Electronic Government: National Archives and Records Administration's Fiscal Year 2011 Expenditure Plan
Published: 2011-03-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since 2001, the National Archives and Records Administration (NARA) has been working to develop an Electronic Records Archive (ERA) to preserve and provide access to massive volumes of all types of electronic records. NARA originally planned to complete the system in 2012, but has repeatedly revised the program schedule and estimated cost and is now planning to deploy an ERA system with reduced functionality by the end of fiscal year 2011. As required by the Consolidated Appropriations Act, 2010, and the Continuing Appropriations Act, 2011, NARA submitted an expenditure plan to Congress to support its request for fiscal year 2011 ERA funding. The legislation also requires that this plan meet six conditions, including review by GAO. GAO's objectives in reviewing the fiscal year 2011 plan were to (1) determine whether the plan satisfies legislative conditions, (2) determine the extent to which NARA has implemented prior GAO recommendations, and (3) provide any other observations on the plan or the ERA acquisition. To do this, GAO reviewed the expenditure plan and other agency documents and interviewed NARA officials.
section_title: What GAO Found
paragraphs: NARA's fiscal year 2011 expenditure plan satisfies four of the six legislative conditions and partially satisfies two. Specifically, it partially satisfies the condition that NARA meet requirements for reviewing the progress of capital investments, such as ERA. While NARA has held regular meetings with senior-level agency management to review ERA progress, these groups did not document approval of important schedule and scope changes, and NARA did not validate the estimated benefits and costs of deployed ERA capabilities. Further, NARA partially satisfies the condition that the expenditure plan be approved by NARA and the Office of Management and Budget (OMB). NARA approved the expenditure plan in October 2010, but the plan was not approved by OMB. Without approval from OMB, Congress will have limited assurance of the plan's reliability and accuracy. NARA has fully implemented one of GAO's four prior recommendations and partially implemented three. It implemented a recommendation to ensure that ERA's requirements are managed using a disciplined process by, for example, developing a process to keep requirements current. NARA partially implemented three other recommendations. First, to improve its executive-level oversight, NARA documented meetings to review ERA progress, but did not document approval of important changes to a recent phase, or increment, of the system. Second, NARA added information in its expenditure plan on ERA cost, schedule, and performance as recommended, but the plan lacks other key information, such as the estimated costs of an ongoing increment. Third, NARA documented a plan to strengthen its processes for measuring program progress, but continues to have weaknesses in this area, including not accurately portraying ERA program status. GAO has three observations on the expenditure plan and ERA acquisition: (1) The fiscal year 2011 expenditure plan does not provide a reliable basis for informed investment decision making. For example, NARA's cost estimates do not reliably reflect the work to be completed because of weaknesses in its supporting methodology, and the plan does not clearly show what functionality is planned to be delivered in the final year of development, by when, and at what cost. (2) NARA's expenditure plan does not address how remaining multiyear funds from fiscal year 2010 will be allocated. Specifically, NARA's plans for using the remaining $20.1 million are not discussed in the plan. (3) Although NARA recently updated the ERA requirements, the agency has not yet determined which of the requirements would be addressed before the end of development in fiscal year 2011 and has not fully prioritized the requirements to ensure that critical stakeholder needs will be met. Without a reliable expenditure plan and adequate management of the ERA acquisition, it is unclear whether NARA can make substantial progress in delivering additional system capabilities by the end of fiscal year 2011 to justify its planned investment. Congress should consider limiting funding of further ERA development until NARA addresses weaknesses in its oversight and management of the acquisition. GAO is also recommending actions for NARA to take to address these weaknesses. NARA concurred with GAO's recommendations.

section_title: Letter
paragraphs: Since 2001, the National Archives and Records Administration (NARA) has  been working to develop a modern Electronic Records Archive (ERA).  According to NARA, this major information system is estimated to cost  between $456 and $481 million and is intended to preserve and provide  access to massive volumes of all types of electronic records, independent  of their original hardware or software. NARA plans for the system to  manage the full life-cycle of electronic records, from their ingestion  through preservation and dissemination to customers.
Because of the system’s complexity, NARA awarded a contract to  Lockheed Martin to develop ERA in five phases, or increments, the first of  which is referred to as the “ERA base.” According to NARA, the ERA base  included initial functionality for transferring federal electronic records  into the system and achieved initial operating capability in June 2008. The  second increment includes the Executive Office of the President (EOP)  system or “ERA EOP,” and NARA certified that it reached initial operating  capability in December 2008. NARA originally planned to complete the  development of the remaining increments and achieve full operating  capability in March 2012. However, in acquiring this system, NARA has  repeatedly revised the program schedule and increased the estimated  costs. As a result, in July 2010, the Office of Management and Budget  (OMB) directed NARA to halt ERA development at the end of fiscal year  2011, 1 year earlier than originally planned.
