Information Technology Management: Governmentwide Strategic Planning, Performance Measurement, and Investment Management Can Be Further Improved
Released: 2004-02-11T00:00:00

Letter

Background

Advances in the use of IT and the Internet are continuing to change the way that federal agencies communicate, use, and disseminate information; deliver services; and conduct business. For example, electronic government (e-government) has the potential to help build better relationships between government and the public by facilitating timely and efficient interaction with citizens. To help the agencies more effectively manage IT, the Congress has established a statutory framework of requirements and roles and responsibilities relating to information and technology management. Nevertheless, the agencies face significant challenges in effectively planning for and managing their IT. Such challenges can be overcome through the use of a systematic and robust management approach that addresses critical elements, such as IT strategic planning and investment management.

Federal Government’s Statutory Framework for Information and Technology Management

The Congress established a statutory framework to help address the information and technology management challenges that agencies face. Under this framework, agencies are accountable for effectively and efficiently developing, acquiring, and using IT in their organizations. In particular, the Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996 require agency heads, acting through agency CIOs, to, among other things, better link their IT planning and investment decisions to program develop and maintain a strategic IRM plan that describes how IRM activities help accomplish agency missions; develop and maintain an ongoing process to establish goals for improving IRM’s contribution to program productivity, efficiency, and effectiveness; methods for measuring progress toward these goals; and clear roles and responsibilities for achieving these goals; develop and implement a sound IT architecture; implement and enforce IT management policies, procedures, standards, establish policies and procedures for ensuring that IT systems provide reliable, consistent, and timely financial or program performance data; and implement and enforce applicable policies, procedures, standards, and guidelines on privacy, security, disclosure, and information sharing.

Moreover, under the government’s current legislative framework, OMB has important responsibilities for providing direction on governmentwide information and technology management and overseeing agency activities in these areas. Among OMB’s responsibilities are ensuring agency integration of IRM plans, program plans, and budgets for the acquisition and use of IT and the efficiency and effectiveness of interagency IT initiatives; developing and maintaining a governmentwide strategic IRM plan; developing, as part of the budget process, a mechanism for analyzing, tracking, and evaluating the risks and results of all major capital investments made by an executive agency for information systems; directing and overseeing the implementation of policy, principles, standards, and guidelines for the dissemination of and access to public information; encouraging agency heads to develop and use best practices in IT developing and overseeing the implementation of privacy and security policies, principles, standards, and guidelines.

Further, in 2002, the Congress passed, and the President signed, legislation intended to improve the collection, use, and dissemination of government information and to strengthen information security. Specifically, Public Law 107-347, the E-Government Act of 2002, which was enacted in December 2002, includes provisions to promote the use of the Internet and other information technologies to provide government services electronically. The E-Government Act also contains the Federal Information Security Management Act (FISMA) of 2002, which replaced and strengthened the Government Information Security Reform legislative provisions (commonly referred to as “GISRA”). Among other provisions, FISMA requires each agency, including national security agencies, to (1) establish an agencywide risk-based information security program to be overseen by the agency CIO and ensure that information security is practiced throughout the life cycle of each agency system; and (2) develop, maintain, and annually update an inventory of major information systems (including major national security systems) operated by the agency or under its control.

Federal IT Challenges

Even with the framework laid out by the Congress, the federal government faces enduring IT challenges. Specifically, in January 2003, we reported on a variety of challenges facing federal agencies in continuing to take advantage of the opportunities presented by IT. Unless and until the challenges outlined below are overcome, federal agencies are unlikely to optimize their use of IT, which can affect an organization’s ability to effectively and efficiently implement its programs and missions.

Pursuing opportunities for e-government. E-government offers many opportunities to better serve the public, make government more efficient and effective, and reduce costs. Federal agencies have implemented a wide array of e-government applications, including using the Internet to collect and disseminate information and forms; buy and pay for goods and services; submit bids and proposals; and apply for licenses, grants, and benefits. Although substantial progress has been made, the government has not yet fully reached its potential in this area. Recognizing this, a key element of the President’s Management Agenda is the expansion of e-government to enhance access to information and services, particularly through the Internet. In response, OMB established a task force that selected a strategic set of initiatives to lead this expansion. Our review of the initial planning projects associated with these initiatives found that important aspects—such as collaboration and customer focus—had not been thought out for all of the projects and that major uncertainties in funding and milestones were not uncommon. Accordingly, we recommended that OMB take steps as overseer of the e-government initiatives to reduce the risk that the projects would not meet their objectives.

Improving the collection, use, and dissemination of government information. The rapid evolution of IT is creating challenges in managing and preserving electronic records. Complex electronic records are increasingly being created in a decentralized environment and in volumes that make it difficult to organize them and make them accessible. Further, storage media themselves are affected by the dual problems of obsolescence and deterioration. These problems are compounded as computer hardware and application software become obsolete, since they may leave behind electronic records that can no longer be read. Overall responsibility for the government’s electronic records lies with the National Archives and Records Administration (NARA). Our past work has shown that while NARA has taken some action to respond to the challenges associated with managing and preserving electronic records, most electronic records remain unscheduled; that is, their value had not been assessed and their disposition had not been determined. In addition, records of historical value were not being identified and provided to NARA; as a result, they were at risk of being lost. We recommended that NARA develop strategies for raising agency management’s awareness of the importance of records management and for performing systematic inspections. In July 2003 we testified that although NARA has made progress in addressing these issues, more work remains to be done.

The growth of electronic information—as well as the security threats facing our nation—are also highlighting privacy issues. For example, online privacy has emerged as one of the key—and most contentious— issues surrounding the continued evolution of the Internet. In addition, our survey of 25 departments and agencies about their implementation of the Privacy Act—which regulates how federal agencies may use the personal information that individuals supply when obtaining government services or fulfilling obligations—found that a key characteristic of the agencies’ 2,400 systems of records is that an estimated 70 percent contained electronic records. Our survey also found that although compliance with Privacy Act provisions and related OMB guidance was generally high in many areas, according to agency reports, it was uneven across the federal government. To improve agency compliance and address issues reported by the agencies, we made recommendations to OMB, such as to direct agencies to correct compliance deficiencies, to monitor agency compliance, and to reassess its guidance.

