Information Security: Federal Agency Efforts to Encrypt Sensitive Information Are Under Way, but Work Remains
Published: 2008-06-27T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Many federal operations are supported by automated systems that may contain sensitive information such as national security information that, if lost or stolen, could be disclosed for improper purposes. Compromises of sensitive information at numerous federal agencies have raised concerns about the extent to which such information is vulnerable. The use of technological controls such as encryption--the process of changing plaintext into ciphertext--can help guard against the unauthorized disclosure of sensitive information. GAO was asked to determine (1) how commercially available encryption technologies can help agencies protect sensitive information and reduce risks; (2) the federal laws, policies, and guidance for using encryption technologies; and (3) the extent to which agencies have implemented, or plan to implement, encryption technologies. To address these objectives, GAO identified and evaluated commercially available encryption technologies, reviewed relevant laws and guidance, and surveyed 24 major federal agencies.
section_title: What GAO Found
paragraphs: Commercially available encryption technologies can help federal agencies protect sensitive information that is stored on mobile computers and devices (such as laptop computers, handheld devices such as personal digital assistants, and portable media such as flash drives and CD-ROMs) as well as information that is transmitted over wired or wireless networks by reducing the risks of its unauthorized disclosure and modification. For example, information stored in individual files, folders, or entire hard drives can be encrypted. Encryption technologies can also be used to establish secure communication paths for protecting data transmitted over networks. While many products to encrypt data exist, implementing them incorrectly------such as failing to properly configure the product, secure encryption keys, or train users------can result in a false sense of security and render data permanently inaccessible. Key laws frame practices for information protection, while federal policies and guidance address the use of encryption. The Federal Information Security Management Act of 2002 mandates that agencies implement information security programs to protect agency information and systems. In addition, other laws provide guidance and direction for protecting specific types of information, including agency-specific information. For example, the Privacy Act of 1974 requires that agencies adequately protect personal information, and the Health Insurance Portability and Accountability Act of 1996 requires additional protections for sensitive health care information. The Office of Management and Budget has issued policy requiring federal agencies to encrypt all data on mobile computers and devices that carry agency data and use products that have been approved by the National Institute for Standards and Technology (NIST) cryptographic validation program. Further, NIST guidance recommends that agencies adequately plan for the selection, installation, configuration, and management of encryption technologies. The extent to which 24 major federal agencies reported that they have implemented encryption and developed plans to implement encryption of sensitive information varied across agencies. From July through September 2007, the major agencies collectively reported that they had not yet installed encryption technology to protect sensitive information on about 70 percent of their laptop computers and handheld devices. Additionally, agencies reported uncertainty regarding the applicability of OMB's encryption requirements for mobile devices, specifically portable media. While all agencies have initiated efforts to deploy encryption technologies, none had documented comprehensive plans to guide encryption implementation activities such as installing and configuring appropriate technologies in accordance with federal guidelines, developing and documenting policies and procedures for managing encryption technologies, and training users. As a result federal information may remain at increased risk of unauthorized disclosure, loss, and modification.

section_title: Letter
paragraphs: In 2006, the Department of Veterans Affairs reported that a laptop  computer and external hard drive—that had not been encrypted or  password protected and that contained the personal information of  approximately 26.5 million veterans and United States military  personnel—had been stolen from an employee’s home. This incident and  the increasing number of data breaches reported by other government  agencies—such as the Departments of Defense and Health and Human  Services and the Transportation Security Administration—have raised  concerns about the extent to which sensitive information maintained by  the federal government is vulnerable and what current laws, policies, and  practices are in place to protect that information.
In June 2006, GAO testified that federal agencies should consider the use  of encryption technologies to improve their ability to protect information  from improper disclosure, particularly when data must be stored on  mobile computers and devices such as laptop computers, handheld  personal digital assistants, and portable media such as flash drives and  CD-ROMs. Encryption protects data through a process of transforming  ordinary data (commonly referred to as plaintext) into code form  (ciphertext) using a special value known as a key and a mathematical  process called an algorithm. Encryption technologies include  commercially available products (such as hardware or software) that  create the capability to encrypt data.
In response to your request, our objectives were to determine (1) how  commercially available encryption technologies could help federal  agencies protect sensitive information and reduce risks; (2) the federal  laws, policies, and guidance for using encryption technologies to protect  sensitive information; and (3) the extent to which agencies have  implemented, or planned to implement, encryption technologies to protect  sensitive information.
To address these objectives, we identified commercially available  encryption technologies by reviewing prior GAO reports on technology,  researching products approved by the National Institute of Standards and  Technology (NIST), and interviewing NIST encryption experts. We also  reviewed relevant laws, policies, and guidance to identify the mandatory  and optional practices for protecting sensitive information (including  personally identifiable information) that federal agencies collect and  handle. In addition, we surveyed 24 major federal agencies and examined  supporting documentation regarding agency efforts to implement  encryption. We also examined encryption practices at six of these  agencies to determine whether these practices met federal requirements  for installation and configuration of Federal Information Processing  Standards (FIPS)-validated cryptographic modules, encryption products,  and associated management controls.
We conducted this performance audit from February 2007 through June  2008 in accordance with generally accepted government auditing  standards. These 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 the objectives, scope, and methodology of our review.
subsections: section_title: Background
paragraphs: Virtually all federal operations are supported by automated systems,  mobile devices, and electronic media that may contain sensitive  information such as Social Security numbers, medical records, law  enforcement data, national or homeland security information, and  proprietary information that could be inappropriately disclosed, browsed,  or copied for improper or criminal purposes.
In our survey of 24 major federal agencies, 10 agencies reported having  systems that contain sensitive medical information, 16 reported having  systems that contain sensitive regulatory information, 19 reported having  systems that contain sensitive personal information, and 20 reported  having systems that contain sensitive program-specific information. It is  important for agencies to safeguard sensitive information because, if left  unprotected, the information could be compromised—leading to loss or  theft of resources (such as federal payments and collections), modification  or destruction of data, or unauthorized use of computer resources,  including launching attacks on other computer systems.
subsections: section_title: Factors Placing Sensitive Information at Risk
paragraphs: Many factors can threaten the confidentiality, integrity, and availability of  sensitive information. Cyber threats to federal systems and critical  infrastructures containing sensitive information can be intentional or  unintentional, targeted or nontargeted, and can come from a variety of  sources. Intentional threats include both targeted and nontargeted  attacks. A targeted attack occurs when a group or individual specifically  attacks an information system. A nontargeted attack occurs when the  intended target of the attack is uncertain, such as when a virus, worm, or  malware is released on the Internet with no specific target. Unintentional  threats can be caused by software upgrades or maintenance procedures  that inadvertently disrupt systems.
The Federal Bureau of Investigation has identified multiple sources of threats  to our nation’s critical information systems, including those from foreign  nation states engaged in information warfare, domestic criminals, hackers,  virus writers, and disgruntled current and former employees working within  an organization. There is increasing concern among both government officials  and industry experts regarding the potential for a cyber attack. According to  the Director of National Intelligence, ‘‘our information infrastructure— including the Internet, telecommunications networks, computer systems, and  embedded processors and controllers in critical industries—increasingly is  being targeted for exploitation and potentially for disruption or destruction by  a growing array of state and non-state adversaries. Over the past year, cyber  exploitation activity has grown more sophisticated, more targeted, and more  serious. The intelligence community expects these trends to continue in the  coming year.’’  Threats to mobile devices are posed by people with malicious intentions,  including causing mischief and disruption as well as committing identity  theft and other forms of fraud. For example, malware threats can infect  data stored on devices, and data in transit can be intercepted through  many means, including from e-mail, Web sites, file downloads, file sharing,  peer-to-peer software, and instant messaging. Another threat to mobile  devices is the loss or theft of the device. Someone who has physical access  to an electronic device can attempt to view the information stored on it.
section_title: Incidents at Federal Agencies Demonstrate That Sensitive Information Is at Risk
paragraphs: The need for effective information security policies and practices is further  illustrated by the increasing number of security incidents reported by federal  agencies that put sensitive information at risk. Personally identifiable  information about millions of Americans has been lost, stolen, or improperly  disclosed, thereby potentially exposing those individuals to loss of privacy,  identity theft, and financial crimes. Reported attacks and unintentional  incidents involving critical infrastructure systems demonstrate that a serious  attack could be devastating. Agencies have experienced a wide range of  incidents involving data loss or theft, computer intrusions, and privacy  breaches, underscoring the need for improved security practices.
When incidents occur, agencies are to notify the federal information  security incident center—the U.S. Computer Emergency Readiness Team  (US-CERT). As shown in figure 1, the number of incidents reported by  federal agencies to US-CERT has increased dramatically over the past 3  years, increasing from 3,634 incidents reported in fiscal year 2005 to 13,029  incidents in fiscal year 2007 (about a 259 percent increase).
