Cybersecurity: Recent Data Breaches Illustrate Need for Strong Controls across Federal Agencies
Published: 2015-06-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Effective cybersecurity for federal information systems is essential to preventing the loss of resources, the compromise of sensitive information, and the disruption of government operations. Federal information and systems face an evolving array of cyber-based threats, and recent data breaches at federal agencies highlight the impact that can result from ineffective security controls.
Since 1997, GAO has designated federal information security as a government-wide high-risk area, and in 2003 expanded this area to include computerized systems supporting the nation's critical infrastructure. This year, in GAO's high-risk update, the area was further expanded to include protecting the privacy of personal information that is collected, maintained, and shared by both federal and nonfederal entities.
This statement summarizes (1) challenges facing federal agencies in securing their systems and information and (2) government-wide initiatives, including those led by DHS, aimed at improving cybersecurity. In preparing this statement, GAO relied on its previously published and ongoing work in this area.
section_title: What GAO Found
paragraphs: GAO has identified a number of challenges federal agencies face in addressing threats to their cybersecurity, including the following:
Designing and implementing a risk-based cybersecurity program.
Enhancing oversight of contractors providing IT services.
Improving security incident response activities.
Responding to breaches of personal information.
Implementing cybersecurity programs at small agencies.
Until federal agencies take actions to address these challenges—including implementing the hundreds of recommendations GAO and agency inspectors general have made—federal systems and information, including sensitive personal information, will be at an increased risk of compromise from cyber-based attacks and other threats.
In an effort to bolster cybersecurity across the federal government, several government-wide initiatives, spearheaded by the Department of Homeland Security (DHS) and the Office of Management and Budget (OMB), are under way. These include the following:
Personal Identity Verification: In 2004, the President directed the establishment of a government-wide standard for secure and reliable forms of ID for federal employees and contractor personnel who access government facilities and systems. Subsequently, OMB directed agencies to issue personal identity verification credentials to control access to federal facilities and systems. OMB recently reported that only 41 percent of user accounts at 23 civilian agencies had required these credentials for accessing agency systems.
Continuous Diagnostics and Mitigation: DHS, in collaboration with the General Services Administration, has established a government-wide contract for agencies to purchase tools that are intended to identify cybersecurity risks on an ongoing basis. These tools can support agencies' efforts to monitor their networks for security vulnerabilities and generate prioritized alerts to enable agency staff to mitigate the most critical weaknesses. The Department of State adopted a continuous monitoring program, and in 2011 GAO reported on the benefits of the program and challenges the department faced in implementing its approach.
National Cybersecurity Protection System (NCPS): This system, also referred to as EINSTEIN, is to include capabilities for monitoring network traffic and detecting and preventing intrusions, among other things. GAO has ongoing work reviewing the implementation of NCPS, and preliminary observations indicate that implementation of the intrusion detection and prevention capabilities may be limited and DHS appears to have not fully defined requirements for future capabilities.
While these initiatives are intended to improve security, no single technology or tool is sufficient to protect against all cyber threats. Rather, agencies need to employ a multi-layered, “defense in depth” approach to security that includes well-trained personnel, effective and consistently applied processes, and appropriate technologies.
section_title: What GAO Recommends
paragraphs: In previous work, GAO and agency inspectors general have made hundreds of recommendations to assist agencies in addressing cybersecurity challenges. GAO has also made recommendations to improve government-wide initiatives.

section_title: Letter
paragraphs: Thank you for inviting me to testify at today’s hearing on the Department  of Homeland Security’s (DHS) efforts to secure federal information  systems. As you know, the federal government faces an array of cyber- based threats to its systems and data, as illustrated by the recently  reported data breaches at the Office of Personnel Management (OPM),  which affected millions of current and former federal employees. Such  incidents underscore the urgent need for effective implementation of  information security controls at federal agencies.
Since 1997, we have designated federal information security as a  government-wide high-risk area, and in 2003 expanded this area to  include computerized systems supporting the nation’s critical  infrastructure. Most recently, in the 2015 update to our high-risk list, we  further expanded this area to include protecting the privacy of personally  identifiable information (PII)—that is, personal information that is  collected, maintained, and shared by both federal and nonfederal  entities.
