Information Technology Reform: Billions of Dollars in Savings Have Been Realized, but Agencies Need to Complete Reinvestment Plans
Published: 2015-09-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Beginning in 2010, OMB initiated a series of IT reform efforts to consolidate the growing number of data centers and eliminate duplicative spending. In May 2012, the agency began a “cut and reinvest” effort that required agencies to propose fiscal year 2014 IT reductions and reinvestments.
GAO was asked to review agencies' savings from OMB's IT reform efforts and determine how those savings are being reinvested. The objectives were to (1) assess agencies' progress in achieving savings from their IT reform efforts, (2) evaluate agencies' plans to reinvest their savings, and (3) evaluate how selected agencies have reinvested their savings and governance processes to oversee the reinvestments. GAO assessed 26 agencies' cost savings and avoidance documentation, evaluated 27 agencies' (including the Smithsonian Institution) reinvestment plans against OMB's guidance, and compared 4 of the agencies' governance processes against best practices. The 4 agencies were selected, in part, because they had the highest dollar amounts of proposed IT reinvestments.
section_title: What GAO Found
paragraphs: Twenty-four of the 26 federal agencies participating in the Office of Management and Budget's (OMB) information technology (IT) reform initiatives reported achieving an estimated total of $3.6 billion dollars in cost savings and avoidances between fiscal years 2011 and 2014. Slightly more than half (or about $2.0 billion) of the savings and avoidances were from data center consolidation and optimization efforts. Notably, of the $3.6 billion total, the Departments of Defense, Homeland Security, Treasury, and the Social Security Administration accounted for about $2.5 billion (or 69 percent).
Most agencies did not fully meet OMB's requirements to submit reinvestment plan information. Of the 27 agencies required to submit reinvestment plans (including one-time and ongoing plans), 5 agencies had fully implemented OMB's guidance, while the remaining 22 had only partially implemented it. For example, most agencies had not fully implemented OMB's guidance for submitting one-time fiscal year 2014 IT reduction and reinvestment plans as part of OMB's “cut and reinvest” effort. As a result, agencies' plans were substantially short of OMB's overall fiscal year 2014 targets: $3.0 billion in proposed reductions and $2.1 billion in proposed reinvestments, compared to OMB's targets of $7.6 billion in reductions and as much as $7.6 billion in reinvestments. Agencies provided varied reasons for not meeting OMB's requirements, such as that their components had not fully tracked and reported how their savings were to be reinvested. Until agencies complete their ongoing reinvestment plans, they will be challenged to ensure that their considerable savings are being used in the most efficient and effective manner possible.
Four selected agencies—the Departments of Education, Interior, Labor, and the Social Security Administration—had documented key governance processes to guide the development of their fiscal year 2014 budget submission, which included proposed IT reinvestments of $350 million. However, none of the four agencies had tracked the reinvestment performance results. They provided varied reasons for not doing so, and two agencies noted the lack of visibility into their components' reinvestments. The lack of performance tracking is also due to OMB not requiring agencies to document actual results. In addition, OMB has not defined targets for reinvestments beyond fiscal year 2014. Until OMB requires agencies to track actual reinvestment performance and defines targets, it will be limited in its ability to ensure that agencies are actually reinvesting funds as planned and may not be able to hold them accountable. Finally, without improved tracking, selected agencies may lack assurance that their components are reinvesting in areas consistent with agency-wide goals.
section_title: What GAO Recommends
paragraphs: GAO recommends that agencies complete their IT savings reinvestment plans and improve tracking, and that OMB define targets for agency reinvestment and require that agencies complete their plans and track actual reinvestment performance. OMB and 12 agencies agreed with GAO's recommendations, 1 did not state whether it agreed or disagreed, 3 had no comments, and 1 partially agreed.

section_title: Letter
paragraphs: Federal agencies spend over $80 billion annually to meet their increasing  demand for information technology (IT). Beginning in 2010, the Office of  Management and Budget (OMB) launched a series of IT reform initiatives  intended to help agencies achieve greater efficiency in their IT  investments by, among other things, consolidating the growing number of  federal data centers and increasing the use of cloud computing. We  have previously reported and testified that OMB’s IT reform initiatives  can help to improve the efficiency and effectiveness of the federal  government and have the potential to save billions of dollars.
To further increase the efficiency of IT spending, in May 2012, OMB  initiated a “cut and reinvest” effort that required agencies, as part of their  fiscal year 2014 budget submission, to propose reductions in IT that  represented 10 percent of their overall spending and to propose  reinvestments of between 50 and 100 percent of the savings. According  to OMB’s guidance, reductions were to be in duplicative,  underperforming, or lower-priority investments, while reinvestments were  to be in innovative solutions that would, among other things, produce a  favorable return on investment within 18 months or demonstrably improve  citizen services or administrative efficiencies.
Given the importance of OMB’s IT reform efforts, you asked us to review  agencies’ savings from such efforts and determine how agencies are  reinvesting their savings. Our objectives were to (1) assess agencies’  progress in achieving savings from their IT reform efforts; (2) evaluate the  extent to which agencies have established plans to reinvest their savings;  and (3) evaluate how selected agencies have reinvested their savings,  including the extent to which IT governance processes are in place to  oversee such reinvestments.
To address our first objective, we obtained and analyzed the cost savings  and avoidance documentation from 26 departments and agencies  (agencies) that are required to implement OMB’s PortfolioStat initiative.  This documentation included quarterly status reports to OMB and other  agency-developed spreadsheets and reporting tools. We then identified  the total agency-reported savings and avoidances achieved from fiscal  years 2011 to 2014. To address our second objective, we compared the  26 PortfolioStat agencies’ long-range (e.g., 3-5 year) reinvestment plans,  as documented in their information resource management (IRM) strategic  plans, to requirements documented in OMB’s March 2013 PortfolioStat  memorandum. We also compared 27 agencies’ fiscal year 2014 IT  reduction and reinvestment plans, as documented in their budget  submissions for that fiscal year, to requirements in OMB’s fiscal year  2014 budget guidance. Finally, we compared the 26 PortfolioStat  agencies’ quarterly reinvestment plans, as documented in their status  reports to OMB, against OMB’s instructions for submitting such reports.
For the third objective, we selected four federal agencies—the  Departments of Education (Education), the Interior (Interior), and Labor  (Labor), and the Social Security Administration (SSA)—based on their  fiscal year 2014 proposed IT reductions and reinvestments, as  documented in their budget submission documentation. We chose these  agencies, in part, because they had the highest proposed reinvestment  dollar amounts. We compared the governance processes used by these  agencies to develop their fiscal year 2014 budget submission (including  planned IT reductions and reinvestments) to key practices for establishing  and involving investment boards in the investment management  framework developed by GAO, analyzed agencies’ actual performance  against their proposed fiscal year 2014 IT reductions and reinvestments,  and interviewed agency officials.
We conducted this performance audit from October 2014 to September  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives. Appendix I contains  additional details on our objectives, scope, and methodology.
subsections: section_title: Background
paragraphs: As we and OMB have noted, duplicative, wasteful, and low-value  investments have proliferated over the years, highlighting the need for  agencies to avoid such investments whenever possible. To help agencies  manage their IT more effectively, reduce duplication, and achieve cost  savings, OMB implemented a series of initiatives beginning in 2010:
Data Center Consolidation and Optimization. In February 2010, the  Federal Chief Information Officer (CIO) established the Federal Data  Center Consolidation Initiative (FDCCI) to address the growing  number of federal data centers. This initiative’s four high-level goals  were to reduce the overall energy and real estate footprint of  government data centers; reduce the cost of data center hardware,  software, and operations; increase the overall IT security posture of  the government; and shift IT investments to more efficient computing  platforms and technologies. OMB estimates that the initiative has the  potential to provide about $3 billion in savings by the end of 2015. In  March 2013, OMB issued a memorandum that expanded FDCCI to  include measuring the extent to which agencies have optimized their  core data centers in areas such as energy, labor, and storage, and  subsequently released a set of 11 data center optimization metrics to  measure agency progress.
IT Reform Plan. In December 2010, the Federal CIO established a 25- Point IT Reform Plan designed to address challenges in IT  acquisition, improve operational efficiencies, and deliver more IT  value to the American taxpayer. The plan set forth action items and  required activities to consolidate the growing number of federal data  centers, shift to increased use of cloud computing, and promote the  use of shared service solutions. In addition, as part of an effort to  reduce the risk associated with IT acquisitions, the plan calls for  federal IT programs to deploy capabilities or functionality in release  cycles no longer than 12 months, and ideally, less than 6 months.
Cloud Computing Strategy. In order to accelerate the adoption of  cloud computing solutions across the government, OMB’s 25-Point IT  Reform Plan included a “Cloud First” policy that required each agency  CIO to fully migrate three services to a cloud solution by June 2012,  and implement cloud-based solutions whenever a secure, reliable,  and cost-effective cloud option exists. Building on this requirement, in  February 2011, OMB issued the Federal Cloud Computing Strategy,  which provided definitions of cloud computing services; benefits of  cloud services, such as accelerating data center consolidations; case  studies to support agencies’ migration to cloud computing; and roles  and responsibilities for federal agencies. According to OMB, shifting  from building custom systems to adopting cloud technologies and  shared solutions will improve the government’s operational  efficiencies and result in substantial cost savings.