Data breaches present federal agencies with potentially serious and  expensive consequences; for example, a security breach might require an  agency to fund the burdensome costs of notifying affected individuals and  associated credit monitoring services or it could jeopardize the agency’s  mission. Implementation of a risk-based framework of management,  operational, and technical controls that includes controls such as  encryption technology can help guard against the inadvertent compromise  of sensitive information. While encrypting data might add to operational  burdens by requiring individuals to enter pass codes or use other means to  encrypt and decrypt data, it can also help to mitigate the risk associated  with the theft or loss of computer equipment that contains sensitive data.
section_title: Workforce Mobility Introduces Additional Risks to Sensitive Information
paragraphs: Protecting information has become more challenging in today’s IT  environment of highly mobile workers and decreasing device size. Using  small, easily pilferable devices such as laptop computers, handheld  personal digital assistants, thumb-sized Universal Serial Bus (USB) flash  drives, and portable electronic media such as CD-ROMs and DVDs,  employees can access their agency’s systems and information from  anywhere. When computers were larger and stationary, sensitive  information that was stored on mainframe computers was accessible by  only a limited number of authorized personnel via terminals that were  secured within the physical boundaries of the agency’s facility. Now,  mobile workers can process, transport, and transmit sensitive information  anywhere they work. This transition from a stationary environment to a  mobile one has changed the type of controls needed to protect the  information.  Encryption technologies, among other controls, provide  agencies with an alternate method of protecting sensitive information that  compensates for the protections offered by the physical security controls  of an agency facility when the information is removed from, or accessed  from, outside of the agency location.
section_title: Encryption Can Help Protect Sensitive Information
paragraphs: Data breaches can be reduced through the use of encryption, which is the  process of transforming plaintext into ciphertext using a special value  known as a key and a mathematical process called an algorithm (see fig. 2).
Cryptographic algorithms are designed to produce ciphertext that is  unintelligible to unauthorized users. Decryption of ciphertext—returning  the encoded data to plaintext—is possible by using the proper key.  Encryption can protect sensitive information in storage and during  transmission. Encryption of data in transit hides information as it moves,  for example, between a database and a computing device over the  Internet, local networks, or via fax or wireless networks. Stored data  include data stored in files or databases, for example, on a personal digital  assistant, a laptop computer, a file server, a DVD, or a network storage  appliance. Encryption may also be used in system interconnection devices  such as routers, switches, firewalls, servers, and computer workstations to  apply the appropriate level of encryption required for data that pass  through the interconnection.
section_title: Commercially Available Encryption Technologies Can Help Agencies Reduce Risks
paragraphs: Commercially available encryption technologies can help federal agencies  protect sensitive information and reduce the risks of its unauthorized  disclosure and modification. These technologies have been designed to  protect information stored on computing devices or other media and  transmitted over wired or wireless networks.
Because the capability of each type of encryption technology to protect  information is limited by the boundaries of the file, folder, drive, or  network covered by that type of technology, a combination of several  technologies may be required to ensure that sensitive information is  continuously protected as it flows from one point, such as a remote mobile  device, to another point, such as a network or portable electronic media.
For example, one product that encrypts a laptop’s hard drive may not  provide any protection for files copied to portable media, attached to an e- mail, or transmitted over a network.
subsections: section_title: Encryption Technologies to Protect Stored Information Are Available
paragraphs: Agencies have several options available when selecting an encryption  technology for protecting stored data. According to NIST guidance on  encrypting stored information, these include full disk, hardware-based,  file, folder, or virtual disk encryption. Through the use of these  technologies, encryption can be applied granularly, to an individual file  that contains sensitive information, or broadly, by encrypting an entire  hard drive. The appropriate encryption technology for a particular  situation depends primarily on the type of storage, the amount of  information that needs to be protected, and the threats that need to be  mitigated. Storage encryption technologies require users to authenticate  successfully before accessing the information that has been encrypted.  The combination of encryption and authentication controls access to the  stored information.
subsections: section_title: Full Disk Encryption
paragraphs: Full disk encryption software encrypts all data on the hard drive used to  boot a computer, including the computer’s operating system, and permits  access to the data only after successful authentication to the full disk  encryption software. The majority of current full disk encryption products  are implemented entirely within a software application. The software  encrypts all information stored on the hard drive and installs a special  environment to authenticate the user and begin decrypting the drive. Users  enter their user identification and password before decrypting and starting  the operating system. Once a user authenticates to the operating system by  logging in, the user can access the encrypted files without further  authentication, so the security of the solution is heavily dependent on the  strength of the operating system authenticator.
When a computer is turned off, all the information encrypted by full disk  encryption is protected, assuming that pre-boot authentication is required.  After the computer is booted, full disk encryption provides no protection  and the operating system becomes fully responsible for protecting the  unencrypted information.
section_title: Hardware-Based Encryption
paragraphs: Full disk encryption can also be built into a hard drive. Hardware and  software-based full disk encryption offer similar capabilities through  different mechanisms. When a user tries to boot a device protected with  hardware-based full disk encryption, the hard drive prompts the user to  authenticate before it allows an operating system to load. The full disk  encryption capability is built into the hardware in such a way that it  cannot be disabled or removed from the drive. The encryption code and  authenticators, such as passwords and cryptographic keys, are stored  securely on the hard drive. Because the encryption and decryption are  performed by the hard drive itself, without any operating system  participation, typically there is very little performance impact.
A major difference between software- and hardware-based full disk  encryption is that software-based full disk encryption can be centrally  managed, but hardware-based full disk encryption can usually be managed  only locally. This makes key management and recovery actions  considerably more resource-intensive and cumbersome for hardware- based full disk encryption than for software-based. Another major  difference is that because hardware-based full disk encryption performs  all cryptographic processing within the hard drive’s hardware, it does not  need to place its cryptographic keys in the computer’s memory, potentially  exposing the keys to malware and other threats. A third significant  difference is that hardware-based full disk encryption does not cause  conflicts with software that modifies the master boot record, for example,  software that allows the use of more than one operating system on a hard  drive.
section_title: File, Folder, and Virtual Disk Encryption
paragraphs: File, folder, and virtual disk encryption are all used to encrypt specified  areas of data on a storage medium such as a laptop hard drive. File  encryption encrypts files, a collection of information logically grouped  into a single entity and referenced by a unique name, such as a file name.  Folder encryption encrypts folders, a type of organizational structure used  to group files. Virtual disk encryption encrypts a special type of file— called a container—that is used to encompass and protect other files.
File encryption is the process of encrypting individual files on a storage  medium and permitting access to the encrypted data only after proper  authentication is provided. Folder encryption is very similar to file  encryption, except that it addresses individual folders instead of files.  Some operating systems offer built-in file and/or folder encryption  capabilities, and many third-party programs are also commercially  available. File/folder encryption does not provide any protection for data  outside the protected files or folders such as unencrypted temporary files  that may contain the contents of any unencrypted files being held in  computer memory.
Virtual disk encryption is the process of encrypting a container. The  container appears as a single file but can hold many files and folders that  are not seen until the container is decrypted. Access to the data within the  container is permitted only after proper authentication is provided, at  which point the container appears as a logical disk drive that may contain  many files and folders. Virtual disk encryption does not provide any  protection for data created outside the protected container, such as  unencrypted temporary files, that could contain the contents of any  unencrypted files being held in computer memory.
section_title: Agency Information Can Be Encrypted while in Transit over a Network
paragraphs: Sensitive data are also at risk during transmission across unsecured— untrusted—networks such as the Internet. For example, as reported by  NIST, transmission of e-mail containing sensitive information or direct  connections for the purpose of processing information between a mobile  device and an internal trusted system can expose sensitive agency data to  monitoring or interception. According to both NIST and an industry  source, agencies can use commercially available encryption technologies  such as virtual private networks and digital signatures to encrypt sensitive  data while they are in transit over a wired or wireless network.
subsections: section_title: Virtual Private Networks
paragraphs: According to NIST, a virtual private network is a data network that  enables two or more parties to communicate securely across a public  network by creating a private connection, or “tunnel,” between them.
Because a virtual private network can be used over existing networks such  as the Internet, it can facilitate the secure transfer of sensitive data across  public networks. Virtual private networks can also be used to provide a  secure communication mechanism for sensitive data such as Web-based  electronic transactions and to provide secure remote access to an  organization’s resources.
section_title: Digital Signatures and Digital Certificates
paragraphs: Properly implemented digital signature technology uses public key  cryptography to provide authentication, data integrity, and nonrepudiation  for a message or transaction. As NIST states, public key infrastructures  (PKI) can be used not only to encrypt data but also to authenticate the  identity of specific users. Just as a physical signature provides assurance  that a letter has been written by a specific person, a digital signature is an  electronic credential created using a party’s private key with an encryption  algorithm. When it is added to a document, it can be used to confirm the  identity of a document’s sender since it also contains the user’s public key  and name of the encryption algorithm. Validating the digital signature not  only confirms who signed it, but also ensures that there have been no  alterations to the document since it was signed.
