department’s fiscal year 2011 expenditure plan. Thus, this project was not assessed in our 

study. 
 

Page 15 GAO-13-455 HUD Information Technology

Table 2: Summary of Next Generation Management System Projects Included in Our Study

Project name Purpose

Affordable Housing Data Architecture Create a data model for affordable housing programs and serve as the architectural 

foundation for other modernization efforts. 

Budget Forecasting and Formulation Define and develop a tenant-based rental assistance solution to automate the end-to-end 

process of developing precise, targeted budget forecasting scenarios based on timely, 

accurate, and granular data.

Cash Management Provide the ability to disburse funds based on grantee needs supported by near real-time 

data and continuous budget reconciliations.

Integrated Budget Forecasting Model Define and develop a solution to improve budget forecasting and program funds 

management for project-based rental assistance programs and create reliable mechanisms 

to support the end-to-end financial management life cycle from initial budget formulation 

requests to financial closure and reconciliation. 

Portfolio and Risk Management Tool Develop the capability to analyze portfolio performance and risk through a single point of 

access.

Source: GAO analysis of HUD data.

Effective use of project planning and management practices is essential 

for the success of modernization efforts such as those being undertaken 

by HUD. Our prior reviews of federal agencies have shown that, when 

effectively implemented, these practices can significantly increase the 

likelihood of delivering promised capabilities on time and within budget.27

Moreover, project management maturity is dependent on an agency’s 

standardization and institutionalization of such practices. PMI reported in 

its March 2013 annual survey of project management professionals that 

high-performing organizations are almost three times more likely than 

low-performing organizations to use standardized practices throughout 

the organization, and generate better project outcomes.28

To guide the application of best practices, we and others, including PMI 

and SEI at Carnegie Mellon University, have issued reports and 

 

27GAO, Information Technology: FDA Needs to Fully Implement Key Management 

Practices to Lessen Modernization Risks, GAO-12-346 (Washington, D.C.: Mar. 15, 

2012); USDA Systems Modernization: Management and Oversight Improvements Are 

Needed, GAO-11-586 (Washington, D.C.: July 20, 2011); and Office of Personnel 

Management: Retirement Modernization Planning and Management Shortcomings Need 

to Be Addressed, GAO-09-529 (Washington, D.C.: Apr. 21, 2009). 

28PMI, Pulse of the ProfessionTM: The High Cost of Low Performance (Newtown Square, 

Pa.: March 2013). 

Key Practices for 

Modernization Project 

Management
 

Page 16 GAO-13-455 HUD Information Technology

frameworks for effective project management.29 These reports and 

frameworks emphasize practices that include the development of 

essential documentation needed for the execution and management of 

projects in the areas of project planning (charters, work breakdown 

structures, and project management plans), requirements management 

(requirements management plans and traceability matrixes), and 

acquisition planning (acquisition strategies).

• Project planning: This practice helps establish project objectives and 

outline the course of action required to attain those objectives. It also 

provides a means to track, review, and report progress and 

performance of the project by defining project activities and 

developing cost and schedule estimates, among other things. Project 

planning involves, for example, creating a charter to authorize project 

work, developing a work breakdown structure, and establishing 

project management plans that provide processes for measuring 

progress.

• Requirements management: Having a documented strategy for 

developing and managing requirements can help ensure that the final 

product will function as intended. Effective management of 

requirements involves assigning responsibility for them, tracking them, 

and controlling changes to them over the course of the project. It also 

ensures that each requirement traces back to the business need and 

forward to its design and testing. Requirements management 

practices call for the use of requirements management plans to 

provide a mechanism for documenting the process for managing 

requirements and associated traceability matrixes, which are intended 

to facilitate efforts to link requirements to identified business needs to 

help ensure that they will be satisfied by the end product.

• Acquisition planning: Effective IT project management also involves 

creating strategies to serve as the road map for acquisition planning. 

Such road maps are used for early planning of procurements and are 

developed by a project manager. Among other things, acquisition 

 

29SEI, CMMI® for Development; CMMI® for Acquisition; PMI, PMBOK® Guide (see 

footnote 9); GAO-12-120G; GAO-09-3SP; and GAO-04-394G.
 

Page 17 GAO-13-455 HUD Information Technology

strategies should address plans for how projects will manage risks, 

deliverables, and reporting on contractor performance.30

In addition to calling for agencies to apply best practices, federal 

guidance, along with our framework for managing IT investments and our

prior reviews of federal investments,31 outlines the importance of having 

reviews conducted by management at various points throughout a 

project’s life cycle. Such reviews are critical to helping ensure that cost, 

schedule, and performance goals for a project are satisfied, and they can 

provide early detection of risks and problems that could impede progress 

toward those goals. Further, management reviews can help ensure that 

appropriate quality standards are achieved and provide input for areas 

that need improvement.

In order to better manage its modernization efforts, during 2011 HUD 

established new policies and procedures for executing and governing IT 

investments.32 Specifically, in April 2011, the department developed a 

Project Planning and Management (PPM) framework33 to provide 

 

30For the purposes of this report, we use the term “acquisition planning” to refer to 

activities for planning contracts, including practices described in the PMBOK® Guide as 

procurement management (see footnote 9).

31OMB, Memorandum for Chief Information Officers: Information Technology Investment 

Baseline Management Policy, M-10-27 (Washington, D.C.: June 28, 2010); GAO, 

Information Technology: OMB Has Made Improvements to Its Dashboard, but Further 

Work Is Needed by Agencies and OMB to Ensure Data Accuracy, GAO-11-262

(Washington, D.C.: Mar. 15, 2011); Information Technology: OMB and Agencies Need to 

Improve Planning, Management, and Oversight of Projects Totaling Billions of Dollars, 

GAO-08-1051T (Washington, D.C.: July 31, 2008); and GAO-04-394G. 

32HUD’s website provides an overview of the framework and links to documents used to 

manage IT projects. See http://portal.hud.gov/hudportal/HUD/program_offices/cio/ppm, 

accessed May 7, 2013. These policies include the following: HUD, Policy for Information 

Technology Capital Management, Handbook 3420.1, Version 1.1 (Washington, D.C.: July 

14, 2011); Policy for Information Technology Governance, Handbook 3415.1, Version 1.0. 

(Washington, D.C.: July 14, 2011); Policy for Information Technology Strategic Planning, 

Handbook 3425.1, Version 1.1 (Washington, D.C.: July 14, 2011); and Policy for 

Information Technology Management, Handbook 3400.1, Version 1.0 (Washington, D.C.: 

Apr. 22, 2011).

33According to HUD’s fiscal year 2011 expenditure plan, this framework was developed 

using the PMI PMBOK® Guide’s structure and processes. The PMBOK® Guide standards 

include processes, tools, and techniques that may increase the likelihood of managing a 

project toward a successful outcome (see footnote 9).

HUD’s IT Project 

Management Framework 

and Governance Structure
 

Page 18 GAO-13-455 HUD Information Technology

guidance for managing a project’s life cycle in accordance with best 

practices. Using the framework, projects—such as those related to FHA 

Transformation and NGMS modernization efforts—are expected to 

proceed through life-cycle phases that require specific documents to 

demonstrate project activities and outcomes. The framework provides 

guidance through sample templates, with associated instructions and 

checklists that projects can use in developing their documentation. The 

framework also calls for management reviews that are intended to help 

ensure projects are aligned with the department’s architecture and 

technical standards, and that they have developed required information 

before committing resources to the next life-cycle phase. For example, at 

the initiation of a project, among other things, a charter and schedule are 

expected to be developed and approved by a review committee. In 

addition, during a project’s definition phase critical documents, such as a 

project management plan, requirements management plan, requirements 

traceability matrix, and an acquisition strategy, are also expected to be 

developed and approved by a review committee.

In July 2011, HUD also established a governance policy that set forth 

processes, standards, roles, and responsibilities to facilitate decision 

making around investments, stakeholder relationships, project life-cycle 

management, and other important IT operational areas.34 In particular, the 

policy established an IT governance structure consisting of the Executive 

Investment Board, Customer Care Committee, Investment Review 

Subcommittee, and Technical Review Subcommittee. Figure 2 provides a 

simplified depiction of this governance structure.

 

34HUD, HUD Policy for Information Technology Governance, Handbook 3415.1, Version 

1.0 (Washington, D.C.: July 14, 2011). 
 

Page 19 GAO-13-455 HUD Information Technology

Figure 2: HUD’s Governance Structure for IT Investments

According to HUD’s Policy for Information Technology Governance

handbook, these governance bodies have the following composition and 

responsibilities.

• Executive Investment Board: Comprised of senior leaders, including 

the HUD Secretary, Deputy Secretary, and Chief Information Officer, 

with responsibilities for providing strategic direction, managing the IT 

investment portfolio, and overseeing and approving projects that cost 

more than $5 million.

• Customer Care Committee: Comprised of executives, including the 

Chief Information Officer, the Chief Procurement Officer, and deputy 

assistant secretaries, who manage IT investments and perform 

project management oversight by reviewing and submitting 

recommendations to the Executive Investment Board, and 

coordinating with the subcommittees responsible for approving 

projects that cost between $500,000 and $5 million.

• Investment Review Subcommittee: Comprised of business area 

personnel, including representatives designated by deputy assistant 

secretaries, who focus on investment management oversight with 
 

Page 20 GAO-13-455 HUD Information Technology

respect to business cases and budget information for the Office of 

Management and Budget (OMB).

• Technical Review Subcommittee: Comprised of personnel from 

within OCIO, including the Chief Technology Officer, the Chief 

Architect, and the Chief Information Security Officer, with a focus on 

ensuring that the technical architecture is aligned with the 

department’s strategic goals and monitoring IT projects through 

conducting control gate reviews that assess whether all necessary 

documentation has been produced. The subcommittee is also 

responsible for approving projects that cost less than $500,000.

For its FHA Transformation and NGMS modernization efforts, HUD has 

taken initial steps toward applying key project management practices in 

the areas of project planning, requirements management, and acquisition 

planning. However, the department has not yet fully implemented any of 

these practices in managing the 14 projects in our review. In large part, 

these deficiencies can be attributed to inadequate development and use 

of the department’s project management framework and governance 

structure. Without fully implementing these practices and effectively 

developing and using its framework and governance structure, HUD risks 

investing its resources on projects that may not meet critical mission 

needs.

According to the Project Management Institute and the Software 

Engineering Institute, disciplined project management practices call for 

the development of project details such as objectives, scope of work, 

schedules, costs, and requirements against which projects can be 

managed and executed.35 This step can be facilitated by developing 

project artifacts that include, among other things, charters to authorize 

projects and assign responsibility for their execution, work breakdown 

structures to define the work that needs to be done to accomplish project 

objectives, project management plans to define how projects are to be 

executed and controlled, and requirements management plans to 

document the processes and methods to be used for developing and 

managing project requirements. Further, developing requirements 

traceability matrixes that provide linkages between business objectives 

 

35SEI, CMMI® for Acquisition and CMMI® for Development; and PMI, PMBOK® Guide 

(see footnote 9). 

HUD Has Begun 

Applying Key 

Practices for Its 

Modernization Efforts 

but Has Been 

Hindered by 

Inadequacies in Its 

Project Management 

Framework and 

Governance 
 

Page 21 GAO-13-455 HUD Information Technology

and detailed system requirements, and establishing strategies to ensure 

adequate acquisition planning are practices that contribute to effective 

project management. Our prior reviews of federal agencies have shown 

that applying these practices can significantly increase the likelihood of 

delivering promised capabilities on time and within budget.36

HUD had taken initial steps in applying key project management practices 

by developing artifacts, to varying degrees, for the 9 FHA Transformation 

and 5 NGMS modernization efforts in our review. Nevertheless, the 

department lacked information needed for managing and executing the 

projects because the documentation developed did not contain a number 

of essential details that best practices stress as being critical to effectively 

defining a project and measuring its success. In this regard, none of the 

documentation included all of the critical information that could facilitate 

effective project management, such as full descriptions of the work 

necessary to complete the projects, cost and schedule baselines, or 

prioritized requirements.

Table 3 summarizes the key project management practices in the areas 

of project planning (charters, work breakdown structures, and project 

management plans), requirements management (requirements 

management plans and traceability matrixes), and acquisition planning 

(acquisition strategies) for the 14 projects that we assessed. In addition, 

appendix III provides our more detailed assessment against best 

practices.

 

36GAO, GAO-11-586; Information Technology: Opportunities Exist to Improve 

Management of DOD’s Electronic Health Record Initiative, GAO-11-50 (Washington, D.C.: 

Oct. 6, 2010); GAO-09-529; Business Systems Modernization: IRS Needs to Complete 

Recent Efforts to Develop Policies and Procedures to Guide Requirements Development 

and Management, GAO-06-310 (Washington, D.C.: Mar. 20, 2006); and GAO-04-394G. 
 

