Veterans Affairs: The Critical Role of the Chief Information Officer Position in Effective Information Technology Management
Published: 2005-09-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In carrying out VA's mission of serving the nation's veterans and their dependents, the agency relies extensively on information technology (IT), for which it is requesting about $2.1 billion in fiscal year 2006. VA's vision is to integrate its IT resources and streamline interactions with customers, so that it can provide services and information to veterans more quickly and effectively. Fully exploiting the potential of IT to improve performance is a challenging goal for VA, as it is throughout government. The Clinger-Cohen Act of 1996 addressed this challenge by, among other things, establishing the position of chief information officer (CIO) to serve as the focal point for information and technology management within departments and agencies. The Committee requested that GAO discuss the role of CIOs in the federal government, as well as provide a historical perspective on the roles and responsibilities of VA's CIO. In developing this testimony, GAO relied on its previous work at VA as well as on the CIO role across government, including a 2004 review of CIOs at major departments and agencies.
section_title: What GAO Found
paragraphs: CIOs play a critical role in managing information and technology within federal agencies. According to GAO's 2004 review, CIOs generally held wide responsibilities and reported to their agency heads or other top level managers. In general, CIOs reported that they were responsible for key information and technology management areas; for example, all the CIOs were responsible for five key areas (capital planning and investment management, enterprise architecture, information security, strategic planning for information technology and information resource management, and information technology workforce planning). However, in carrying out their responsibilities, the tenure of federal CIOs was often less than the length of time that some experts consider necessary for them to be effective and implement changes: the median tenure was about 2 years, and the most common response regarding time required to be effective was 3 to 5 years. In contrast, CIOs were generally helped in carrying out their responsibilities by the background and experience they brought to the job: most had background in information technology (IT) or related fields, and many also had business knowledge related to their agencies. Other factors that help CIOs meet their responsibilities include (1) being supported by senior executives who recognize the importance to their missions of IT and an effective CIO; (2) playing an influential role in applying IT to business needs; and (3) being able to structure their organizations appropriately. At the same time, CIOs cited several challenges, of which the two most frequently mentioned were implementing effective IT management and obtaining sufficient and relevant resources. Over time, the CIO position at VA, as well as information and technology management as a whole, has received increased attention at the department. After several years with CIOs whose primary duty was not information and technology management or who were serving in an acting capacity, the department appointed a full-time permanent CIO in August 2001. In 2002, the department proposed further strengthening the position and centralizing IT management, recognizing that aspects of its computing environment were particularly challenging and required substantial management attention. In particular, the department's information systems and services were highly decentralized, and a large proportion of the department's IT budget was controlled by the VA's administrations and staff offices. To address these challenges, the Secretary issued a memo in 2002 announcing that IT functions, programs, and funding would be centralized under the department-level CIO. This realignment held promise for improving accountability and enabling the department to accomplish its mission. The additional oversight afforded the CIO could have a significant impact on the department's ability to more effectively account for and manage its IT spending.

section_title: Letter
paragraphs: Thank you for inviting us to take part in your discussion of the  information technology organization at the Department of Veterans  Affairs (VA) and the role of the Chief Information Officer (CIO). In  carrying out its mission of serving our nation’s veterans, the  department relies heavily on information technology, for which it is  requesting about $2.1 billion in funding for fiscal year 2006. The CIO  will play a vital role in ensuring that this money is well spent and  that information technology is managed effectively. As we have  previously reported, an effective CIO can make a significant  difference in building the institutional capacity that is needed to  improve an agency’s ability to manage information and technology  and thus enhance program performance.
At your request, we will discuss the role of CIOs in the federal  government, as well as providing a historical perspective on the  roles and responsibilities of VA’s CIO.
In developing this testimony, we reviewed our previous work in this  area. All work covered in this testimony was performed in  accordance with generally accepted auditing standards.
subsections: section_title: Background
paragraphs: VA comprises three major components: the Veterans Benefits  Administration (VBA), the Veterans Health Administration (VHA),  and the National Cemetery Administration (NCA). VA’s mission is  summed up in its mission statement, a quotation from Abraham  Lincoln: “to care for him who shall have borne the battle and for his  widow and his orphan.” VA carries out this mission by providing  benefits and other services to veterans and dependents.