Strengthening information security. Since September 1996, we have reported that poor information security is a high-risk area across the federal government with potentially devastating consequences. Although agencies have taken steps to redesign and strengthen their information system security programs, our analyses of information security at major federal agencies have shown that federal systems were not being adequately protected from computer-based threats. Our latest analyses of audit reports published from October 2001 through October 2002 continue to show significant weaknesses in federal computer systems that put critical operations and assets at risk. In addition, in June 2003 we testified that agencies’ fiscal year 2002 reports and evaluations required by GISRA found that many agencies have not implemented security requirements for most of their systems, such as performing risk assessments and testing controls. In addition, the usefulness of agency corrective action plans may be limited when they do not identify all weaknesses or contain realistic completion dates.

One of the most serious problems currently facing the government is cyber critical infrastructure protection, which is protecting the information systems that support the nation’s critical infrastructures, such as national defense and power distribution. Since the September 11 attacks, warnings of the potential for terrorist cyber attacks against our critical infrastructures have increased. In addition, as greater amounts of money are transferred through computer systems, as more sensitive economic and commercial information is exchanged electronically, and as the nation’s defense and intelligence communities increasingly rely on commercially available information technology, the likelihood increases that information attacks will threaten vital national interests. Among the critical infrastructure protection challenges the government faces are (1) developing a national critical infrastructure protection strategy, (2) improving analysis and warning capabilities, and (3) improving information sharing on threats and vulnerabilities. For each of the challenges, improvements have been made and continuing efforts are in progress, but much more is needed to address them. In particular, we have identified and made numerous recommendations over the last several years concerning critical infrastructure challenges that still need to be addressed. As a result of our concerns in this area, we have expanded our information security high-risk area to include cyber critical infrastructure protection.

Constructing and enforcing sound enterprise architectures. Our experience with federal agencies has shown that attempts to modernize IT environments without blueprints—models simplifying the complexities of how agencies operate today, how they want to operate in the future, and how they will get there—often result in unconstrained investment and systems that are duplicative and ineffective. Enterprise architectures offer such blueprints. Our reports on the federal government’s use of enterprise architectures in both February 2002 and November 2003 found that agencies’ use of enterprise architectures was a work in progress, with much to be accomplished. Nevertheless, opportunities exist to significantly improve this outlook if OMB were to adopt a governmentwide, structured, and systematic approach to promoting enterprise architecture use, measuring agency progress, and identifying and pursuing governmentwide solutions to common enterprise architecture challenges that agencies face. Accordingly, we made recommendations to OMB to address these areas.

Employing IT system and service management practices. Our work and other best-practice research have shown that applying rigorous practices to the acquisition or development of IT systems or the acquisition of IT services improves the likelihood of success. In other words, the quality of IT systems and services is governed largely by the quality of the processes involved in developing or acquiring each. For example, using models and methods that define and determine organizations’ software-intensive systems process maturity that were developed by Carnegie Mellon University’s Software Engineering Institute, which is recognized for its expertise in software processes, we evaluated several agencies’ software development or acquisition processes. We found that agencies are not consistently using rigorous or disciplined system management practices. We have made numerous recommendations to agencies to improve their management processes, and they have taken, or plan to take, actions to improve. Regarding IT services acquisition, we identified leading commercial practices for outsourcing IT services that government entities could use to enhance their acquisition of IT services.

Using effective agency IT investment management practices.

Investments in IT can have a dramatic impact on an organization’s performance. If managed effectively, these investments can vastly improve government performance and accountability. If not, however, they can result in wasteful spending and lost opportunities for improving delivery of services to the public. Using our information technology investment management maturity framework, we evaluated selected agencies and found that while some processes have been put in place to help them effectively manage their planned and ongoing IT investments, more work remains.

IT Challenges Are Interdependent

Complicating the government’s ability to overcome these IT management challenges are these challenges’ interdependencies. As a result, the inability of an organization to successfully address one IT management area can reduce the effectiveness of its success in addressing another management function. For example, a critical aspect of implementing effective e-government solutions and developing and deploying major systems development projects is ensuring that robust information security is built into these endeavors early and is periodically revisited.

The government’s many IT challenges can be addressed by the use of effective planning and execution, which can be achieved, in part, through strategic planning/performance measurement, and investment management. For example, strong strategic planning is focused on using IT to help accomplish the highest priority customer needs and mission goals, while effective performance measurement helps determine the success or failure of IT activities. Finally, IT investment management provides a systematic method for minimizing risks while maximizing the return on investments and involves a process for selecting, controlling, and evaluating investments. These processes, too, are interdependent. For example, the investment management process is a principal mechanism to ensure the effective execution of an agency’s IT strategic plan.

Objectives, Scope, and Methodology

Our objectives were to determine the extent to which federal agencies are following practices associated with key legislative and other requirements for (1) IT strategic planning/performance measurement and (2) IT investment management.

To address these objectives, we identified and reviewed major legislative requirements and executive orders pertaining to IT strategic planning, performance measurement, and investment management. Specifically, we reviewed the Paperwork Reduction Act of 1995; the Clinger-Cohen Act of 1996; the E-Government Act of 2002; the Federal Information Security Management Act of 2002; Executive Order 13011, Federal Information Technology; and Executive Order 13103, Computer Software Piracy.

Using these requirements and policy and guidance issued by OMB and GAO, we identified 30 IT management practices that (1) can be applied at the enterprise level and (2) were verifiable through documentation and interviews. These 30 practices focused on various critical aspects of IT strategic management, performance measurement, and investment management, including the development of IRM plans, the identification of goals and related measures, and the selection and control of IT investments, respectively.