Page 22 GAO-13-455 HUD Information Technology

Table 3: Summary of Key Project Management Practices for the 14 FHA Transformation and Next Generation Management 

System Projects, as of April 2013

Project Charter

Work 

breakdown 

structure

Project 

management 

plan

Requirements 

management 

plan

Requirements 

traceability 

matrix

Acquisition 

strategy

FHA Transformation

Capital Needs Assessment ◐ ○ ○ ○ ○ ◐

Federal Financial Services Platform ◐ ○ ◐ ◐ ◐ ◐

Healthcare Automated Leader Application 

Pilot

◐ ○ ○ ◐ ○ ◐

Legacy Application Transformation ◐ ○ ◐ ◐ ◐ ◐

Leader Electronic Assessment Portal 

(LEAP) Automation of Lender Approval 

Workflow

◐ ○ ◐ ◐ ◐ ◐

LEAP Institution Manager ◐ ○ ◐ ◐ ◐ ◐

Multifamily Housing (MFH) Development & 

Underwriting Business Process 

Reengineering/Automated Underwriting 

Solution

◐ ○ ◐ ◐ ◐ ◐

MFH Physical Inspections Alignment ◐ ○ ○ ○ ○ ◐

Portfolio Risk Reporting & Analytics ◐ ○ ◐ ◐ ◐ ◐

Next Generation Management System

Affordable Housing Data Architecture ○ ○ ◐ ◐ ○ ◐

Budget Forecasting and Formulation ◐ ◐ ◐ ◐ ◐ ◐

Cash Management ○ ○ ◐ ◐ ○ ◐

Integrated Budget Forecasting Model ◐ ○ ◐ ◐ ◐ ◐

Portfolio and Risk Management Tool ◐ ○ ◐ ◐ ○ ◐

Key: ●: Artifact developed and contained essential information.

◐: Artifact developed but lacked essential information.

○: Artifact not yet developed.

Source: GAO analysis of HUD data.

A project charter formally authorizes a project and identifies high-level 

information that constitutes and assigns responsibility for project success.

According to project management practices, to be effective, a charter 

should include, among other things, a project’s purpose or justification; 

high-level information on such factors as requirements and risks, 

measurable objectives, and related success criteria; a summary schedule 

and budget; project approval requirements (e.g., information on what 

factors will define project success and who will be responsible for final 

sign off at the completion of the project); and names, responsibilities, and 

Most of the Projects Had 

Developed Charters, but 

They Lacked Clear 

Accountability 
 

Page 23 GAO-13-455 HUD Information Technology

authority levels of assigned leadership such as the project manager and 

sponsor.37

Of the 14 projects in our review, all 9 FHA Transformation and 3 of the 

NGMS projects had developed charters that included most of the relevant 

high-level information. For example, all of the charters included such 

information as the project purpose, description, and high-level risks and 

requirements, as well as the names of the assigned project managers. 

Regarding measurable objectives and success criteria, 10 of the projects 

included objectives, while 6 had related success criteria. Lastly, 10 project 

charters included a summary schedule, and 1 included a summary 

budget.

While most of the charters contained high-level information, other 

essential details were not included such as the authority levels of project 

leaders and the requirements for approving the completion of the 

projects. Specifically, while each of the charters generally referenced 

HUD’s PPM framework and the associated governance committees, the 

charters did not explicitly state what results would constitute project 

success (e.g., a specified number of project objectives met) or what 

individuals or entities would be responsible for final sign-off at the 

completion of the project. For example, FHA Transformation’s LEAP 

Institution Manager project charter included the project’s purpose, highlevel risks and requirements, and measurable objectives and related 

criteria. Specifically, the charter noted that, by the end of fiscal year 2014, 

the project would result in the retirement of four systems, eliminating the 

associated costs for operations and maintenance. The charter also 

incorporated a summary schedule and the names of its project manager 

and sponsor. However, while the charter included a total budget figure, it 

did not include details regarding the breakdown of the budget provided, 

the responsibilities and levels of authority given to the manager and 

sponsor identified, and the requirements for approving the completion of 

the projects.

Additionally, the NGMS Integrated Budget Forecasting Model project 

charter provided the project’s purpose, high-level risks and requirements, 

the names of the project sponsors and managers, a summary schedule, 

and measurable objectives with related success criteria. In particular, 

 

37SEI, CMMI® for Acquisition and PMI, PMBOK® Guide (see footnote 9).
 

Page 24 GAO-13-455 HUD Information Technology

regarding the measurable objectives, the charter stated that the project 

would reduce the average time to respond to ad hoc requests for 

budgetary reports and data from 3 days to 1 day. However, while the 

charter referenced the OMB Capital Asset Plan and Business Case 

Summary (Exhibit 300) for a list of associated costs, it did not include a 

summary of the project’s expected budget. This charter also did not 

include the responsibilities and the authority levels of the sponsors and 

managers or the project completion requirements.

FHA Transformation and NGMS officials acknowledged the absence of 

these details in the charters and attributed the deficiencies to the general 

immaturity of the department’s project management practices. Regarding 

the remaining two NGMS projects for which charters had not yet been 

developed, project officials stated in April 2013, that one project was in 

the process of developing a charter, while relevant information for the 

other project was expected to be incorporated into the Budget 

Forecasting and Formulation charter.

In the absence of charters that reflect all of the essential elements, HUD 

lacks clear definitions of what will constitute success for its modernization 

projects and has less ability to hold the responsible officials accountable 

for this success. Moreover, the lack of important details that a charter is 

intended to provide at the initial authorization of a project makes it more 

difficult to undertake other project planning activities, such as developing 

work breakdown structures, project management plans, and 

requirements.

A work breakdown structure is the cornerstone of every project because it 

defines in detail the work necessary to accomplish a project’s objectives 

and provides a basic framework for a variety of related activities like 

estimating costs, developing schedules,38 identifying resources, and 

determining where risks may occur.39 According to best practices, this 

 

38A work breakdown structure should also be used as the outline of the integrated master 

schedule, which includes all activities necessary to complete a program.

39GAO-09-3SP. 

Work Breakdown 

Structures Had Not Been 

Fully Developed
 

Page 25 GAO-13-455 HUD Information Technology

artifact should be a deliverable-oriented40 hierarchical decomposition of 

the work to be executed by the project team to accomplish the project’s 

objectives. Moreover, best practices state that it should represent the 

entire scope of the project and product work, including project 

management, and it should be standardized to enable an organization to 

collect and share data among projects. In addition, it should be 

accompanied by a dictionary that describes in brief narrative form what 

work is to be performed in each of the various work breakdown structure 

elements.41

Of the 9 FHA Transformation and 5 NGMS projects, none had developed 

complete work breakdown structures and associated dictionaries; only 

one NGMS project—Budget Forecasting and Formulation—had a draft 

work breakdown structure and associated dictionary. However, while this 

draft work breakdown structure included details regarding the first 

increment of the project, neither it nor the associated dictionary provided 

details for any of the future planned increments. Thus, it did not reflect the 

entire scope of the project and lacked descriptions of the work that would 

be performed following the first increment, which is expected to deploy 

initial functionality by late summer of 2013. Further, rather than being 

organized by deliverables—that is, unique and verifiable products, results, 

or capabilities—the draft was organized by life-cycle phases such as 

definition and design. As a result, it did not allow for progress to be 

measured by deliverable, which would enable more precise identification 

and effective mitigation of the root causes for any cost or schedule 

overruns. Moreover, developing a deliverable-oriented work breakdown 

structure would show how deliverables relate to one another as well as to 

the overall end product.

According to NGMS officials, plans are under way to fully develop work 

breakdown structures that represent the first and second increments of all 

projects in late spring 2013. Notwithstanding these plans, as of April 

2013, a specific time frame for developing the work breakdown structures 

 

40A deliverable is any unique and verifiable product, result, or capability to perform a 

service that must be produced to complete a process, phase, or project. Deliverables are 

produced as outputs from processes performed to accomplish the project work planned 

and scheduled in the project management plan. Deliverable- or product-oriented means 

that a work breakdown structure’s content should be focused on the deliverables or 

products and not on the processes.

41PMI, PMBOK® Guide (see footnote 9) and GAO-09-3SP. 
 

Page 26 GAO-13-455 HUD Information Technology

and associated dictionaries for the third increment of NGMS projects had 

not yet been determined.

Further, regarding the 9 FHA Transformation projects, in April 2013 

officials stated that a work breakdown structure and dictionary to 

represent the entire modernization effort is being developed. However, 

the department was not able to provide a specific date for when this 

documentation would be completed.

NGMS and FHA Transformation officials stated that work breakdown 

structures were not initially developed for the projects because the PPM 

framework did not require the completion of this artifact. The officials 

added that, in addition to HUD project management practices lacking 

maturity, their staff had not yet developed the expertise required to create 

this artifact.

Until FHA Transformation and NGMS develop deliverable-oriented work 

breakdown structures and associated dictionaries for all of their projects, 

these efforts will lack critical information for understanding the detailed 

work that needs to be performed to accomplish project objectives. 

Further, by not defining the work to be performed, HUD cannot provide 

reasonable assurance that cost and schedule estimates will capture all 

the relevant information needed for the management of these efforts.

According to project management practices, a project management plan 

is the primary source that defines how a project is to be executed and 

controlled.42 Best practices emphasize the importance of having such 

plans in place to, among other things, establish a complete description 

that ties together all project activities and evolves over time to 

continuously reflect the current status and desired end point of the 

project.43 Moreover, these practices state that to be effective, a project 

management plan should identify life-cycle processes to be applied, 

outline plans for project tailoring (i.e., determining what processes and 

documentation would be necessary to accomplish project objectives), 

provide communication techniques to be used, and list management 

reviews. Further, building on the initial summary schedule and budget in 

 

42SEI, CMMI® for Acquisition and PMI, PMBOK® Guide (see footnote 9).

43GAO-11-50; GAO-09-529; and GAO-04-394G. 

Project Management Plans 

Included Important Details 

but Lacked Baselines and 

Management Processes
 

Page 27 GAO-13-455 HUD Information Technology

the charter, the project management plan should include baseline cost 

and schedule estimates developed during planning activities. Moreover, 

this baseline information should be updated as needed and periodically 

compared with actual performance data in order to track and report 

progress. Finally, the plan should include, or make reference to, 

subsidiary management plans that describe how subordinate activities 

are to be carried out for the project.44

Six FHA Transformation and 5 NGMS45 projects had drafted or completed 

project management plans that outlined life-cycle processes, identified 

communication techniques and management reviews, and incorporated 

certain subsidiary management plans. For example, the plan for FHA 

Transformation’s Legacy Application Transformation project included an 

approach for tailoring the life-cycle processes to be used; contained a 

communication table with details about what techniques would be used; 

and described different types of management reviews, including an 

official team review and a structured walkthrough. Similarly, the plan for 

NGMS’s Integrated Budget Forecasting Model project indicated that the 

project was following HUD’s PPM framework, which includes tailoring lifecycle processes; contained communication techniques; and identified 

different types of management reviews, including audit reviews and postproject reviews.

However, the plans provided for the 11 projects lacked other essential 

information. Specifically, they did not clearly identify cost and schedule 

baselines or consistently incorporate subsidiary plans. For example, the 

plan for FHA Transformation’s MFH Development & Underwriting 

Business Process Reengineering/Automated Underwriting Solution 

project listed milestones, such as implementing a solution by July 2013, 

and referenced a total cost of ownership artifact that indicated a cost of 

 

44SEI, CMMI® for Acquisition and PMI, PMBOK® Guide (see footnote 9). According to 

these best practices, baselines are approved plans for a project that are compared to 

actual performance to determine if performance is within acceptable variance thresholds. 

Specific baselines include cost and schedule baselines. Subsidiary management plans 

include, but are not limited to, scope, requirements, schedule, cost, quality, process 

improvement, human resource, communications, risk, and acquisition management plans.

45NGMS developed one project management plan that reflected four of the five projects in 

our study. This plan included details for the Affordable Housing Data Architecture, Budget 

Forecasting and Formulation, Cash Management, and Portfolio and Risk Management 

Tool projects. The remaining project—Integrated Budget Forecasting Model—developed 

its own plan. 
 

Page 28 GAO-13-455 HUD Information Technology

$1.9 million. Yet, the plan did not indicate if these were considered to be 

the project’s schedule and cost baselines against which progress would

be measured. The impact of the lack of clear baselines was evidenced by 

inconsistencies between the project management plan and other project 

documentation. For example, weekly status reports indicated that the 

solution would be implemented by November 2013, rather than by the 

July 2013 date identified in the project management plan. This lack of 

clarity regarding the project’s cost and schedule baseline makes it difficult 

to accurately measure and report progress against commitments made to 

deliver functionality.

In a similar example, the project management plan for NGMS’s Integrated 

Budget Forecasting Model provided project milestones and identified cost 

estimates by life-cycle phase, but it did not specify if these figures 

represented cost or schedule baselines developed as part of planning 

activities. Additionally, the plan that reflected the other 4 NGMS projects 

in our study included subsidiary plans for requirements, scope, schedule, 

cost, quality, human resources, and risk management, but it did not 

incorporate necessary details in the acquisition strategy46 and lacked one 

for process improvement.

According to FHA Transformation and NGMS officials, the project 

management plans did not include cost and schedule baselines, in part, 

because the baseline information had been included in the updates 

provided to OMB. However, including a project’s cost and schedule 

baseline in a project management plan is important because the plan 

serves as a primary source of information used to execute and manage 

the project. In addition, such baseline information provides managers and 

sponsors the foundational basis for measuring project progress. Relying 

on information reported to an external entity such as OMB rather than on 

cost and schedule baselines to manage projects may not allow the project 

manager to have accurate real-time information available when 

responding to stakeholder interests regarding the status of project 

progress. Regarding the incorporation of subsidiary plans, the officials 

stated that these plans were not required by the PPM framework to 

complete control gate reviews and, as a result, were not fully addressed 

in all of the project plans. Further, for the remaining 3 FHA projects that 

 

46For an explanation regarding what details were missing from the acquisition strategy, 

see the discussion for this project in the app. III section on acquisition strategies. 
 