The department’s vision is to be a more customer-focused  organization, functioning as “One VA.” This vision stemmed from the  recognition that veterans think of VA as a single entity, but often  encountered a confusing, bureaucratic maze of uncoordinated  programs that put them through repetitive and frustrating  administrative procedures and delays. The “One VA” vision is to  create versatile new ways for veterans to obtain services and  information by streamlining interactions with customers and  integrating IT resources to enable VA employees to help customers  more quickly and effectively. This vision will require modifying or  replacing separate information systems with integrated systems  using common standards to share information across VA programs  and with external partner organizations, such as the Department of  Defense. Accordingly, effective management of its IT programs is  vital to VA’s successful achievement of its vision and mission.
Table 1 shows a breakdown of VA’s approximately $2.1 billion IT  budget request for fiscal year 2006. Of the total, VHA accounted for  approximately $1.8 billion, VBA approximately $150 million, and the  National Cemetery Administration (NCA) approximately $11  million. The remaining $84 million was allocated to the department  level.
section_title: CIO Plays Major Role in IT Management
paragraphs: The Congress has long recognized that IT has the potential to enable  federal agencies to accomplish their missions more quickly,  effectively, and economically. However, fully exploiting this  potential presents challenges to agencies. Despite substantial IT  investments, the federal government’s management of information  resources has produced mixed results. One of the ways in which the  Congress has addressed this issue was to establish the CIO position;  an agency’s CIO serves as the focal point for information and  technology management within an agency.
subsections: section_title: Legislative Evolution of Agency CIO Role
paragraphs: For more than 20 years, federal law has structured the management  of IT and information-related activities under the umbrella of  information resources management (IRM). The IRM approach was  first enacted into law in the Paperwork Reduction Act of 1980. The  intention of the Congress was to provide for a coordinated approach  to managing federal agencies’ information resources, addressing the  entire information life cycle, from collection through disposition,  with the ultimate goal of improving the efficiency and effectiveness  of government while reducing the “paperwork burden” on the  public.
The 1980 Paperwork Reduction Act centralized governmentwide  IRM responsibilities in the Office of Management and Budget  (OMB), giving OMB specific policy-setting and oversight duties  regarding individual IRM areas, such as records management,  privacy, and the acquisition and use of IT. Agencies were given  responsibility for carrying out their IRM activities in an efficient,  effective, and economical manner in compliance with OMB policies  and guidelines. The law also required that each agency head  designate a senior official, reporting directly to the agency head, to  carry out the agency’s responsibilities under the law.
In 1996, the Clinger-Cohen Act established the position of agency  CIO by giving this title to the “senior IRM official” mentioned in the  Paperwork Reduction Act and specifying additional responsibilities  for this position. Among these responsibilities, the Clinger-Cohen  act required that the CIOs in the 24 major departments and agencies  have IRM as their “primary duty.”
The view of the Congress as reflected in current law is thus that  CIOs should play a key leadership role in ensuring that agencies  manage their information functions in a coordinated and integrated  fashion in order to improve the efficiency and effectiveness of  government programs and operations.
section_title: CIO Responsibilities and Reporting Relationships
paragraphs: Besides their statutory responsibilities, CIOs have other  responsibilities that can contribute significantly to the successful  implementation of information systems and processes. In July 2004,  we interviewed 27 CIOs at major agencies on their roles,  responsibilities, and challenges, among other things. For this report,  we identified major areas of CIO responsibilities that were either  statutory requirements or critical to effective information and  technology management. Altogether, we identified the 13 areas  shown in table 2.
According to our report, CIOs were generally responsible for the key  information and technology management areas shown in the table,  although not all CIOs were completely responsible for all areas. For  example:   ●  All the CIOs were responsible for five areas (capital planning and  investment management, enterprise architecture, information  security, IT/IRM strategic planning, and IT workforce planning).   ●  More than half had responsibility for six additional areas (systems  acquisition, major e-government initiatives, information  collection/paperwork reduction, records management, information  dissemination, and privacy).  ●  Fewer than half were responsible for two areas (information  disclosure and statistics).
It was common for CIOs to share responsibility for certain  functions, and in some cases responsibilities were assigned to other  offices. For example, systems acquisition responsibility could be  shared among the CIO and other officials, such as a procurement  executive or program executive; disclosure could be assigned to  general counsel and public affairs, while statistical policy could be  assigned to offices that deal with the agency’s data analysis.  Nevertheless, even for areas of responsibility that were not assigned  to CIOs, agency CIOs generally reported that they contributed to the  successful execution of the agency’s overall responsibilities in that  area.