PortfolioStat. In March 2012, OMB launched the PortfolioStat  initiative, which requires agencies to conduct an annual agency-wide  IT portfolio review to, among other things, reduce commodity IT  spending and demonstrate how its IT investments align with the  agency’s mission and business functions. PortfolioStat is designed  to assist agencies in assessing the current maturity of their IT portfolio  management process, make decisions on eliminating duplication, and  move to shared solutions in order to maximize the return on IT  investments across the portfolio. OMB reported that the PortfolioStat  effort has the potential to save the government $2.5 billion between  fiscal years 2013 and 2015 by consolidating and eliminating  duplicative systems.
IT Shared Services Strategy. In May 2012, building on a requirement  established in its 25-Point IT Reform Plan, OMB released its Federal  IT Shared Services Strategy. The strategy requires agencies to use  shared services—IT functions that are provided for consumption by  multiple organizations within or between federal agencies—for IT  service delivery in order to increase return on investment, eliminate  waste and duplication, and improve the effectiveness of IT solutions.  Examples of commodity IT areas to consider migrating to a shared  environment, as described in the strategy, include software licenses,  e-mail systems, and human resource systems. According to OMB, a  review of over 7,000 federal agency IT investments reported in budget  year 2013 revealed many redundancies and billions of dollars in  potential savings that could be achieved through consolidation and a  shared approach to IT service delivery within and between agencies.
subsections: section_title: OMB Required Agencies to Establish Plans to Reinvest Their Savings
paragraphs: With the potential for significant savings, and in continuing its focus on  increasing efficiency and reducing costs, OMB established both one-time  and ongoing requirements for agencies to establish plans to reinvest their  savings. These requirements include the following:
Long-range (e.g., 3-5 year) reinvestment plans. In March 2013, OMB  issued a memorandum that consolidated previously collected IT- related plans, reports, and data submissions, and introduced a new  requirement for submitting reinvestment information. Specifically,  the memorandum required each of the 26 agencies that participate in  the PortfolioStat initiative to describe how they plan to reinvest  savings resulting from the consolidation of commodity IT resources  (including data centers) in their IRM strategic plan.
Fiscal year 2014 reduction and reinvestment plans. OMB’s fiscal year  2014 budget guidance required 27 agencies to propose, in their  budget submissions for that fiscal year only, reductions in IT that  represented 10 percent of their overall IT spending, and propose  reinvestments of at least 50 percent, and up to 100 percent, of the  savings. More specifically, agencies were required to reduce agency  spending in the following IT areas: duplicative commodity IT  investments or contracts; underperforming projects or investments of  any type; and lower-value or lower-priority investments of any type.  Regarding reinvestments, agencies were required to propose  reinvestments that were expected to demonstrate a favorable return  on investment (quantitative or qualitative) to the agency within 18  months from the enactment of the fiscal year 2014 appropriations.  OMB’s guidance further stated that these proposed reinvestments  were to address, among other things, improvements to citizen  services or administrative efficiencies, adoption of shared services,  and consolidation of commodity IT.
Quarterly reinvestment plans. OMB’s March 2013 memorandum also  required the 26 agencies that participate in the PortfolioStat initiative  to report quarterly on cost savings and avoidances related to the  migration to shared services and data center consolidation, among  other areas, in their integrated data collection submissions to OMB.  As part of these submissions, OMB also required agencies to  describe their plans to use the cost savings and avoidances resulting  from any cost savings and avoidance initiatives reported.
section_title: Recent Legislation Requires Improvements to the Acquisition and Management of IT
paragraphs: Recognizing the importance of reforming the government-wide  management of IT, in December 2014, Federal Information Technology  Acquisition Reform provisions (commonly referred to as FITARA) were  enacted as a part of the Carl Levin and Howard P. ‘Buck’ McKeon  National Defense Authorization Act for Fiscal Year 2015. Among other  things, the law includes the following requirements:
Agencies, except for the Department of Defense (Defense), shall  ensure that CIOs have a significant role in, among other things,  programming and budgeting decisions, as well as management,  governance, and oversight processes related to IT. For example,  agencies (other than Defense) may only enter into contracts for IT and  IT services that are reviewed and approved by the agency CIO.
OMB shall require, in its annual capital planning guidance, that CIOs  certify that IT acquisitions are adequately implementing incremental  development.
OMB shall issue guidance that requires the CIO to adequately reflect  each major IT investment’s cost and schedule performance in the  investment evaluation.
OMB shall make available to the public a list of each major IT  investment including data on cost, schedule, and performance.
The General Services Administration (GSA) shall identify and develop  a government-wide program, as provided for in the statute, for the  acquisition, dissemination, and shared use of software and that allows  for the purchase of government-wide software licenses.
In addition, the law also includes the following requirements related to the  reporting of IT reform-related cost savings:
OMB, in consultation with agency CIOs (except for Defense), shall  implement a process to assist them in reviewing their IT portfolios,  including developing a multi-year strategy to identify and reduce  duplication and waste and to identify projected cost savings resulting  from the strategy.
OMB’s Administrator of the Office of Electronic Government shall  submit a quarterly report to specified congressional committees on the  cost savings and reductions in duplicative IT investments identified  during reviews of agency IT portfolios.
Agencies (except for Defense) shall annually report to OMB’s  Administrator of the Office of Electronic Government about federal  data center inventories and strategies to achieve consolidation,  including yearly calculations of investment and cost savings.
OMB’s Administrator of the Office of Electronic Government shall  develop, and make publicly available, yearly goals for the amount of  planned cost savings and optimization improvements achieved  through FDCCI, and for each year thereafter, compare reported cost  savings against those goals.
In June 2015, OMB released guidance on how agencies are to implement  the law. OMB’s guidance stated that it is intended to, among other  things, assist agencies in aligning their IT resources with statutory  requirements; establish government-wide IT management controls that  will meet the law’s requirements, while providing agencies with flexibility  to adapt to unique agency processes and requirements; clarify the CIO’s  role and strengthen the relationship with agency CIOs and bureau CIOs;  and strengthen CIO accountability for IT cost, schedule, and  performance.
Further, the guidance includes several actions agencies are to take within  specified time frames to implement a basic set of roles and  responsibilities for CIOs and other senior agency officials (referred to as  the “common baseline”) needed for the management of IT and to  implement the specific authorities described in the legislation. Such roles  and responsibilities described include those related to budget formulation  and planning, acquisition and execution, and organization and workforce.  To implement the common baseline, the proposed guidance includes the  following more specific requirements:
By August 15, 2015, each agency is to conduct a self-assessment  and articulate a plan describing the changes it will make to ensure  that all common baseline responsibilities are implemented by  December 31, 2015. Agencies are to submit their plans to OMB’s  Office of E-Government for review and approval and make the plans  publicly available on agency websites no later than 30 days after  approval.
By December 31, 2015, agencies are to implement specific  responsibilities and processes for the management of IT from the  common baseline.
By April 30, 2016, agencies are to update their self-assessment to  identify any obstacles or incomplete implementation of common  baseline responsibilities over the preceding 12 months. The self- assessment is to be updated on an annual basis thereafter.
Finally, OMB’s guidance also includes requirements to help support  agency implementation of the common baseline. For example, through  the end of fiscal year 2016, the Federal CIO Council is to meet quarterly  to discuss topics related to the implementation of the common baseline  and to assist agencies by, for example, sharing examples of agency  governance processes and IT policies. Additionally, by June 30, 2015, the  President’s Management Council is to select three members from the  council to provide an update on government-wide implementation of  FITARA on a quarterly basis through September 2016. The updates are  to improve the agencies’ awareness of policies and procedures that have  worked well in other agencies.
section_title: GAO Has Reported and Testified on Issues Related to OMB’s IT Reform Efforts
paragraphs: Since 2011, we have reported and testified that OMB’s IT reform  initiatives can help to improve the efficiency and effectiveness of the  federal government and have the potential to save billions of dollars.  These key initiatives include FDCCI, PortfolioStat, and cloud computing.
Between July 2011 and September 2014, we issued several reports and  testified on agency efforts to consolidate federal data centers and  achieve cost savings. Most recently, in September 2014, we reported that  19 of the 24 agencies that participate in FDCCI collectively reported  achieving an estimated $1.1 billion in cost savings between fiscal years  2011 and 2013, and that, by 2017, that figure was estimated to rise to a  total of about $5.3 billion. However, we found that planned savings may  be higher because six agencies that reported closing as many as 67 data  centers reported limited or no savings.
In addition, 11 of the 21 agencies with planned cost savings had  underreported their fiscal years 2012 through 2015 figures to OMB by  approximately $2.2 billion. While several agencies noted communication  issues as the reason for this, others did not provide a reason. We  concluded that until agencies fully report their savings, the $5.3 billion in  total savings will be understated. Accordingly, we recommended that  OMB assist agencies in reporting savings, and that agencies fully report  their consolidation cost savings. OMB and the agencies to which we  made recommendations generally agreed and described planned actions  to implement them. Further, Defense noted in a November 2014  response to our report that, in addition to the $2.6 billion in cost savings  planned by fiscal year 2017, the department expects that figure to  increase to $4.7 billion in future years as efficiencies are gained.
We have also previously reported on the implementation of OMB’s  PortfolioStat initiative. Specifically, in November 2013, we determined  that additional OMB and agency actions were needed to achieve savings  from OMB’s PortfolioStat initiative. For example, although all of the 26  federal agencies that were required to participate in the PortfolioStat  initiative had fully addressed four of seven key requirements established  by OMB, only 1 of the 26 agencies addressed all the requirements.  Further, agencies had not developed action plans that addressed all  elements, such as criteria for identifying wasteful, low-value, or  duplicative investments, or migrated two commodity IT areas—such as  enterprise IT systems and infrastructure—to a shared service by the end  of 2012.