We selected 26 major departments and agencies for our review (23 entities identified in 31 U.S.C. 901 and the 3 military services). At our request, each agency completed a self-assessment on whether and how it had implemented the 30 IT management practices. We reviewed the completed agency self-assessments and accompanying documentation, including agency and IT strategic plans, agency performance plans and reports required by the Government Performance and Results Act, and IT investment management policy and guidance, and interviewed applicable agency IT officials to corroborate whether the practices were in place. We did not evaluate the effectiveness of agencies’ implementation of the practices. For example, we did not review specific IT investments to determine whether they were selected, controlled, and reviewed in accordance with agency policy and guidance. However, we reviewed applicable prior GAO and agency inspector general reports and discussed whether agency policies had been fully implemented with applicable agency IT officials.

On the basis of the above information, we assessed whether the practices were in place, using the following definitions: Yes—the practice was in place.

Partially—the agency has some, but not all, aspects of the practice in place. Examples of circumstances in which the agency would receive this designation include when (1) some, but not all, of the elements of the practice were in place; (2) the agency documented that it has the information or process in place but it was not in the prescribed form (e.g., in a specific document as required by law or OMB); (3) the agency’s documentation was in draft form; or (4) the agency had a policy related to the practice but evidence supported that it had not been completely or consistently implemented.

No—the practice was not in place.

Not applicable—the practice was not relevant to the agency’s particular circumstances.

We also collected information from the Department of Homeland Security (DHS) but found that since it had been established so recently, it was too early to judge its IT strategic planning, performance measurement, and investment management. As a result, although we provided information on what DHS was doing with respect to these areas, we did not include it in our assessment.

We also interviewed officials from OMB’s Office of Information and Regulatory Affairs regarding OMB’s role in establishing policies and overseeing agencies’ implementation of the identified practices.

We performed our work at the agencies’ offices in greater Washington, D.C. We conducted our review between April and mid-December 2003 in accordance with generally accepted government auditing standards.

Agencies’ Use of IT Strategic Planning/Performance Measurement Practices Is Uneven

The use of IT strategic planning/performance measurement practices is uneven (see fig. 1), which is of concern because a well-defined strategic planning process helps ensure that an agency’s IT goals are aligned with that agency’s strategic goals. Moreover, establishing performance measures and monitoring actual-versus-expected performance of those measures can help determine whether IT is making a difference in improving performance. Among the practices or elements of practices that agencies largely have in place were those pertaining to establishing goals and performance measures. On the other hand, agencies are less likely to have fully documented their IT strategic planning processes, developed comprehensive IRM plans, linked performance measures to their enterprisewide IT goals, or monitored actual-versus-expected performance for these enterprisewide goals. Agencies cited various reasons, such as the lack of support from agency leadership, for not having strategic practices/performance measurement practices in place. Without strong strategic management practices, it is less likely that IT is being used to maximize improvement in mission performance. Moreover, without enterprisewide performance measures that are being tracked against actual results, agencies lack critical information about whether their overall IT activities, at a governmentwide cost of billions of dollars annually, are achieving expected goals.

Governmentwide Progress Demonstrated, but More Work Remains

Critical aspects of the strategic planning/performance measurement area include documenting the agency’s IT strategic planning processes, developing IRM plans, establishing goals, and measuring performance to evaluate whether goals are being met. Although the agencies often have these practices, or elements of these practices, in place, additional work remains, as demonstrated by the following examples: Strategic planning process. Strategic planning defines what an organization seeks to accomplish and identifies the strategies it will use to achieve desired results. A defined strategic planning process allows an agency to clearly articulate its strategic direction and to establish linkages among planning elements such as goals, objectives, and strategies.

About half of the agencies fully documented their strategic planning processes. For example, the General Services Administration (GSA) documented an IT governance structure that addresses the roles and responsibilities of various organizations in strategic planning and investment management. In addition, in its IT strategic plan, GSA describes how it developed the plan, including its vision, business- related priorities, and goals. In contrast, the Department of Agriculture has not completely documented its IT strategic planning process or integrated its IT management operations and decisions with other agency processes. According to Agriculture IT officials, the department’s ongoing budget and performance integration initiative is expected to result in a more clearly defined and integrated IT strategic management planning process. Such a process provides the essential foundation for ensuring that IT resources are effectively managed.

Strategic IRM plans. The Paperwork Reduction Act requires that agencies indicate in strategic IRM plans how they are applying information resources to improve the productivity, efficiency, and effectiveness of government programs. An important element of a strategic plan is that it presents an integrated system of high-level decisions that are reached through a formal, visible process. The plan is thus an effective tool with which to communicate the mission and direction to stakeholders. In addition, a strategic IRM plan that communicates a clear and comprehensive vision for how the agency will use information resources to improve agency performance is important because IRM encompasses virtually all aspects of an agency’s information activities.

Although the Paperwork Reduction Act also requires agencies to develop IRM plans in accordance with OMB’s guidance, OMB does not provide cohesive guidance on the specific contents of IRM plans. OMB Circular A-130 directs that agencies have IRM plans that support agency strategic plans, provide a description of how IRM helps accomplish agency missions, and ensure that IRM decisions are integrated with organizational planning, budgets, procurement, financial management, human resources management, and program decisions. However, Circular A-130 does not provide overall guidance on the plan’s contents. As a result, although agencies generally provided OMB with a variety of planning documents to meet its requirement that they submit an IRM plan, these plans were generally limited to IT strategic or e-government issues and did not address other elements of IRM, as defined by the Paperwork Reduction Act. Specifically, these plans generally include individual IT projects and initiatives, security, and enterprise architecture elements but do not often address other information functions, such as information collection, records management, and privacy, or the coordinated management of all information functions.

OMB IT staff agreed that the agency has not set forth guidance on the contents of agency IRM plans in a single place, stating that its focus has been on looking at agencies’ cumulative results and not on planning documents. In addition, these staff also noted that agencies account for their IRM activities through multiple documents (e.g., Information Collection Budgets and Government Paperwork Elimination Act plans). However, the OMB IT staff stated that they would look at whether more guidance is needed to help agencies in their development of IRM plans, but have not yet made a commitment to provide such guidance. Half the agencies indicated a need for OMB to provide additional guidance on the development and content of IRM plans.