Digital signatures may also be employed in authentication protocols to  confirm the identity of the user before establishing a session.  Specifically,  digital signatures can be used to provide higher assurance authentication  (in comparison with passwords) when establishing virtual private  networks.
Digital signatures are often used in conjunction with digital certificates. A  digital certificate is an electronic credential that guarantees the  association between a public key and a specific entity, such as a person or  organization. As specified by NIST, the signature on the document can be  validated by using the public key from the digital certificate issued to the  signer. Validating the digital certificate, the system can confirm that the  user’s relationship to the organization is still valid. The most common use  of digital certificates is to verify that a user sending a message is who he or  she claims to be and to provide the receiver with a means to encode a  reply.  For example, an agency virtual private network could use these  certificates to authenticate the identity of the user, verify that the key is  still good, and that he or she is still employed by the agency.
section_title: Encryption Technologies Available for Handheld Mobile Computing Devices
paragraphs: NIST guidance further states that encryption software can be used to  protect the confidentiality of sensitive information stored on handheld  mobile computing devices and mirrored on the desktop computer. The  information on the handheld’s add-on backup storage modules can also be  encrypted when not in use. This additional level of security can be added  to provide an extra layer of defense, further protecting sensitive  information stored on handheld devices.
In addition, encryption technologies can protect data on handheld devices  while the data are in transit. Users often subscribe to third-party wireless  Internet service providers, which use untrusted networks; therefore, the  handheld device would require virtual private network software and a  supporting corporate system to create a secure communications tunnel to  the agency.
Table 1 describes the types of commercial encryption technologies  available to agencies.
While many technologies exist to protect data, implementing them  incorrectly—such as failing to properly configure the product, secure  encryption keys, or train users—can result in a false sense of security or  even render data permanently inaccessible. See appendix II for a  discussion of decisions agencies face and important considerations for  effectively implementing encryption to reduce agency risks.
section_title: Key Laws Frame Practices for Information Protection, while Federal Policies and Guidance Address Use of Encryption
paragraphs: Although federal laws do not specifically require agencies to encrypt sensitive  information, they give federal agencies responsibilities for protecting it.  Specifically, FISMA, included within the E-Government Act of 2002, provides  a comprehensive framework for ensuring the effectiveness of information  security controls over federal agency information and information systems. In  addition, other laws frame practices for protecting specific types of sensitive  information. OMB is responsible for establishing governmentwide policies  and for providing guidance to agencies on how to implement the provisions of  FISMA, the Privacy Act, and other federal information security and privacy  laws. In the wake of recent security breaches involving personal data, OMB  issued guidance in 2006 and 2007 reiterating the requirements of these laws  and guidance. In this guidance, OMB directed, among other things, that  agencies encrypt data on mobile computers or devices and follow NIST  security guidelines. In support of federal laws and policies, NIST provides  federal agencies with planning and implementation guidance and mandatory  standards for identifying and categorizing information types, and for selecting  adequate controls based on risk, such as encryption, to protect sensitive  information.
subsections: section_title: Key Laws Provide Framework for Protecting Sensitive Information
paragraphs: Although federal laws do not specifically address the use of encryption,  they provide a framework for agencies to use to protect their sensitive  information. FISMA, which is Title III of the E-Government Act of 2002,  emphasizes the need for federal agencies to develop, document, and  implement programs using a risk-based approach to provide information  security for the information and information systems that support their  operations and assets. Its purposes include the following:    providing a comprehensive framework for ensuring the effectiveness of  information security controls over information resources that support  federal operations and assets;  recognizing the highly networked nature of the current federal  computing environment and providing effective governmentwide  management and oversight of the related information security risks,  including coordination of information security efforts throughout the  civilian, national security, and law enforcement communities;    providing for development and maintenance of minimum controls  required to protect federal information and information systems;    acknowledging that commercially developed information security  products offer advanced, dynamic, robust, and effective information  security solutions, reflecting market solutions for the protection of  critical information infrastructures important to the national defense  and economic security of the nation that are designed, built, and  operated by the private sector; and  recognizing that the selection of specific technical hardware and  software information security solutions should be left to individual  agencies choosing from among commercially developed products.
This act requires agencies to provide cost-effective controls to protect  federal information and information systems from unauthorized access,  use, disclosure, disruption, modification, or destruction, and it directs  OMB and NIST to establish policies and standards to guide agency  implementation of these controls, which may include the use of  encryption.
The E-Government Act of 2002 also strives to enhance protection for  personal information in government information systems by requiring that  agencies conduct privacy impact assessments. A privacy impact  assessment is an analysis of how personal information is collected, stored,  shared, and managed in a federal system.
Additionally, the Privacy Act of 1974 regulates agencies’ collection, use,  and dissemination of personal information maintained in systems of  records.  In this regard, the Privacy Act requires agencies to establish  appropriate administrative, technical, and physical safeguards to ensure  the security and confidentiality of records and to protect against any  threats or hazards to their security or integrity that could result in  substantial harm, embarrassment, inconvenience, or unfairness to any  individual on whom information is maintained.
Congress has also passed laws requiring protection of sensitive  information that are agency-specific or that target a specific type of  information. These laws include the Health Insurance Portability and  Accountability Act of 1996, which requires additional protections to  sensitive health care information and the Veterans Benefits, Health Care,  and Information Technology Act, enacted in December 2006, which  establishes information technology security requirements for personally  identifiable information that apply specifically to the Department of  Veterans Affairs.
Table 2 summarizes the laws that provide a framework for agencies to use  in protecting sensitive information.
section_title: OMB Policy Requires Encryption of Sensitive Government Information on Mobile Devices
paragraphs: OMB is responsible for establishing governmentwide policies and for  providing guidance to agencies on how to implement the provisions of  FISMA, the Privacy Act, and other federal information security and privacy  laws. OMB policy expands on the risk-based information security program  requirements of FISMA in its 2002 and 2004 guidance and in the wake of  recent security breaches involving personal data, outlines minimum  practices for implementation of encryption required by federal agencies in  guidance issued in 2006 and 2007. Specifically    OMB memorandum M-04-04, E-Authentication Guidance for Federal  Agencies, requires that agencies implement specific security controls  recommended by NIST, including the use of approved cryptographic  techniques for certain types of electronic transactions that require a  specified level of protection.
OMB memorandum M-06-16, Protection of Sensitive Agency Information,  recommends, among other things, that agencies encrypt all agency data on  mobile computers and devices or obtain a waiver from the Deputy  Secretary of the agency that the device does not contain sensitive  information. The memorandum also recommends that agencies use a NIST  checklist provided in the memorandum that states agencies should verify  that information requiring protection is appropriately categorized and  assigned an appropriate risk impact category.
OMB memorandum M-07-16, Safeguarding Against and Responding to  the Breach of Personally Identifiable Information, restated the M-06-16  recommendations as requirements, and also required the use of NIST- certified cryptographic modules.
These OMB memorandums significant to the use of encryption are briefly  described in table 3.
section_title: NIST Provides Guidance and Standards for Encryption Use
paragraphs: In support of federal laws and policies, NIST provides federal agencies  with implementation guidance and mandatory standards for identifying  and categorizing information types and for selecting adequate controls  based on risk, such as encryption, to protect sensitive information.  Specifically, NIST Special Publication 800-53 instructs agencies to follow  the implementation guidance detailed in supplemental NIST publications,  including the following:    NIST Special Publication 800-21, Guideline for Implementing  Cryptography in the Federal Government, guides the implementation of  encryption by agencies. It recommends that prior to selecting a  cryptographic method, or combination of methods, agencies address  several implementation considerations when formulating an approach and  developing requirements for integrating cryptographic methods into new  or existing systems, including installing and configuring appropriate  cryptographic components associated with selected encryption  technologies; monitoring the continued effectiveness and functioning of  encryption technologies; developing policies and procedures for life cycle  management of cryptographic components (such as procedures for  management of encryption keys, backup and restoration of services, and  authentication techniques); and training users, operators, and system  engineers.
Special Publication 800-57, Recommendation for Key Management,  provides guidance to federal agencies on how to select and implement  cryptographic controls for protecting sensitive information by describing  cryptographic algorithms, classifying different types of keys used in  encryption, and providing information on key management.
Special Publication 800-60, Guide for Mapping Types of Information and  Information Systems to Security Categories, provides implementation  guidance on the assignment of security categories to information and  information systems using FIPS 199.
Special Publication 800-63, Electronic Authentication Guideline,  addresses criteria for implementing controls that correspond to the  assurance levels of OMB memorandum M-04-04 such that, if agencies  assign a level 2, 3, or 4 to an electronic transaction, they are required to  implement specific security controls, including the use of approved  cryptographic techniques.
Special Publication 800-77, Guide to IPsec VPNs, provides technical  guidance to agencies in the implementation of virtual private networks,  such as identifying needs and designing, deploying, and managing the  appropriate solution, including the use of Federal Information Processing  Standards (FIPS)-compliant encryption algorithms.