In addition, we reported that OMB’s estimate of about 100 consolidation  opportunities and a potential $2.5 billion in savings from the PortfolioStat  initiative was understated because, among other things, it did not include  estimates from the Departments of Defense and Justice. Our analysis,  which included these estimates, showed that, collectively, the 26  agencies were reporting 204 opportunities and at least $5.8 billion in  potential savings through fiscal year 2015. To address these  shortcomings, we made a total of 64 recommendations, including that  OMB require agencies to fully disclose limitations in CIOs’ ability to  exercise their authority and that 24 agencies take steps to improve their  PortfolioStat implementation. OMB agreed with some of the  recommendations and disagreed with others; likewise, responses from  the 24 other agencies we made recommendations to varied.
More recently, in April 2015, we reviewed OMB’s second iteration of  PortfolioStat and reported that agencies had achieved a total of  approximately $1.1 billion in PortfolioStat-related savings during fiscal  years 2013 and 2014. However, agencies’ total planned PortfolioStat  savings from fiscal year 2013 to fiscal year 2015 had decreased by about  66 percent (from at least $5.8 billion to approximately $2 billion)  compared to what they had reported in 2013. In addition, agencies had  not consistently included savings from FDCCI in their PortfolioStat  reporting, which means that the total savings amount is understated.  Finally, the report notes that, while three selected agencies were able to  explain how they reinvested their PortfolioStat savings, they were not  always able to provide support for how such savings were used. We  recommended, among other things, that OMB ensure that its reports to  Congress accurately reflect savings generated from all PortfolioStat  initiatives, including those associated with FDCCI, and require agencies  to document how such savings are being reinvested. OMB agreed with  our recommendations and described plans to implement them.
We have also reported on agencies’ cloud computing efforts. For  example, we reported in September 2014 that, while agencies had  made progress in implementing OMB’s “Cloud First” policy, additional  opportunities for implementing cloud services and achieving savings  needed to be pursued. Specifically, although the seven agencies  reviewed had increased their cloud computing services since we last  reported on their progress in 2012, the overall increase in their IT  budgets was just 1 percent. We determined that the relatively small  increase in cloud spending was attributed, in part, to the fact that these  agencies collectively had not considered cloud computing services for  about 67 percent of their investments, which was inconsistent with OMB’s  policy that calls for cloud solutions to be considered first whenever a  secure, reliable, and cost-effective option exists regardless of where the  investment is in its life cycle.
We also found that the seven agencies collectively reported cost savings  of about $96 million from the implementation of cloud services, but that  other cloud services implemented did not save money, in part, because  the associated costs negated any savings. We concluded that, until the  agencies fully assess all their IT investments, they will not be able to  achieve the resulting benefits of operational efficiencies and cost savings.  To address these shortcomings, we recommended that the seven  agencies assess the IT investments identified in the report that have yet  to be evaluated for suitability for cloud computing services. The seven  agencies generally agreed with our recommendations.
Finally, in light of the project failures that continue to plague the federal  government and the duplicative and wasteful management of IT  operations, in the February 2015 update to our High-Risk List, we  designated the management of IT acquisitions and operations as a new  government-wide high-risk area. In doing so, we emphasized the  importance of federal agencies expeditiously implementing the  requirements of the December 2014 IT acquisition reform legislation to (1)  improve the transparency and management of IT acquisitions and  operations across the government and (2) strengthen CIOs’ authority to  provide needed direction and oversight. Our High-Risk List update also  notes that, beyond implementing legislation, OMB and the agencies need  to continue to implement our previous recommendations in order to  improve their ability to effectively and efficiently invest in IT. Finally, OMB  and agencies should demonstrate measurable government-wide progress  in key areas, including achieving planned PortfolioStat and FDCCI cost  savings.
section_title: Agencies Reported Achieving Billions of Dollars in Savings from Implementation of OMB’s IT Reform Efforts
paragraphs: As previously stated, beginning in 2010, OMB launched a series of IT  reform initiatives in the areas of data center consolidation, cloud  computing, and shared services migration, among other things, intended  to help agencies achieve greater efficiency in their IT investments, as well  as identify and execute opportunities for savings. In March 2013, OMB  issued a memorandum that included a requirement for the 26 agencies  that participate in the PortfolioStat initiative to begin reporting quarterly on  their planned and actual cost savings and avoidances achieved or  expected through their IT reform efforts. OMB uses these data to report  quarterly to Congress on the status of federal IT reform efforts.
In total, 24 of the 26 agencies reported achieving approximately $3.6  billion in cost savings and avoidances from the implementation of OMB’s  IT reform efforts between fiscal years 2011 and 2014. The 2 agencies  that did not report any savings were the National Aeronautics and Space  Administration (NASA) and Office of Personnel Management (OPM).  NASA officials stated that, as of June 2015, previously reported cost  avoidances (of about $54 million) had been reduced to zero due to the  inclusion of additional requirements that were not accounted for in the  new, consolidated contract that initially led to the avoidances. OPM  officials said that, while planned IT consolidation initiatives had been  executed, savings were minimal and not quantifiable.
Of the 24 agencies with reported cost savings and avoidances, 4— Defense, Department of Homeland Security (DHS), Department of the  Treasury (Treasury), and SSA—accounted for approximately $2.5 billion  (or about 69 percent) of the total. Treasury reported the highest amount of  cost savings and avoidances, about $1.1 billion, followed by DHS  reporting approximately $671.4 million. See table 1 for a listing of the 26  agencies’ cost savings and avoidances between fiscal years 2011 and  2014.
Data center consolidation and optimization cost savings and avoidances  comprise slightly more than half of the $3.6 billion total, while PortfolioStat  and other initiatives (such as cloud computing and shared services  migration) comprise the remainder of the cost savings and avoidances.  Figure 1 shows the key areas where the cost savings and avoidances  have been reported by agencies and the associated amounts.
See table 2 for a listing of OMB’s key IT reform areas and selected  examples of agency-reported savings or avoidances in each.
While agencies have reported significant savings to us, they have not fully  reported their savings to OMB, as required. In turn, OMB does not have  the information to use in its statutorily required quarterly reports to  Congress on the status of federal IT reform efforts. Specifically, OMB  noted in its May 2015 quarterly report to Congress that 25 agencies  reported total cost savings and avoidances of approximately $2.89 billion  between fiscal years 2012 and 2014. In contrast, 24 agencies reported to  us approximately $3.38 billion in cost savings and avoidances over that  same time frame, which is approximately $484 million higher than the  savings and avoidances being reported by OMB to Congress. See figure  2 for a graphical depiction of the differences in reported cost savings and  avoidances.
The $484 million shortfall in OMB’s report to Congress is due, in part, to  agencies not yet fully implementing our prior recommendations related to  reporting all their data center consolidation cost savings and avoidances  to OMB. Specifically, in September 2014, we reported that 11 agencies  had underreported (through the integrated data collection process) their  fiscal year 2011 through 2015 data center consolidation cost savings to  OMB by a total of approximately $2.2 billion. Accordingly, we  recommended that the agencies report all data center consolidation cost  savings and avoidances to OMB in accordance with established  guidance. The agencies generally agreed with our recommendation;  however, as of June 2015, only 3 of the 11 agencies—the Departments of  Commerce (Commerce) and Energy (Energy) and the Environmental  Protection Agency (EPA)—had implemented our recommendation by  reporting their data center consolidation cost savings to OMB. The  remaining 8 agencies had not yet fully implemented our  recommendation, although many had taken action by reporting a portion,  but not all, of their data center consolidation cost savings and avoidances  to OMB.
The shortfall can also be attributed to other inconsistencies in how the  amounts are being reported by agencies and OMB. Specifically, in April  2015, we reported on the implementation of OMB’s second iteration of  the PortfolioStat initiative and identified dozens of examples of cost- savings initiatives that were reported to OMB but not to us, or initiatives  that agencies reported to us but not to OMB. We attributed these  inconsistencies to several reasons, including that agencies did not always  follow OMB’s instructions regarding what savings information to report, or  when to report it, and that several agencies had stated that their reported  savings were not always included in OMB’s report to Congress. We  concluded that, until these inconsistencies are addressed, it will be  difficult to determine the extent to which the PortfolioStat initiative is  meeting its goals. As a result, we recommended that OMB ensure that its  reports to Congress related to the results of IT reform efforts accurately  reflect savings generated from all PortfolioStat initiatives, including those  associated with FDCCI. OMB agreed with our recommendation.
The importance of agencies identifying and reporting their cost savings to  OMB, and OMB reporting such savings to Congress, has also been  emphasized in recent legislation. Specifically, as previously mentioned, in  December 2014, Congress enacted IT acquisition reform legislation  (commonly referred to as FITARA) that requires, among other things,  agencies to work with OMB to increase the efficiency and effectiveness of  their IT portfolios and identify potential cost savings. The legislation also  requires agencies to report to OMB on cost savings realized from the  implementation of FDCCI, as well as progress on optimization and  consolidation. Further, the legislation requires OMB to submit a goal of  planned cost savings and optimization improvements to Congress.
Finally, OMB shall provide an annual update of aggregated cost savings  and optimization improvements achieved to date through FDCCI and  compare the savings to the projected cost savings and optimization  improvements.