Page 29 GAO-13-455 HUD Information Technology

had not yet developed project management plans, FHA Transformation 

officials said the projects were still completing initial planning activities. In 

accordance with the PPM framework, the projects would be expected to 

develop plans when those activities are completed.

Until FHA Transformation and NGMS have comprehensive project 

management plans that reflect cost and schedule baselines and fully 

incorporate subsidiary plans for process improvement and acquisition 

management, these modernization efforts will continue to lack a 

foundational tool needed for successfully managing their projects and for 

providing stakeholders with insight into the status of the projects.

According to project management practices, effective planning of 

requirements includes documenting the processes and methods to be 

used for developing and managing requirements from initial identification 

through implementation. Such practices state that requirements 

management plans should incorporate the approach for how 

requirements development activities (e.g., collecting requirements) will be 

conducted and how changes will be managed; identify methods for 

prioritizing requirements; and specify the metrics to be used to measure 

products against identified requirements, among other things.47 As we 

previously reported, effective planning for requirements development and 

management activities can reduce the risk of cost overruns, schedule 

delays, and limitations in system functionality.48

Seven of the FHA Transformation and all 5 of the NGMS projects in our 

review had developed requirements management plans that documented 

how requirements development activities would be conducted, including 

managing changes.49 For example, the FHA Transformation’s Healthcare 

Automated Lender Application Pilot project plan outlined processes for 

how changes to requirements would be, among other things, evaluated 

upon submission and analyzed for determining their impact on original 

requirements in order for decisions to be made regarding proposed 

 

47SEI, CMMI® for Acquisition and CMMI® for Development; and PMI, PMBOK® Guide 

(see footnote 9). 

48GAO-06-310. 

49Two of these nine projects—Federal Financial Services Platform and LEAP Automation 

of Lender Approval Workflow—provided the same requirements management plan. 

Requirements Management 

Plans Lacked Details for 

Prioritizing and Measuring 

Requirements
 

Page 30 GAO-13-455 HUD Information Technology

changes. In addition, the NGMS Integrated Budget Forecasting Model 

project plan indicated that requirements would be gathered through 

interviews between the contractor and stakeholders, and provided 

detailed policies and procedures for developing and maintaining 

requirements. However, only 1 of the 12 projects—LEAP Automation of 

Lender Approval Workflow50—identified methods for prioritizing 

requirements, and none of the projects established metrics for 

determining the extent to which the products developed addressed 

requirements. The over 2,400 functional requirements identified for the 

NGMS Budget Forecasting and Formulation project illustrates the 

significance of this point as the lack of prioritization could heighten the 

difficultly developers may face in determining which among the many 

requirements to focus on first.

FHA Transformation and NGMS officials stated that they had followed the 

PPM framework template to develop the requirements management plans 

for their projects. However, they added that the framework did not call for 

prioritization methods to be identified in the requirements management 

plan, and the department’s governance committee responsible for project 

oversight did not provide feedback to indicate that the plans needed to 

include this information. As of late April 2013, according to FHA 

Transformation officials, the remaining 2 projects had not yet developed 

requirements management plans because the projects were still in initial 

planning.

Without establishing methods for prioritizing requirements, the 

department will lack vital information needed to allocate resources in a 

manner which ensures that higher-priority requirements are addressed 

before lower-priority ones. In addition, until metrics for determining how 

products address requirements are established, the department lacks the 

ability to ensure that products will address business needs. As a result of 

these missing details, HUD increases the risk that implemented solutions 

may not effectively support the department’s mission.

 

50While this project identified prioritization methods and applied them to its requirements, 

this prioritization was not reflected in the requirements management plan. 
 

Page 31 GAO-13-455 HUD Information Technology

According to best practices, the development of a requirements 

traceability matrix is intended to link business needs outlined in high-level 

requirements to more detailed requirements. Traceability refers to the 

ability to follow a requirement from origin to implementation and is critical 

to understanding the interconnections and dependencies among the 

individual requirements and the impact when a requirement is changed. 

Requirement matrixes provide tracing to, among other things, business 

needs and the criteria used to evaluate and accept requirements. Further, 

the use of attributes (e.g., a unique identifier, priority level, status, and 

completion date) in the matrix helps define the requirement to facilitate 

traceability.51 As we have reported, establishing and maintaining 

traceability is important for understanding the relationships among 

requirements—from the point at which business requirements are initially 

established through the execution of test cases to validate the resulting 

product.52

Six FHA Transformation projects and 2 NGMS projects had developed 

requirements traceability matrixes to track their requirements. However, 

the eight matrixes that had been developed varied in the extent to which 

project requirements linked detailed functional requirements backwards to 

high-level business needs and forward to implementation. Further, 

attributes intended to allow the original business needs to be traced to 

detailed functional requirements were incomplete or missing. For 

example, the FHA Transformation Portfolio Risk Reporting & Analytics 

project matrix supported traceability of requirements back to higher-level 

business goals and also provided specific attributes such as unique 

identifiers. However, the matrix did not link the high-level requirements 

outlined in the project’s requirements definition documentation to more 

detailed requirements or trace to documentation that described criteria to 

be used for evaluation and acceptance of requirements.

In addition, the NGMS Integrated Budget Forecasting Model matrix 

included requirements that were traced from high-level to more detailed 

requirements and recorded specific attributes such as a unique identifier 

and the current status. However, the matrix did not provide traceability to 

criteria for evaluating and accepting requirements or consistently record 

 

51SEI, CMMI® for Acquisition and CMMI® for Development and PMI, PMBOK® Guide 

(see footnote 9). 

52GAO-11-586 and GAO-06-310. 

Requirements Matrixes 

Provided Limited 

Traceability
 

Page 32 GAO-13-455 HUD Information Technology

accurate information regarding the current status of the requirements. For 

instance, the matrix included two identical requirements, but each stated 

requirement had a different disposition: the information for one 

requirement indicated that it had been “completed” while information for 

the other requirement included a notation of “discontinued,” but without 

any associated dates to clarify which disposition accurately described 

whether the requirement had been implemented. Further, the NGMS 

Budget Forecasting and Formulation project developed a matrix that used 

a unique identifier that allowed traceability from 15 high-level 

requirements to more detailed functional requirements. In addition, these 

requirements and the traceability matrix were approved by the 

appropriate stakeholders. However, the matrix did not document several 

other attributes, including status, or provide traceability to criteria for the 

evaluation and acceptance of these requirements. In particular, the matrix 

did not establish priorities for requirements to aid in ensuring that those of 

highest priority are addressed first.

According to FHA Transformation and NGMS officials, the PPM 

framework guidance was used in creating the matrixes and, in many 

cases, the projects relied on contractors to complete the artifacts. In 

addition, according to these officials, project resources were focused on 

providing the documentation required by the framework and associated 

governance committee. As a result, information that was not explicitly 

identified as being required in an artifact, such as matrixes that 

demonstrate traceability, was not developed. With regard to the remaining 

3 FHA Transformation and 3 NGMS projects, department officials said the 

projects were still completing initial planning activities and had not 

reached a point where requirements had been defined to populate a 

matrix.

The incomplete state of the requirements traceability matrixes makes it 

unclear what mission needs have been addressed by project functional 

requirements and are planned to be implemented in a solution. Without 

fully traceable requirements for each project, the FHA Transformation and 

NGMS modernization efforts are limited in their ability to know whether 

necessary requirements are being implemented or if those being 

implemented support defined business needs.
 

Page 33 GAO-13-455 HUD Information Technology

Best practices also state that effective IT project management involves 

creating a strategy for acquisition planning.53 The strategy should be 

based on the needs of each individual project and can be formal or 

informal, and highly detailed or broadly framed. The strategy should also 

be incorporated as a subsidiary component of the project management 

plan. An acquisition strategy serves as the road map for effective 

acquisition planning and should document the types of contracts to be 

used, address contract risks, determine dates for deliverables, and 

coordinate contracts with other processes, such as scheduling and 

performance reporting. Additionally, the strategy should reflect early 

identification of metrics to be used in managing and evaluating 

contractors to help ensure that business needs are addressed through 

contracted support.54

FHA Transformation and NGMS each developed one acquisition strategy 

that was intended to represent all the projects being undertaken by their 

respective modernization efforts. In addition, while the acquisition strategy 

for NGMS was intended to represent all the projects, one project—

Integrated Budget Forecasting Model—also developed its own individual 

strategy. These three strategies identified the types of contracts (e.g., 

time and materials, firm-fixed price, or interagency agreement) that were 

planned to be awarded for their associated projects. For instance, the 

FHA Transformation strategy stated that indefinite-delivery, indefinitequantity contracts would be awarded and associated task orders would 

be firm-fixed price, time and materials, or labor hour. The NGMS strategy 

stated that it would utilize existing interagency agreements and work with 

small disadvantaged businesses55 for its contract needs. Further, the 

NGMS Integrated Budget Forecasting Model project’s separate 

acquisition strategy identified the type of contract to be used (i.e., blanket 

purchase agreement with firm-fixed price task orders), addressed contract 

risks (e.g., the unavailability of server space), and determined dates for 

 

53For the purposes of this report, we use the term “acquisition planning” to refer to presolicitation activities including practices described in the PMBOK Guide® as procurement 

management (see footnote 9). See the discussion of acquisition strategies included in 

app. III for additional details. 

54PMI, PMBOK® Guide (see footnote 9).

55The 8(a) Business Development Program is managed by the Small Business 

Administration and was established to help small disadvantaged businesses compete in 

the market place. 

Strategies Lacked Details 

for Guiding Project 

Acquisitions 
 

Page 34 GAO-13-455 HUD Information Technology

deliverables (e.g., create and update detailed functional requirements 

between January 20 and February 10, 2011).

Nonetheless, the three strategies did not fully document details needed 

for effective acquisition planning, such as information on how risks would 

be addressed, determining dates for deliverables, coordinating with other 

processes, and identifying metrics needed for evaluating contractors. For 

example, the FHA Transformation acquisition strategy identified dates for 

projects, but did not state how contract dates would be coordinated with 

schedule processes. Moreover, both the NGMS strategy and the 

individual strategy for the Integrated Budget Forecasting Model project 

did not state how other project processes, such as requirements 

development, would be coordinated with acquisitions or identify metrics 

for assessing contractors’ performance.56

FHA Transformation and NGMS officials stated that the strategies 

developed were based on the PPM framework template and that the 

strategies had been approved by the Technical Review Subcommittee, 

which did not identify the deficiencies. Further, while a strategy should 

guide acquisition planning, OCIO officials said the requirement in the 

PPM framework did not call for developing strategies prior to awarding 

contracts.

Without strategies that guide planning activities in order to ensure that 

acquisitions are managed in accordance with other processes and 

provide performance metrics, the department increases the risk that 

acquisitions associated with its modernization efforts will not be effectively 

managed and that acquired services or products will not meet its needs.

 

56Although FHA Transformation and NGMS documents call for regular reporting from 

contractors, the acquisition strategies did not identify metrics for assessing the 

contractors’ performance. 
 

Page 35 GAO-13-455 HUD Information Technology

As previously discussed, HUD’s project management framework and 

associated governance structure was established to provide policies and 

procedures for managing the department’s IT investments. Specifically, 

the framework provides instructions, templates, and checklists intended to 

help ensure important details are incorporated for use during the 

execution and management of project activities. The department’s 

governance structure is responsible for ensuring that all necessary 

documentation is produced for all IT projects through control gate reviews 

conducted by the Technical Review Subcommittee.

Officials responsible for the 9 FHA Transformation and 5 NGMS projects 

in our review stated that they relied on the department’s PPM framework 

to implement project management practices and the artifacts discussed in 

this report. However, guidance discussed in the framework did not always 

include essential information called for by best practices. For example, 

the guidance for developing requirements management plans did not 

specifically direct the projects to identify methods for prioritizing 

requirements. In addition, the projects did not develop strategies early 

enough to guide acquisitions because the framework did not call for the 

strategy to be developed until after projects completed initial planning 

activities.

In other cases, where guidance was provided, FHA Transformation and 

NGMS projects did not always follow the guidance provided or adequately 

implement the tools provided by the framework in developing the 

documentation we examined. This was particularly evident in the 

development of work breakdown structures. For example, the PPM 

guidance included specific details regarding the importance of developing 

work breakdown structures as the basis for defining project work and 

establishing reliable cost and schedule baselines. However, as noted 

earlier, only 1 of the 14 projects in our study had drafted a work 

breakdown structure. Further, the project management plan template and 

guidance call for incorporation of cost and schedule baselines and 

approaches for how those will be managed for any given project. 

However, the project management plans we examined did not clearly 

incorporate such baselines or how they would be managed.