NIST also issues FIPS, which frame the critical elements agencies are  required to follow to protect sensitive information and information  systems. Specifically    FIPS 140-2, Security Requirements for Cryptographic Modules. Agencies  are required to encrypt agency data, where appropriate, using NIST- certified cryptographic modules. This standard specifies the security  requirements for a cryptographic module used within a security system  protecting sensitive information in computer and telecommunication  systems (including voice systems) and provides four increasing, qualitative  levels of security intended to cover a wide range of potential applications  and environments.
Several standards describe the technical specifications for cryptographic  algorithms, including those required when using digital signatures.
FIPS 199 provides agencies with criteria to identify and categorize all of  their information and information systems based on the objectives of  providing appropriate levels of information security according to a range  of risk levels.
FIPS 200 requires a baseline of minimum information security controls for  protecting the confidentiality, integrity, and availability of federal  information systems and the information processed, stored, and  transmitted by those systems. FIPS 200 directs agencies to implement the  baseline control recommendations of NIST Special Publication 800-53. The  following security-related areas in FIPS 200 whose controls are further  detailed in Special Publication 800-53 pertain to the use of encryption:   Access control—describes controls for developing and enforcing  policies and procedures for access control including remote access,  wireless access, and for portable and mobile devices using mechanisms  such as authentication and encryption.
Contingency planning—includes controls to ensure that the  organization protects system backup information from unauthorized  modification by employing appropriate mechanisms such as digital  signatures.
Identification and authentication—describes controls for developing  and documenting identification and authentication policies and  procedures.
Maintenance—includes remote maintenance control that addresses  how an organization approves, controls, and monitors remotely  executed maintenance and diagnostic activities including using  encryption and decryption of diagnostic communications.
Media protection—describes developing policies and procedures for  media protection including media storage (which may include  encrypting stored data) and transport.
System and communications protection—includes controls to ensure  the integrity and confidentiality of information in transit by employing  cryptographic mechanisms if required, including establishing and  managing cryptographic keys.
NIST publications pertaining to the use of encryption in federal agencies  are briefly described in table 4.
section_title: Efforts to Encrypt Sensitive Information Varied among Agencies
paragraphs: The extent to which 24 major federal agencies reported that they had  implemented encryption and developed plans to implement encryption  varied across agencies. Although all agencies had initiated efforts to  encrypt stored and transmitted sensitive agency information, none had  completed these efforts or developed and documented comprehensive  plans to guide their implementation of encryption technologies. Our tests  at 6 selected agencies revealed weaknesses in the encryption  implementation practices involving the installation and configuration of  FIPS-validated cryptographic modules encryption products, monitoring  the effectiveness of installed encryption technologies, the development  and documentation of policies and procedures for managing these  technologies, and the training of personnel in the proper use of installed  encryption products. As a result of these weaknesses, federal information  may remain at increased risk of unauthorized disclosure, loss, and  modification.
subsections: section_title: Reported Efforts to Encrypt Stored Information Lagged behind Efforts to Encrypt Transmitted Information
paragraphs: All 24 major federal agencies reported varying degrees of progress in their  efforts to encrypt stored and transmitted sensitive agency information.  While most of the agencies reported that they had not completed efforts to  encrypt stored sensitive information, they reported being further along  with efforts to encrypt transmitted sensitive information. Preparing for the  implementation of encryption technologies involves numerous  considerations. In response to our survey, agencies reported that they had  encountered challenges that hinder the implementation of encryption. See  appendix III for a discussion of the hindrances identified by agencies.
subsections: section_title: Few Agencies Have Encrypted All Sensitive Information Stored on Mobile Devices
paragraphs: OMB requires agencies to encrypt all agency data on mobile computers  and devices or obtain a waiver from the Deputy Secretary of the agency  stating that the device does not contain sensitive information. Of 24  agencies that reported from July through September 2007 on the status of  their efforts to encrypt sensitive information stored on their laptops and  handheld mobile devices, 8 agencies reported having encrypted  information on less than 20 percent of these devices and 5 agencies  reported having encrypted information on between 20 and 39 percent of  these devices (see fig. 3). Overall, the 24 agencies reported that about 70  percent of laptop computers and handheld devices had not been  encrypted.
In addition, 10 of 22 agencies reported having encrypted information on  less than 20 percent of portable storage media taken offsite, and 3 of 22  reported having encrypted between 20 and 39 percent. Further, 9 of 17  agencies reported encrypting sensitive information on less than 20 percent  of offsite backup storage media. However, while agencies were encrypting  sensitive data on mobile computers and devices such as laptop computers  and handheld devices (e.g. personal digital assistants), 6 agencies reported  having other storage devices, such as portable storage media, that could  contain sensitive data. Of the 6 agencies, 4 had not encrypted these  additional devices. Further, officials at 1 agency had no plans to encrypt  sensitive data contained on their portable media.
In response to our query in April 2008, OMB officials stated that the term  “mobile computers and devices” was intended to include all agency  laptops, handheld devices, and portable storage devices such as portable  drives and CD-ROMs that contain agency data. Nevertheless, this  description is not clear in any of its memorandums. Until OMB clarifies the  applicability of the encryption requirement so that agencies can complete  encrypting sensitive agency information stored on applicable devices, the  information will remain at risk of unauthorized disclosure.
section_title: Most Agencies Are Encrypting Sensitive Transmitted Information
paragraphs: Most agencies reported that they had encrypted sensitive information  transmitted over wired and wireless networks. Of 23 agencies reporting on  their efforts to encrypt wired Internet transmissions of sensitive  information, 18 agencies reported encrypting nearly all or all (80 percent  to 100 percent), of their transmissions over wired Internet networks. In  addition, of 21 agencies reporting on their efforts to encrypt wireless  transmissions of sensitive information, 12 reported having encrypted all or  nearly all such transmissions (see fig. 4).
section_title: Encryption Efforts Had Not Been Adequately Planned at Most Agencies
paragraphs: Although 24 major federal agencies reported having encryption efforts  under way, none of the agencies had documented a comprehensive plan  that considered the security control implementation elements  recommended by NIST. According to NIST, cryptography is best designed  as an integrated part of a comprehensive information security program  rather than as an add-on feature and it suggests that implementing  technical approaches without a plan to guide the process is the least  effective approach to making use of cryptography. Specifically, as part of  an effective information security program, NIST Special Publication 800-53  requires agencies to inventory and categorize information and systems  according to risk as well as to document the baseline security controls— such as encryption—selected to adequately mitigate risks to information.  However, of the 24 agencies we surveyed, 18 reported that they had not  completed efforts to inventory sensitive information that they hold.
Further, NIST recommends that agencies follow NIST Special Publication  800-21 guidance when formulating their approach for integrating  cryptographic methods into new or existing systems and documenting  plans for implementing encryption, such plans consist of the following  minimum elements:  installing and properly configuring FIPS-validated cryptographic  modules associated with selected encryption technologies;    monitoring the continued effectiveness of installed cryptographic  controls, including the proper functioning of encryption technologies;    documenting and implementing policies and procedures for  management of cryptographic components, such as the effective  implementation and use of FIPS-compliant encryption technologies  and the establishment and management of encryption keys; and    providing training to users, operators, and system engineers.
Although several agencies had developed ad hoc encryption technology  acquisition or deployment plans, none of the agencies had documented  comprehensive plans that addressed the elements recommended by NIST.
In response to our query, OMB officials stated that they monitor agencies’  progress toward implementing encryption through quarterly data  submitted by the agencies as part of the President’s Management Agenda  scorecard. However, OMB did not provide us with evidence to  demonstrate monitoring of the agencies’ efforts to inventory the sensitive  information they hold or to develop implementation plans. As previously  noted, agencies did not have such plans and often did not have  inventories. Until agencies develop and document comprehensive plans to  guide their approach for implementing encryption, including completing  an inventory of the sensitive information they hold, agencies will have  limited assurance that they will be able to effectively complete  implementation and manage life cycle maintenance of encryption  technologies, as we observed at selected agencies and discuss later in this  report.
section_title: Weaknesses in Encryption Implementation Practices Exist at Selected Agencies
paragraphs: Practices for implementing encryption displayed weaknesses at the 6  federal agencies we reviewed for testing. Specifically, 2 of the 6 agencies  had not installed FIPS-validated cryptographic modules encryption  technologies and 4 had not configured installed encryption technologies in  accordance with FIPS 140-2 specifications. In addition, all of the 6  agencies had not either developed or documented policies and procedures  for managing encryption implementation, and 3 of these agencies had not  adequately trained personnel in the effective use of installed encryption  technologies. Protection of information and information systems relies not  only on the technology in place but on establishing a foundation for  effective implementation, life cycle management, and proper use of the  technologies. Until agencies resolve these weaknesses, their data may not  be fully protected.
subsections: section_title: FIPS-Compliant Encryption Products Had Not Been Installed on All Agency Devices
paragraphs: OMB requires agencies to protect sensitive agency data stored on mobile  devices by installing a FIPS-validated cryptographic modules product, and  NIST Special Publication 800-53 recommends that agencies install FIPS- compliant products when the agency requires encryption of stored or  transmitted sensitive information. Agencies can now acquire FIPS- validated cryptographic module products for encrypting stored  information through the General Services Administration’s (GSA)  SmartBUY program (see app. IV for a description of this program).  Use of  encryption technologies approved by NIST as compliant with FIPS 140-2  provides additional assurance that the product implemented—if  configured correctly—will help protect sensitive information from  unauthorized disclosure.