Until agencies implement our prior recommendations to report all  aggregated cost savings and avoidances, and OMB implements our prior  recommendation to ensure that its quarterly reports to Congress  accurately reflect such information, Congress may be limited in its ability  to oversee agencies’ progress in achieving savings from OMB’s IT reform  efforts.
section_title: Agencies Have Incomplete Plans for Reinvesting Savings
paragraphs: Most agencies did not fully implement OMB’s guidance for submitting  reinvestment plan information. As previously stated, OMB has established  both one-time and ongoing requirements for agencies to establish plans  to reinvest their savings. Specifically, for long-range reinvestment plans,  OMB’s fiscal year 2013 PortfolioStat memorandum included a  requirement for agencies to describe plans to reinvest savings resulting  from the consolidation of commodity IT resources, including data centers,  in their IRM strategic plans.
Further, OMB’s fiscal year 2014 budget guidance required federal  agencies to develop one-time fiscal year 2014 reduction and reinvestment  plans as part of its “cut and reinvest” initiative. Specifically, agencies were  to cut 10 percent from proposed IT spending based on their average IT  spending between fiscal years 2010 and 2012 and propose reinvestments  of 50 to 100 percent of the savings into priority investments that were  expected to demonstrate a favorable return on investment (quantitative or  qualitative) to the agency within 18 months from the enactment of the  fiscal year 2014 appropriations. Each of the proposed reductions and  reinvestments was also to include supplemental information, such as the  reduction or reinvestment type and explanations of the changes in  funding. In addition, each of the proposed reinvestments was to include a  priority level and a description of the favorable return on investment.  Finally, agencies were to submit quarterly reinvestment plans via their  integrated data collection submissions to OMB, which were to describe  agency plans to use the resulting cost savings or avoidances for each IT  reform-related savings and avoidance initiative reported.
Of the 27 agencies required to submit reinvestment plan information to  OMB, 5 had fully implemented OMB’s guidance, while the remaining 22  agencies had partially implemented the guidance. More specifically,  although about two-thirds of agencies had established long-range  reinvestment plans in their IRM strategic plans, most agencies had not  fully implemented OMB’s guidance for establishing fiscal year 2014  reduction and reinvestment plans. In addition, half of the agencies had  not fully implemented OMB’s guidance for submitting quarterly  reinvestment plans in their integrated data collection submission. See  table 3 for a summary of agencies’ cost savings and avoidances and the  completeness of their reinvestment plans provided to OMB. A more  detailed discussion of agencies’ reinvestment plans follows the table.
subsections: section_title: About Two-thirds of Agencies Had Long-range Reinvestment Plans
paragraphs: About two-thirds of agencies provided a long-range reinvestment plan in  their IRM strategic plan, in accordance with OMB’s guidance.  Specifically, of the 26 agencies required to submit an IRM strategic plan,  18 included a reinvestment plan and the remaining 8 did not, as detailed  in table 4.
For the 18 agencies that implemented OMB’s guidance, their long-range  reinvestment plans included a wide range of reinvestment initiatives. For  example, DHS plans to invest in its secure network to improve its security  posture and improve its capability to use and protect classified  information. Interior plans to capture savings generated by the  consolidation of IT infrastructure and other streamlining efforts and to  reinvest those savings into subsequent phases of IT transformation, such  as migration of applications and services to the cloud. EPA also plans to  reinvest savings into its E-Enterprise initiative to modernize the delivery of  environmental services to industry and the public by creating an  interactive set of shared services for use by agency and state data  systems. According to EPA’s plan, this is intended to improve  environmental protection and reduce the burden on EPA’s regulated  community.
However, approximately one-third of agencies did not include long-range  reinvestment plan information in their IRM strategic plans and provided  varied reasons for not doing so. For example, Treasury’s Chief  Technology Officer stated that the reinvestment plans for the department  were not available when the IRM strategic plan was developed and  submitted to OMB, most recently in February 2014. He added that the  department is waiting to add such reinvestment information until OMB  finalizes its guidance on how to implement the December 2014 IT  acquisition reform legislation. In addition, U.S. Army Corps of Engineers  officials agreed that the reinvestment information in the agency’s current  IRM strategic plan was incomplete and stated that the agency was  awaiting feedback from OMB on the plan before making additional  updates. Finally, Department of Health and Human Services (HHS)  officials stated that the department requested additional guidance  regarding the reinvestment information to include from OMB and had not  received it. In the absence of further clarification from OMB, HHS officials  stated that they did not include specific reinvestment plans in the  department’s IRM strategic plan.
Until agencies update their strategic plans to include their approach to  reinvesting savings from the consolidation of commodity IT resources,  including data centers, they will lack an important tool to help ensure that  savings are being used in the most efficient and effective manner  possible.
section_title: Only One-Third of Agencies’ Fiscal Year 2014 Reduction and Reinvestment Plans Were Complete
paragraphs: Most agencies did not follow OMB’s guidance for proposing one-time  fiscal year 2014 IT reductions of 10 percent and reinvestments of  between 50 and 100 percent of the savings in their budget submissions  for that fiscal year. Specifically, of the 27 agencies required to submit  fiscal year 2014 reduction and reinvestment plan information, 9 had fully  met OMB’s guidance by meeting or exceeding OMB’s reduction and  reinvestment targets and including all required supplemental information,  but 18 had not. Specifically, 11 agencies had partially met the guidance, 5  had not met it, and 2 had not submitted the required document. See table  5 for an assessment of agencies’ one-time fiscal year 2014 proposed  reductions and reinvestments against OMB’s guidance.
Of the nine agencies that had fully met or exceeded OMB’s one-time  reduction and reinvestment targets and included all required  supplemental information, two agencies—DHS and Interior—accounted  for more than $650 million of proposed IT reductions and $400 million in  reinvestments. For example, DHS was required by OMB’s guidance to  submit $563 million in reductions and provided almost $574 million in  reductions, in areas such as enterprise IT systems and data centers. The  department also proposed reinvesting $316 million of its savings across  39 IT investments aimed at improving shared services, security posture,  and citizen services. In addition, Interior proposed reductions to 51 IT  investments, collectively totaling about $99 million, primarily in the areas  of IT infrastructure and business systems, and planned to reinvest the full  amount across 79 reinvestments, in areas such as administrative  efficiencies and commodity IT.
Eleven agencies only partially met OMB’s guidance because they either  did not meet OMB’s one-time reduction and reinvestment target or did not  include the required supplemental information for each of the proposed  reductions and reinvestments (e.g., reduction or reinvestment type,  explanation of the changes in funding, and description of the favorable  return on investments). For example, OPM met the guidance for providing  reductions amounting to 10 percent and proposing reinvestments for at  least half of that amount, but did not provide a description of the favorable  return on investment for each of its reinvestments. According to OPM’s  Chief of Investment Management, Operations Technology Management,  the agency’s offices did not provide a description of the favorable return  on investment, so the information could not be provided in the  department’s submission.
As another example, Energy did not meet OMB’s guidance for the  percentage of reductions and reinvestments, but did provide complete  supplemental information for the reductions and reinvestments that the  department reported. Energy officials acknowledged that the department  did not meet the target IT reduction set by OMB, but stated that they felt  that the target did not account for significant IT reductions already  achieved in fiscal years 2012 and 2013 in response to other OMB and  internal IT cost savings initiatives. Officials further noted that several  programs had just completed significant IT reduction efforts in the  previous years and found it difficult to identify additional reductions for the  fiscal year 2014 budget submission. Similarly, NASA also did not meet  OMB’s guidance for reductions and reinvestments, but provided complete  supplemental information. According to NASA officials, the agency could  not meet the target for reinvestment due to having already completed  many of its projects that would have provided OMB’s expected benefits  and that the agency was working with its Office of the Chief Technologist  to identify new IT investments for future years.
Five agencies did not meet OMB’s guidance because they did not meet  OMB’s one-time reduction and reinvestment targets for fiscal year 2014  and did not provide supplemental information for all required fields.  Agencies’ reasons for not meeting the guidance varied. For example, a  Department of Justice official from the Office of the CIO stated that the  department had made significant reductions in its IT spending in the  previous two budget cycles and did the best it could to meet OMB’s  guidance, but ultimately fell short. In addition, the Department of Housing  and Urban Development’s (HUD) Deputy CIO for Customer Relations and  Performance Management stated that the department had focused on  proposing reductions that were possible to achieve as opposed to  reductions that were not feasible. Although the department did not meet  OMB’s targets, the official added that, since OMB did not convey any  objection to HUD’s approach, the department inferred that OMB did not  have any objection to the reductions and reinvestments that HUD  provided.
As another example, EPA officials stated that their initial submission was  rejected by OMB because the information was not submitted according to  OMB’s guidance. As a result, the agency submitted a revised version to  address OMB’s feedback; however, our assessment of that version  showed that it did not meet OMB’s guidance. Finally, Veterans Affairs  (VA) officials stated that the department believed that the OMB target did  not take into consideration spending reductions made in prior years. As a  result, VA submitted $120 million in proposed spending reductions  (compared to its target of $316 million) for fiscal year 2014 that the  Deputy Assistant Secretary believed were appropriate. The officials  stated that the $196 million difference was funding that was being spent  on mission-related priorities (instead of IT-related priorities).
The two agencies that did not submit one-time fiscal year 2014 reduction  and reinvestment plan information—Defense and HHS—provided varying  reasons for not doing so. Specifically, rather than submit the required  documentation, Defense requested an exemption from the requirement  from OMB on the basis that an arbitrary 10 percent reduction was not in  the best interests of national security and also cited system limitations  that prevented the department from providing the requested information.  Defense officials also stated that OMB’s guidance on what information to  include in the reduction and reinvestment plans was issued too late to  make changes to the department’s budgeting process in order to provide  the requested information. In addition, HHS did not submit fiscal year  2014 IT reduction and reinvestment plans. According to HHS officials, the  department requested additional guidance from OMB on how the  reductions and proposed reinvestments submitted would be incorporated  into the department’s budget request, but did not receive a response, so  the department chose not to submit the required documentation.