As mandated by the Consolidated Appropriations Act, NARA is required  to submit an expenditure plan before obligating multiyear funds for the  ERA program. On October 1, 2010, the agency submitted its fiscal year  2011 expenditure plan to support its request for $85.5 million in ERA  funding, which includes $61.8 million in multiyear funds. In the  expenditure plan, NARA also included support for requests at two  alternative funding levels—$72.0 million and $61.4 million—based on  congressional direction. Subsequently, on October 19, 2010, NARA  submitted a summary of its expenditure plan that included revised  requests at $72 million and $65 million funding levels. According to NARA,  both the expenditure plan and the summary reflect fiscal year 2011 as the  final year of ERA development.
As in the previous year, the plan must satisfy six legislative conditions,  including a review by GAO. Our objectives in reviewing the plan and the  summary were to (1) determine whether NARA’s fiscal year 2011  expenditure plan satisfies legislative conditions, (2) determine the extent  to which NARA has implemented prior GAO recommendations, and (3)  provide any other observations about the expenditure plan and the ERA  acquisition.
To assess compliance with legislative conditions, we analyzed the  expenditure plan submitted by NARA in October 2010 and reviewed its  budget submission to OMB, along with other program documentation. To  determine the extent to which NARA had implemented our prior  recommendations, we obtained and reviewed agency documents, which  included briefings to senior management on ERA cost, schedule, and  performance; requirements management documentation; and earned value  management processes. To develop observations on the ERA expenditure  plan and acquisition, we analyzed fiscal year 2010 and 2011 cost, schedule,  and planned system functionality information contained in the  expenditure plans and other ERA briefings. In addition, we reviewed and  analyzed requirements management documentation, including the revised  list of ERA requirements. We also interviewed NARA and Lockheed Martin  officials.
To assess the reliability of the data in the expenditure plan, we  interviewed NARA officials to gain an understanding of the data and  discussed our use of the data in this briefing. We concluded that the data  were sufficiently reliable for our purposes. In addition, we reviewed NARA  budget documents, as well as its consolidated financial statement results  for the fiscal year 2010 Performance and Accountability Report. We did  not, however, assess the reliability of the information in these documents.
We conducted this performance audit from October 2010 to March 2011 at  NARA’s College Park, Maryland, location 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.
On December 21, 2010, we transmitted the results of our review to the  staffs of the Senate Subcommittee on Financial Services and General  Government, Committee on Appropriations, and the House Subcommittee  on Financial Services and General Government, Committee on  Appropriations. This report transmits the briefing materials we provided,  the matter we suggest Congress consider, and the recommendations that  we made to the Archivist of the United States. The full briefing materials,  including details on our scope and methodology, are reprinted as   appendix I.
In summary, we made the following major points:    NARA’s fiscal year 2010 expenditure plan satisfies four of the six  legislative conditions. Specifically, NARA’s plan complies with the  agency’s enterprise architecture, conforms to the agency’s enterprise life- cycle methodology, reflects certain system acquisition best practices, and  was reviewed by GAO. The expenditure plan partially satisfies the other  two conditions:   NARA partially satisfies the condition that it develop capital planning  and investment control review processes designed to help ensure that  projects are being implemented at an acceptable cost and within  expected time frames and that they are contributing to observable  improvements in mission performance. While NARA has conducted  regular meetings with senior-level agency management to review ERA  progress, these groups did not document approval of important  schedule and scope changes to a recent ERA increment. Further,  NARA has not conducted post-implementation reviews of deployed  ERA capabilities, such as the recently deployed congressional records  component, to validate estimated benefits and costs. As a result, NARA  has limited ability to ensure that the system is being implemented at an  acceptable cost and within expected time frames, and that deployed  capabilities are contributing to observable improvements in mission  performance.
NARA partially satisfies the condition that the expenditure plan be  approved by the agency and OMB. NARA approved the expenditure  plan in October 2010, but the plan was not approved by OMB because,  according to NARA officials, OMB will only review the expenditure  plan if there is an existing appropriation with language requiring its  review. Without approval from OMB, Congress will have limited  assurance that the plan is accurate and reliable.
NARA has fully implemented one of our prior recommendations and    NARA implemented our recommendation to ensure that ERA’s  requirements are managed using a disciplined process by updating the  ERA requirements document and developing a process to ensure that  the ERA requirements are kept current following significant changes to  the program, such as significant modifications to the contract.