My statement today will discuss (1) cybersecurity challenges that federal  agencies face in securing their systems and information and (2)  government-wide initiatives, including those led by DHS, aimed at  improving agencies’ cybersecurity. In preparing this statement, we relied  on our previous work in these areas, as well as the preliminary  observations from our ongoing review of DHS’s EINSTEIN initiative. We  discussed these observations with DHS officials. The prior reports cited  throughout this statement contain detailed discussions of the scope of the  work and the methodology used to carry it out. All the work on which this  statement is based was conducted or is being conducted in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform audits 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.
subsections: section_title: Background
paragraphs: As computer technology has advanced, both government and private  entities have become increasingly dependent on computerized  information systems to carry out operations and to process, maintain, and  report essential information. Public and private organizations rely on  computer systems to transmit proprietary and other sensitive information,  develop and maintain intellectual capital, conduct operations, process  business transactions, transfer funds, and deliver services. In addition,  the Internet has grown increasingly important to American business and  consumers, serving as a medium for hundreds of billions of dollars of  commerce each year, and has developed into an extended information  and communications infrastructure that supports vital services such as  power distribution, health care, law enforcement, and national defense.
Ineffective protection of these information systems and networks can  result in a failure to deliver these vital services, and result in  loss or theft of computer resources, assets, and funds;  inappropriate access to and disclosure, modification, or destruction of  sensitive information, such as national security information, PII, and  proprietary business information; disruption of essential operations supporting critical infrastructure,  national defense, or emergency services; undermining of agency missions due to embarrassing incidents that  erode the public’s confidence in government; use of computer resources for unauthorized purposes or to launch  attacks on other systems; damage to networks and equipment; and high costs for remediation.
subsections: section_title: Cyber Threats to Federal Systems
paragraphs: Risks to cyber-based assets can originate from unintentional or  intentional threats. Unintentional threats can be caused by, among other  things, natural disasters, defective computer or network equipment, and  careless or poorly trained employees. Intentional threats include both  targeted and untargeted attacks from a variety of sources, including  criminal groups, hackers, disgruntled employees, foreign nations engaged  in espionage and information warfare, and terrorists.
These adversaries vary in terms of their capabilities, willingness to act,  and motives, which can include seeking monetary gain or a political,  economic, or military advantage. For example, adversaries possessing  sophisticated levels of expertise and significant resources to pursue their  objectives—sometimes referred to as “advanced persistent threats”— pose increasing risks. They make use of various techniques— or  exploits—that may adversely affect federal information, computers,  software, networks, and operations.
Since fiscal year 2006, the number of information security incidents  affecting systems supporting the federal government has steadily  increased each year: rising from 5,503 in fiscal year 2006 to 67,168 in  fiscal year 2014, an increase of 1,121 percent (see fig. 1).
Furthermore, the number of reported security incidents involving PII at  federal agencies has more than doubled in recent years—from 10,481  incidents in fiscal year 2009 to 27,624 incidents in fiscal year 2014.
These incidents and others like them can adversely affect national  security; damage public health and safety; and lead to inappropriate  access to and disclosure, modification, or destruction of sensitive  information. Recent examples highlight the impact of such incidents:  In June 2015, OPM reported that an intrusion into its systems affected  personnel records of about 4 million current and former federal  employees. The Director of OPM also stated that a separate incident  may have compromised OPM systems related to background  investigations, but its scope and impact have not yet been  determined.
In June 2015, the Commissioner of the Internal Revenue Service  (IRS) testified that unauthorized third parties had gained access to  taxpayer information from its “Get Transcript” application. According to  IRS, criminals used taxpayer-specific data acquired from non-IRS  sources to gain unauthorized access to information on approximately  100,000 tax accounts. These data included Social Security  information, dates of birth, and street addresses.
In April 2015, the Department of Veterans Affairs (VA) Office of  Inspector General reported that two VA contractors had improperly  accessed the VA network from foreign countries using personally  owned equipment.
In February 2015, the Director of National Intelligence stated that  unauthorized computer intrusions were detected in 2014 on OPM’s  networks and those of two of its contractors. The two contractors were  involved in processing sensitive PII related to national security  clearances for federal employees.
In September 2014, a cyber-intrusion into the United States Postal  Service’s information systems may have compromised PII for more  than 800,000 of its employees.
section_title: Federal Agencies Face Ongoing Cybersecurity Challenges
paragraphs: Given the risks posed by cyber threats and the increasing number of  incidents, it is crucial that federal agencies take appropriate steps to  secure their systems and information. We and agency inspectors general  have identified challenges in protecting federal information and systems,  including those in the following key areas:
Designing and implementing risk-based cybersecurity programs  at federal agencies. Agencies continue to have shortcomings in  assessing risks, developing and implementing security controls, and  monitoring results. Specifically, for fiscal year 2014, 19 of the 24  federal agencies covered by the Chief Financial Officers (CFO) Actreported that information security control deficiencies were either a  material weakness or a significant deficiency in internal controls over  their financial reporting.agencies cited information security as a major management challenge  for their agency.