Because not all agencies followed OMB’s guidance, the totals of  agencies’ proposed reductions and reinvestments were substantially  short of OMB’s overall goals for its “cut and reinvest” initiative.  Specifically, agencies should have submitted a total of $7.6 billion in  reductions and proposed reinvestments between $3.8 and $7.6 billion.  Instead, agencies collectively proposed reductions of about $3.0 billion  and reinvestments of $2.1 billion in their fiscal year 2014 budget  submissions. The difference is primarily due to two agencies—Defense,  which was expected to propose about $3.5 billion in reductions and  between $1.75 and $3.5 billion in reinvestments, and HHS, which was  expected to propose $662 million in reductions and between $331 and  $662 million in reinvestments. See figure 3 for a graphical depiction of the  total of agencies’ proposed reductions and reinvestments compared to  OMB’s guidance.
Agencies were also required to assign an area to each of their proposed  reductions (e.g., IT infrastructure, data centers, underperforming  investment) and proposed reinvestments (e.g., citizen services,  administrative efficiencies, energy efficiency). IT infrastructure accounted  for the largest area of proposed reductions, about $978 million, while  citizen services accounted for the largest area of reinvestment, about  $480 million. See figure 4 for a graphical depiction of the total proposed  reductions and total proposed reinvestments in each area assigned by  agencies and the associated dollar values.
As previously discussed, several agencies that only partially followed or  did not follow OMB’s guidance stated that their submissions reflected the  best that could be done after consideration of other cost reduction efforts  in the preceding years. In addition, the lack of agency compliance with  OMB’s guidance is also due, in large part, to OMB not enforcing the  requirements in its guidance. Most agencies reported that they did not  receive explicit approval or disapproval of their IT reduction and  reinvestment proposals. As a result, many of the agencies considered  their submissions to be approved once the budget request submission  process had been concluded, even in cases where they did not meet the  expected reduction or reinvestment targets. According to staff from  OMB’s Office of E-Government and Information Technology, all agencies,  except for Defense, adhered to the requirements for the IT reduction and  reinvestment plan submission; however, OMB was unable to provide  documentation to support this claim. In addition, as previously stated, the  results of our analysis showed that most agencies did not follow OMB’s  guidance for their submissions, including submitting IT reductions and  reinvestments that met OMB’s defined targets.
section_title: Half of Agencies’ Quarterly Plans Did Not Provide Reinvestment Details
paragraphs: Half of the agencies did not provide complete quarterly reinvestment plan  information in their integrated data collection submissions, in accordance  with OMB guidance. Specifically, of the 26 agencies required to submit  this information, 12 had provided both the reinvestment category and  reinvestment details, 12 had provided partial information, and 2—NASA  and OPM—had not reported any cost savings or avoidances. See table  6 for an assessment of the reinvestment information in agencies’  integrated data collection submissions.
For the 12 agencies that included complete information, their quarterly  submissions provided insight into key cost savings and avoidance  initiatives and related reinvestment plans. For example, HHS reported  that it had reduced the number of data centers and servers, which  resulted in a reduction in operating expenses. The resulting $16.4 million  in cost avoidances since 2012 has been used to help fund projects  related to data center operations, as well as other mission-related  projects and initiatives. In addition, the National Archives and Records  Administration has saved $6.0 million in Electronic Records Archives  activities in fiscal years 2013 and 2014 that it plans to use to help adapt  its archives into a cloud-based solution to support increases in the volume  of records managed. As another example, SSA has expanded use of its  Electronic Case Analysis Tool that automatically identifies and speeds the  processing of people’s cases with severe medical conditions. This has  resulted in approximately $128.1 million in cost avoidances over the last 3  fiscal years, which the agency plans to use to fund other disability  determination investments.
The remaining 12 agencies provided partial information about their  reinvestment plans. For example, 6 of the 12 agencies provided only  reinvestment category information (e.g., administrative efficiencies,  shared services, innovative investments), but did not provide the related  details of their reinvestment plans. The remaining 6 agencies provided  reinvestment categories and the related reinvestment details for a portion,  but not all, of their cost savings and avoidance initiatives. For example,  Commerce reported that it had migrated existing and built new IT  infrastructure in a virtualized environment to reduce its IT footprint. This  resulted in $11.8 million in cost avoidances that were expected to be used  to reduce physical infrastructure procurement requirements year-over- year. However, the department was missing detailed reinvestment  information for 13 of its 18 initiatives.
The agencies that submitted partial reinvestment plan information in their  quarterly submissions provided various reasons for why information was  missing. For example, U.S. Agency for International Development officials  indicated that they were not aware of the requirement to provide  reinvestment information in their integrated data collection submission. In  contrast, a Commerce official stated that the integrated data collection  information is provided by the department’s component-level  organizations and that the Office of the CIO does not have insight into  why complete information was not provided. Interior’s Director of IT  Planning also stated that missing information in their integrated data  collection submission was also due to its component agencies not  tracking and reporting complete information for their savings and  avoidance initiatives.
Without complete reinvestment plans in their integrated data collection  submissions, agencies will lack important information that could be used  to better ensure that cost savings and avoidances from OMB IT reform  efforts are being used in the most efficient and effective manner possible.
section_title: Selected Agencies Documented Key Governance Processes in Planning IT Reinvestments, but Did Not Track Performance Results
paragraphs: According to our IT Investment Management Framework, organizations  should establish IT governance processes that include one or more  decision-making bodies or boards that are involved in making decisions  on which investments to fund and ensuring that such decisions meet  stakeholder needs and are made in the best interests of the organization.  Additionally, standards for internal control emphasize the need for federal  agencies to put in place mechanisms to achieve their objectives, such as  comparing actual performance against plans and goals, and analyzing  significant differences. Finally, leading practices of government and  industry have established the importance of developing performance  measures, including identifying targets, to gauge progress. They should  be measurable, outcome-oriented, and actively tracked and reported.
The four selected agencies—SSA, Interior, Education, and Labor— documented the role of key investment boards and related IT governance  processes to guide the development of their fiscal year 2014 budget  submission (which included planned IT reductions and reinvestments).  See table 7 for a detailed description of each agency’s key governance  responsibilities and processes for developing the fiscal year 2014 IT  budget submission.
In executing their fiscal year 2014 budget formulation processes, the four  selected agencies proposed $350 million in total IT reductions and $350  million in IT reinvestments for fiscal year 2014. The largest amount of  reductions, approximately $240.9 million, were planned in the area of IT  infrastructure, while the largest amount of reinvestments, approximately  $240.2 million, were planned in the area of commodity IT. Table 8  outlines the selected agencies’ approved reductions and reinvestments  for fiscal year 2014, according to the key areas.
However, three of the four selected agencies did not track performance  results against their planned reductions. One agency—SSA—was able to  provide supporting documentation that it had tracked the results of its  proposed reductions. Specifically, the agency reported that it had  achieved an estimated $106.7 million in total reductions, primarily in the  area of IT infrastructure, as compared to total planned reductions of  $150.1 million (see table 9.) The remaining three agencies—Education,  Labor, and Interior—had not tracked performance results against their  planned IT reductions.
In addition, none of the four selected agencies had tracked the  performance results of their planned reinvestments. While SSA had  provided information regarding how spending had increased in their  planned reinvestment areas (e.g., data centers, office automation, etc.),  the agency was unable to track the amounts against the reinvestment  amounts in their fiscal year 2014 budget submission. Interior officials  stated that their proposed fiscal year 2014 IT reductions and  reinvestments were likely executed as planned, while Labor’s IT  Governance Director stated that their reinvestment amounts were likely  equal to or slightly higher than planned due to certain component  agencies increasing IT service levels; however, neither was able to  provide supporting documentation. Labor, Interior, and Education officials  also stated that the execution of the reductions and reinvestments was  not tracked because the fiscal year 2014 plan was a one-time submission  and not an ongoing OMB reporting requirement.
While none of the agencies had tracked their proposed fiscal year 2014  reinvestments, two agencies—SSA and Education—had established  policies and processes to oversee the reallocation (i.e., reinvestment) of  funds to other investments. Specifically, according to SSA’s Capital  Planning and Investment Control policy, dated November 2014, budget  changes are required to be submitted to the Deputy Commissioner for  Systems/CIO for approval through the agency’s IT investment  management system using the IT funding change request process. The  policy further states that such change requests should include an  explanation and justification of budget adjustment and discuss the impact  of the change on the investments providing the additional funds as well as  the investment receiving the funds. Further, according to Education’s IT  Investment Management Process Guide, dated March 2014, when  additional funding becomes available, Education’s Investment Review  Board will convene and take under consideration recommendations for IT  investment funding from the department’s Planning and Investment  Review Working Group. The guide further states that projects or project  components that previously did not receive funding may be reconsidered  along with any new investment proposals.