NARA has partially implemented three other recommendations. First,  in response to our recommendation that NARA ensure that its  investment review process has adequate executive-level oversight by  maintaining documentation of the results of reviews, NARA  documented meetings that its senior management attended where the  ERA program was discussed, but the agency did not document  approval of important changes to a recent increment through its  review process. Second, in response to our recommendation that  NARA provide additional information in the fiscal year 2011  expenditure plan on what was spent and delivered for deployed  increments, NARA added information on delivered functionality and  additional capabilities planned for fiscal year 2011. However, the  expenditure plan lacked other important information, such as the  estimated fiscal year 2011 costs and the expected completion date of  an ongoing increment. Third, in response to our recommendation to  strengthen its use of earned value processes, NARA documented an  action plan to improve its earned value processes, but continues to  have weaknesses in this area. Among other things, we found that  ERA’s earned value data trends do not accurately portray program  status, and future cost overruns would likely be between $195 and  $433 million if the full ERA system were to be completed as originally  designed.
We made three observations related to the ERA program and fiscal year  2011 expenditure plan and summary:   NARA’s fiscal year 2011 ERA expenditure plan does not provide a  reliable basis for informed investment decision making. Specifically,  NARA’s plan does not clearly show what functions have been delivered  to date or how actual costs compare to planned costs. For example,  the plan does not clearly show the system functions of an ongoing  increment that have been delivered and how the actual costs of this  increment compare to the amount NARA planned to spend, as reported  in the fiscal year 2010 expenditure plan. Further, even though NARA  plans to end development in fiscal year 2011, the fiscal year 2011  expenditure plan does not clearly show what functionality is planned  to be delivered, by when, and at what cost during this period. For  example, the plan does not discuss the delivery date of an ongoing  increment, nor the fiscal year 2011 costs associated with completing  this increment. Lastly, NARA’s cost estimates, used as the basis for  determining its fiscal year 2011 funding requests, do not reliably reflect  the work to be completed because of weaknesses in the supporting  methodology. For example, while NARA’s estimates were based on  information provided by the contractor, including estimates of the  total lines of software code required and the related costs, these data  could not be traced back to their original sources, and NARA did not  validate the information when preparing its cost estimates.
NARA’s fiscal year 2011 expenditure plan does not address how  remaining multiyear funds from fiscal year 2010 will be allocated.  Specifically, in fiscal year 2010, NARA spent $41.7 million of the $61.8  million in accumulated multiyear funds that it was provided by  Congress to develop the ERA system, which resulted in a balance of  $20.1 million that is available for obligation in fiscal year 2011.  According to NARA officials, the ERA program plans to use the $20.1  million to fund development efforts needed to make the system  available to all federal agencies, as well as to fund other operations  and maintenance costs. However, NARA’s plans for using these funds  and their supporting details are not included in the fiscal year 2011  expenditure plan or the revised summary. Until NARA specifies how it  will use the multiyear funds remaining from fiscal year 2010,  appropriators will lack information important for evaluating NARA’s  fiscal year 2011 request.
NARA has not yet determined which ERA requirements will be  implemented in fiscal year 2011, nor fully prioritized the remaining  requirements. In June 2010, we reported that NARA had developed and  documented a set of 853 high-level business requirements for ERA and  planned to complete about 57 percent of them by the end of fiscal year  2010. Subsequently, in July 2010, NARA updated its requirements  document. According to NARA, the original 853 requirements were  decomposed to a more detailed set of 1,577 requirements, portions of  which were allocated to Increments 1 through 5, deferred to post- Increment 5 (i.e., post-fiscal year 2011), or removed from the scope of  the ERA program. However, NARA could not determine which of the  remaining requirements would be addressed before the end of fiscal  year 2011 because, according to NARA officials, the requirements were  subject to ongoing negotiations with the development contractor. This  uncertainty is further exacerbated because NARA has not fully  prioritized its requirements. Maintaining a prioritized set of system  requirements can better ensure that the requirements that are most  critical to the customer and other stakeholders are addressed quickly.  Until the ERA program fully prioritizes the ERA requirements to be  completed during fiscal year 2011, it will be unclear what system  development work is planned to be completed and whether it will  result in functionality that is most critical to NARA’s customers and  other stakeholders.
subsections: section_title: Conclusions
paragraphs: While NARA’s fiscal year 2011 expenditure plan meets four of the six  legislative conditions, the lack of critical capital planning and oversight  steps—including documentation demonstrating approval of significant  changes to a recent ERA increment, post-implementation reviews of  deployed capabilities, and OMB’s approval of the expenditure plan—limits  NARA’s ability to ensure that the system is being implemented at an  acceptable cost and within expected time frames and contributes to  observable improvements in mission performance. These issues are  further exacerbated by the agency’s partial implementation of several  open GAO recommendations, such as those related to improving  investment oversight and earned value processes. With significant  weaknesses in many basic oversight and management processes, as well  as continued delays in completing Increment 3, NARA’s ability to make  significant development progress in the remainder of the fiscal year will be  challenged.