Laptop computers. The Department of Housing and Urban Development  (HUD) had not installed encryption products on any of its laptop  computers despite an agency official’s assertions to the contrary. HUD  officials explained that they had planned to implement FIPS-compliant  encryption in fiscal year 2008 but that implementation was delayed until  late in fiscal year 2008 due to lack of funding and it is now part of their  fiscal year 2009 budget request. In addition, the Department of Education  had not installed a FIPS-validated cryptographic modules product to  encrypt sensitive information on any of the 15 laptop computers that we  tested at one of its components. Of the 4 remaining agencies, 3—the  Department of Agriculture (USDA), the State Department, and GSA—had  installed FIPS-compliant technologies on all 58 of the laptop computers  that we tested at specific locations within each agency. At the National  Aeronautics and Space Administration (NASA) location we tested, we  confirmed that the agency’s selected FIPS-compliant encryption software  had been installed on 27 of 29 laptop computers. Although the agency  asserted that it had installed it on all 29 laptops, officials explained that  they did not have a mechanism to detect whether the encryption product  was successfully installed and functioning.
Handheld devices. All 6 of the agencies had deployed FIPS-compliant  handheld mobile devices (specifically, BlackBerry® devices) for use by  personnel. BlackBerry software and the BlackBerry enterprise server  software enable users to store, send, and receive encrypted e-mail and  access data wirelessly using FIPS-validated cryptographic modules  encryption algorithms.
Virtual private networks. One of three virtual private networks installed  by the Department of Education was not a FIPS-compliant product. The  remaining 5 agencies had installed FIPS-validated cryptographic modules  products to protect transmissions of sensitive information.
section_title: Certain Agencies Did Not Consistently Configure or Install Encryption Technologies in Accordance with NIST Requirements
paragraphs: Although most agencies had installed FIPS-compliant products to encrypt  information stored on devices and transmitted across networks, some did  not monitor whether the product was functioning or configure the product  to operate only in a FIPS-validated cryptographic modules secure mode.  Until agencies configure FIPS-compliant products in a secure mode as  directed by NIST—for example, by enabling only FIPS-validated  cryptographic module encryption algorithms—protection against  unauthorized decryption and disclosure of sensitive information will be  diminished.
Laptop computers. Of the 4 agencies with FIPS-compliant products  installed on laptop computers, 3 had configured the product to operate in  a secure mode as approved by NIST on all devices that we examined.  However, a component of the Department of Agriculture had not  effectively monitored the effectiveness and continued functioning of  encryption products on 5 of the 52 laptop computers that we examined.  Agency officials were unaware that the drives of these devices had not  been correctly encrypted. The drives, while having the encryption  software installed, did not encrypt the data on the drive. This agency’s  system administrator attributed the noncompliance to the failure of a step  in the installation process; specifically, the laptop had not been connected  to the agency’s network for a sufficient period of time to complete  activation of the user’s encryption key by the central server, and the  agency had no mechanism in place to monitor whether the installed  product was functioning properly.
Handheld devices. Three of the 6 agencies—the Department of Education,  HUD, and NASA—had not configured their handheld BlackBerry devices  to encrypt the data contained on the devices. All six of the agencies  encrypted data in transit because FIPS-validated cryptographic modules  encryption was built into the BlackBerry device software. However,  agencies must enable the encryption to protect information stored on the  device itself by making a selection to do so and requiring the user to input  a password. Officials at these 3 agencies stated that they had not enabled  this protective feature on all their BlackBerry devices due to operational  issues with enabling content protection and that they are awaiting a  solution from the vendor.
Virtual private networks. Two of the 6 agencies—the Department of  Education and HUD—had not configured their virtual private networking  technologies to use only strong, FIPS-validated cryptographic modules  encryption algorithms for encrypting data and to ensure message integrity.  The use of weak encryption algorithms—ones that have not been  approved by NIST or that have explicitly been disapproved by NIST— provides limited assurance that information is adequately protected from  unauthorized disclosure or modification.
section_title: Agencies Had Not Developed or Documented Encryption Policies and Procedures
paragraphs: The weaknesses in encryption practices identified at the 6 selected  agencies existed in part because agencywide policies and procedures did  not address federal guidelines related to implementing and using  encryption. NIST Special Publication 800-53 recommends that agencies  develop a formal, documented policy that addresses the system and  communications controls as well as a formal, documented procedure to  facilitate implementation of these controls. While policies should address  the agency’s position regarding use of encryption and management of  encryption keys, the implementation procedures should describe the steps  for performance of specific activities such as user registration, system  initialization, encryption key generation, key recovery, and key  destruction. However, 4 of the 6 agencies did not have a policy that  addressed the establishment and management of cryptographic keys as  directed by NIST, and none of the 6 agencies had detailed procedures for  implementing this control.
Furthermore, according to NIST guidance, agency policies and procedures  are to address how agencies will install and configure FIPS-compliant  encryption products. All agencies’ policies addressed how the agency  planned to comply with these requirements. However, 4 agencies did not  have detailed procedures requiring installation and configuration of FIPS- compliant cryptography (see table 5).
Policies and procedures for installing and configuring encryption  technologies and for managing encryption keys provide the foundation for  the effective implementation and use of encryption technologies and are a  necessary element of agency implementation plans. Until these agencies  develop, document, and implement these policies and procedures, the  agencies’ implementation of encryption may be ineffective in protecting  the confidentiality, integrity, and availability of sensitive information.
section_title: Three Agencies Had Not Adequately Trained Personnel to Use Installed Encryption Products
paragraphs: Also contributing to the weaknesses at 3 of 6 agencies was the failure to  adequately train personnel in the proper use of installed encryption  technology. Specifically    USDA officials stated that users had not been trained to check for  continued functioning of the software after installation but that they were  in the process of including encryption concepts in its annual security  awareness training required for all computer users. At the conclusion of  our review, USDA had not yet completed this effort.
At the component of the Department of Education where testing was  conducted, some users were unaware that the agency had installed  encryption software on their laptop computers. These users, therefore,  had never used the software to encrypt sensitive files or folders. Further,  while an agency official asserted that encryption training was provided,  the training documents provided pertained only to the protection of  personally identifiable information and did not provide specifics on how to  use the available encryption products. Users we spoke with were unaware  of any available training.
At NASA, several users stated that they had refused to allow the  encryption software to be installed on their devices, while other users said  they were unfamiliar with the product. Although NASA requires users to  receive training when encryption is installed and has developed a training  guide, there was no mechanism in place to track whether users complete  the necessary training.
Until these agencies provide effective training to their personnel in the  proper management and use of installed encryption technologies, they will  have limited confidence in the ability of the installed encryption  technologies to function as intended.
section_title: Conclusions
paragraphs: Despite the availability of numerous types of commercial encryption  technologies and federal policies requiring encryption, most federal  agencies had just begun to encrypt sensitive information on mobile  computers and devices. In addition, agencies had not documented  comprehensive plans to guide activities for effectively implementing  encryption. Although governmentwide efforts were under way, agency  uncertainty with OMB requirements hampered progress. In addition,  weaknesses in encryption practices at six selected federal agencies— including practices for installing and configuring FIPS-validated  cryptographic modules products, monitoring the effectiveness of these  technologies, developing encryption policies and procedures, and training  personnel—increased the likelihood that the encryption technologies used  by the agencies will not function as intended. Until agencies address these  weaknesses, sensitive federal information will remain at increased risk of  unauthorized disclosure, modification, or loss.
section_title: Recommendations for Executive Action
paragraphs: We are making 20 recommendations to the Director of the Office of  Management and Budget and six federal departments and agencies to  strengthen encryption of federal systems.
To assist agencies with effectively planning for and implementing  encryption technologies to protect sensitive information, we recommend  that the Director of the Office of Management and Budget take the  following two actions:    clarify governmentwide policy requiring agencies to encrypt sensitive  agency data through the promulgation of additional guidance and/or  through educational activities and   monitor the effectiveness of the agencies’ encryption implementation  plans and efforts to inventory the sensitive information they hold.