The remaining two agencies—Interior and Labor—stated that they did not  track performance results of their fiscal year 2014 reinvestments because  their CIO offices did not have information regarding such reinvestments at  their component agencies. For example, Interior’s officials stated that  because the department has a decentralized business structure and  investment management autonomy within its 14 bureaus and offices, with  each having primary control over their IT spending, it was difficult to be  able to track their specific reinvestments. In addition, officials added that a  tracking mechanism was not put in place, since the fiscal year 2014  reduction and reinvestment plan was a one-time submission and not an  ongoing requirement. Labor’s IT Governance Director cited similar  difficulties in tracking the reductions and reinvestments of their  component agencies.
subsections: section_title: Incomplete OMB Requirements Have Resulted in Lack of Tracking of Reinvestment Performance
paragraphs: The lack of agency tracking of the actual performance of their  reinvestments is due, in part, to weaknesses in OMB’s requirements for  submitting reinvestment information. Specifically, while agencies were  required to establish proposed reductions and reinvestments for fiscal  year 2014, OMB did not require agencies to track the actual performance  against those reductions and reinvestments. A policy analyst from OMB’s  Office of E-Government and Information Technology indicated that  agencies were not expected to assess performance against their planned  reductions and reinvestments because the exercise was considered to be  complete when the fiscal year 2014 President’s budget was issued.  However, OMB did not formally convey this information to agencies in its  fiscal year 2014 budget guidance or in other guidance documents.  Officials from several agencies included in this review stated that the lack  of guidance from OMB left them unsure of how to proceed with the  reductions and reinvestments in their fiscal year 2014 budget  submissions.
Further, although OMB’s ongoing requirements for reinvestment  information include providing long-range reinvestment plans in agency  IRM strategic plans and more specific quarterly reinvestment plans for  each cost savings and avoidance initiative, it has not established a  requirement for agencies to track the actual performance of their  reinvestments. As previously stated, as part of the quarterly integrated  data collection submissions, OMB requires agencies to document, for  each cost savings and avoidance initiative, their plans to use such  savings or avoidances. However, in addition to the fact that most  agencies did not provide complete information in these submissions,  there is no OMB requirement for agencies to document whether the  reinvestment was executed as planned or to report the performance  results through the integrated data collection process.
In addition, while OMB had previously established targets to guide  agencies in their one-time fiscal year 2014 IT reduction and reinvestment  plans, its ongoing requirements for reinvestment plans do not include any  targets. For example, as previously discussed, OMB’s fiscal year 2014  budget guidance included a reinvestment dollar amount range for each  agency. However, the ongoing requirements for reinvestment plans only  require agencies to provide narrative on their reinvestment plans and do  not require agencies’ reinvestments to meet any specific dollar amounts,  specific percentages of planned reductions, or other performance  indicator. Established targets are important because, as previously  stated, they provide an indicator for gauging progress and improving  performance if they are outcome-oriented and actively tracked and  reported against.
Until OMB requires agencies to report actual reinvestment performance  and defines performance targets to guide agency reinvestment efforts, it  will be limited in its ability to ensure that agencies are reinvesting funds as  planned and may not be able to hold agencies accountable. Further,  without visibility into agencies’ reinvestment performance, OMB may not  be able to provide effective budgetary oversight. Finally, without improved  tracking of reinvestments through the use of existing governance  mechanisms and the implementation of FITARA, Interior and Labor may  lack assurance that their component agencies are reinvesting in areas  consistent with agency-wide goals.
section_title: Conclusions
paragraphs: In the more than 5 years since OMB began its IT reform efforts, agencies  have reported more than $3 billion in savings from their implementation of  such efforts—most notably, Defense, DHS, Treasury, and SSA, which  account for 69 percent of the reported government-wide savings to date.  However, continued discrepancies of more than $484 million in the  savings being reported by agencies and those being reported in OMB’s  quarterly reports to Congress indicates that agencies are still not  reporting all of their savings to OMB. OMB and agency implementation of  our prior recommendations in this area could help ensure that agencies  report all data center consolidation savings, and that OMB’s quarterly  reports to Congress accurately reflect savings achieved. Ensuring  accurate reporting is increasingly important in light of the December 2014  IT acquisition reform legislation that specifically addresses agency and  OMB reporting of IT reform-related savings.
The extent of savings reported through fiscal year 2014 makes evident  the increasing importance for agencies to establish complete  reinvestment plans. While several agencies have established plans in  accordance with OMB’s guidance, most ongoing agency reinvestment  plans—including the long-range plans in their IRM strategic plans and  quarterly plans in their integrated data collection submissions—are  incomplete, which raises questions about whether these agencies are in  the best position to reallocate funding to the appropriate investments after  savings are realized. Until such plans are completed, agencies will be  challenged to ensure that their considerable savings are being used in the  most efficient and effective manner possible.
While the four agencies that we selected documented key governance  processes and fully embraced OMB’s “cut and reinvest” guidance by  proposing to reinvest the full amount of their proposed reductions in their  fiscal year 2014 budget submissions, none of the four agencies was able  to provide support that they had tracked the actual performance of their  proposed reinvestments. Although SSA and Education have since  established policies and processes to oversee reinvestment, two  agencies—Interior and Labor—attributed the weaknesses in this tracking  to a lack of visibility into component agencies’ reinvestment activities.  Expeditiously implementing the requirements of the December 2014 IT  acquisition reform legislation in conjunction with OMB’s recent  implementation guidance will help to ensure that these agencies have  better oversight of their component agencies’ reinvestments. The  weaknesses in agency tracking of actual reinvestment performance are  also due, in part, to OMB not having established a requirement for  reporting such information. When combined with the lack of established  performance targets—similar to those used by OMB in the fiscal year  2014 budget cycle—it will be difficult for OMB to gauge agency progress  in reinvesting their savings going forward. In the absence of a  requirement for agencies to track actual reinvestment performance and  defined targets, OMB will be limited in its ability to ensure that agencies’  reinvestments are occurring as planned and may not be able to hold  agencies accountable for continued progress.
section_title: Recommendations for Executive Action
paragraphs: To better ensure that agencies’ IT savings are being reinvested in the  most efficient and effective manner possible, we are making two  recommendations to OMB. Specifically, we recommend that the Director  of OMB direct the Federal CIO to ensure that agencies complete their reinvestment plans, in  accordance with established requirements, and maintain those plans  on an ongoing basis; and  require agencies to track actual reinvestment performance and define  performance targets for agencies’ reinvestments, as done previously.
In addition, we are making 22 recommendations to 17 of the departments  and agencies in our review to improve their reinvestment planning and  oversight. Appendix II contains these recommendations.
section_title: Agency Comments and Our Evaluation
paragraphs: We received comments on a draft of our report from OMB, the 17  agencies to which we made recommendations, and the remaining 10 that  had no recommendations. Specifically, OMB and 12 agencies agreed  with our recommendations, while 1 (State) did not state whether it agreed  or disagreed, 3 had no comments, and 1 (Defense) partially agreed. The  10 agencies without recommendations stated that they had no comments.  Multiple agencies also provided technical comments, which we have  incorporated as appropriate. Comments from the agencies to which we  made recommendations are discussed in more detail here.
In comments provided via e-mail on August 27, 2015, an OMB official  from the Office of the General Counsel stated that the agency  generally agreed with our report and recommendations and noted that  the recommendations would be realized in future budget guidance  should OMB engage in a similar effort in the future to realize and  reinvest savings. However, OMB also stated that, because the  reinvestment plans were included in the fiscal year 2014 budget  guidance, changing the rules at this point to have better transparency  into the reinvestment decisions would likely outweigh the value of  having that detail. Further, the agency stated that, if OMB changed  the rules at this stage to require agencies to report investment  decisions with greater detail, agencies would invest an inordinate  amount of effort for the benefit. We disagree with these statements.  As we note in our report, the extent of savings reported through fiscal  year 2014 makes evident the increasing importance for OMB to  immediately require agencies to complete their reinvestment plans  and track reinvestment performance. Until such requirements are in  place, agencies may be challenged to ensure that their considerable  savings are being used in the most efficient and effective manner  possible and OMB will be limited in its ability to ensure that agencies’  reinvestments are occurring as planned. We therefore believe our  recommendations are warranted.
In written comments, Agriculture’s Assistant Secretary for  Administration stated that the department concurred with our  recommendation. Agriculture also noted that it supports our  recommendations to OMB to define targets for agency reinvestment  and require that agencies complete their reinvestment plans and track  actual performance. The department’s comments are provided in  appendix III.
In written comments, Commerce’s Deputy Secretary stated that the  department agreed with the report’s recommendations and described  actions to address the recommendations. Specifically, Commerce  stated that it will review and update its IRM strategic plan to establish  a means to oversee reinvestments rendered from the consolidation of  commodity IT resources. In addition, the department noted that it will  continue to collect and report all initiatives resulting in cost savings  and avoidances to ensure IT savings are being realized. The  department’s comments are provided in appendix IV.
In written comments, Defense’s CIO provided comments for both the  department and the U.S. Army Corps of Engineers. It partially  concurred with the recommendation made to the Defense CIO related  to ensuring that the department’s integrated data collection  submission to OMB includes complete plans to reinvest any resulting  savings and avoidances from OMB-directed IT reform-related efforts.  Specifically, Defense stated that it will continue to use its Planning,  Programming, Budget, and Execution process as the framework for  decision making on all resource decisions and that savings achieved  as a result of Defense IT efficiency efforts will be directed to defense  capabilities as determined by the department’s existing process. The  department also noted that it is making progress in making these IT  resource decisions and associated cost savings and avoidances more  transparent.
We support the department’s efforts to be more transparent and  acknowledge in our report that Defense had approximately $380  million in reported cost savings and avoidances between fiscal years  2011 and 2014. However, considering the magnitude of the  department’s reported savings and avoidances, we believe that the  department should develop reinvestment plans in accordance with  OMB’s guidance. Further, without complete reinvestment plans, the  department will be challenged to ensure that its considerable savings  are being used in the most efficient and effective manner possible.  We therefore believe our recommendation is warranted.