Moreover, inspectors general at 23 of the 24  As we testified in April 2015, for fiscal year 2014, most of the agencies  had weaknesses in the five key security control categories. These  control categories are (1) limiting, preventing, and detecting  inappropriate access to computer resources; (2) managing the  configuration of software and hardware; (3) segregating duties to  ensure that a single individual does not have control over all key  aspects of a computer-related operation; (4) planning for continuity of  operations in the event of a disaster or disruption; and (5)  implementing agency-wide security management programs that are  critical to identifying control deficiencies, resolving problems, and  managing risks on an ongoing basis. (See fig. 2.)
Examples of these weaknesses include: (1) granting users access  permissions that exceed the level required to perform their legitimate  job-related functions; (2) not ensuring that only authorized users can  access an agency’s systems; (3) not using encryption to protect  sensitive data from being intercepted and compromised; (4) not  updating software with the current versions and latest security  patches to protect against known vulnerabilities; and (5) not ensuring  employees were trained commensurate with their responsibilities.  GAO and agency inspectors general have made hundreds of  recommendations to agencies aimed at improving their  implementation of these information security controls.
Enhancing oversight of contractors providing IT services. In  August 2014, we reported that five of six agencies we reviewed were  inconsistent in overseeing assessments of contractors’  implementation of security controls. This was partly because  agencies had not documented IT security procedures for effectively  overseeing contractor performance. In addition, according to OMB, 16  of 24 agency inspectors general determined that their agency’s  program for managing contractor systems lacked at least one required  element. We recommended that OMB, in conjunction with DHS,  develop and clarify guidance to agencies for annually reporting the  number of contractor-operated systems and that the reviewed  agencies establish and implement IT security oversight procedures for  such systems. OMB did not comment on our report, but the agencies  generally concurred with our recommendations.
Improving security incident response activities. In April 2014, we  reported that the 24 agencies did not consistently demonstrate that  they had effectively responded to cyber incidents. Specifically, we  estimated that agencies had not completely documented actions  taken in response to detected incidents reported in fiscal year 2012 in  about 65 percent of cases. In addition, the 6 agencies we reviewed  had not fully developed comprehensive policies, plans, and  procedures to guide their incident response activities. We  recommended that OMB address agency incident response practices  government-wide and that the 6 agencies improve the effectiveness of  their cyber incident response programs. The agencies generally  agreed with these recommendations. We also made two  recommendations to DHS concerning government-wide incident  response practices. DHS concurred with the recommendations and, to  date, has implemented one of them.
Responding to breaches of PII. In December 2013, we reported that  eight federal agencies had inconsistently implemented policies and  procedures for responding to data breaches involving PII. In  addition, OMB requirements for reporting PII-related data breaches  were not always feasible or necessary. Thus, we concluded that  agencies may not be consistently taking actions to limit the risk to  individuals from PII-related data breaches and may be expending  resources to meet OMB reporting requirements that provide little  value. We recommended that OMB revise its guidance to agencies on  responding to a PII-related data breach and that the reviewed  agencies take specific actions to improve their response to PII-related  data breaches. OMB neither agreed nor disagreed with our  recommendation; four of the reviewed agencies agreed, two partially  agreed, and two neither agreed nor disagreed.
Implementing security programs at small agencies. In June 2014,  we reported that six small agencies (i.e., agencies with 6,000 or fewer  employees) had not implemented or not fully implemented their  information security programs. For example, key elements of their  plans, policies, and procedures were outdated, incomplete, or did not  exist, and two of the agencies had not developed an information  security program with the required elements. We recommended that  OMB include a list of agencies that did not report on the  implementation of their information security programs in its annual  report to Congress on compliance with the requirements of FISMA,  and include information on small agencies’ programs. OMB generally  concurred with our recommendations. We also recommended that  DHS develop guidance and services targeted at small agencies. DHS  has implemented this recommendation.
Until federal agencies take actions to address these challenges— including implementing the hundreds of recommendations we and  inspectors general have made—federal systems and information will be  at an increased risk of compromise from cyber-based attacks and other  threats.
section_title: Government-Wide Cybersecurity Initiatives Present Potential Benefits and Challenges
paragraphs: In addition to the efforts of individual agencies, DHS and OMB have  several initiatives under way to enhance cybersecurity across the federal  government. While these initiatives all have potential benefits, they also  have limitations.
Personal Identity Verification: In August 2004, Homeland Security  Presidential Directive 12 ordered the establishment of a mandatory,  government-wide standard for secure and reliable forms of identification  for federal government employees and contractor personnel who access  government-controlled facilities and information systems. Subsequently,  the National Institute of Standards and Technology (NIST) defined  requirements for such personal identity verification (PIV) credentials  based on “smart cards”—plastic cards with integrated circuit chips to  store and process data—and OMB directed federal agencies to issue and  use PIV credentials to control access to federal facilities and systems.