In addition, without a reliable ERA expenditure plan, NARA has not  provided adequate information to assist congressional oversight and  informed decision making related to the use of appropriated funds. When  these weaknesses are combined with the lack of prioritization of the  remaining requirements under negotiation for fiscal year 2011, Congress  has little assurance that additional funds allocated to ERA will result in  significant benefits to potential users. With OMB’s direction to stop  development after 2011, it is unclear whether NARA will be able to  effectively address the full range of weaknesses we identified and still  have adequate time to complete significant development efforts.
section_title: Matter for Congressional Consideration
paragraphs: The identified deficiencies in NARA’s expenditure plan and management  of the ERA acquisition make it unclear whether NARA can make  substantial progress in delivering additional ERA system capabilities that  justify its planned investment by the end of fiscal year 2011. As such, we  suggest that Congress consider employing an accountability mechanism  that limits NARA’s ability to use funds appropriated for ERA development  until NARA implements an adequate capital planning and investment  control process, updates its expenditure plan to clearly describe what  system capabilities and benefits are to be delivered in fiscal year 2011, and  establishes an associated set of prioritized system requirements and  adequate earned value reporting.
section_title: Recommendations for Executive Action
paragraphs: We are recommending that the Archivist of the United States immediately  take the following two actions while the current system development  contract is active:    Report to Congress on the specific outcomes to be achieved with the  balance of any previous multiyear funds in fiscal year 2011.
Ensure that the ERA requirements planned for fiscal year 2011 are fully  prioritized so that those most critical to NARA’s customers and other  stakeholders are addressed.
To ensure that any future efforts are completed within reasonable funding  and time constraints, we are recommending that the Archivist of the  United States take the following four actions:    Ensure that significant changes to ERA’s program’s cost, schedule, and  scope are approved through NARA’s investment review process.
Conduct post-implementation reviews of deployed ERA capabilities to  validate estimated benefits and costs.
Submit ERA expenditure plans to OMB for review and approval prior to  submitting to Congress.
Update the ERA Requirements Management Plan and related guidance to  mandate requirements prioritization throughout the project’s life-cycle.
section_title: Agency Comments
paragraphs: In written comments on a draft of this report, which are reprinted in  appendix II, the Archivist of the United States concurred with our six  recommendations. Specifically, he stated that NARA has sufficiently  addressed the first two recommendations. He further stated that NARA  would be unable to address the final four recommendations in a near-term  action plan since those were specific to a future ERA development effort.  The Archivist also noted that NARA is developing an addendum to the  fiscal year 2011 expenditure plan to provide updated information on ERA  requirements, costs, and the schedule of software releases.
We are sending copies of this report to the Archivist of the United States.  The report will also be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staffs have any questions concerning this report, please  contact me at (202) 512-9286 or by e-mail at pownerd@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report. GAO staff who made major  contributions to this report are listed in appendix III.
section_title: Appendix I: Briefing for Staff of Congressional Committees
subsections: section_title: ELECTRONIC GOVERNMENT: Review of the National Archives and Records Administration’s Fiscal Year 2011 Electronic Records Archive Expenditure Plan
subsections: section_title: December 21, 2010
subsections: section_title: Agency Comments and Our Evaluation
paragraphs: On October 1, 2010, the agency submitted its fiscal year 2011 expenditure plan to the relevant House and Senate  appropriations committees to support its request for $85.5 million in ERA funding. Of this amount, $61.8 million  consists of multi-year funds allocated to ERA. In the expenditure plan, NARA also included support for requests at  two alternative funding levels—$72.0 million and $61.4 million—based on congressional direction. Subsequently,  on October 19, 2010, NARA submitted a summary of its expenditure plan to the appropriations committees that  included revised requests at $72 million and $65 million funding levels. According to NARA, both the expenditure  plan and the summary reflect fiscal year 2011 as the final year of ERA development.
section_title: Appendix II: Comments from the National Archives and Records Administration
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, key contributions to this report  were made by James R. Sweetman, Jr., Assistant Director; Monica Perez- Nelson; Eric Costello; Lee McCracken; Tarunkant Mithani; Karl Seifert;  Jonathan Ticehurst; and Adam Vodraska.