Compounding the issue of inadequate development and use of the 

framework was the lack of evidence that the department’s governance 

bodies had provided adequate oversight to ensure compliance with 

project management practices. In particular, the department’s Technical 

Review Subcommittee did not express concerns regarding the alignment 

of FHA Transformation or NGMS documentation with the framework and, 

Inadequate Development 

and Use of HUD’s Project 

Management Framework 

and Governance 

Contributed to FHA 

Transformation and NGMS 

Weaknesses
 

Page 36 GAO-13-455 HUD Information Technology

when issues were raised, the subcommittee had nonetheless allowed the 

projects to proceed. In doing so, the projects were able to move to the 

next control gate review without critical information—a practice which 

could result in projects proceeding for months without correcting flaws or 

inadequacies in information that was vital to effective project 

management. Specifically, in examining documentation for control gate 

reviews, we found that the Technical Review Subcommittee did not 

consistently operate as intended or use the guidance provided in the 

department’s framework. While the department’s framework outlines 

processes for conducting control gate reviews of projects and provides

templates to be used, the reviews were conducted without using the 

framework guidance. For example, the control gate review procedures 

state that documentation should be assessed based on (1) its accuracy in 

capturing necessary information for the project’s development, (2) its 

completeness with a level of detail sufficient to provide correct and 

relevant information, and (3) the adequacy of information in the artifact to 

make it actionable and informative. The framework also provided a 

decision document intended to capture any issues or concerns identified 

by the subcommittee.

However, it was not evident that any of the control gate reviews 

conducted from 2011 through 2012 had assessed the documentation 

against the outlined criteria or that the decision document was used. For 

example, during this time, none of the control gate review documents 

provided for FHA Transformation and NGMS included an assessment of 

the documentation against the criteria in the control gate review 

procedures, and meeting minutes or e-mails were used to record highlevel issues or concerns identified instead of the more detailed 

information called for in the decision document. According to responsible 

OCIO officials, the subcommittee did not assess compliance with the 

framework, but was focused on reviewing the technical aspects of IT 

projects. The officials also noted that the subcommittee did not have the 

staff needed to fully implement the control gate review guidance included 

in the framework, but that it did look to see if the identified artifacts were 

developed for each project. Further, these officials stated that it was the 

responsibility of the project managers and their teams to address issues 

identified before the next control gate review, but that the subcommittee 

did not enforce any specific deadlines. Based on our assessment of the 

control gate review documentation, as well as interviews with OCIO and

modernization effort officials, it was not clear that the subcommittee 

consistently considered its role to include a full assessment of the 

artifacts for compliance with the framework outlined in control gate review 

guidance and templates. 
 

Page 37 GAO-13-455 HUD Information Technology

According to OCIO officials, the initial implementation of the framework 

focused on attempting to get projects to understand basic project 

management, and as a result, the department limited the focus of the first 

version of the framework. In April 2013, the department reported that it 

was working on a revised version of the framework that would be 

released in September 2013. However, the preliminary information 

provided regarding the revisions planned for the framework did not 

incorporate information to address all the deficiencies identified by project 

officials or highlighted in this report. For example, draft documents 

regarding the planned revisions did not explicitly state whether work 

breakdown structures and associate dictionaries would be required 

documentation to serve as the basis of cost and schedule baselines. 

Further, the preliminary information did not specify if methods for 

prioritizing requirements are to be incorporated into the requirements 

guidance. Additionally, as of February 2013, the department had 

assigned new leadership for managing the control gate reviews. 

According to this official, the control gates are expected to be revised to 

ensure that artifacts are evaluated and that the subcommittee takes a 

more active role in assessing the application of project management 

practices. However, the department did not state if it would clarify the 

Technical Review Subcommittee’s role or associated guidance outlined in 

the PPM framework or identify time lines for implementing the anticipated 

changes.

Until HUD has a PPM framework for managing its projects that 

incorporates the abovementioned details, including clarifying the role of 

the Technical Review Subcommittee, and is appropriately used in 

managing its modernization efforts, the department increases the risk of 

continuing to inadequately apply project management practices and will 

not be positioned to effectively manage or report progress of its 

modernization efforts.

HUD has taken steps toward applying best practices by establishing a 

framework for standardizing project management, and to varying 

degrees, the FHA Transformation and NGMS modernization efforts have 

developed basic documentation in the areas of project planning, 

requirements management, and acquisition planning. Notwithstanding 

these initial actions, the limited extent to which its modernization efforts 

implemented key practices in these areas puts its projects at an 

increased risk of failure. Specifically, the absence of complete information 

in foundational documentation intended to guide these efforts—such as 

project charters that define project success, deliverable-oriented work 

Conclusions 
 

Page 38 GAO-13-455 HUD Information Technology

breakdown structures that detail the work needed to be accomplished, 

project management plans that include cost and schedule baselines, 

requirements management plans that provide methods for prioritizing 

requirements, traceable requirements to desired capabilities, and sound 

acquisition strategies that guide planning activities—means that HUD has 

not taken the steps to fully define its modernization efforts in terms of 

what they will accomplish, what steps are necessary to complete them, 

what they will cost, when they will be completed, what specific 

functionality is needed to meet their goals, and how contractors will be 

held accountable for performance. This indicates that, despite the steps 

that have been taken, the maturity of HUD’s project management 

practices does not sufficiently position the department to successfully 

carry out these efforts.

Contributing to these deficiencies is that the department has not 

developed and used its project management framework in a manner that 

ensured the quality or completeness of project management 

documentation. Additionally, the lack of adequate oversight from the 

Technical Review Subcommittee resulted in projects not fully 

understanding how to develop complete artifacts. Until it addresses these 

weaknesses in applying project management practices, HUD may 

continue to invest resources in modernization projects that will not satisfy 

business needs and support its mission. Moreover, fully implementing 

effective project management practices is critical not only for the success 

of these modernization efforts, but also for that of the other five IT 

Transformation Initiatives or any other projects under way or undertaken 

in the future.

To ensure that HUD effectively and efficiently manages its modernization 

efforts aimed at improving its IT environment to support mission needs, 

we recommend that the Secretary of Housing and Urban Development 

direct the Deputy Secretary to establish a plan of action that identifies 

specific time frames for correcting the deficiencies highlighted in this 

report for both its ongoing projects, as applicable, and its planned 

projects, to include

• developing charters that define what constitutes project success and 

establish accountability,

• finalizing deliverable-oriented work breakdown structures and 

associated dictionaries that define the detailed work needed to 

accomplish project objectives,

Recommendations for 

Executive Action
 

Page 39 GAO-13-455 HUD Information Technology

• completing comprehensive project management plans that reflect cost 

and schedule baselines and fully incorporate subsidiary management 

plans,

• establishing requirements management plans that include 

prioritization methods to be applied and metrics for determining how 

products address requirements,

• completing matrixes to include requirements traceability from mission 

needs through implementation, and

• establishing strategies to guide how acquisitions are managed in 

accordance with other processes and that performance metrics are 

established.

Further, to improve development and use of the department’s project 

management framework, we recommend that the Secretary direct

• the FHA Transformation and NGMS steering committees to ensure 

that project management expertise needed to apply the guidance 

outlined in the framework is provided to execute and manage their 

respective projects; 

• the Chief Information Officer to ensure that revisions to the framework 

incorporate specific information to address the areas of deficiency in 

project planning, requirements management, and acquisition planning 

identified in this report; and

• the Customer Care Committee to review the role and responsibilities 

of the Technical Review Subcommittee and ensure that the 

department’s governance structure operates as intended and 

adequately oversees the management of all of its modernization 

efforts.

We provided a draft of this report to HUD for review. In response, HUD 

provided a letter, signed by the Acting Chief Information Officer, which 

included a chart containing the department’s written comments on the 

draft report. In the chart, the department outlined its views related to our 

four recommendations, and provided other comments and technical 

corrections on information in specific sections of the draft report, including 

the background and appendix I, our discussion of the findings on the 

development and use of HUD’s project management framework, and the 

report title page. The department’s comments are reprinted in their 

entirety in appendix IV. 

In commenting on our recommendations, the department discussed 

actions it was taking on various aspects of the first recommendation, but 

Agency Comments 

and Our Evaluation
 

Page 40 GAO-13-455 HUD Information Technology

did not state whether or not it concurred with the entirety of the 

recommendation; stated that our conclusion leading to the second

recommendation did not follow from the premises established in the draft 

report; and concurred with our third and fourth recommendations. 

Summaries of HUD’s comments for each recommendation, along with our 

responses, follow. 

• With regard to the first recommendation—which called for the Deputy 

Secretary to establish a plan of action that identifies specific time 

frames for correcting the deficiencies highlighted in this report for both 

of its ongoing projects, as applicable, and its planned projects—the 

department noted activities that FHA Transformation expects to 

undertake in addressing the deficiencies for the six specific items 

listed as part of this recommendation. In this regard, the department 

stated that FHA Transformation acknowledged the need to update 

project charters and project management plans, develop deliverableoriented work breakdown structures, examine and correct the 

requirements management plans and traceability matrixes, and work 

with support offices to ensure acquisition planning occurs at the 

earliest possible opportunity in the project’s life cycle. The department 

added that FHA Transformation had recognized the need to update its

charters and project management plans well ahead of our draft report. 

Nonetheless, updated artifacts for FHA Transformation were not 

provided during our review. Moreover, the department did not address

whether or how it intends to address deficiencies for its ongoing or 

planned projects, including those associated with the NGMS 

modernization effort. Accordingly, we maintain that it is important for 

HUD to establish a plan of action that identifies specific time frames 

for addressing the deficiencies in its IT projects. As acknowledged in 

the department’s comments, efforts to improve these project 

management practices could be applied to the other five IT 

Transformation Initiatives or any other projects under way or 

undertaken in the future. 

• For our second recommendation, which called for the FHA 

Transformation and NGMS steering committees to ensure that project 

management expertise needed to apply the guidance outlined in the 

framework is provided to execute and manage their respective 

projects, the department contended that our conclusion leading to this 

recommendation did not follow from the premises established in the 

report. The department stated that it has ample talent and that 

providing additional talent would likely yield similar results regarding 

its deficiencies until the underlying steps are taken to apply effective 

project management practices. 
 

Page 41 GAO-13-455 HUD Information Technology

We agree that applying effective project management practices is 

important; however, in our view, it is essential for the FHA 

Transformation and NGMS steering committees to ensure that their 

respective modernization efforts have the expertise needed to do so, 

as it pertains to the development of tools such as work breakdown 

structures and requirements traceability matrixes. During our study, 

department officials stated on multiple occasions, that certain artifacts 

and practices were not implemented because staff lacked expertise in 

these areas. For example, both FHA Transformation and NGMS

officials stated that their staff had not developed the expertise 

required to create work breakdown structures. Similarly, these officials 

stated that projects had relied on contractors to complete 

requirements traceability matrixes. Additionally, as we noted, the 

officials acknowledged that a lack of project management maturity 

was the cause of many of the deficiencies identified. Moreover, in its 

comments on this report, the department stated that staff training for 

the transition to applying the framework was limited. Thus, for these 

reasons, we believe our recommendation is valid and should be 

implemented.

• The department concurred with our third recommendation that the 

Chief Information Officer ensure that revisions to the framework 

incorporate specific information to address the areas of deficiency in 

project planning, requirements management, and acquisition planning 

identified in this report. 

• In commenting on the fourth recommendation, the department 

concurred with the need for the Customer Care Committee to review 

the role and responsibilities of the Technical Review Subcommittee 

and ensure that the department’s governance structure operates as 

intended and adequately oversees the management of its 

modernization efforts. 

In other comments, the department stated that the discussion of the 

department’s project management framework did not recognize the 

difficulty of implementing this framework over the past 2 years. It stressed 

that tremendous effort had been made by the FHA Transformation and 

NGMS modernization efforts toward applying the framework while 

continuing to make progress on their related projects. It also stated that 

time is needed to fully incorporate the framework throughout the 

department on projects other than these modernization efforts. 

• Acknowledging that the department has continued to take actions to 

improve its environment, the focus of our work for this report was on 
 

Page 42 GAO-13-455 HUD Information Technology

the implementation of project management practices for FHA 

Transformation and NGMS, specifically. As such, we did not assess 

the difficulties associated with improving the department’s overall 

capacity to manage its IT projects. We do agree that there are 

difficulties associated with applying project management practices 

while concurrently undertaking multiple modernization efforts and 

have previously reported on the progress HUD has made in 

addressing its limited capacity to manage and modernize its IT 

environment.57

• Regarding the title page, HUD commented that modernization efforts 

historically account for a relatively small percentage of IT projects at 

the department, and that a more comprehensive perspective that 

accounts for all IT investments should be considered in the title of our 

report. Our objective for this report was specifically to identify the 

extent to which key project management practices were implemented 

for the FHA Transformation and NGMS modernization efforts. As 

such, this report did not evaluate all of the department’s IT 

investments. However, in this report, we do acknowledge the value of 

HUD applying these practices to all of its IT projects and moreover, 

we plan to undertake future work to evaluate the department’s 

institutionalization of its IT governance that we anticipate will be more 

comprehensive in assessing the department’s management of IT 

investments.

• Lastly, the department stated that the report should contain historical 

information illustrating the distribution of modernization funding in 

contrast to funding available for the operation and maintenance of IT. 

Toward this end, we assessed all relevant data that the department 

provided to us regarding its IT funding against the data that it reported 

to OMB. However, we found these data to lack consistency and 

concluded they were not sufficiently reliable for inclusion in our report. 

With respect to HUD’s technical corrections on the draft report, we have 

incorporated revisions, as appropriate. Specifically, in the background 

section and appendix I, we included a footnote to clarify that the Office of 

Program Systems Management is within the Office of Housing/FHA Office 

of Multifamily Housing Programs. We also updated the report section that 

discussed the development and use of HUD’s project management 

 

57GAO-12-580T; GAO-11-762; GAO-11-72; and GAO-09-675. 
 