In carrying out their responsibilities, CIOs generally reported to  their agency heads. The Paperwork Reduction Act—as well as our  guidance—generally calls for CIOs to report to their agency heads,  forging relationships that ensure high visibility and support for far- reaching information management initiatives. For 19 of the agencies  in our review, the CIOs stated that they had this reporting  relationship. In the other 8 agencies, the CIOs stated that they  reported instead to another senior official, such as a deputy  secretary, under secretary, or assistant secretary. In addition, 8 of  the 19 CIOs who said they had a direct reporting relationship with  the agency head noted that they also reported to another senior  executive, usually the deputy secretary or under secretary for  management, on an operational basis. According to members of our  Executive Council on Information Management and Technology,  what is most critical is for the CIO to report to a top level official.
section_title: Tenure and Backgrounds of CIOs
paragraphs: Federal CIOs often remained in their positions for less than the  length of time that some experts consider necessary for them to be  effective and implement changes. At the major departments and  agencies included in our review, the median time in the position of  permanent CIOs whose time in office had been completed was  about 23 months. For career CIOs, the median was 32 months; the  median for political appointees was 19 months. To the question of  how long a CIO needed to stay in office to be effective, the most  common response of the CIOs (and former agency IT executives  whom we consulted) was 3 to 5 years. Between February 10, l996,  and March 1, 2004, only about 35 percent of the permanent CIOs  who had completed their time in office reportedly had stayed in  office for a minimum of 3 years. The gap between actual time in  office and the time needed to be effective is consistent with the view  of many agency CIOs that the turnover rate was high, and that this  rate was influenced by the political environment, the pay  differentials between the public and private sectors, and the  challenges that CIOs face.
In contrast, the CIOs interviewed for our report were generally  helped in carrying out their responsibilities by the background and  experience they brought to the job. The background of the CIOs  varied in that they had previously worked in the government, the  private sector, or academia, and they had a mix of technical and  management experience. However, virtually all had work  experience or educational backgrounds in IT or IT-related fields; 12  agency CIOs had previously served in a CIO or deputy CIO capacity.  Moreover, most of the them had business knowledge related to their  agencies because they had previously worked at the agency or had  worked in an area related to the agency’s mission.
section_title: Success Factors and Challenges of CIOs
paragraphs: To allow CIOs to serve effectively in the key leadership role  envisioned by the Congress, federal agencies must use the full  potential of CIOs as information and technology management  leaders and active participants in the development of the agency’s  strategic plans and policies. The CIOs, in turn, must meet the  challenges of building credible organizations and developing and  organizing information and technology management capabilities to  meet mission needs.
In February 2001, we issued guidance on the effective use of CIOs,  which describes the following three factors as key contributors to  CIO success:  ●  Supportive senior executives embrace the central role of technology  in accomplishing mission objectives and include the CIO as a full  participant in senior executive decision making.  ●  Effective CIOs have legitimate and influential roles in leading top  managers to apply IT to business problems and needs. Placement of  the position at an executive management level in the organization is  important, but in addition, effective CIOs earn credibility and  produce results by establishing effective working relationships with  business unit heads.  ●  Successful CIOs structure their organizations in ways that reflect a  clear understanding of business and mission needs. Along with  knowledge of business processes, market trends, internal legacy  structures, and available IT skills, this understanding is necessary to  ensure that the CIO’s office is aligned to best serve agency needs.
The CIO study that we reported on in July 2004 also provides  information on the major challenges that federal CIOs face in  fulfilling their duties. In particular, CIOs view IT governance  processes, funding, and human capital as critical to their success, as  indicated by two challenges that were cited by over 80 percent of  the CIOs: implementing effective information technology  management and obtaining sufficient and relevant resources.   ●  Effective IT management.
Leading organizations execute their information technology  management responsibilities reliably and efficiently. A little over 80  percent of the CIOs reported that they faced one or more challenges  related to implementing effective IT management practices at their  agencies. This is not surprising given that, as we have previously  reported, the government has not always successfully executed the  IT management areas that were most frequently cited as challenges  by the CIOs—information security, enterprise architecture,  investment management, and e-gov.  ●  Sufficient and relevant resources.
One key element in ensuring an agency’s information and  technology success is having adequate resources. Virtually all  agency CIOs cited resources, both in dollars and staff, as major  challenges. The funding issues cited generally concerned the  development and implementation of agency IT budgets and whether  certain IT projects, programs, or operations were being adequately  funded.
We have previously reported that the way agency initiatives are  originated can create funding challenges that are not found in the  private sector. For example, certain information systems may be  mandated or legislated, so the agency does not have the flexibility to  decide whether to pursue them. Additionally, there is a great deal of  uncertainty about the funding levels that may be available from year  to year.