The department concurred with the recommendation we made to the  U.S. Army Corps of Engineers, stating that the agency will include  information in its next IRM strategic plan regarding the approach to  reinvesting savings from the consolidation of commodity information  management and IT resources in accordance with OMB’s guidance.  The department’s comments are provided in appendix V.
In written comments, Energy’s CIO stated that the department  concurred with our recommendation and described planned actions to  address it. Specifically, the CIO stated that the department will ensure  that its integrated data collection submission to OMB includes, for all  reported initiatives, complete plans to reinvest any resulting cost  savings and avoidances from OMB-directed IT reform-related efforts.  Energy’s written comments are provided in appendix VI.
In written comments, HHS’s Assistant Secretary for Legislation stated  that the department concurred with our recommendation and  described planned actions to address it. Specifically, the department  stated that HHS’s Office of the CIO will address reinvestment of cost  savings when the department’s IRM Strategic Plan is next updated.  The department also provided technical comments, which we have  incorporated as appropriate. HHS’s written comments are provided in  appendix VII.
In written comments, DHS’s Director of the Departmental GAO-OIG  Liaison Office stated that the department concurred with our  recommendation and described planned actions to address it.  Specifically, the department stated that the DHS CIO will ensure that  the integrated data collection submission to OMB includes complete  plans to reinvest any resulting savings and avoidances from OMB- directed IT reform-related efforts for all reported initiatives. DHS also  elaborated on existing IT governance processes in place to facilitate  planning for the reinvestment of cost savings, as well as other  decision-making processes for budget and acquisition used to enable  investment recommendations.
However, the department also noted that OMB does not currently  require agencies to document reinvestment plans for cost savings  achieved and cited our prior report on the implementation of OMB’s  PortfolioStat initiative. We disagree with this statement. As  mentioned in this report, agencies are required to submit quarterly  reinvestment plans via their integrated data collection submissions to  OMB, which are to describe agency plans to use the resulting cost  savings or avoidances for each IT reform-related savings and  avoidance initiative reported. In our prior report on OMB’s  PortfolioStat initiative, we determined that there was no OMB  requirement for agencies to report whether they had actually  reinvested the funds as planned—an issue that raises questions  about whether reinvestments actually occurred. As such, we believe  we have accurately presented OMB’s requirements for reporting  reinvestment plan information in this report. DHS’s written comments  are provided in appendix VIII.
In written comments, HUD’s CIO stated that the department  concurred with our recommendation. HUD’s written comments are  provided in appendix IX.
In written comments, Interior’s Principal Deputy Assistant Secretary of  Policy, Management and Budget stated that the department generally  agreed with our findings and concurred with our recommendations.  The department also described planned actions to address the  recommendations, including that the Office of the CIO will update its  integrated data collection template to make reinvestment plans a  required field and review the reinvestment plans for completeness  prior to submission to OMB. In addition, the department stated that  these new procedures, along with existing and improved governance  mechanisms, will be used to facilitate better tracking of how savings  are reinvested. Interior’s written comments are provided in appendix  X.
In comments provided via e-mail on August 11, 2015, a Labor audit  liaison stated that the department had no comments on the report.
In written comments, State’s Comptroller did not agree or disagree  with our recommendation, but described planned actions to update its  strategic planning guidance to provide additional information on the  allocation and reinvestment of IT resources. The department also  elaborated on efforts to initiate IT reforms, cost reductions, and  reinvestment efforts since 2011, and stated that it is working to ensure  that the cost savings yielded by data center consolidation activities  are reinvested into the department’s strategic priorities. State’s written  comments are provided in appendix XI.
In comments provided by e-mail on August 12, 2015, an audit liaison  from Treasury’s Office of the CIO stated that the department had no  comments on the report.
In written comments, VA’s Chief of Staff stated that the department  generally agreed with our conclusions and concurred with our  recommendation. The department also described planned actions to  address our recommendation, stating that its Office of Information and  Technology plans to establish a program management office to track  cost savings, avoidance, and reinvestment opportunities by the end of  2015. VA’s written comments are provided in appendix XII.
In written comments, EPA’s CIO stated that the agency concurred  with our recommendation. In addition, the CIO noted that it would  resolve our finding that its one-time fiscal year 2014 reduction and  reinvestment plan did not meet OMB’s guidance. However, the  agency did not provide additional documentation to support a revision  to our evaluation. As such, we continue to believe our evaluation is  appropriate. EPA’s written comments are provided in appendix XIII.
In written comments, NRC’s Deputy Executive Director for Corporate  Management stated that NRC staff agreed with our findings and  recommendations. NRC also noted that, while OMB has issued  guidance requiring agencies to report cost savings, the guidance is  general in nature. The agency added that a discussion of how  agencies’ IT reinvestment and reporting would benefit from specific  cost definitions and categorization would be useful in our report and  would facilitate more meaningful comparisons among agencies. While  we acknowledge NRC’s comments, this report focused on agencies’  progress in achieving savings from their IT reform efforts and did not  review the adequacy of OMB’s guidance on reporting cost savings,  including related cost definitions and categorizations. As a result, we  do not have a basis to recommend improvements to OMB’s guidance  in these areas. NRC’s written comments are provided in appendix  XIV.
In written comments, OPM’s CIO stated that the agency concurred  with our recommendation and noted that, in future updates to OPM’s  Strategic IT Plan, information will be provided regarding the approach  to reinvesting savings from the consolidation of commodity IT  resources (including data centers) in accordance with OMB’s  guidance. OPM’s written comments are provided in appendix XV.
In comments provided via e-mail on July 17, 2015, a systems  accountant from USAID’s Office of the Chief Financial Officer, Audit,  Performance and Compliance Division stated that the agency had no  comments on the report. The agency also provided technical  comments, which we have incorporated as appropriate.
Comments from the agencies without recommendations are discussed in  more detail here.
In comments provided by e-mail on August 11, 2015, a policy analyst  from Education’s Office of the Secretary stated that the department  had no comments on the report. The department also provided  technical comments, which we have incorporated as appropriate.
In comments provided by e-mail on August 11, 2015, a Justice audit  liaison specialist stated that the department had no comments on the  report.
In comments provided via e-mail on July 27, 2015, Transportation’s  Deputy Director, Office of Audit Relations, stated that the department  had no comments on the report.
In comments provided via e-mail on August 11, 2015, a financial  management analyst from GSA’s Office of Administrative Services,  GAO/IG Audit Response Division stated that the department had no  additional comments on the report.
Our draft report provided to GSA for comment included a  recommendation that the agency ensure that its integrated data  collection submission to OMB include, for all reported initiatives,  complete plans to reinvest any resulting cost savings and avoidances  from OMB-directed IT reform-related efforts. This was based on the  agency’s quarterly integrated data collection submission to OMB not  including reinvestment plan information for 3 of the agency's 13 cost  savings and avoidance initiatives. Subsequently, GSA provided  additional documentation that included reinvestment plans for all of its  initiatives. As a result of GSA's action, we have removed the  recommendation and made appropriate changes in the report to  reflect the updated information.
In comments provided via e-mail on August 12, 2015, NASA’s  GAO/OIG Audit Liaison Team Lead stated that the agency had no  comments on the report.
In written comments, the Archivist of the United States stated that the  agency had no comments on the report. NARA’s written comments  are provided in appendix XVI.
In written comments, NSF’s CIO stated that the agency had no  comments on the report. NSF’s written comments are provided in  appendix XVII.
In comments provided via e-mail on August 5, 2015, the program  manager for SBA’s Office of Congressional and Legislative Affairs  stated that the agency had no comments on the report.
In comments provided via e-mail on August 17, 2015, an official from  Smithsonian’s Office of Government Relations stated that the agency  had no comments on the report.
In written comments, SSA’s Executive Counselor to the  Commissioner stated that the agency had no comments on the report.  SSA’s written comments are provided in appendix XVIII.
We are sending copies of this report to interested congressional  committees, the Director of OMB, the secretaries and agency heads of  the departments and agencies addressed in this report, and other  interested parties. In addition, the report will be available at no charge on  GAO’s website at http://www.gao.gov.
If you or your staffs have any questions on the matters discussed in this  report, please contact me at (202) 512-9286 or pownerd@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  major contributions to this report are listed in appendix XIX.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) assess agencies’ progress in achieving  savings from their information technology (IT) reform efforts; (2) evaluate  the extent to which agencies have established plans to reinvest their  savings; and (3) evaluate how selected agencies have reinvested their  savings, including the extent to which IT governance processes are in  place to oversee such reinvestments.
To assess agencies’ progress in achieving savings from their IT reform  efforts, we obtained and analyzed the cost savings and avoidance  documentation from the 26 departments and agencies (agencies) that  are required to implement the Office of Management and Budget’s (OMB)  PortfolioStat initiative. This documentation included, but was not limited  to, quarterly status reports to OMB and other agency-developed  spreadsheets and reporting tools. We then identified the total agency- reported savings and avoidances achieved from fiscal years 2011 to  2014.