Strong agency strategic IRM plans could also provide valuable input to a governmentwide IRM plan, which is also required by the Paperwork Reduction Act. As we reported last year, although OMB designated the CIO Council’s strategic plan for fiscal years 2001-2002 as the governmentwide strategic IRM plan, it does not constitute an effective and comprehensive strategic vision. Accordingly, we recommended that OMB develop and implement a governmentwide strategic IRM plan that articulates a comprehensive federal vision and plan for all aspects of government information. In April 2003, we testified that OMB had taken a number of actions that demonstrate progress in fulfilling the Paperwork Reduction Act’s requirement of providing a unifying IRM vision. However, more remains to be done. In particular, we reported that although OMB’s strategies and models are promising, their ability to reduce paperwork burden and accomplish other objectives depends on how OMB implements them.

One element required by the Clinger-Cohen Act to be included in agency IRM plans is the identification of a major IT acquisition program(s), or any phase or increment of that program, that significantly deviated from cost, performance, or schedule goals established by the program. However, few agencies met this requirement. In these cases, a common reason cited for not including this information was that it was not appropriate to have such detailed information in a strategic plan because such plans should be forward thinking and may not be developed every year. Agencies also identified other mechanisms that they use to track and report cost, schedule, and performance deviations. Because agencies generally do not address this Clinger-Cohen Act requirement in their IRM plans, they may benefit from additional guidance from OMB on how to address this requirement.

IT goals. The Paperwork Reduction Act and the Clinger-Cohen Act require agencies to establish goals that address how IT contributes to program productivity, efficiency, effectiveness, and service delivery to the public. We have previously reported that leading organizations define specific goals, objectives, and measures, use a diversity of measure types, and describe how IT outputs and outcomes impact operational customer and agency program delivery requirements.

The agencies generally have the types of goals outlined in the Paperwork Reduction Act and the Clinger-Cohen Act. For example, the Social Security Administration (SSA) set a goal of achieving an average of at least a 2 percent per year improvement in productivity, and it expects that advances in automation will be a key to achieving this goal along with process and regulation changes. In addition, the Department of Veterans Affairs’ (VA) latest departmental strategic plan has a goal that includes using business process reengineering and technology integration to speed up delivery of benefit payments, improve the quality of health care provided in its medical centers, and administer programs more efficiently. The VA goal includes strategies such as using its enterprise architecture as a continuous improvement process, implementing e-government solutions to transform paper-based electronic collections to electronic-based mechanisms, and establishing a single, high-performance wide area data network. Five agencies do not have one or more of the goals required by the Paperwork Reduction Act and the Clinger-Cohen Act. For example, the Department of Labor’s single IT strategic goal—to provide better and more secure service to citizens, businesses, government, and Labor employees to improve mission performance—which it included in its fiscal year 2004 performance plan, does not address all required goals. Further, in contrast to other agencies, Labor does not have goals in its IRM plan. It is important that agencies specify clear goals and objectives to set the focus and direction of IT performance.

IT performance measures. The Paperwork Reduction Act, the Clinger- Cohen Act, and Executive Order 13103 require agencies to establish a variety of IT performance measures, such as those related to how IT contributes to program productivity, efficiency, and effectiveness, and to monitor the actual-versus-expected performance of those measures. As we have previously reported, an effective performance management system offers a variety of benefits, including serving as an early warning indicator of problems and the effectiveness of corrective actions, providing input to resource allocation and planning, and providing periodic feedback to employees, customers, stakeholders, and the general public about the quality, quantity, cost, and timeliness of products and services.

Although the agencies largely have one or more of the required performance measures, these measures are not always linked to the agencies’ enterprisewide IT goals. For example, the Department of Defense (DOD), Air Force, and Navy have a variety of enterprisewide IT goals but do not have performance measures associated with these goals. Each of these organizations are in the process of developing such measures. To illustrate, the Air Force’s August 2002 information strategy includes nine goals, such as providing decision makers and all Air Force personnel with on-demand access to authoritative, relevant, and sufficient information to perform their duties efficiently and effectively, but does not have performance measures for these goals. The Air Force recognizes the importance of linking performance measures to its goals and is developing such measures, which it expects to complete by the fourth quarter of fiscal year 2004.

Leading organizations use performance measures to objectively evaluate mission, business, and project outcomes. Such organizations also focus on performance measures for gauging service to key management processes and tailoring performance measures to determine whether IT is making a difference in improving performance. Few agencies monitored actual-versus-expected performance for all of their enterprisewide IT goals. Specifically, although some agencies tracked actual-versus-expected outcomes for the IT performance measures in their performance plans or accountability reports and/or for specific IT projects, they generally did not track the performance measures specified in their IRM plans. For example, although the Department of Health and Human Services’ (HHS) IT strategic plan identifies enterprisewide goals and performance measures, these measures generally do not identify quantified outcomes (e.g., the measures indicate that the outcome will be a percentage transaction increase or cost decrease in certain areas but do not provide a baseline or target). In addition, the HHS plan does not describe how the department will monitor actual-versus-expected performance for these measures. HHS’s Director of Business Operations in its IRM office reported that the department recognizes the need to develop an integrated program for monitoring performance against the enterprisewide measures in the IT strategic plan. He stated that HHS has recently begun an initiative to establish such a process. By not measuring actual-versus-expected performance, agencies lack the information to determine where to target agency resources to improve overall mission accomplishment.

Benchmarking. The Clinger-Cohen Act requires agencies to quantitatively benchmark agency process performance against public- and private-sector organizations, where comparable processes and organizations exist. Benchmarking is used by entities because there may be external organizations that have more innovative or more efficient processes than their own processes. Our previous study of IT performance measurement at leading organizations found that they had spent considerable time and effort comparing their performance information with that of other organizations.