The government also faces long-standing and widely recognized  challenges in maintaining a high-quality IT workforce. In 1994 and  2001, we reported on the importance that leading organizations  placed on making sure they had the right mix of skills in their IT  workforce. About 70 percent of the agency CIOs reported on a  number of substantial IT human capital challenges, including, in  some cases, the need for additional staff. Other challenges included  recruiting, retention, training and development, and succession  planning.
In addition, two other commonly cited challenges were  communicating and collaborating (both internally and externally)  and managing change.   ●  Communicating and collaborating.
Our prior work has shown the importance of communication and  collaboration, both within an agency and with its external partners.  For example, one of the critical success factors we identified in our  guide focuses on the CIO’s ability to establish his or her organization  as a central player in the enterprise. Ten agency CIOs reported that  communication and collaboration were challenges. Examples of  internal communication and collaboration challenges included  (1) cultivating, nurturing, and maintaining partnerships and alliances  while producing results in the best interest of the enterprise and  (2) establishing supporting governance structures that ensure two- way communication with the agency head and effective  communication with the business part of the organization and  component entities. Other CIOs cited activities associated with  communicating and collaborating with outside entities as  challenges, including sharing information with partners and  influencing the Congress and OMB.  ●  Managing change.
Top leadership involvement and clear lines of accountability for  making management improvements are critical to overcoming an  organization’s natural resistance to change, marshaling the  resources needed to improve management, and building and  maintaining organizationwide commitment to new ways of doing  business. Some CIOs reported challenges associated with  implementing both changes originating from their own initiative and  changes from outside forces. Implementing major IT changes can  involve not only technical risks but also nontechnical risks, such as  those associated with people and the organization’s culture. Six  CIOs cited dealing with the government’s culture and bureaucracy  as challenges to implementing change. Former agency IT executives  also cited the need for cultural changes as a major challenge facing  CIOs. Accordingly, in order to effectively implement change, it is  important that CIOs build understanding, commitment, and support  among those who will be affected by the change.
Effectively tackling these reported challenges can improve the  likelihood of a CIO’s success. Until these challenges are overcome,  federal agencies are unlikely to optimize their use of information  and technology, which can affect an organization’s ability to  effectively and efficiently implement its programs and missions.
section_title: Roles and Responsibilities of the CIO Position at VA Have Evolved over Time
paragraphs: Since enactment of the Clinger-Cohen Act in 1996, the roles and  responsibilities of VA’s Chief Information Officer have evolved.  From lacking a CIO entirely, the department has taken steps to  address the challenges posed by its multiple widespread  components and its decentralized information technology and  services.
In June 1998, VA assigned CIO responsibility to a top manager.   However, we reported in July 1998 that the person holding the CIO  position at VA had multiple additional major responsibilities, as this  person also served as Assistant Secretary for Management, Chief  Financial Officer, and Deputy Assistant Secretary for Budget.  According to the act, the CIO’s primary responsibility should be  information and technology management. Noting that VA’s structure  was decentralized, its IT budget was large, and its CIO faced serious  information and technology management issues, we recommended  that the Secretary appoint a CIO with full-time responsibilities for  IRM. Concurring with the recommendation, VA established the  position of Assistant Secretary for Information and Technology to  serve as its CIO.
As of May 2000, however, the position of Assistant Secretary for  Information and Technology was vacant, and as we reported at the  time, it had been unfilled since its creation in 1998. The Secretary  then created and filled the position of Principal Deputy Assistant  Secretary for Information and Technology, designating that person  as VA’s acting CIO until an Assistant Secretary could be appointed.  The Secretary also realigned IRM functions within VA under this  position, which reported directly to the Secretary.
As we reported, the Principal Deputy Assistant Secretary was  involved in IT planning issues across the department. In addition to  advising the Secretary on IT issues, he served as chair of the  department’s CIO Council and as a member of the department’s  Capital Investment Board, and he worked with the CIOs in VBA and  VHA (at the time, NCA had no CIO). According to this official, one  of his priorities was to ensure that IT activities in VBA and VHA  were in concert with VA’s departmentwide efforts.
In August 2001, VA filled the CIO position. In March 2002, we  testified that this hiring was one of the important strides that the  Secretary of Veterans Affairs had made to improve the department’s  IT leadership and management, along with making a commitment to  reform the department’s use of IT.
On June 29, 2003, the CIO retired after a tenure of almost 2 years  (about the median length of tenure for federal CIOs, as discussed  above); the current CIO was confirmed in January 2004.