To assist the Department of Agriculture as it continues to deploy its  departmentwide encryption solutions and to improve the life cycle  management of encryption technologies, we recommend that the  Secretary of Agriculture direct the chief information officer to take the  following three actions:    establish and implement a mechanism to monitor the successful  installation and effective functioning of encryption products installed on  devices,   develop and implement departmentwide procedures for encryption key  establishment and management, and    develop and implement a training program that provides technical support  and end-user personnel with adequate training on encryption concepts,  including proper operation of the specific encryption products used.
We also recommend that the Secretary of the Department of Education  direct the chief information officer to take the following five actions to  improve the life cycle management of encryption technologies:    evaluate, select, and install FIPS 140-compliant products for all encryption  needs and document a plan for implementation that addresses protection  of all sensitive information stored and transmitted by the agency;    configure installed FIPS-compliant encryption technologies in accordance  with FIPS-validated cryptographic modules security settings for the  product;   develop and implement departmentwide policy and procedures for  encryption key establishment and management;   develop and implement departmentwide procedures for use of FIPS-   develop and implement a training program that provides technical support  and end-user personnel with adequate training on encryption concepts,  including proper operation of the specific encryption products used.
To ensure that the Department of Housing and Urban Development is  adequately protecting its sensitive information and to improve the life  cycle management of encryption technologies at the department, we  recommend that the Secretary of Housing and Urban Development direct  the chief information officer to take the following three actions:   evaluate, select, and install FIPS 140-compliant products for all encryption  needs and document a plan for implementation that addresses protection  of all sensitive information stored and transmitted by the agency;     configure installed FIPS-compliant encryption technologies in accordance  with FIPS-validated cryptographic modules security settings for the  product; and    develop and implement departmentwide procedures for the use of FIPS- compliant cryptography and for encryption key establishment and  management.
To improve the life cycle management of encryption technologies at the  Department of State, we recommend that the Secretary of State direct the  chief information officer to take the following two actions:    develop and implement departmentwide policy and procedures for  encryption key establishment and management and   develop and implement departmentwide procedures for use of FIPS- compliant cryptography.
To improve the life cycle management of encryption technologies at the  General Services Administration, we recommend that the Administrator of  the General Services Administration direct the chief information officer to  take the following two actions:    develop and implement departmentwide policy and procedures for  encryption key establishment and management and   develop and implement departmentwide procedures for use of FIPS- compliant cryptography.
As the National Aeronautics and Space Administration continues to plan  for a departmentwide encryption solution and to improve the life cycle  management of encryption technologies, we recommend that the  Administrator of the National Aeronautics and Space Administration  direct the chief information officer to take the following three actions:   establish and implement a mechanism to monitor the successful  installation and effective functioning of encryption products installed on  devices,    develop and implement departmentwide policy and procedures for  encryption key establishment and management, and   develop and implement a training program that provides technical support  and end-user personnel with adequate training on encryption concepts,  including proper operation of the specific encryption products used.
section_title: Agency Comments
paragraphs: We received written comments on a draft of this report from the  Administrator, Office of E-Government and Information Technology at  OMB (reproduced in app. V). OMB generally agreed with the report’s  contents and stated that it would carefully consider our recommendations.  We also received written comments from Education’s Chief Information  Officer (reproduced in app. VI), from HUD’s Acting Chief Information  Officer (reproduced in app. VII), from the Department of State  (reproduced in app. VIII), from the Acting Administrator of the GSA  (reproduced in app. IX), and from the Deputy Administrator of NASA  (reproduced in app. X). We received comments via email from the  Department of Agriculture.
In these comments, the Departments of Agriculture, Education, HUD, and  State; the GSA; and NASA agreed with our recommendations to their  respective departments. Agencies also stated that they had implemented  or were in the process of implementing our recommendations. In addition,  NIST and the Social Security Administration provided technical  comments, which we have incorporated as appropriate.
As we agreed with your offices, unless you publicly announce the contents  of this report earlier, we plan no further distribution of it until 30 days  from the date of this letter. At that time, we will send copies of this report  to interested congressional committees and the agency heads and  inspectors general of the 24 major federal agencies. We will also make  copies available to others on request. In addition, this report will be  available at no charge on the GAO Web site at http://www.gao.gov.
If you have any questions or wish to discuss this report, please contact me  at (202) 512-6244 or wilshuseng@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix XI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: The objectives of our review were to determine (1) how commercially  available encryption technologies could help federal agencies protect  sensitive information and reduce risks; (2) the federal laws, policies, and  guidance for using encryption technologies to protect sensitive  information; and (3) the extent to which agencies have implemented, or  planned to implement, encryption technologies to protect sensitive  information.
To address the first objective, we reviewed prior GAO reports and  reviewed documentation regarding products validated by the National  Institute of Standards and Technology (NIST) Cryptographic Module  Validation Program to identify commercially available encryption  technologies. Additionally, we met with a vendor of an encryption product  and interviewed NIST encryption experts regarding the characteristics of  products that can reduce risks to agencies.
To address the second objective, we reviewed prior GAO and agency  inspector general reports to identify relevant laws and guidance such as  the Federal Information Security Management Act of 2002 (FISMA) and  the Privacy Act of 1974 to identify mandatory and optional practices for  protecting sensitive information (including personally identifiable  information but excluding classified national security information) that  federal agencies collect, process, store, and transmit. We examined the  laws to identify federal agencies responsible for promulgating federal  policies and standards on the use of encryption. Additionally, we  researched official publications issued by the Office of Management and  Budget and NIST and interviewed officials from these agencies to identify  the policies, standards, and guidance on encryption that have been issued.
To address the third objective, we collected and analyzed agency-specific  policies, plans, and practices through a data request and also conducted a  survey of the 24 major federal agencies. A survey specialist designed the  survey instrument in collaboration with subject matter experts. Then, the  survey was pretested at 4 of these agencies to ensure that the questions  were relevant and easy to comprehend. For each agency surveyed, we  identified the appropriate point of contact, notified each one of our work,  and distributed the survey along with a data request to each via e-mail in  June 2007. In addition, we discussed the purpose and content of the survey  and data request with agency officials when requested. All 24 agencies  responded to our survey and data request from June to September 2007;  results are reported as of this date. We contacted agency officials when  necessary for additional information or clarification of agencies’ status of  encryption implementation. We did not verify the accuracy of the agencies’  responses; however, we reviewed supporting documentation that agencies  provided to corroborate information provided in their responses. We then  analyzed the results from the survey and data request to identify:  the types of information encrypted in data when stored and in transit;   technologies used by the agency to encrypt information;    whether the technologies implemented by the agency met federal  the extent to which the agency has implemented, or plans to  implement, encryption; and    any challenges faced and lessons learned by agencies in their efforts to  encrypt sensitive but unclassified information.
Conducting any survey may introduce errors. For example, differences in  how a particular question is interpreted, the sources of information that  are available to respondents, or how the data are entered or were analyzed  can introduce variability into the survey results. We took steps in the  development of the survey instrument, the data collection, and the data  analysis to minimize errors.
In addition, we tested the implementation of encryption technologies at 6  agencies to determine whether each agency was complying with federal  guidance that required agencies to use NIST-validated encryption  technology. Out of 24 major federal agencies, we selected 6 that met one  or more of the following conditions: they (1) had not been tested under a  recent GAO engagement, (2) had reported having initiated efforts to install  FIPS-validated cryptographic modules encryption technologies, (3) had  experienced publicized incidents of data compromise, or (4) were  reasonably expected to collect, store, and transmit a wide range of  sensitive information. Specifically, we tested the implementation of  encryption for BlackBerry servers, virtual private networks, or a random  selection of laptop computers at specific locations at the following 6  agencies within the Washington, D.C. area:    U.S. Department of Agriculture,    Department of Housing and Urban Development,    General Services Administration, and    National Aeronautics and Space Administration  At each of these agencies, we requested an inventory of laptop computers  that were located at agency facilities in the Washington, D.C., metro area  and that were encrypted. For each agency, we nonstatistically selected one  location at which to perform testing, and thus the encryption test results  for each agency cannot be projected to the entire agency. We performed  the testing between September and December 2007. At each location  where laptop computers were tested, there were a small number of laptop  computers that were requested as part of our sample but which were not  made available to us for testing. Department officials cited several reasons  for this, including that the user of the device could not bring it to the  location in time for our testing.
In testing the laptop computers, we determined whether encryption  software had been installed on the device and whether the software had  been configured properly to adhere to federally required standards.  Although we identified unencrypted laptop computers at each agency, we  were not able to make statistical estimates of the percentage of  unencrypted devices at each location. The small number of devices in each  sample not made available to us for our testing compromised the  randomness of each sample.
Additionally, for each of the selected locations among the 6 agencies, we  requested information on their BlackBerry servers, chose the server with  the greatest number of users for testing, and reviewed through observation  the specific security configuration settings. We also requested and  examined agency-provided information for their virtual private networks  to determine if encrypted networks were using products validated by  NIST. Finally, we interviewed agency officials regarding their practices for  encrypting stored data as well as data in transit, and for encryption key  establishment and management.