Seven agencies have mechanisms—such as policies and strategies—in place related to benchmarking their IT processes. For example, DOD’s information resources and IT directive states that DOD components shall routinely and systematically benchmark their functional processes against models of excellence in the public and private sector and use these and other analyses to develop, simplify, or refine the processes before IT solutions are applied. In general, however, agencies’ benchmarking decisions are ad hoc. Few agencies have developed a mechanism to identify comparable external private- or public-sector organizations and processes and/or have policies related to benchmarking; however, all but 10 of the agencies provided examples of benchmarking that had been performed. For example, the Small Business Administration (SBA) does not have benchmarking policies in place, but the agency provided an example of a benchmarking study performed by a contractor that compared SBA’s IT operations and processes against industry cost and performance benchmarks and best practices and resulted in recommendations for improvement.

Practice-Specific Analysis

Table 1 provides additional detail on each strategic planning/performance measurement practice and our evaluation of whether each agency had the practice in place. The table indicates that work remains for the agencies to have each of the practices fully in place as well as that several agencies reported that they were taking, or planned to take, actions to address the practices or elements of practices.

Agency IT officials could not identify why practices were not in place in all cases, but in those instances in which reasons were identified, a variety of explanations were provided. For example, reasons cited by agency IT officials included that they lacked the support from agency leadership, that the agency had not been developing IRM plans until recently and recognized that the plan needed further refinement, that the process was being revised (in at least one case because of changes that are needed to reflect a loss of component organizations to the new DHS), and that requirements were evolving. In other cases, the agency reported that it had the information but it was not in the format required by legislation. For instance, FISMA requires agencies to include in the performance plans required by the Government Performance and Results Act the resources, including budget, staffing, and training, and time periods to implement its information security program. None of the agencies included this information in their performance plans. However, the agencies commonly reported that they had this information but that it was in another document. Nevertheless, this does not negate the need for having the agency report to the Congress in the required form. This is particularly important since, as in the example of the FISMA requirement, the reporting requirement involves a public document, whereas other reports may not be publicly available.

In the case of DHS, while we did not include the department in our assessment and in table 1, the department is in the process of developing its first IT strategic plan. According to DHS, it expects to complete this plan by mid-February 2004.

Agencies’ Use of IT Investment Management Practices Is Mixed

The use of IT investment management practices is mixed (as shown in fig. 2), which demonstrates that agencies do not have all the processes in place to effectively select, control, and evaluate investments. An IT investment management process is an integrated approach to managing investments that provides for the continuous identification, selection, control, life-cycle management, and evaluation of IT investments. Among the investment management practices that are most frequently in place are having investment management boards and requiring that projects demonstrate that they are economically beneficial. Practices less commonly in place are those requiring that IT investments be performed in a modular, or incremental, manner and that they be effectively controlled. Only by effectively and efficiently managing their IT resources through a robust investment management process can agencies gain opportunities to make better allocation decisions among many investment alternatives and further leverage their IT investments.

Governmentwide Progress Demonstrated, but More Work Remains

Critical aspects of IT investment management include developing well- supported proposals, establishing investment management boards, and selecting and controlling IT investments. The agencies’ use of practices associated with these aspects of investment management is wide-ranging, as follows: IT investment proposals. Various legislative requirements, an executive order, and OMB policies provide minimum standards that govern agencies’ consideration of IT investments. In addition, we have issued guidance to agencies for selecting, controlling, and evaluating IT investments. Such processes help ensure, for example, that investments are cost-beneficial and meet mission needs and that the most appropriate development or acquisition approach is chosen.

The agencies in our review have mixed results when evaluated against these various criteria. For example, the agencies almost always require that proposed investments demonstrate that they support the agency’s business needs, are cost-beneficial, address security issues, and consider alternatives. To demonstrate, the Department of Transportation requires that proposed projects complete a business case to indicate that the project (1) will meet basic requirements in areas such as mission need, affordability, technical standards, and disabled access requirements, (2) is economically beneficial, and (3) has considered alternatives.

One element in this area that agencies were not as likely to have fully in place was the Clinger-Cohen Act requirement that agencies follow, to the maximum extent practicable, a modular, or incremental, approach when investing in IT projects. Incremental investment helps to mitigate the risks inherent in large IT acquisitions/developments by breaking apart a single large project into smaller, independently useful components with known and defined relationships and dependencies. An example of such an approach is DOD’s policy stating that IT acquisition decisions should be based on phased, evolutionary segments that are as brief and narrow in scope as possible and that each segment should solve a specific part of an overall mission problem and deliver a measurable net benefit independent of future segments. However, 14 agencies do not have a policy that calls for investments to be done in a modular manner. For example, although the Environmental Protection Agency (EPA) reported that it worked with program offices to try to segment work so that the scope and size of each project is manageable, it does not have a policy that calls for investments to be done in a modular manner. The absence of a policy calls into question whether EPA is implementing incremental investment in a consistent and effective manner.

Investment management boards. Our investment management guide states that establishing one or more IT investment boards is a key component of the investment management process. According to our guide, the membership of this board should include key business executives and should be responsible for final project funding decisions or should provide recommendations for the projects under its scope of authority. Such executive-level boards, made up of business-unit executives, concentrate management’s attention on assessing and managing risks and regulating the trade-offs between continued funding of existing operations and developing new performance capabilities.

Almost all of the agencies in our review have one or more enterprise- level investment management boards. For example, HUD’s Technology Investment Board Executive Committee and supporting boards have responsibility for selecting, controlling, and evaluating the department’s IT investments. HUD’s contractor-performed maturity audits also have helped the department validate its board structure and its related investment management processes. However, the investment management boards for six agencies are not involved, or the agency did not document the board’s involvement, in the control phase. For example, the National Science Foundation (NSF) has a CIO advisory group that addresses only the select phase of the IT investment management process. NSF’s CIO explained that the agency reviews the progress of its major information system projects through other means, such as meetings with management. In providing comments on a draft of this report, the CIO stated that he believes that NSF has a comprehensive set of management processes and review structures to select, control, and evaluate IT investments and cited various groups and committees used as part of this process. However, NSF’s summary of its investment management process and memo establishing the CIO advisory group include only general statements related to the oversight of IT investments, and NSF provided no additional documentation demonstrating that its investment management board plays a role in the control and evaluation phases. Our investment management guidance identifies having an IT investment management board(s) be responsible for project oversight as a critical process. Maintaining responsibility for oversight with the same body that selected the investment is crucial to fostering a culture of accountability by holding the investment board that initially selected an investment responsible for its ongoing success.