Page 43 GAO-13-455 HUD Information Technology

framework by removing the specific reference to the Deputy Chief 

Information Officer for IT Operations. In this same section, the department 

stated that OCIO did not concur with statements attributed to officials 

from the Technical Review Subcommittee. We modified the statements 

and the attribution in that section to represent more specifically what the 

officials stated. In doing so, we also further clarified the activities 

conducted by members of the Technical Review Subcommittee and 

comments provided by officials from the two modernization efforts.

We are sending copies of this report to interested congressional 

committees. We are also sending copies to the Secretary of the 

Department of Housing and Urban Development and the Director of the 

Office of Management and Budget. Copies of this report will also be 

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 (202) 512-6304 or melvinv@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 significant contributions to this 

report are acknowledged in appendix IV.

Valerie C. Melvin

Director, Information Management and

 Technology Resources Issues
Appendix I: Objective, Scope, and 

Methodology

Page 44 GAO-13-455 HUD Information Technology

Our objective was to identify the extent to which the Department of 

Housing and Urban Development (HUD) has implemented key project 

management practices for the Federal Housing Administration 

Transformation Initiative (FHA Transformation) and the Next Generation 

Management System (NGMS) modernization efforts. To address this 

objective, we examined all 14 projects for FHA Transformation and 

NGMS that had been identified in the department’s fiscal year 2011 

expenditure plan.1 This included 9 FHA Transformation and 5 NGMS 

projects, which are identified in tables 1 and 2 of this report.

Because HUD recently began implementing project management 

practices for its information technology (IT) modernization projects, we 

reviewed the implementation of practices during the initial phases of the 

projects’ life cycles; these practices establish the foundational plans and 

processes for managing projects throughout their life cycles. Specifically, 

we reviewed project planning and management practices essential for the 

success of modernization efforts in three areas: project planning, 

requirements management, and acquisition planning. We identified best 

practices in these areas included in the Project Management Institute’s 

(PMI) A Guide to the Project Management Body of Knowledge (PMBOK® 

Guide), the Software Engineering Institute’s (SEI) Capability Maturity 

Model® Integration for Development (CMMI-DEV) and for Acquisition

(CMMI-ACQ), and GAO’s Cost Estimating and Assessment Guide (Cost 

Guide).2

 

1

Since the start of our review, FHA Transformation and NGMS identified two additional 

projects—Loan Review and HUDCAPS Migration—that were not in the fiscal year 2011 

expenditure plan. Thus, these projects were not assessed in our study. In addition, when 

the department determined that the developed NGMS prototypes would not address 

business needs, we adjusted our study to include Affordable Housing Data Architecture 

and Portfolio and Risk Management Tool, which were two additional projects that replaced 

the prototype efforts. 

2

These best practices are identified in the Software Engineering Institute/Carnegie Mellon, 

CMMI for Development, Version 1.3, CMU/SEI-2010-TR-033 (Hanscomb AFB, Mass.: 

November 2010) and CMMI® for Acquisition, Version 1.3, CMU/SEI-2010-TR-032 

(Pittsburgh, Pa.: November 2010); Project Management Institute: A Guide to the Project 

Management Body of Knowledge (PMBOK® Guide), Fourth Edition, Project Management 

Institute, Inc. (PMI), 2008, copyright and all rights reserved (material from this publication 

has been reproduced with the permission of PMI); and previously issued GAO reports and 

guidance, including GAO, Best Practices for Project Schedules—Exposure Draft, 

GAO-12-120G (Washington, D.C.: May 30, 2012); and Cost Estimating and Assessment 

Guide: Best Practices for Developing and Managing Capital Program Costs, GAO-09-3SP

(Washington D.C.: Mar. 2, 2009). 

Appendix I: Objective, Scope, and 

Methodology 
Appendix I: Objective, Scope, and 

Methodology

Page 45 GAO-13-455 HUD Information Technology

For the 14 projects in our study, we assessed the three project 

management areas by reviewing six relevant documents to determine 

whether they contained essential information called for by best practices. 

Our assessment evaluated to what extent these documents (1) were 

developed and contained essential information, (2) were developed but 

lacked essential information, or (3) had not yet been developed. 

Specifically:

• To assess project planning activities, we determined whether projects 

had developed project charters, work breakdown structures, and 

project management plans, and when they had, we compared the 

contents of these documents with project management practices in 

order to determine the extent to which critical elements were 

incorporated or executed on the projects. Specifically, we assessed 

whether project charters addressed important elements such as the 

project purpose or justification, the project manager’s responsibility 

and authority level, and the name and responsibility of the project 

sponsor. We assessed whether the work breakdown structures were 

deliverable-oriented hierarchical decompositions of the work to be 

executed and had associated dictionaries. Finally, we assessed 

whether project management plans addressed important elements 

such as the project life cycle, results of project tailoring, cost and 

schedule baselines, and subsidiary management plans.

• To assess requirements management, we determined whether 

projects had developed requirements management plans and 

requirements traceability matrixes, and when they had, we compared 

the contents of these documents with best practices in order to 

determine the extent to which each program was applying specific 

elements. Specifically, we assessed whether requirements 

management plans addressed important elements such as 

configuration management activities, methods used to prioritize 

requirements, metrics, and a traceability structure. In addition, we 

assessed whether requirements identified in matrixes were, among 

other things, traceable to business needs, opportunities, goals, and 

objectives and whether the matrixes included essential information 

such as requirements change requests and status.

• To assess acquisition planning, we determined whether the 

modernization initiatives had developed acquisition strategies and, 

when they had, compared the contents of these documents with key 

practices to determine the actions HUD is taking to ensure that the 

acquisitions for FHA Transformation and NGMS are planned in 

accordance with best practices and guidance. Specifically, we 
Appendix I: Objective, Scope, and 

Methodology

Page 46 GAO-13-455 HUD Information Technology

assessed whether acquisition strategies addressed important 

elements such as the established dates for the contract deliverables, 

and procurement metrics.

We interviewed relevant HUD officials and staff in the FHA 

Transformation and NGMS project offices, including the General Deputy 

Assistant Secretary for Public and Indian Housing, the Director for the 

Office of Program Systems and Management,3 the Deputy Director of 

FHA Transformation, and the NGMS Program Manager. In addition, we 

interviewed officials from the department’s Chief Procurement Office, 

including the Deputy Chief Procurement Officer, and the Office of the 

Chief Information Officer, including the Acting Deputy Chief Information 

Officer for Business and IT Modernization, to obtain information on how 

these offices support the work of the two modernization efforts. Further, 

we attended and observed project status meetings, and related review 

sessions conducted by senior leadership, including HUD’s Deputy 

Secretary.

We determined that information provided by the department, such as 

work breakdown structures and requirements traceability matrixes, was 

sufficiently reliable for the purposes of our review. To arrive at this 

assessment, we conducted reliability testing by comparing information 

with statements from relevant department officials to identify 

discrepancies. However, we did not test the quality of certain information, 

such as cost and schedule data provided by the program offices. 

We conducted this performance audit from June 2012 to June 2013, 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 objective. We believe that 

the evidence obtained provided a reasonable basis for findings and 

conclusions based on our audit objective.

 

3

The Office of Program Systems Management is responsible for developing and 

enhancing the automated systems that support multifamily programs and for coordinating 

funding for multifamily systems contracts. This office is within the Office of Housing/FHA 

Office of Multifamily Housing Programs, which is responsible for the overall management, 

development, direction, and administration of the department’s multifamily housing 

programs. 
Appendix II: Summary of HUD’s 

Transformation Initiative Information 

Technology Modernization Efforts

Page 47 GAO-13-455 HUD Information Technology

Table 4: HUD’s Seven Transformation Initiative IT Modernization Efforts

Name Description

Federal Housing Administration (FHA) 

Transformation

Develop and implement a modern financial services IT environment to better manage 

and mitigate risk across FHA’s insurance programs for single-family housing, multifamily 

housing, and the insured healthcare portfolio.

Homeless Emergency Assistance and 

Rapid Transition to Housing and eGrants 

Management Implementation

Reengineer processes and implement an automated system for managing grants that will 

reduce application time, eliminate manual paper processes, and increase the 

transparency of grant management information.

HUD Agency-Wide Place-Based 

Performance Management System 

Provide business intelligence and geospatial tools for documenting and assessing 

progress toward achieving strategic goals that will enhance transparency, reduce 

workload, increase employee productivity, and improve data quality.

Human Resources End-to-End Integrate human resources systems and tools to allow for automated recruitment and 

hiring documentation, reduction of manual data entry, and accelerated candidate 

decision making.

HUD Integrated Acquisition Management 

System 

Integrate an acquisition management system that is compliant with federal regulations to 

reduce inefficiencies, time, and duplication in the procurement process across office 

locations to expedite services rendered to the public. 

New Core Financial System Modernize and replace financial management systems through an outsourced shared 

services provider.

Next Generation Management System Reengineer management processes to establish a technical infrastructure that will 

integrate disparate systems and provide consistent information in order to support rental 

housing assistance services. 

Source: GAO analysis of HUD data.

Appendix II: Summary of HUD’s 

Transformation Initiative Information 

Technology Modernization Efforts
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 48 GAO-13-455 HUD Information Technology

Our assessment of FHA Transformation and NGMS implementation of 

key project management documentation1 in the areas of project planning 

(charters, work breakdown structures, and project management plans), 

requirements management (requirements management plans and 

traceability matrixes) and acquisition planning (acquisition strategies) is 

described below.

Best practices recognize the development of a project charter as an 

integral step in project planning for establishing and maintaining project 

teams. A charter formally authorizes a project and identifies high-level 

information that constitutes and assigns responsibility for project success. 

This is a critical artifact for creating project management plans, 

documenting business needs, and outlining the result a project is 

intended to achieve. Specifically, to be effective, project management 

practices state that a charter should include

• the project’s purpose or justification;

• high-level requirements;

• high-level project description;

• high-level risks;

• measurable objectives and related success criteria;

• summary milestone schedule;

• summary budget;

• project approval requirements (e.g., what results in project success 

and who is responsible for final sign off);

• assigned project manager, responsibility and authority level; and

• the name and authority of the sponsor or other person(s) authorizing 

the project charter.2

 

1

SEI, CMMI® for Development; CMMI® for Acquisition; PMI, PMBOK® Guide (see 

footnote 2); GAO-12-120G; and GAO-09-3SP.

2

SEI, CMMI® for Acquisition and PMI, PMBOK® Guide (see footnote 2).

Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation 

Project Charters
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 49 GAO-13-455 HUD Information Technology

Table 5: Assessment of FHA Transformation and NGMS Project Charters

Name Assessment Explanation

FHA Transformation 

Capital Needs Assessment Developed, but lacks 

essential information 

Details regarding the project’s purpose, high-level requirements, highlevel description, high-level risks, measurable project objectives, a 

summary schedule, a summary budget, and the names of the project 

sponsors and project managers were included in the charter. For 

example, the ability for any agency using the Capital Needs Assessment 

tool to exercise its own discretion to waive or modify the tool requirements 

for very small properties was included as a high-level requirement. 

However, while the charter included measurable project objectives, it did 

not identify related success criteria or include information regarding 

project approval requirements or the roles and responsibilities of the 

project sponsor and manager. For instance, while the charter listed the 

name and role of the two sponsors and two project managers, it did not 

include the responsibilities for these individuals or their levels of authority 

relative to the project. 

Federal Financial Services 

Platform 

Developed, but lacks 

essential information

The charter included a description of the project’s purpose, high-level 

requirements, a high-level project description, high-level risks, measurable 

objectives and related success criteria, and the name of the assigned 

project manager. For example, the charter stated that one high-level 

requirement would be to provide loan origination and endorsement. 

However, the charter did not include a summary schedule, a summary 

budget, project approval requirements, assigned project manager 

responsibilities and authority level, and the name and authority level of the 

project sponsor. For example, the charter referenced cost data provided 

to the Office of Management and Budget (OMB) for the overall FHA 

Transformation Initiative, but did not include budget information for this 

project, such as the breakdown of costs for hardware, software, and 

installation. According to project officials, this charter was also considered 

the charter for the LEAP Automation of Lender Approval Workflow project.

Lender Electronic Assessment 

Portal (LEAP) Automation of 

Lender Approval Workflow

Healthcare Automated Lender 

Application Pilot 

Developed, but lacks 

essential information 

The charter listed the project’s purpose, high-level requirements, a highlevel project description, high-level risks, measurable project objectives, a 

summary schedule, and the names of the project sponsor and project 

managers. However, while the charter identified measurable project 

objectives, it did not include related success criteria. In addition, the 

charter included a total budget figure, but it did not provide details 

regarding the breakdown of those funds. For example, the charter stated 

that the total budget estimated was $500,000, but this number was not 

accompanied by a breakdown of how those funds would be applied 

toward the pilot. The charter also did not identify project approval 

requirements or the authority of the project sponsor or project manager. 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 50 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Legacy Application 

Transformation 

Developed, but lacks 

essential information

The charter contained high-level information regarding the project’s 

purpose, requirements, description, and risks, a summary schedule, and 

the names of the project sponsor and the project managers. For example, 

a delay in the procurement of tools and services was listed as a high risk 

that might affect the project schedule. However, the charter did not 

include measurable objectives and related success criteria. For example, 

the charter stated that an objective was to implement and deploy a risk 

and fraud tool that meets FHA requirements and provides initial reporting 

and analysis capabilities, but did not include metrics or details for 

determining what specific FHA requirements would be satisfied. While the 

charter also included a total budget figure, it did not provide details 

regarding the breakdown of those funds. Further, the charter did not 

incorporate project approval requirements, the detailed responsibilities 

and authority level of the project managers, or the authority level of the 

project sponsor. 