Figure 1 is a time line showing the history of the CIO position at VA  since the passage of the Clinger-Cohen Act.
subsections: section_title: VA Proposed to Realign its IT Organization in Response to IT Management Challenges
paragraphs: Our prior work highlighted some of the challenges that the CIO  faced as a result of the way the department was organized to carry  out its IT mission. Among these challenges was that information  systems and services were highly decentralized, and the VA  administrations and staff offices controlled a majority of the  department’s IT budget. For example, in VA’s information  technology budget for fiscal year 2002 of approximately $1.25  billion, VHA controlled about $1.02 billion (over 80 percent),  whereas the department level controlled about $60.2 million (less  than 5 percent).
In addition, we noted that there was neither direct nor indirect  reporting to VA’s cyber security officer—the department’s senior  security official—thus raising questions about this person’s ability to  enforce compliance with security policies and procedures and  ensure accountability for actions taken throughout the department.  The more than 600 information security officers in VA’s three  administrations and its many medical facilities throughout the  country were responsible for ensuring the department’s information  security, although they reported only to their facility’s director or to  the chief information officer of their administration.
Given the large annual funding base and decentralized management  structure, we testified that it was crucial for the departmental CIO  to ensure that well-established and integrated processes for leading,  managing, and controlling investments are commonplace and  followed throughout the department. This is consistent with the  finding in our CIO review that implementation of IT management  practices was a challenge; over half of federal CIOs identified IT  investment management specifically.
Recognizing weaknesses in accountability for the department’s IT  resources and the need to reorganize IT management and financing,  the Secretary announced a realignment of the department’s IT  operations in a memorandum dated August 2002. According to the  memorandum, the realignment would centralize IT functions,  programs, workforce personnel, and funding into the office of the  department-level CIO. In particular, several significant changes were  described:  ●  The CIOs in each of the three administrations—VHA, VBA, and  NCA—were to be designated deputy CIOs and were to report  directly to the department-level CIO. Previously, these officials  served as component-level CIOs who reported only to their  respective administrations’ under secretaries.  ●  All administration-level cyber security functions were to be  consolidated under the department’s cyber security office, and all  monies earmarked by VA for these functions were to be placed  under the authority of the cyber security officer. Information  security officers previously assigned to VHA’s 21 veterans integrated  service networks would report directly to the cyber security  officer, thus extending the responsibilities of the cyber security  office to the field.  ●  Beginning in fiscal year 2003, the department-level CIO would  assume executive authority over VA’s IT funding.
In September 2002, we testified that in pursuing these reforms, the  Secretary demonstrated the significance of establishing an effective  management structure for building credibility in the way IT is used,  and took a significant step toward achieving a “One VA” vision. The  Secretary’s initiative was also a bold and innovative step by the  department—one that has been undertaken by few other federal  agencies. For example, of 17 agencies contacted in 2002, 8 reported  having component-level CIOs, none of which reported to the  department-level CIO. Only one agency with component-level CIOs  reported that its department-level CIO had authority over all IT  funding.
We also noted that the CIO’s success in managing IT operations  under the realignment would hinge on effective collaboration with  business counterparts to guide IT solutions that meet mission needs,  and we pointed out the importance of the three key contributors to  CIO success described in our 2001 guidance (discussed earlier).
Although we have not reviewed the current status of this proposed  realignment or VA’s current organizational structure, it remains our  view that the proposed realignment held promise for building a  more solid foundation for investing in and improving the  department’s accountability over IT resources. Specifically, under  the realignment the CIO would assume budget authority over all IT  funding, including authority to veto proposals submitted from  subdepartment levels. This could have a significant effect on VA’s  accountability for how components are spending money.
To sum up, the CIO plays a vital role in ensuring that VA’s funds are  well spent and in managing information technology to serve our  nation’s veterans. In our view, the realignment of VA’s IT  organization proposed in 2002 held promise for improving  accountability and enabling the department to accomplish its  mission. The additional oversight afforded the CIO could have a  significant impact on the department’s ability to more effectively  account for and manage its proposed $2.1 billion in planned IT  spending.
Mr. Chairman, this concludes my statement. I would be pleased to  respond to any questions that you or other members of this  Committee may have at this time.
section_title: Contacts and Acknowledgements
paragraphs: For information about this testimony, please contact Linda D.  Koontz, Director, Information Management Issues, at (202) 512-6240  or at koontzl@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last  page of this statement. Individuals making key contributions to this  testimony include Barbara Collier, Lester Diamond, Barbara Oliver,  and Eric Trout.
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