Furthermore, we reviewed and analyzed data on the General Services  Administration’s SmartBUY program to determine the extent of savings  the program provides to federal agencies and how certain agencies have  already benefited from the program.
We conducted this performance audit from February 2007 through June  2008 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: Important Considerations for Implementing Encryption to Effectively Reduce Agency Risks
paragraphs: Encryption technology may help protect sensitive information from  compromise; however, there are several important implementation and  management considerations when selecting and implementing this  technology. Encryption can be a powerful tool, but implementing it  incorrectly—such as by failing to properly configure the product, secure  encryption keys, or train users—can, at best, result in a false sense of  security and, at worst, render data permanently inaccessible. Designing,  building, and effectively implementing commercially available  cryptographic technologies involves more than installing the technology.  Decisions must be made for managing encryption keys and related  cryptographic components, as well as for managing mobile devices and  using public key infrastructure (PKI) technologies. Ultimately, the  effectiveness of the encryption technologies used to protect agency  information and reduce risk depends on how an agency implements and  manages these technologies and the extent to which they are an integral  part of an effectively enforced information security policy that includes  sound practices for managing encryption keys.
subsections: section_title: Encryption Key Management Considerations
paragraphs: Policies and procedures. Comprehensive policies for the management of  encryption and decryption keys—the secret codes that lock and unlock  the data—are an important consideration. Providing lifetime management  of private keys and digital certificates across hundreds of applications and  thousands of servers, end-users, and networked devices can quickly strain  an agency’s resources. For example, if a key is lost or damaged, it may not  be possible to recover the encrypted data. Therefore, it is important to  ensure that all keys are secured and managed properly by planning key  management processes, procedures, and technologies before  implementing storage encryption technologies. According to NIST, this  planning would include all aspects of key management, including key  generation, use, storage, and destruction. It would also include a careful  consideration of how key management practices can support the recovery  of encrypted data if a key is inadvertently destroyed or otherwise becomes  unavailable (for instance, because a user unexpectedly resigns or loses a  cryptographic token containing a key). An example of recovery  preparation is storing duplicates of keys in a centralized, secured key  repository or on physically secured removable media. Additional  considerations for the encryption of removable media are how changing  keys may affect access to encrypted storage on the media and what  compensating controls could be developed, such as retaining the previous  keys in case they are needed.
Key storage location. Another consideration that NIST describes is  deciding where the local keys will be stored. For some encryption  technologies, such as full disk encryption and many file/folder encryption  products, there are often several options for key location, including the  local hard drive, a flash drive, a cryptographic token, or a trusted platform  module chip. Some products also permit keys to be stored on a centralized  server and retrieved automatically after the user authenticates  successfully. For virtual disk encryption, the main encryption key is often  stored encrypted within the disk or container itself.
Access to encryption keys. Another consideration is properly restricting  access to encryption keys. According to NIST, storage encryption  technologies should require the use of one or more authentication  mechanisms, such as passwords, smart cards, and cryptographic tokens,  to decrypt or otherwise gain access to a storage encryption key. The keys  themselves should be logically secured (encrypted) or physically secured  (stored in a tamper-resistant cryptographic token). The authenticators  used to retrieve keys should also be secured properly.
Managing cryptographic components related to encryption keys. In  addition to key management, NIST describes several other considerations  when planning a storage encryption technology. Setting the cryptography  policy involves choosing the encryption algorithm, mode of cryptographic  operation, and key length. Federal agencies must also use NIST-validated  cryptographic modules configured for FIPS-compliant algorithms and key  lengths. In addition, several FIPS-compliant algorithms are available for  integrity checking. Another consideration for managing cryptographic  components is how easily an encryption product can be updated when  stronger algorithms and key sizes become available in the future.
section_title: Other Implementation Considerations
paragraphs: Centralized management of mobile devices. NIST recommends  centralized management for most storage encryption deployments  because of its effectiveness and efficiency for policy verification and  enforcement, key management, authenticator management, data recovery,  and other management tasks. Centralized management can also automate  these functions: deployment and configuration of storage encryption  software to end user devices, distribution and installation of updates,  collection and review of logs, and recovery of information from local  failures.
PKI technology. Because PKI technology uses a public key as part of its  encryption system, PKI systems with key management can be used to  avoid the problem of lost keys. Data encrypted with PKI relies on one  public key, so the private key of the person encrypting the data isn’t  necessarily required to decrypt it. However, if an unauthorized user is able  to obtain a private key, the digital certificate could then be compromised.  Agencies considering PKI technology must ensure that the key systems of  different agencies are compatible for cross-agency collaboration on tasks  such as security incident information sharing. Further, users of certificates  are dependent on certification authorities to verify the digital certificates.  If a valid certification authority is not used, or a certification authority  makes a mistake or is the victim of a cyber attack, a digital certificate may  be ineffective.
Ongoing maintenance of encryption technologies. Systems  administrators responsible for encryption technology maintenance should  be able to configure and manage all components of the technology  effectively and securely. According to NIST, it is particularly important to  evaluate the ease of deployment and configuration, including how easily  the technology can be managed as the technology is scaled to larger  deployments. Another consideration is the ability of administrators to  disable configuration options so that users cannot circumvent the  intended security. Other maintenance considerations NIST describes  include the effects of patching/upgrading software, changing software  settings (changing cryptographic algorithms or key sizes), uninstalling or  disabling encryption software, changing encryption/decryption keys, and  changing user or administrator passwords.
section_title: Appendix III: Hindrances Faced by Agencies when Implementing Encryption
paragraphs: Preparing an agency for encryption presents numerous challenges to  agencies, including selecting an adequate combination of cost-effective  baseline security controls, properly configuring the networks and user  devices within the information technology (IT) infrastructure to  accommodate selected encryption technologies, providing training to  personnel, and managing encryption keys. In response to our survey,  agencies reported several conditions that hinder their ability to encrypt  sensitive information as required by the Office of Management and Budget.
In response to our survey, all 24 agencies reported hindrances with  implementing encryption. These hindrances included prohibitive costs;  user acceptance; user training; data backup and recovery; data archival  and retrieval; interoperability; infrastructure; vendor support for  encryption products acquired; availability of FIPS-compliant products to  meet the needs of uncommon or unique devices, applications, or  environments within the agency’s IT infrastructure; and management  support for migration to encryption controls. Agencies noted the level of  hindrance caused by these challenges ranged from little or no hindrance to  great or very great hindrance. The most challenging conditions are  discussed below.
Prohibitive costs. Nine agencies reported that the cost of acquiring and  implementing encryption was their greatest hindrance, and 13 agencies  cited this condition as somewhat of a hindrance or a moderate hindrance.  As reported in appendix IV, a governmentwide initiative (SmartBUY) has  been established to assist agencies with overcoming this hindrance.
User acceptance and training. Some encryption technologies can be  burdensome to users and can require specialized training on encryption  concepts and proper installation, maintenance, and use of encryption  products. Sixteen agencies reported facing somewhat of a hindrance or a  moderate hindrance in obtaining user acceptance of encryption  implementations and in training personnel.  Four agencies reported a great  or very great hindrance from lack of user acceptance, and 2 agencies  reported a great hindrance from insufficient training.
Data backup, recovery, archiving, and retrieval. Agencies must establish  policies and procedures for management of encryption keys, which are  necessary to recover data from back-ups in the event of a service  interruption or disaster, or to retrieve data in archived records, perhaps  many years in the future. For example, if the key is not properly backed up  and is on a server that has been destroyed in a fire or the key used to  encrypt archived records changes over time, data encrypted with the key  may be irretrievably lost. Sixteen agencies reported facing somewhat of a  hindrance or a moderate hindrance with backup and recovery, and 15  agencies reported the same level of hindrance with data archiving and  retrieval.
Interoperability. Key systems and technologies of different agencies need  to be compatible with each other for cross-agency collaboration. Five  agencies reported that lack of interoperability was a great or very great  hindrance, and 13 reported somewhat of a hindrance or a moderate  hindrance.
Infrastructure considerations. Six agencies reported facing a great or  very great hindrance in readying their IT infrastructure for encryption and  11 reported this was somewhat of a hindrance or a moderate hindrance.
Table 6 summarizes the number of agencies reporting the extent to which  10 conditions affect their agency’s ability to implement encryption.
Although agencies reported facing hindrances to implementing encryption,  a new program (GSA SmartBUY specific to encryption products)  established after we started our review, offers agencies options to  overcome key hindrances. For example, prohibitive costs and acquiring  FIPS-compliant products are two hindrances that agencies may be able to  address through SmartBUY. As discussed in appendix IV, discounted  pricing is available for data-at-rest encryption software. In addition, all  products available through SmartBUY use cryptographic modules  validated under FIPS 140-2 security requirements.
section_title: Appendix IV: GSA SmartBUY Program for Data-at-Rest Encryption Products
paragraphs: To help agencies comply with OMB requirements for encrypting  information on mobile devices, a governmentwide acquisition vehicle was  established for encryption products for stored data. Through a  governmentwide program known as SmartBUY (Software Managed and  Acquired on the Right Terms), agencies can procure encryption software  at discounted prices. According to the General Services Administration  (GSA), SmartBUY is a federal government procurement vehicle designed  to promote effective enterprise-level software management. By leveraging  the government’s immense buying power, SmartBUY could save taxpayers  millions of dollars through governmentwide aggregate buying of  commercial off-the-shelf software products.