LEAP Institution Manager Developed, but lacks 

essential information 

The charter included the project’s purpose, high-level requirements, highlevel description, high-level risks, and measureable objectives and related 

criteria. For example, the charter noted that by the end of fiscal year 2014 

the project would result in the retirement of four systems, eliminating the 

associated cost for operations and maintenance. The charter also 

incorporated a summary schedule, and the names of the project sponsor 

and project manager. However, while the charter included a total budget 

figure, it did not include details regarding the breakdown of the total 

budget provided, project approval requirements, detailed responsibilities 

of the project manager, or the authority levels of the project sponsor and 

project manager. 

Multifamily Housing (MFH) 

Development & Underwriting 

Business Process 

Reengineering/Automated 

Underwriting Solution

Developed, but lacks 

essential information 

The project’s purpose, high-level requirements, description, high-level 

risks, measurable project objectives and related success criteria, a 

summary schedule and its project manager and sponsor names, 

responsibilities, and authority levels were included in the charter. For 

example, the charter stated that the technical solution would be 

implemented by July 31, 2013, and included various interim dates. 

However, while the charter also referenced several other documents for 

the costs associated with the project, our review of these documents 

identified two estimated costs—$6 million and $13 million—making the 

actual budget for the project unclear. The charter also did not incorporate 

project approval requirements.

MFH Physical Inspections 

Alignment 

Developed, but lacks 

essential information 

The charter incorporated details regarding the project’s purpose, highlevel requirements, description, risks, schedule, and the names of the 

project sponsor and project managers. For example, it stated that the 

project would begin March 1, 2012, with final system implementation 

estimated to be 8 months after contract award. However, while the charter 

identified measurable project objectives, it did not include related success 

criteria. In addition, the charter stated that the cost estimate was $1.8 

million, but it did not provide a summary budget detailing the way these 

funds would be used or describe project approval requirements, detailed 

responsibilities of the project managers, or the authority levels of the 

project managers and the project sponsor. 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 51 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Portfolio Risk Reporting & 

Analytics 

Developed, but lacks 

essential information 

The project’s purpose, high-level requirements, description, high-level 

risks, objectives, summary schedule, and the names of the project 

sponsor and the project managers were included in the charter. For 

example, the solution’s ability to be run on-demand with data refreshed 

monthly was listed as a high-level requirement. However, although the 

charter included various objectives such as providing structured reports 

that would allow FHA leadership to make proactive risk- and policy-based 

decisions, it did not provide related success criteria. For instance, the 

charter did not state what quality level these reports would need to have in 

order for them to be deemed successful in providing essential information 

for decision making. Similarly, the charter included a total budget figure, 

but it did not provide details regarding the breakdown of those funds. In 

addition, the charter did not include project approval requirements or 

detailed responsibilities of the project managers or the authority levels of 

the project sponsor or project managers. 

NGMS

Affordable Housing Data 

Architecture 

Not yet developed As of April 2013, this project had not yet completed a charter. According 

to NGMS officials, a charter for this project is expected to be developed in 

late spring.

Budget Forecasting and 

Formulation

Developed, but lacks 

essential information 

Details regarding the project’s purpose, high-level requirements, 

description, high-level risks, measurable objectives with related success 

criteria, schedule, and the names of project sponsors and managers were 

included in the charter. For example, the schedule that was included in 

the charter stated that system deployment would be in September 2013, 

with interim milestones such as designing the system in June 2013. 

However, the charter did not include a summary budget, project approval 

requirements, the responsibilities of the project managers, or the authority 

levels of the sponsors and managers. For example, the charter indicated 

that its budget estimate was not yet available. 

Cash Management Not yet developed As of April 2013, this project had not yet completed a charter. According 

to NGMS officials, a charter for this project is expected to be developed in 

late spring.

Integrated Budget Forecasting 

Model

Developed, but lacks 

essential information

The charter provided the project’s purpose, high-level requirements, highlevel description, high-level risks, measurable objectives with related 

success criteria, a summary schedule, and the names of the project 

sponsors and managers. For example, the charter stated that the project 

would reduce the average time to respond to ad hoc requests for 

budgetary reports and data from 3 days to 1 day. However, the charter did 

not include a summary budget, project approval requirements, the 

responsibilities of the managers, or the authority levels of the sponsors 

and managers. For example, it referenced OMB’s Capital Asset Plan and 

Business Case Summary (Exhibit 300) for a list of associated costs, but 

did not include a summary of the project’s expected budget. 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 52 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Portfolio and Risk Management 

Tool

Developed, but lacks 

essential information

The project’s charter provided the purpose, high-level requirements, 

description, high-level risks, a summary schedule, as well as the names of 

the project sponsor and managers. For example, the charter indicated that 

the purpose of the project would be to provide a single access point where 

users can access, analyze, and interpret all major program performance 

indicators for all Public and Indian Housing programs. However, the 

charter did not include measurable objectives and related success criteria, 

and while a summary budget was provided, it did not include costs 

beyond requirements development and contractor development. Further, 

the charter did not discuss project approval requirements, the 

responsibilities of the managers, or the authority levels of the sponsor and 

managers.

Source: GAO analysis of HUD data.

According to best practices, a work breakdown structure is the 

cornerstone of every project because it defines in detail the work 

necessary to accomplish a project’s objectives and provides a basic 

framework for a variety of related activities like estimating costs, 

developing schedules,3 identifying resources, and determining where 

risks may occur. In the context of the work breakdown structure, work 

refers to work products or deliverables that are the result of effort and not 

to the effort itself. Creating a work breakdown structure involves 

subdividing (or decomposing) project deliverables and work into smaller, 

more manageable components (called work packages) that can be 

scheduled, cost estimated, and managed.4 According to best practices, 

the work breakdown structure is a deliverable-oriented5 hierarchical 

decomposition of the work to be executed by the project team to 

accomplish the project’s objectives and create the required deliverables. 

Further, these practices state that a work breakdown structure should 

 

3

A work breakdown structure should also be used as the outline of the integrated master 

schedule, which includes all activities necessary to complete a project.

4

PMI’s Practice Standard for Work Breakdown Structures provides guidance and example 

work breakdown structure templates that can be tailored to specific projects. In addition, 

GAO-09-3SP also provides a checklist of best practices for developing a work breakdown 

structure and includes case studies of agencies GAO has reviewed. 

5

A deliverable is any unique and verifiable product, result, or capability to perform a 

service that must be produced to complete a process, phase, or project. Deliverables are 

produced as outputs from processes performed to accomplish the project work planned 

and scheduled in the project management plan. Deliverable- or product-oriented means 

that a work breakdown structure’s content should be focused on the deliverables or 

products and not on the processes.

Work Breakdown 

Structures 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 53 GAO-13-455 HUD Information Technology

also represent the entire scope of the project and product work, including 

project management, and it should be standardized to enable an 

organization to collect and share data among projects. In addition, it 

should be accompanied by a dictionary of the various work breakdown 

structure elements that describes in brief narrative form what work is to 

be performed in each element.6

Table 6: Assessment of FHA Transformation and NGMS Work Breakdown Structures

Name Assessment Explanation

FHA Transformation 

Capital Needs Assessment Not yet developed As of April 2013, a work breakdown structure and associated dictionary had 

not been developed for any of the FHA Transformation projects. According to 

FHA Transformation officials, plans are under way to create a work 

breakdown structure for the entire modernization effort; however, a specific 

date for doing so had not yet been determined.

Federal Financial Services 

Platform

Healthcare Automated Lender 

Application Pilot 

Legacy Application 

Transformation 

LEAP Automation of Lender 

Approval Workflow 

LEAP Institution Manager 

MFH Development & 

Underwriting Business Process 

Reengineering/Automated 

Underwriting Solution

MFH Physical Inspections 

Alignment 

Portfolio Risk Reporting & 

Analytics 

NGMS

Affordable Housing Data 

Architecture 

Not yet developed As of April 2013, a work breakdown structure and associated dictionary for 

this project had not yet been developed. According to NGMS officials, plans 

are under way to fully develop a work breakdown structure and dictionary that 

represent the first and second increments of this project in late spring. 

Cash Management Not yet developed In late April 2013, NGMS provided draft schedules as evidence of work 

breakdown structures for these two projects. However, neither schedule 

satisfied critical elements of a work breakdown structure. Specifically, they 

were not deliverable-oriented or fully standardized, and did not represent the 

entire scope of the projects. In addition, no associated dictionaries were 

provided. Accordingly, we did not consider the information provided to be 

equivalent to developing work breakdown structures for these projects.

Portfolio and Risk 

Management Tool

 

6

GAO-09-3SP and PMI, PMBOK® Guide (see footnote 2).
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 54 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Budget Forecasting and 

Formulation

Developed, but lacks 

essential information

In February 2013, NGMS produced a draft work breakdown structure and 

associated dictionary for this project that contained details regarding the first 

increment, but did not provide details for the second increment of the project. 

In addition, rather than being organized by deliverable—that is, unique and 

verifiable products, results, or capabilities—it was organized by life-cycle 

phase processes (e.g., requirements development), which is inconsistent with 

best practices. Additionally, the associated dictionary was specific to the first 

increment of the project, and it did not include the other increments. 

Integrated Budget Forecasting 

Model

Not yet developed As of April 2013, a work breakdown structure and associated dictionary had 

not been developed for this project. According to NGMS officials, development 

of a work breakdown structure for future functionality of this project would be 

considered; however, plans for doing so had not yet been determined. 

Source: GAO analysis of HUD data.

As we have previously reported, agencies need to develop 

comprehensive project management plans, and best practices emphasize 

the importance of having a plan in place that, among other things, 

establishes a complete description that ties together all activities and 

evolves over time to continuously reflect the current status and desired 

end point of the project.7 According to project management practices, a 

project management plan is the primary source that defines, among other 

things, how the project is to be executed and controlled. Project 

management plans can be either summary level or detailed and can be 

composed of one or more subsidiary plans to address elements of project 

management. To be effective, best practices state that a project 

management plan integrates cost and schedule baselines from planning 

activities, and this baseline information should be updated as needed and 

periodically compared with actual performance data in order to track and 

report progress. While the content of a project management plan will vary 

depending upon the type and complexity of a project, it is developed 

through a series of integrated processes and is progressively elaborated 

by updates during the execution and management of a project. Such 

plans include

 

7

GAO, Information Technology: Opportunities Exist to Improve Management of DOD’s 

Electronic Health Record Initiative, GAO-11-50 (Washington, D.C.: Oct. 6, 2010); Office of 

Personnel Management: Retirement Modernization Planning and Management 

Shortcomings Need to Be Addressed, GAO-09-529 (Washington, D.C.: Apr. 21, 2009); 

and Information Technology Investment Management: A Framework for Assessing and 

Improving Process Maturity, GAO-04-394G (Washington, D.C.: Mar. 1, 2004).

Project Management Plans
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 55 GAO-13-455 HUD Information Technology

• identification of the projected life cycle and processes to be applied to 

each phase;

• results of project tailoring;

• how the team will execute the work to accomplish project objectives;

• project cost and schedule baselines;

• how the team will maintain the integrity of performance measurement 

baselines;

• the needs and techniques for communicating among stakeholders;

• key management reviews;

• a change management plan that documents how changes will be 

monitored and controlled;

• a configuration management plan to define those items that are 

configurable, those items that require formal change control, and the 

process for controlling change to such items; and

• subsidiary management plans (scope, requirements, schedule, cost, 

quality, process improvement, human resources, communication, risk 

and procurement). 8

Table 7: Assessment of FHA Transformation and NGMS Project Management Plans

Name Assessment Explanation

FHA Transformation 

Capital Needs Assessment Not yet 

developed

As of April 2013, a project management plan had not yet been developed. According 

to FHA Transformation officials, this project is still completing initial planning activities; 

thus, a date for completing its plan had not yet been determined. 

Federal Financial Services 

Platform 

Developed, but 

lacks essential 

information

The project management plan for these two projects identified the life-cycle processes 

through a project tailoring agreement, communication techniques, and management 

reviews, and included a configuration management plan. For example, the plan 

included a matrix that identified several different methods of communication, including 

weekly meetings, project dashboards, and monthly status reports. However, the plan 

did not describe how the work would be executed, cost or schedule baselines, or the 

maintenance of performance measurement baselines. Further, the plan only partially 

discussed change management and did not incorporate all subsidiary management 

plans. For example, the plan described approaches for subsidiary activities such as 

requirements, quality, staffing, communication, and risk, but it only partially described 

procurement management and did not discuss how scope, cost, schedule, or process 

improvement would be managed. 

LEAP Automation of Lender 

Approval Workflow

 

8

PMI, PMBOK® Guide (see footnote 2).
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 56 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Healthcare Automated 

Lender Application Pilot 

Not yet 

developed

As of April 2013, a project management plan had not yet been developed for the 

project. According to FHA officials, this project is being considered for incorporation 

with the MFH Development & Underwriting Business Process 

Reengineering/Automated Underwriting Solution project, and as a result, would be 

included in that project management plan. However, a date for doing so had not yet 

been determined. 