In addition, 17 agencies do not fully address the practice that calls for processes to be in place that address the coordination and alignment of multiple investment review boards. For example, we recently reported that the Department of the Interior has established three department- level IT investment boards and begun to take steps to ensure that investment boards are established at the bureau level. However, at the time of our review, the department (1) could not assert that department-level board members exhibited core competencies in using Interior’s IT investment approach and (2) had limited ability to oversee investments in its bureaus. We made recommendations to Interior to strengthen both the activities of the department-level boards and the department’s ability to oversee investment management activities at the bureaus.

Selection of IT investments. During the selection phase of an IT investment management process, the organization (1) selects projects that will best support its mission needs and (2) identifies and analyzes each project’s risks and returns before committing significant funds. To achieve desired results, it is important that agencies have a selection process that, for example, uses selection criteria to choose the IT investments that best support the organization’s mission and prioritizes proposals.

Twenty-two agencies use selection criteria in choosing their IT investments. In addition, about half the agencies use scoring models to help choose their investments. For example, the working group and CIO office officials that support the Department of Education’s investment review board used a scoring model as part of deciding which IT investments to recommend for the board’s consideration and approval. This model contained two main categories of criteria: (1) value criteria that measured the impact and significance of the initiative, given project goals and the strategic objectives of the department; and (2) health criteria that measured the potential for the success of the initiative and helped to assess both the performance and the associated risks that are involved in project and contract management. In the case of DOD, in February 2003 we reported that it had established some, and was establishing other IT investment criteria, but these criteria had not been finalized. Accordingly, we recommended, and DOD concurred, that DOD establish a standard set of criteria. In September we reported that this recommendation had not been implemented. DOD officials stated that the department was developing the criteria but that the proposed governance structure had not yet been adopted.

Control over IT investments. During the control phase of the IT investment management process, the organization ensures that, as projects develop and as funds are spent, the project is continuing to meet mission needs at the expected levels of cost and risk. If the project is not meeting expectations or if problems have arisen, steps are quickly taken to address the deficiencies. Executive level oversight of project- level management activities provides the organization with increased assurance that each investment will achieve the desired cost, benefit, and schedule results.

Although no agencies had the practices associated with the control phase fully in place, some have implemented important aspects of this phase. For example, Labor requires project managers to prepare a control status report based on a review schedule established during the selection phase, which is reviewed by the Office of the CIO and its technical review board as part of determining whether to continue, modify, or cancel the initiative. For initiatives meeting certain criteria, the technical review board makes recommendations to the management council, which serves as the department’s top tier executive investment review council, is chaired by the Assistant Secretary of Administration and Management, and consists of component agency heads.

Nevertheless, in general, the agencies are weaker in the practices pertaining to the control phase of the investment management process than in the selection phase. In particular, the agencies did not always have important mechanisms in place for agencywide investment management boards to effectively control investments, including decision-making rules for project oversight, early warning mechanisms, and/or requirements that corrective actions for under-performing projects be agreed upon and tracked. For example, the Department of the Treasury does not have a department-level control process; instead, each bureau may conduct its own reviews that address the performance of its IT investments and corrective actions for under- performing projects. In a multitiered organization like Treasury, the department is responsible for providing leadership and oversight for foundational critical processes by ensuring that written policies and procedures are established, repositories of information are created that support IT investment decision making, resources are allocated, responsibilities are assigned, and all of the activities are properly carried out where they may be most effectively executed. In such an organization, the CIO is specifically responsible for ensuring that the organization is effectively managing its IT investments at every level. Treasury IT officials recognize the department’s weaknesses in this area and informed us that they are working on developing a new capital planning and investment control process that is expected to address these weaknesses. Similarly, the Department of Energy is planning on implementing the investment control process outlined in its September 2003 capital planning and investment control guide in fiscal year 2004, which addresses important elements such as corrective action plans. However, this guide does not document the role of Energy’s investment management boards in this process.

Practice-Specific Analysis

Table 2 provides additional detail on each investment management practice and our evaluation of whether each agency had the practice in place. The table indicates those practices in which improvement is needed as well as which agencies reported that they were taking, or planned to take, actions to address the practices or elements of practices.

Among the variety of reasons cited for practices not being fully in place were that the CIO position had been vacant, that not including a requirement in the IT investment management guide was an oversight, and that the process was being revised. However, in some cases the agencies could not identify why certain practices were not in place.

Regarding DHS, although we did not include the department in our assessment or table 2, the department has investment management processes that it has put in place or is in the process of putting in place.

Conclusions

Federal agencies did not always have in place important practices associated with IT laws, policies, and guidance. At the governmentwide level, agencies generally have IT strategic plans or information resources management (IRM) plans that address IT elements, such as security and enterprise architecture, but do not cover other aspects of IRM that are part of the Paperwork Reduction Act, such as information collection, records management, and privacy. This may be attributed, in part, to OMB not establishing comprehensive guidance for the agencies detailing the elements that should be included in such a plan. There were also numerous instances of individual agencies that do not have specific IT strategic planning, performance measurement, or investment management practices fully in place. Agencies cited a variety of reasons for not having these practices in place, such as that the CIO position had been vacant, not including a requirement in guidance was an oversight, or that the process was being revised. Nevertheless, not only are these practices based on law, executive orders, OMB policies, and our guidance, but they are also important ingredients for ensuring effective strategic planning, performance measurement, and investment management, which, in turn, make it more likely that the billions of dollars in government IT investments will be wisely spent. Accordingly, we believe that it is important that they be expeditiously implemented by individual agencies.