SmartBUY officially began in 2003, when OMB issued a memo emphasizing  the need to reduce costs and improve quality in federal purchases of  commercial software. The memo designates GSA as the executive agent  to lead the interagency initiative in negotiating governmentwide enterprise  licenses for software. SmartBUY establishes strategic enterprise  agreements with software publishers (or resellers) via blanket purchase  agreements.
OMB Memorandum 04-08, Maximizing Use of SmartBUY and Avoiding  Duplication of Agency Activities with the President’s 24 E-Gov  Initiatives, requires agencies to review SmartBUY contracts to determine  whether they satisfy agency needs—such as for products to encrypt stored  data—and, absent a compelling justification for doing otherwise, acquire  their software requirements from the SmartBUY program.
The issuance of OMB’s May 2006 recommendation to encrypt mobile  devices contributed to the addition of 11 SmartBUY agreements for stored  data encryption products established in June 2007. The products offered  fall into one of three software and hardware encryption product  categories: full disk encryption, file encryption, or integrated full disk/file  encryption products. All products use cryptographic modules validated  under FIPS 140-2 security requirements.
Volume discounts on encryption products are available when purchasing  in tiers of 10,000, 33,000, and 100,000 users. Each of the 11 agreements has  its own pricing structure, which may include maintenance and training in  addition to licenses for users. Discounts on volume pricing can range up to  85 percent off GSA schedule prices.
Table 7 provides an example of the discounted pricing available from 1 of  the 11 SmartBUY agreements for encryption software.
As of January 2008, 10 agencies had purchased encryption products—such  as software licenses, annual maintenance services, and training—from the  stored data SmartBUY list, realizing significant cost savings. One of those  agencies—the Social Security Administration—purchased 250,000 licenses  of one of the stored data products at a savings of $6.7 million off the GSA  schedule prices. Additionally, USDA negotiated an agreement for 180,000  licenses at $9.63 each, as opposed to the GSA unit price of $170 per  license. The large number of licenses acquired allowed USDA to negotiate  the low price. Several agencies noted that considering an enterprisewide  deployment of encryption can be helpful with issues of standardization,  interoperability, and infrastructure readiness. While 10 agencies have  already acquired encryption products through the SmartBUY program,  several agencies are still in the process of assessing which encryption  products (including those available under the SmartBUY program) will  best suit agency needs.
section_title: Appendix V: Comments from the Office of Management and Budget
section_title: Appendix VI: Comments from the Department of Education
section_title: Appendix VII: Comments from the Department of Housing and Urban Development
section_title: Appendix VIII: Comments from the Department of State
section_title: Appendix IX: Comments from the General Services Administration
section_title: Appendix X: Comments from the National Aeronautics and Space Administration
section_title: Appendix XI: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Nancy DeFrancesco (Assistant  Director), James Ashley, Debra Conner; Season Dietrich, Neil Doherty,  Nancy Glover, Joel Grossman, Ethan Iczkovitz, Stanley J. Kostyla, Lowell  Labaro, Rebecca Lapaze, Anjalique Lawrence, Harold Lewis, Lee  McCracken, and Tammi L. Nguyen made key contributions to this report.
section_title: Glossary
paragraphs: Process of determining the permissible activities of users and authorizing  or prohibiting activities by each user.
subsections: section_title: Authentication
paragraphs: Process of confirming an asserted identity with a specified or understood  level of confidence.
section_title: Authorization
paragraphs: Granting the appropriate access privileges to authenticated users.
section_title: Card Management System
paragraphs: A system that manages life cycle maintenance tasks associated with the  credentials, such as unlocking the personal identity verification cards  during issuance or updating a personal identification number or digital  certificate on the card.
section_title: Certificate
paragraphs: A digital representation of information that (1) identifies the authority  issuing the certificate; (2) names or identifies the person, process, or  equipment using the certificate; (3) contains the user’s public key; (4)  identifies the certificate’s operational period; and (5) is digitally signed by  the certificate authority issuing it. A certificate is the means by which a  user is linked—or bound—to a public key.
section_title: Ciphertext
paragraphs: Data in an encrypted form.
section_title: Container
paragraphs: The file used by a virtual disk encryption technology to encompass and  protect other files.
section_title: Credential
paragraphs: An object, such as a smart card, that identifies an individual as an official  representative of, for example, a government agency.
section_title: Digital Signature
paragraphs: The result of the transformation of a message by means of a cryptographic  system using digital keys, so that a relying party can determine (1)  whether the transformation was created using the private key that  corresponds to the public key in the signer’s digital certificate and (2)  whether the message has been altered since the transformation was made.  Digital signatures may also be attached to other electronic information and  programs so that the integrity of the information and programs may be  verified at a later time.
section_title: Electronic Credentials
paragraphs: The electronic equivalent of a traditional paper-based credential—a  document that vouches for an individual’s identity.
section_title: End-to-End Encryption
paragraphs: The encryption of information at its origin and decryption at its intended  destination without any intermediate decryption.
section_title: File
paragraphs: A collection of information that is logically grouped into a single entity and  referenced by a unique name, such as a file name.
section_title: Folder
paragraphs: An organizational structure used to group files.
section_title: Full Disk Encryption
paragraphs: The process of encrypting all the data on the hard drive used to boot a  computer, including the computer’s operating system, that permits access  to the data only after successful authentication with the full disk  encryption product.
section_title: Hardware Based Encryption
paragraphs: Encryption that is normally performed by dedicated hardware in the  client/host system.
section_title: Identification
paragraphs: The process of determining to what identity a particular individual  corresponds.
section_title: Key
paragraphs: A value used to control cryptographic operations, such as decryption,  encryption, signature generation, or signature verification.
section_title: Malware
paragraphs: A program that is inserted into a system, usually covertly, with the intent  of compromising the confidentiality, integrity, or availability of the victim’s  data, applications, or operating system or of otherwise annoying or  disrupting the victim.
section_title: Master Boot Record
paragraphs: A computer’s master boot record is a reserved sector on its bootable  media that determines which software (e.g., operating system, utility) will  be executed when the computer boots from the media.
section_title: Operating System
paragraphs: The program that, after being initially loaded into the computer by a boot  program, manages all the other programs in a computer. Examples of  operating systems include Microsoft Windows, MacOS, and Linux. The  other programs are called applications or application programs. The  application programs make use of the operating system by making a  request for service through a defined application program interface. In  addition, users can interact directly with the operating system through a  user interface such as a command language or a graphical user interface.
section_title: Private Key
paragraphs: The secret part of an asymmetric key pair that is typically used to digitally  sign or decrypt data.
section_title: Public Key
paragraphs: The public part of an asymmetric key pair that is typically used to verify  signatures or encrypt data.
section_title: Public Key Infrastructure
paragraphs: A system of hardware, software, policies, and people that, when fully and  properly implemented, can provide a suite of information security  assurances—including confidentiality, data integrity, authentication, and  nonrepudiation—that are important in protecting sensitive  communications and transactions.
section_title: Risk
paragraphs: The expectation of loss expressed as the probability that a threat will  exploit a vulnerability with a harmful result.
section_title: Senstitive Information
paragraphs: Any information that an agency has determined requires some degree of  heightened protection from unauthorized access, use, disclosure,  disruption, modification, or destruction because of the nature of the  information, e.g., personal information required to be protected by the  Privacy Act of 1974, proprietary commercial information, information  critical to agency program activities, and information that has or may be  determined to be exempt from public release under the Freedom of  Information Act.
section_title: Standard
paragraphs: A statement published on a given topic by organizations such as the  National Institute of Standards and Technology, the Institute of Electrical  and Electronics Engineers, the International Organization for  Standardization, and others specifying characteristics—usually  measurable ones—that must be satisfied to comply with the standard.
section_title: Trusted Platform Module Chip
paragraphs: A tamper-resistant integrated circuit built into some computer  motherboards that can perform cryptographic operations (including key  generation) and protect small amounts of sensitive information such as  passwords and cryptographic keys.
section_title: Virtual Disk Encryption
paragraphs: The process of encrypting a container, which can hold many files and  folders, and of permitting access to the data within the container only after  proper authentication is provided. In this case, the container is typically  mounted as a virtual disk; it appears to the user as a logical disk drive.
section_title: Virtual Private Network
paragraphs: A virtual private network is a logical network that is established, at the  application layer of the open systems interconnection model, over an  existing physical network and typically does not include every node  present on the physical network.