Legacy Application 

Transformation 

Developed, but 

lacks essential 

information

Details regarding project life cycle, tailoring, communication techniques, management 

reviews, and configuration management were included in the project management 

plan. For example, the plan indicated that the project was following HUD’s PPM 

framework, which requires project teams to tailor life-cycle processes in order to 

appropriately address project needs. However, the plan did not discuss how work will 

be executed or project baselines, and although its requirements management plan 

included change management with respect to requirements, the plan did not discuss 

change management for the entire project. In addition, it did not fully incorporate all 

subsidiary management plans, including schedule, cost, human resource, process 

improvement, procurement, or scope management plans.

LEAP Institution Manager Developed, but 

lacks essential 

information

The life-cycle processes identified through a project tailoring agreement, 

communication techniques, and management reviews were included in the project 

management plan. For example, the plan included descriptions of four different types 

of reviews, including a self-review, an informal review, a formal review, and a 

structured walkthrough. However, the project management plan did not describe how 

work would be executed, integrate cost or schedule baselines, or describe how 

baselines would be maintained. For example, the plan listed milestones and 

referenced a total cost of ownership artifact, but it did not clearly state whether this 

information constituted the project’s schedule and cost baselines. In addition, the plan 

also discussed a generic method for measuring costs throughout the project life cycle, 

but it did not discuss the maintenance of the cost or schedule baselines. While the 

project developed a change management plan, it was not referenced in the project 

management plan. Further, the project management plan did not provide a detailed 

description of configuration management or fully incorporate all subsidiary 

management plans, including scope, schedule, cost, process improvement, and 

procurement management plans.

MFH Development & 

Underwriting Business 

Process 

Reengineering/Automated 

Underwriting Solution

Developed, but 

lacks essential 

information

Descriptions of the life-cycle processes identified through a project tailoring 

agreement, communication techniques, management reviews, and configuration 

management were included in the project management plan. For example, the plan 

identified different types of communication techniques, including status meetings, 

requirements gathering sessions, design validation, and kick-off meetings at the start 

of each phase of the project life cycle. However, the plan did not discuss the 

execution of work, cost or schedule baselines, or the maintenance of baselines, or 

provide a full description of change management. For example, the plan listed 

milestones and referenced a total cost of ownership artifact, but it did not clearly state 

whether this information constituted the project’s schedule and cost baselines, nor did 

it discuss the maintenance of the cost or schedule baselines. In addition, the plan did 

not fully incorporate all subsidiary management plans, including scope, schedule, 

process improvement, procurement, human resource, and cost management plans. 

MFH Physical Inspections 

Alignment 

Not yet 

developed

As of April 2013, a project management plan had not yet been developed. According 

to FHA Transformation officials, this project is still completing initial planning activities; 

however, a date for completing its plan had not yet been determined. 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 57 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Portfolio Risk Reporting & 

Analytics 

Developed, but 

lacks essential 

information

The project management plan described the life-cycle processes identified through a 

project tailoring agreement, communication techniques, management reviews, and 

configuration management. For example, the plan stated that reviews provide a 

method of verifying and evaluating completeness, consistency, conformity, objectives, 

and clarity of work in progress. However, the plan did not describe how work would be 

executed, integrate cost or schedule baseline, or discuss how the baselines would be 

maintained. While the project’s requirements management plan included change 

management, the project management plan did not cover changes for areas other 

than requirements. In addition, the plan did not fully incorporate all subsidiary 

management plans, including scope, schedule, process improvement, procurement, 

cost, or human resource management plans. 

NGMS

Affordable Housing Data 

Architecture 

Developed, but 

lacks essential 

information

The NGMS project management plan was developed and reflected the processes for 

these projects. The plan identified projected life-cycle phases, communication 

techniques, management reviews, the maintenance of schedule and cost baselines, 

change management, and configuration management, and it included subsidiary 

plans for requirements, scope, schedule, cost, quality, human resources, and risk 

management. For example, the plan stated that a schedule baseline approved by the 

executive project sponsor would be reviewed on a regular basis. However, the plan 

did not discuss the execution of work, cost and schedule baselines or the 

management of process improvement, and it did not fully incorporate a subsidiary 

management plan for procurement management. Additionally, while the plan noted 

that project tailoring would be done, the results of the tailoring had only been 

completed for the Budget Forecasting and Formulation project. As of April 2013, 

officials stated that plans were under way to complete the tailoring for the remaining 

projects—Affordable Housing Data Architecture, Cash Management, and Portfolio and 

Risk Management Tool. 

Budget Forecasting and 

Formulation

Cash Management

Integrated Budget 

Forecasting Model

Developed, but 

lacks essential 

information 

The project management plan described the life-cycle processes identified through a 

project tailoring agreement, management reviews and communication techniques, the 

methodology for change requests, and configuration management. For example, the 

plan described post-project and audit reviews. However, the plan did not describe the 

execution of work, identify cost or schedule baselines, discuss the maintenance of 

baselines, and include subsidiary plans for scope, schedule, or process improvement, 

or fully incorporate plans for procurement management. While it identified cost 

estimates by life-cycle phase, it did not specifically state if the cost and schedule 

figures were project baselines or describe how baselines would be maintained. For 

example, the plan identified milestones for each phase of the project life cycle, but it 

did not specifically identify or refer to a schedule baseline. 

Portfolio and Risk 

Management Tool

Developed, but 

lacks essential 

information 

In addition to the explanation above for the Affordable Housing Data Architecture 

project, this project also developed a plan that provided an overview of the project’s 

development approach, challenges, benefits, and risks. However, similar to the NGMS 

project management plan, this specific plan did not discuss the maintenance of 

performance measurement baselines, cost and schedule baselines, or the 

management of process improvement. 

Source: GAO analysis of HUD data.

According to project management practices, effective planning of 

requirements includes documenting the processes and methods to be 

used for effectively developing and managing requirements from initial 

Requirements Management 

Plans
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 58 GAO-13-455 HUD Information Technology

identification through implementation. A project’s success is directly 

influenced by the care taken in capturing and managing requirements. 

Other essential planning activities such as developing a work breakdown 

structure or estimating a project’s cost and schedule are built upon 

requirements developed. Best practices state that in establishing 

requirements, project teams should plan requirements collection activities 

such as conducting interviews, focus groups, facilitated workshops, or 

other techniques, including surveys and prototypes. Depending on the 

type of project, the approach for managing requirements can vary, but 

requirements management plans document the approach for how 

requirements development activities will be conducted. In particular, a 

plan includes

• how requirements activities (e.g., collecting requirements) will be 

planned, tracked, and reported;

• configuration management activities such as how changes will be 

initiated, analyzed, and managed;

• requirements prioritization methods;

• product metrics that will be used and the rationale for using them; and

• a traceability structure outlining attributes9 for a traceability matrix and 

identifying what other project documents requirements will be traced 

to.10

 

9

Attributes help define key information about the requirement. Typical attributes used in a 

traceability matrix may include a unique identifier, a textual description of the requirement, 

priority, current status (such as active, cancelled, deferred, added, or approved), and date 

completed. Additional attributes to ensure that the requirement has met stakeholders’ 

satisfaction may include stability, complexity, and acceptance criteria. 

10SEI, CMMI® for Acquisition and CMMI® for Development; PMI, PMBOK® Guide (see 

footnote 2); and GAO-06-310. 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 59 GAO-13-455 HUD Information Technology

Table 8: Assessment of FHA Transformation and NGMS Requirements Management Plans

Name Assessment Explanation

FHA Transformation 

Capital Needs 

Assessment

Not yet developed As of April 2013, a requirements management plan had not yet been developed. 

According to FHA Transformation officials, this project is still completing initial 

planning activities; thus, a date for completing its plan had not yet been 

determined.

Federal Financial Services 

Platform

Developed, but lacks 

essential information 

The requirements management plan incorporated for these projects information 

about how changes to requirements would be managed and provided high-level 

plans for requirements development. For example, the plan explained that a 

process to address requirements change requests had been established and 

outlined the details needed to analyze the impact of the change. However, the 

plan did not detail how requirement activities would be planned, tracked, or 

reported; explain how the team would prioritize them; identify metrics for 

determining whether each requirement has been satisfied by the final product; or 

establish a traceability structure describing which requirements attributes would 

be captured on the matrix. For example, the plan included a section on 

requirements traceability; however, that section discusses the need for traceability 

without providing any details about the processes to be applied to the project. In 

addition, while the plan did not explain how requirements would be prioritized, the 

LEAP Automation of Lender Approval Workflow project identified methods in its 

other requirements documentation. 

LEAP Automation of 

Lender Approval Workflow

Healthcare Automated 

Lender Application Pilot 

Developed, but lacks 

essential information 

Details about how changes to established requirements would be configured and 

managed were incorporated into the requirements management plan. For 

example, it outlined processes for how changes to requirements would be, among 

other things, evaluated upon submission and analyzed for determining their 

impact on original requirements to support decisions about whether to accept or 

reject the proposed change. However, the plan did not outline processes for 

planning, tracking, or reporting requirements activities or include details regarding 

the methods that would be used to prioritize requirements or metrics for 

determining whether each requirement had been satisfied by the final product. 

For example, the plan did not outline criteria for establishing metrics or list any 

specific metrics for assessing the implementation of stakeholder requirements. 

Further, the plan did not identify which requirements attributes, such as current 

status or date completed, will be captured on the traceability matrix.

Legacy Application 

Transformation 

Developed, but lacks 

essential information 

The plan identified how requirements changes will be handled by the team and 

outlined high-level activities for gathering requirements, but it did not provide 

details regarding how the project would plan, track, or report on requirements 

activities. In addition, the plan did not incorporate plans for the methods for 

prioritizing requirements or metrics for measuring the extent to which each 

requirement had been satisfied by the final product. For example, the plan did not 

identify how project requirements would be categorized to ensure that required 

functionality was focused on first and that “nice to have” functionality would be 

added later, if resources were available. Further, the plan did not include a 

description of what requirements attributes would be used as the basis of a 

traceability structure for associated matrixes.
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 60 GAO-13-455 HUD Information Technology

Name Assessment Explanation

LEAP Institution Manager Developed, but lacks 

essential information 

Processes for configuring and managing changes to established requirements 

were addressed in the requirements management plan. Specifically, the plan 

outlined processes and described forms for requesting changes to requirements, 

provided categories of changes requested, as well as methods for tracking the 

specific status of changes from the time they are requested (“open”) until they are 

implemented (“closed”). However, it did not provide specificity about other 

requirement management activities and did not establish methods for prioritizing 

requirements or identify metrics that the project will use to determine whether the 

final product addresses established requirements. For example, the plan did not 

identify processes for categorizing project requirements to ensure that required 

functionality would be focused on first and “nice to have” functionality would be 

added later, if resources were available. Further, a traceability structure 

describing which requirements attributes would be captured on the traceability 

matrix had not been established.

MFH Development & 

Underwriting Business 

Process 

Reengineering/Automated 

Underwriting Solution

Developed, but lacks 

essential information 

The requirements management plan established processes for configuring and 

managing changes to requirements; however, it did not fully incorporate other 

requirements management techniques outlined by best practices. Specifically, the 

plan incorporated high-level plans for requirements development activities, but did 

not provide sufficient detail about how requirements would be planned, tracked, or 

reported. In addition, it did not outline processes and methods for prioritizing 

requirements or metrics for determining whether each requirement had been 

satisfied by the final product. For example, the plan briefly stated that the team 

would use software tools to capture and prioritize both functional and 

nonfunctional requirements, but did not identify prioritization methods. Further, the 

plan did not establish a traceability structure outlining specific requirements 

attributes to be captured on the traceability matrix.

MFH Physical Inspections 

Alignment 

Not yet developed As of April 2013, a requirements management plan had not yet been developed. 

According to FHA Transformation officials, this project is still completing initial 

planning activities; thus, a date for completing its plan had not yet been 

determined.

Portfolio Risk Reporting & 

Analytics 

Developed, but lacks 

essential information 

The requirements management plan addressed how requirements changes were 

to be managed. In addition, the plan addressed high-level processes for 

developing requirements but did not describe the processes in detail. For 

example, the plan stated that interviews with subject matter experts and business 

users for each functional capability would be completed and stakeholder 

commitment for resulting requirements would be obtained, but it did not identify 

stakeholders or detail the processes for identifying stakeholders to participate in 

requirements development activities. Additionally, the plan did not incorporate 

details about prioritizing requirements or measuring the extent to which 

requirements were addressed. For example, the plan briefly stated that the 

project would use software tools to capture and prioritize functional and 

nonfunctional requirements but did not establish methods for prioritizing these 

requirements that would help teams to address those that were most important 

first. Further, the plan did not establish a traceability structure that described 

which requirements attributes would be captured on the traceability matrix.

NGMS

Affordable Housing Data 

Architecture 

Developed, but lacks 

essential information 

The NGMS requirements management plan for these projects identified how 

changes to requirements will be managed and addressed, at a high level, how 

requirements activities would be handled. For example, the plan described the 

intent to maintain and update a change management log and to collaborate with Budget Forecasting and 

Formulation
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 61 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Cash Management HUD stakeholders to reach a decision regarding changes to requirements. 

However, the plan did not provide details on how requirement development 

activities would be conducted. For example, while the plan states that the project 

team will meet with stakeholders to discuss, among other things, the 

requirements baseline; it did not identify stakeholders or detail the processes for 

identifying stakeholders to participate in requirements development activities. 