In September 2011, we reported that OMB and the eight agencies in our  review had made mixed progress for using PIV credentials for controlling  access to federal facilities and information systems. We attributed this  mixed progress to a number of obstacles, including logistical problems in  issuing PIV credentials to all agency personnel and agencies not making  this effort a priority. We made several recommendations to the eight  agencies and to OMB to more fully implement PIV card capabilities.  Although two agencies did not comment, seven agencies agreed with our  recommendations or discussed actions they were taking to address them.  For example, we made four recommendations to DHS, who concurred  and has taken action to implement them. In February 2015, OMB  reported that, as of the end of fiscal year 2014, only 41 percent of agency  user accounts at the 23 civilian CFO Act agencies required PIV cards for  accessing agency systems.
Continuous Diagnostics and Mitigation (CDM): According to DHS, this  program is intended to provide federal departments and agencies with  capabilities and tools that identify cybersecurity risks on an ongoing basis,  prioritize these risks based on potential impacts, and enable cybersecurity  personnel to mitigate the most significant problems first. These tools  include sensors that perform automated searches for known cyber  vulnerabilities, the results of which feed into a dashboard that alerts  network managers. These alerts can be prioritized, enabling agencies to  allocate resources based on risk. DHS, in partnership with the General  Services Administration, has established a government-wide contract that  is intended to allow federal agencies (as well as state, local, and tribal  governmental agencies) to acquire CDM tools at discounted rates.
In July 2011, we reported on the Department of State’s (State)  implementation of its continuous monitoring program, referred to as  iPost.visibility over information security at the department and helped IT  administrators identify, monitor, and mitigate information security  weaknesses. However, we also noted limitations and challenges with  State’s approach, including ensuring that its risk-scoring program  identified relevant risks and that iPost data were timely, complete, and  accurate. We made several recommendations to improve the  implementation of the iPost program, and State partially agreed.
We determined that State’s implementation of iPost had improved  National Cybersecurity Protection System (NCPS): The National  Cybersecurity Protection System, operationally known as “EINSTEIN,” is  a suite of capabilities intended to detect and prevent malicious network  traffic from entering and exiting federal civilian government networks. The  EINSTEIN capabilities of NCPS are described in table 1.
In March 2010, we reported that while agencies that participated in  EINSTEIN 1 improved their identification of incidents and mitigation of  attacks, DHS lacked performance measures to understand if the initiative  was meeting its objectives. We made four recommendations regarding  the management of the EINSTEIN program, and DHS has since taken  action to address them.
Currently, we are reviewing NCPS, as mandated by Congress. The  objectives of our review are to determine the extent to which (1) NCPS  meets stated objectives, (2) DHS has designed requirements for future  stages of the system, and (3) federal agencies have adopted the system.
Our final report is expected to be released later this year, and our  preliminary observations include the following:
DHS appears to have developed and deployed aspects of the  intrusion detection and intrusion prevention capabilities, but potential  weaknesses may limit their ability to detect and prevent computer  intrusions. For example, NCPS detects signature anomalies using  only one of three detection methodologies identified by NIST  (signature-based, anomaly-based, and stateful protocol analysis).  Further, the system has the ability to prevent intrusions, but is  currently only able to proactively mitigate threats across a limited  subset of network traffic (i.e., Domain Name System traffic and e- mail).
DHS has identified a set of NCPS capabilities that are planned to be  implemented in fiscal year 2016, but it does not appear to have  developed formalized requirements for capabilities planned through  fiscal year 2018.
The NCPS intrusion detection capability appears to have been  implemented at 23 CFO Act agencies.capability appears to have limited deployment, at portions of only 5 of  these agencies. Deployment may have been hampered by various  implementation and policy challenges.
The intrusion prevention  In conclusion, the danger posed by the wide array of cyber threats facing  the nation is heightened by weaknesses in the federal government’s  approach to protecting its systems and information. While recent  government-wide initiatives hold promise for bolstering the federal  cybersecurity posture, it is important to note that no single technology or  set of practices is sufficient to protect against all these threats. A “defense  in depth” strategy is required that includes well-trained personnel,  effective and consistently applied processes, and appropriately  implemented technologies. While agencies have elements of such a  strategy in place, more needs to be done to fully implement it and to  address existing weaknesses. In particular, implementing GAO and  inspector general recommendations will strengthen agencies’ ability to  protect their systems and information, reducing the risk of a potentially  devastating cyber attack.
Chairman Ratcliffe, Ranking Member Richmond, and Members of the  Subcommittee, this concludes my statement. I would be happy to answer  any questions you may have.
section_title: Contact and Acknowledgments
paragraphs: If you have any questions about this statement, please contact Gregory  C. Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Other staff  members who contributed to this statement include Larry Crosland and  Michael Gilmore (assistant directors), Bradley Becker, Christopher  Businsky, Nancy Glover, Rosanna Guerrero, Kush Malhotra, and Lee  McCracken.
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