To assess the reliability of agencies’ savings and avoidance data, we  reviewed agency documentation for missing data or other errors (e.g.,  incorrect calculations). We compared the cost savings and avoidances  reported to us by agencies with cost savings identified in OMB’s quarterly  reports to Congress on the status of IT reform efforts. In addition, we  interviewed agency officials to confirm our understanding of their reported  savings and avoidances and obtain additional supporting information  regarding the steps that the agency took to ensure the reliability of its  figures and validate these figures. We also discussed with agency  officials any discrepancies or potential errors identified during our review  of their supporting documentation to determine the cause or request  additional information. We determined that the data were sufficiently  reliable to report on agencies’ cost savings and avoidances achieved to  date. However, as part of our reliability assessment, we identified issues  with the reliability of OMB’s quarterly reports to Congress, including that  agencies’ cost savings and avoidances were not being fully reflected in  OMB’s report. We have highlighted this issue in our report.
To evaluate the extent to which agencies have established plans to  reinvest their savings, we compared 26 PortfolioStat agencies’ long-range  (e.g., 3-5 year) reinvestment plan information in their information resource  management (IRM) strategic plans to OMB’s guidance, as documented in  OMB’s March 2013 PortfolioStat memorandum. This guidance states  that agencies are to describe plans to reinvest savings resulting from the  consolidation of commodity IT resources, including data centers, in their  IRM strategic plans. We rated this requirement as “fully implemented” if  the agency’s IRM strategic plan or equivalent document contained this  information and “not implemented” if the agency’s IRM strategic plan did  not contain this information.
We also compared 27 agencies’ fiscal year 2014 IT reductions and  reinvestments plans, as documented in their budget submissions for that  fiscal year, to requirements in OMB’s fiscal year 2014 budget guidance.  More specifically, we assessed whether each agency had met OMB’s  targets for proposed reductions and reinvestments and whether the  agency had included supplemental information for each reduction and  reinvestment, including OMB budget account number, reduction and  reinvestment types, explanation of the changes in funding, priority level,  and description of the favorable return on investments, in accordance with  OMB’s guidance. We rated this requirement as “fully implemented” if the  agency’s submission met or exceeded OMB’s reduction and  reinvestments targets and included all required supplemental information;  “partially implemented” if the agency’s submission either did not meet  OMB’s reduction and reinvestment targets or did not include the required  supplemental information for each of the proposed reductions and  reinvestments; and “not implemented” if the agency did not meet OMB’s  reduction and reinvestment targets and did not provide supplemental  information for all required fields, or the agency did not submit the  required documentation to OMB.
To assess the reliability of agencies’ IT reduction and reinvestment plans  in their fiscal year 2014 budget submission, we checked the submissions  for obvious omissions (i.e., fields left blank), mistakes (e.g., incorrect  calculations), outliers, and other potential errors (e.g., IT reinvestments  occurring in the same areas as the reductions). We also interviewed  agency officials and, in some cases, obtained written responses from  agencies regarding the processes and methods used to determine their  IT reductions and reinvestments, the related supporting documentation,  and the steps that the agency took to review and approve its submission  and ensure the reliability of and validate its figures. In cases where we  found missing data or potential errors, we interviewed agency officials to  determine the cause or request additional information. We found the data  sufficiently reliable for reporting on the completeness of agencies’ IT  reduction and reinvestment plans. However, certain agencies were  missing supplemental information related to their proposed IT reductions  and reinvestments, such as reduction and reinvestment types and  explanations of the changes in funding. We highlight this issue in our  report.
Finally, we compared the 26 PortfolioStat agencies’ quarterly  reinvestment plans, as documented in their status reports to OMB (known  as the integrated data collection submission), against OMB’s instructions  for submitting such reports. These instructions state that agencies are to  include both a category and details regarding their plans to use any cost  savings and avoidances resulting from the savings and avoidance  initiatives reported in their quarterly submission. We rated agencies as  “fully implemented” if they included both the category and details for each  cost savings and avoidance initiative reported; “partially implemented” if  the agency provided reinvestment category, but not details, or did not  include category and details for all cost savings and avoidance initiatives  reported, and; “not implemented” if the agency did not include  reinvestment category and details for all cost savings and avoidance  initiatives reported.
For evaluating how selected agencies have reinvested their savings,  including the extent to which IT governance processes are in place to  oversee such reinvestments, we selected four federal agencies (the  Departments of Education, Interior, and Labor, and the Social Security  Administration) based on their fiscal year 2014 proposed IT reductions  and reinvestments, as documented in their budget submission  documentation. We chose these agencies because, of the agencies with  the highest percentage of proposed reinvestment (i.e., 100 percent  reinvestment of proposed reductions), these agencies had the four  highest proposed reinvestment dollar amounts. We compared the  governance processes used by these agencies to develop their fiscal  year 2014 budget submission (including planned IT reductions and  reinvestments) to key practices for establishing investment boards in our  IT Investment Management Framework. We also analyzed agencies’  actual performance against their proposed fiscal year 2014 IT reductions  and reinvestments. Finally, we interviewed agency officials to further our  understanding of how agency IT governance processes were involved  with the development of the fiscal year 2014 budget submission and to  discuss the extent to which the agency had documented actual fiscal year  2014 reductions and reinvestments.
We conducted this performance audit from October 2014 to September  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Recommendations to Departments and Agencies
subsections: section_title: Department of Agriculture
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Agriculture direct the CIO to take the  following action:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Department of Commerce
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Commerce direct the CIO to take the  following two actions:
As part of any future update to the department’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Department of Defense
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Defense direct the Defense CIO to take  the following action:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
In addition, to improve the U.S. Army Corps of Engineers’ IT savings  reinvestment plans, we recommend that the Secretary of Defense direct  the Secretary of the Army to take the following action:
As part of any future update to the U.S. Army Corps of Engineers’  IRM strategic plan or equivalent document, include information  regarding the approach to reinvesting savings from the consolidation  of commodity IT resources (including data centers) in accordance with  OMB’s guidance.
section_title: Department of Energy
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Energy direct the CIO to take the  following action:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Department of Health and Human Services
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Health and Human Services direct the  CIO to take the following action:
As part of any future update to the department’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
section_title: Department of Homeland Security
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Homeland Security direct the CIO to  take the following action:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Department of Housing and Urban Development
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Housing and Urban Development direct  the CIO to take the following action:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Department of the Interior
paragraphs: To improve the department’s IT savings reinvestment plans and tracking  of reinvestments, we recommend that the Secretary of the Interior direct  the CIO to take the following two actions:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
Use existing governance mechanisms and any improvements  resulting from the implementation of FITARA to improve tracking of  how savings have been reinvested.
section_title: Department of Labor
paragraphs: To improve the department’s tracking of reinvestments, we recommend  that the Secretary of Labor direct the CIO to take the following action:
Use existing governance mechanisms and any improvements  resulting from the implementation of FITARA to improve tracking of  how savings have been reinvested.
section_title: Department of State
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of State direct the CIO to take the  following action:
As part of any future update to the department’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
section_title: Department of the Treasury
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of the Treasury direct the CIO to take the  following two actions:
As part of any future update to the department’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to use any  resulting cost savings and avoidances from OMB-directed IT reform- related efforts.
section_title: Department of Veterans Affairs
paragraphs: To improve the department’s IT savings reinvestment plans, we  recommend that the Secretary of Veterans Affairs direct the CIO to take  the following action:
Ensure that the department’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Environmental Protection Agency
paragraphs: To improve the agency’s IT savings reinvestment plans, we recommend  that the Administrator of the Environmental Protection Agency direct the  CIO to take the following action:
Ensure that the agency’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Nuclear Regulatory Commission
paragraphs: To improve the agency’s IT savings reinvestment plans, we recommend  that the Chairman of the U.S. Nuclear Regulatory Commission direct the  CIO to take the following two actions:
As part of any future update to the agency’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
Ensure that the agency’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Office of Personnel Management
paragraphs: To improve the agency’s IT savings reinvestment plans, we recommend  that the Director of the Office of Personnel Management direct the CIO to  take the following action:
As part of any future update to the agency’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
section_title: U.S. Agency for International Development
paragraphs: To improve the agency’s IT savings reinvestment plans, we recommend  that the Administrator of the U.S. Agency for International Development  direct the CIO to take the following two actions:
As part of any future update to the agency’s IRM strategic plan or  equivalent document, include information regarding the approach to  reinvesting savings from the consolidation of commodity IT resources  (including data centers) in accordance with OMB’s guidance.
Ensure that the agency’s integrated data collection submission to  OMB includes, for all reported initiatives, complete plans to reinvest  any resulting cost savings and avoidances from OMB-directed IT  reform-related efforts.
section_title: Appendix III: Comments from the Department of Agriculture
section_title: Appendix IV: Comments from the Department of Commerce
section_title: Appendix V: Comments from the Department of Defense
section_title: Appendix VI: Comments from the Department of Energy
section_title: Appendix VII: Comments from the Department of Health and Human Services
section_title: Appendix VIII: Comments from the Department of Homeland Security
section_title: Appendix IX: Comments from the Department of Housing and Urban Development
section_title: Appendix X: Comments from the Department of the Interior
section_title: Appendix XI: Comments from the Department of State
section_title: Appendix XII: Comments from the Department of Veterans Affairs
section_title: Appendix XIII: Comments from the Environmental Protection Agency
section_title: Appendix XIV: Comments from the Nuclear Regulatory Commission
section_title: Appendix XV: Comments from the Office of Personnel Management
section_title: Appendix XVI: Comments from the National Archives and Records Administration
section_title: Appendix XVII: Comments from the National Science Foundation
section_title: Appendix XVIII: Comments from the Social Security Administration
section_title: Appendix XIX: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, individuals making contributions  to this report included Dave Hinchman (Assistant Director), Justin Booth,  Chris Businsky, Corey Evans, Nancy Glover, Lisa Hardman, and  Jonathan Ticehurst.