Moreover, the plan did not address how the team would prioritize requirements or 

metrics for determining whether each requirement had been satisfied by the final 

product. Further, the plan did not establish a traceability structure that described 

which requirements attributes would be captured on the traceability matrix.

Portfolio and Risk 

Management Tool

Integrated Budget 

Forecasting Model

Developed, but lacks 

essential information 

Plans for this project outlined high-level processes for gathering requirements 

from stakeholders through interviews between the contractor and stakeholders 

and also detailed policies and procedures for the team and stakeholders to use in 

developing and maintaining requirements. However, the plan did not identify 

specific stakeholders that would be involved in developing requirements or the 

processes for determining participants. In addition, the plans did not address how 

the team would prioritize requirements or metrics for determining whether each 

requirement had been satisfied by the final product. Lastly, a traceability structure 

to describe which requirements attributes would be captured on the matrix was 

not included. 

Source: GAO analysis of HUD data.

Project management practices state that requirements traceability 

matrixes are designed to support backward traceability by linking each 

requirement to the broader business objective it supports and forward 

traceability by linking these requirements to more detailed functional 

requirements. Traceability refers to the ability to follow a requirement from 

origin to implementation and is critical to understanding the 

interconnections and dependencies among the individual requirements 

and the impact when a requirement is changed. This bidirectional 

traceability can help management determine whether the project 

addresses all requirements and that those requirements and the related

deliverables are traceable back to valid business needs. According to 

best practices, requirement matrixes provide tracing to

• business needs, opportunities, goals and objectives;

• high-level requirements to more detailed requirements;

• criteria used for evaluation and acceptance of the requirements;

• a set of approved requirements; and

• status of requirement changes and requests.

Requirements Traceability 

Matrixes
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 62 GAO-13-455 HUD Information Technology

Further, matrixes should have specific attributes recorded for each 

requirement. Attributes associated with each requirement—such as a 

unique identifier, textual description, priority, version, current status, and 

date completed—should be recorded.11

Table 9: Assessment of FHA Transformation and NGMS Requirements Traceability Matrixes

Name Assessment Explanation

FHA Transformation

Capital Needs 

Assessment

Not yet developed As of April 2013, a requirements traceability matrix had not yet been developed. 

According to FHA Transformation officials, this project is still completing initial 

planning activities; thus, a date for developing its requirements had not yet been 

determined.

Federal Financial 

Services Platform 

Developed, but lacks 

essential information 

While these two projects shared a matrix that incorporated two high-level 

requirements, the matrix did not support traceability from business goals and 

objectives to more detailed requirements. The matrix also did not provide 

traceability to criteria to be used for evaluation and acceptance of the requirements, 

approval of the requirements, or the status of requirement changes and requests. 

Further, the matrix did not delineate how requirements were prioritized (since the 

two identified were listed as high priority) or provide other attributes such as 

requirement status or completion dates. 

LEAP Automation of 

Lender Approval 

Workflow 

Healthcare Automated 

Lender Application Pilot 

Not yet developed As of April 2013, a requirements traceability matrix had had not yet been 

developed. According to FHA officials, this project is being incorporated into the 

MFH Development & Underwriting Business Process Reengineering/Automated 

Underwriting Solution project, and as a result, requirements developed would be 

included with that project. Thus, a date for doing so had not yet been determined.

Legacy Application 

Transformation 

Developed, but lacks 

essential information 

This project’s matrix enabled traceability from business objectives to high-level 

requirements and then to more detailed functional requirements. It also provided 

requirements attributes, including unique identifiers and textual descriptions for 

requirements. For example, one requirement had the description that stated it 

should have the ability to monitor performance for assessed properties. However, 

the matrix did not include other attributes such as ones to denote the priority for 

implementing established requirements or report substantive information about the 

status of requirements because all were described as “in progress.” 

LEAP Institution Manager Developed, but lacks 

essential information

Although the requirements listed in the matrix were traceable to high-level 

requirements using a unique identifier and listed the requirements as either “in 

progress” or “complete,” the matrix did not identify the date of completion for the 

requirements. In addition, the matrix did not allow clear traceability back to the 

business goals and needs for the system or link to criteria used for the evaluation 

and acceptance of requirements, or allow for tracking change requests associated 

with established requirements. Further, the matrix did not trace to documentation 

that indicated that the requirements in the matrix were approved by stakeholders.

 

11SEI, CMMI® for Acquisition and CMMI® for Development and PMI, PMBOK® Guide 

(see footnote 2).
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 63 GAO-13-455 HUD Information Technology

Name Assessment Explanation

MFH Development & 

Underwriting Business 

Process 

Reengineering/Automated 

Underwriting Solution

Developed, but lacks 

essential information 

The matrix for this project was traceable to a set of approved requirements and 

captured most attributes including a unique identifier, textual descriptions, and the 

priority and status of requirements. For example, the requirement described as 

“ability to accept lender application data electronically via secure Internet access” 

had a unique identifier. However, the project matrix did not clearly provide 

traceability from business goals and objectives to high-level requirements, and on to 

more detailed functional requirements. It also lacked traceability to criteria for 

evaluating and accepting requirements and for tracking changes to established 

requirements as well as an attribute for completion dates for the requirements 

listed.

MFH Physical Inspections 

Alignment 

Not yet developed As of April 2013, a requirements traceability matrix had had not yet been 

developed. According to FHA Transformation officials, this project is still completing 

initial planning activities; thus, a date for developing its requirements had not yet 

been determined.

Portfolio Risk Reporting & 

Analytics 

Developed, but lacks 

essential information 

The matrix supported traceability of requirements back to higher-level business 

goals and also provided specific attributes such as unique identifiers and brief 

descriptions for requirements. On the other hand, it did not link high-level 

requirements outlined in the project’s requirements definition documentation to 

more detailed requirements. In addition, it did not provide traceability to criteria to 

be used for evaluation and acceptance of the requirements, approval of the 

requirements, or the status of requirement changes and requests. Further, the 

matrix listed all requirements as medium priority (thus providing no prioritization) 

and did not provide completion dates for the requirements documented.

NGMS

Affordable Housing Data 

Architecture 

Not yet developed According to NGMS documentation, this project will begin defining its requirements 

in June 2013. 

Budget Forecasting and 

Formulation

Developed, but lacks 

essential information 

The matrix links requirements to high-level business goals and provides traceability 

from the 15 established high-level business requirements to more detailed 

functional requirements. The matrix also captures attributes such as unique 

identifiers and textual descriptions for each requirement. However, the matrix does 

not allow traceability to criteria to be used for evaluation and acceptance of the 

requirements, approval of the requirements, or the status of requirement changes 

and requests. The matrix also lacked other attributes such as the status and priority 

of requirements.

Cash Management Not yet developed According to NGMS documentation, this project will finish defining its requirements 

in June 2013.

Integrated Budget 

Forecasting Model

Developed, but lacks 

essential information 

The matrix provided traceability from project goals and high-level business needs to 

more detailed requirements. It also recorded specific attributes for requirements 

such as a unique identifier and a textual description. For example, a requirement 

that had a unique identifier also listed the description as “the model must be 

capable of delivering alerts and report content via email to designated internal HUD 

personnel.” However, the matrix did not provide traceability to documentation that 

indicated that requirements had been approved or information about changes to the 

established requirements. Further, the matrix did not incorporate other attributes for 

requirements such as the priority of requirements or completion dates. Regarding 

the attribute for the status of requirements, the matrix contained conflicting 

information. Specifically, it included two identical requirements, but provided 

different dispositions for each; one indicated it has been “completed” and the other 

had a notation of “discontinued” without any associated dates to clarify which 

disposition was accurate. 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 64 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Portfolio and Risk 

Management Tool

Not yet developed According to NGMS documentation, this project finalized its requirements in 

October 2012; however, as of April 2013, a requirements traceability matrix had had 

not yet been developed.

Source: GAO analysis of HUD data.

According to best practices, effective IT project management also 

involves early planning for and management of acquisitions.12 The 

planning process begins with the identification of project needs which can 

best be, or must be, met by acquiring products, services, or results 

outside of the organization. During planning, coordination of the 

acquisition with other project management activities, such as budgeting, 

scheduling, resource estimating, risk identification, and requirements 

definition, should be discussed and documented. Most organizations 

have documented policies and procedures specifically defining mandatory 

acquisition activities for obtaining contracted goods or services. The 

acquisition planning process should result in a plan or strategy that 

describes how management decisions will be applied for a particular 

project. Such strategies serve as the road map for effectively planning 

and managing acquisitions from initiation through contract closure.13 In 

particular, project management practices indicate that acquisition 

strategies should provide guidance for

• defining the types of contracts to be used;

• addressing risk management issues;

• coordinating procurement with other project aspects, such as 

scheduling and performance reporting;

 

12For the purposes of this report, we use the term “acquisition planning” to refer to 

procurement activities and contract management, including practices described in the 

PMBOK® Guide as procurement management (see footnote 2). Procurement 

management plans called for by the PMBOK® Guide are best practices that are 

consistent with federal acquisition regulations (e.g., the Federal Acquisition Regulation, 

known as the “FAR”) for developing acquisition strategies, particularly for major systems. 

See FAR, 48 C.F.R. §34.002. Departments and agencies must follow federal acquisition 

regulations as well as additional department-specific regulations, policies, and procedures. 

13These plans or strategies can be formal or informal, highly detailed or broadly framed 

and are based on the needs of each project. They are to be incorporated as a subsidiary 

component of the project management plan. 

Acquisition Strategies
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 65 GAO-13-455 HUD Information Technology

• setting the scheduled dates in contracts for determining dates for 

deliverables and coordinating with other project management 

processes; and

• establishing procurement metrics to be used in managing and 

evaluating contractors.14

Table 10: Assessment of FHA Transformation and NGMS Acquisition Strategies 

Name Assessment Explanation

FHA Transformation 

Capital Needs Assessment Developed, but 

lacks essential 

information

The FHA Transformation acquisition strategy developed was intended to 

include all 9 projects in our study. This strategy identified the types of contracts 

to be used, stating that indefinite-delivery, indefinite-quantity contracts would 

be awarded and associated task orders would be time and materials, firm-fixed 

price, or labor hour. However, it did not incorporate how risk management 

issues would be handled or describe how the procurement would be 

coordinated with other processes. In addition, although the strategy outlined 

dates for contract deliverables, it did not discuss how these dates would be 

incorporated into schedule development or additional control processes. 

Further, the strategy lacked metrics that would be used to manage the contract 

and evaluate contractors.

Federal Financial Services 

Platform

Healthcare Automated Lender 

Application Pilot 

Legacy Application Transformation 

LEAP Automation of Lender 

Approval Workflow 

LEAP Institution Manager 

MFH Development & Underwriting 

Business Process 

Reengineering/Automated 

Underwriting Solution

MFH Physical Inspections 

Alignment 

Portfolio Risk Reporting & 

Analytics 

NGMS

Affordable Housing Data 

Architecture 

Developed, but 

lacks essential 

information

The NGMS acquisition strategy for these projects identified the types of 

contracts to be used, including utilizing existing interagency agreements and 

working with small, disadvantaged businesses. However, the plan did not 

incorporate how risk management issues would be handled or describe how 

the procurement would be coordinated with other processes. In addition, it did 

not discuss dates for contract deliverables or how these dates would be 

incorporated into schedule development or additional control processes. Lastly, 

the project lacked metrics for managing the contract and evaluating 

contractors.

Budget Forecasting and 

Formulation

Cash Management

Portfolio and Risk Management 

Tool

 

14PMI, PMBOK® Guide (see footnote 2). 
Appendix III: Detailed Assessment of FHA 

Transformation and NGMS Project 

Management Documentation

Page 66 GAO-13-455 HUD Information Technology

Name Assessment Explanation

Integrated Budget Forecasting 

Model

Developed, but 

lacks essential 

information 

The strategy for this project indicated it would use blanket purchase 

agreements with firm-fixed-price task orders as the type of contracts. In 

addition, the strategy identified contract risk issues, such as the unavailability of 

server space and established dates for contract deliverables, and indicated 

how the deliverable dates were going to be coordinated with schedule 

development. However, this strategy did not identify how other project 

management processes, such as scheduling and performance management, 

would be coordinated with the procurement or outline procurement metrics 

intended to support management of contracts and evaluation of contractors.

Source: GAO analysis of HUD data.
Appendix IV: Comments from the Department 

of Housing and Urban Development

Page 67 GAO-13-455 HUD Information Technology

Appendix IV: Comments from the 

Department of Housing and Urban 

Development 
Appendix IV: Comments from the Department 

of Housing and Urban Development

Page 68 GAO-13-455 HUD Information Technology
Appendix IV: Comments from the Department 

of Housing and Urban Development

Page 69 GAO-13-455 HUD Information Technology
Appendix IV: Comments from the Department 

of Housing and Urban Development

Page 70 GAO-13-455 HUD Information Technology
Appendix IV: Comments from the Department 

of Housing and Urban Development

Page 71 GAO-13-455 HUD Information Technology
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 72 GAO-13-455 HUD Information Technology

Valerie C. Melvin, (202) 512-6304 or melvinv@gao.gov

In addition to the contact above, Teresa M. Neven (Assistant Director), 

Kami J. Corbett, Amanda C. Gill, Lee A. McCracken, John Ockay, and 

Shannin G. O’Neill made significant contributions to this report.

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(310990)
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