Recommendations

To help agencies in developing strategic IRM plans that fully comply with the Paperwork Reduction Act of 1995, we recommend that the Director, OMB, develop and disseminate to agencies guidance on developing such plans. At a minimum, such guidance should address all elements of IRM, as defined by the Paperwork Reduction Act. As part of this guidance, OMB should also consider the most effective means for agencies to communicate information about any major IT acquisition program(s) or phase or increment of that program that significantly deviated from cost, performance, or schedule goals established by the program. One option for communicating this information, for example, could be through the annual agency performance reports that are required by the Government Performance and Results Act.

We are also generally making recommendations to the agencies in our review regarding those practices that are not fully in place unless, for example, (1) we have outstanding recommendations related to the practice, (2) the agency has a draft document addressing the practice, or (3) implementation of the practice was ongoing. Appendix I contains these recommendations.

Agency Comments and Our Evaluation

We received written or oral comments on a draft of this report from OMB and 25 of the agencies in our review. We also requested comments from the Department of Homeland Security and the Office of Personnel Management, but none were provided.

Regarding OMB, in oral comments on a draft of this report, representatives from OMB’s Office of Information and Regulatory Affairs and Office of the General Counsel questioned the need for additional IRM plan guidance because they do not want to be prescriptive in terms of what agencies include in their plans. We continue to believe that agencies need additional guidance from OMB on the development and content of their IRM plans because OMB Circular A-130 does not provide overall guidance on the contents of agency IRM plans and half the agencies indicated a need for OMB to provide additional guidance on the development and content of IRM plans. Further, additional guidance would help to ensure that agency plans address all elements of IRM, as defined by the Paperwork Reduction Act. A strategic IRM plan that communicates a clear and comprehensive vision for how the agency will use information resources to improve agency performance is important because IRM encompasses virtually all aspects of an agency’s information activities.

In commenting on a draft of the report, most of the agencies in our review generally agreed with our findings and recommendations. The agencies’ specific comments are as follows: Agriculture’s CIO stated that the department concurred with the findings in this report and provided information on action it was taking, or planned to take, to implement the recommendations. Agriculture’s written comments are reproduced in appendix II.

The Secretary of Commerce concurred with the recommendations in this report and stated that, in response, the department is updating its policies and procedures. Commerce’s written comments are reproduced in appendix III.

DOD submitted a single letter that included comments from the Departments of the Air Force, Army, and Navy. recommendations in this report. DOD also provided additional documentation and information on actions that it is taking, or planned to take, to address these recommendations. We modified our report based on these comments and documentation, as appropriate. DOD’s written comments, along with our responses, are reproduced in appendix IV.

Education’s Assistant Secretary for Management/CIO stated that the agency generally agreed with our assessment of the department’s use of IT strategic planning/performance measurement and investment management practices. Education provided additional comments and documentation related to two of our practices. We modified our report on the basis of these comments and documentation, as appropriate. Education’s written comments, along with our responses, are reproduced in appendix V.

Energy’s Director of Architecture and Standards provided e-mail comments stating that the department believes that GAO fairly depicted where the department currently stands in the IT investment management process. The director also provided other comments that were technical in nature and that we addressed, as appropriate.

EPA’s Assistant Administrator/CIO generally agreed with our findings and recommendations on the need to complete work currently under way to formalize the documentation of IT management practices. However, EPA questioned our characterization of the agency’s IT management and strategic planning and provided other comments, which we addressed, as appropriate. EPA’s written comments, along with our responses, are reproduced in appendix VI.

GSA’s CIO stated that the agency generally agreed with the findings and recommendations in the report. GSA provided suggested changes and additional information and documentation related to nine of our practices and two recommendations. We modified our report on the basis of these comments and documentation, as appropriate. GSA’s written comments, along with our responses, are reproduced in appendix VII.

HHS’s Acting Principal Deputy Inspector General stated that the department concurred with the findings and recommendations of the report. HHS’s written comments are reproduced in appendix VIII.

HUD’s Assistant Secretary for Administration/CIO stated that the department was in agreement with the recommendations in this report. HUD’s written comments are reproduced in appendix IX.

Interior’s Acting Assistant Secretary for Policy, Management and Budget stated that the recommendations in our report would further improve the department’s IT investment management. Interior’s written comments are reproduced in appendix X.

Justice’s CIO stated that, overall, the department concurred with the findings and recommendations in this report, noting that our recommendations will assist in further defining IT strategic planning, performance measurement, and investment management practices. Justice’s written comments, along with our response, are reproduced in appendix XI.

Labor’s Assistant Secretary for Administration and Management/CIO reported that the department generally concurred with this report and provided suggested changes in two areas, which we addressed, as appropriate. Labor’s written comments, along with our responses, are reproduced in appendix XII.

NASA’s Deputy Administrator reported that the agency generally concurred with the recommendations in this report and provided additional information on actions that it is taking, or planned to take, to address these recommendations. NASA’s written comments, along with our response, are reproduced in appendix XIII.

NSF’s CIO provided e-mail comments disagreeing with three areas of this report. First, NSF did not agree with our assessment of practice 1.1, stating that the agency has a comprehensive agency-level planning framework that includes a suite of planning documents and internal and external oversight activities that it believes addresses IT planning requirements. However, our review of the planning documents cited by NSF in its self-assessment found that it did not address the elements of the practice. In particular, the agency did not describe the responsibility and accountability for IT resources or the method that it uses to define program information needs and how such needs will be met. Moreover, in our exit conference with NSF officials, the CIO indicated agreement with our assessment. Since NSF provided no additional documentation, we did not modify the report. Second, the CIO disagreed with our characterization of the agency’s enterprisewide investment management board. We modified the report to reflect the CIO’s comments; however, we did not change our overall assessment of the role of the board because NSF’s summary of its investment management process and memo establishing the CIO advisory group include only general statements related to the oversight of IT investments, and NSF provided no additional documentation demonstrating that its investment management board plays a role in the control and evaluation phases. Third, the CIO stated that NSF has established processes, management, and oversight controls over IT investments. However, NSF provided limited documentation on the control phase of its investment management process. In particular, NSF’s summary of its investment management process and memo establishing the CIO advisory group include only general statements related to the oversight of IT investments, and NSF provided no additional documentation demonstrating that its investment management board plays a role in the control and evaluation phases. Accordingly, we did not modify the report.

NRC’s Executive Director for Operations stated that this report provides useful information and agreed that the practices are important for ensuring effective use of government IT investments but had no specific comments. NRC’s written comments are reproduced in appendix XIV.

SBA’s GAO liaison provided e-mail comments questioning the need to have its enterprise investment management board have final decision- making authority over IT investments. Our IT investment management guidance states that enterprise-level IT investment boards be capable of reviewing lower-level board actions and invoking final decision-making authority over all IT investments. In particular, if disputes or disagreements arise over decision-making jurisdiction about a specific IT investment project, the enterprise board must be able to resolve the issue. Accordingly, we did not modify the report. SBA also provided technical comments that we incorporated, as appropriate.

SSA’s Commissioner generally agreed with the recommendations in the report and provided comments on each recommendation that we addressed, as appropriate. SSA’s written comments, along with our responses, are reproduced in appendix XV.

State’s Assistant Secretary/Chief Financial Officer stated that the findings in the report are consistent with discussions held with its IT staff and provided additional information on four practices. On the basis of this additional information, we modified our report, as appropriate. State’s written comments, along with our response, are reproduced in appendix XVI.

A program analyst in the Department of Transportation’s Office of the CIO provided oral comments that were technical in nature that we addressed, as appropriate.

The Acting Director, Budget and Administrative Management in Treasury's Office of the CIO, provided oral comments stating that the department concurred with our findings and recommendations. The official further stated that the department recognized its shortcomings and was working to correct them.

USAID’s Assistant Administrator, Bureau for Management, did not address whether the agency agreed or disagreed with our overall findings or recommendations but commented on our evaluation of two practices, which we addressed, as appropriate. USAID’s written comments, along with our response, are reproduced in appendix XVII.

The Secretary of VA stated that the department concurred with the recommendations in the report and provided comments on actions that it has taken, or planned to take, in response. We modified the report based on these comments, as appropriate. VA’s written comments, along with our responses, are reproduced in appendix XVIII.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the secretaries of the Departments of Agriculture, the Air Force, the Army, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Justice, Labor, the Navy, State, Transportation, the Treasury, and Veterans Affairs; the administrators of the Environmental Protection Agency, General Services Administration, National Aeronautics and Space Administration, Small Business Administration, and U.S. Agency for International Development; the commissioners of the Nuclear Regulatory Commission and the Social Security Administration; and the directors of the National Science Foundation, Office of Management and Budget, and Office of Personnel Management. We will also make copies available to others upon 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 on matters discussed in this report, please contact me at (202) 512-9286 or Linda J. Lambert, Assistant Director, at (202) 512-9556. We can also be reached by e-mail at pownerd@gao.gov and lambertl@gao.gov, respectively.

Other contacts and key contributors to this report are listed in appendix XIX.

Recommendations to Departments and Agencies

Agriculture

To improve the department’s information technology (IT) strategic planning/performance measurement processes, we recommend that the Secretary of Agriculture take the following six actions: document the department’s IT strategic management processes and how they are integrated with other major departmental processes, such as the budget and human resources management; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by the Federal Information Security Management Act (FISMA) and include a description of major IT acquisitions contained in its capital asset plan that bear significantly on its performance goals; implement a process for assigning roles and responsibilities for achieving the department’s IT goals; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for the department’s enterprisewide IT performance measures in its information resources management (IRM) plan; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Agriculture take the following four actions: include a description of the relationship between the IT investment management process and the department’s enterprise architecture in its IT capital planning and investment control guide and require that IT investments be in compliance with the agency’s enterprise architecture; document the alignment and coordination of responsibilities of the department’s various IT investment management boards for decision making related to IT investments, including cross-cutting investments; establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of commercial-off- the-shelf (COTS) software; and establish a policy requiring modularized IT investments.

Air Force

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of the Air Force take the following two actions: establish a documented process for measuring progress against the department’s IT goals and assign roles and responsibilities for achieving these goals; and develop IT performance measures related to the IT goals in the department’s information strategy, including measures such as those contained in practice 1.9 in our report, and track actual-versus-expected performance.

To improve the department’s IT investment management processes, we recommend that the Secretary of the Air Force take the following four actions: include a description of the relationship between the IT investment management process and the department’s enterprise architecture, and an identification of external and environmental factors in its portfolio management guide; include costs, benefits, schedule, and risk elements as well as measures such as net benefits, net risks, and risk-adjusted return-on-investment in the department’s project selection criteria; implement a scoring model and develop a prioritized list of IT investments as part of its project selection process; and document the role, responsibility, and authority of its IT investment management boards, including work processes, alignment, and coordination of decision making among its various boards, and document processes for controlling and evaluating IT investments, such as those outlined in practices 2.15, 2.16, 2.17, and 2.18.

Army

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of the Army take the following action: complete the development of IT performance measures related to the Army’s enterprisewide IT goals, including measures such as those in practice 1.9 in our report, and track actual-versus-expected performance.

To improve the department’s IT investment management processes, we recommend that the Secretary of the Army take the following four actions: include a description of the relationship between the IT investment management process and the department’s enterprise architecture in the department’s IT capital planning and investment control guide; document the alignment and coordination of responsibilities of its various IT investment management boards for decision making related to IT investments; include costs, benefits, schedule, and risk elements as well as measures such as net benefits, net risks, and risk-adjusted return-on-investment in the department’s project selection criteria; and involve the department’s IT investment management boards in controlling and evaluating IT investments, including the development and documentation of oversight processes such as those in practices 2.15, 2.16, 2.17, and 2.18.

Commerce

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Commerce take the following four actions: include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; document its process of developing IT goals in support of agency needs, measuring progress against these goals, and assigning roles and responsibilities for achieving these goals; develop performance measures related to the department’s IT goals in its IRM plan, and track actual-versus-expected performance for these IT performance measures; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Commerce take the following eight actions: document the alignment and coordination of responsibilities of the department’s various IT investment management boards for decision making related to IT investments; establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; include net risks and risk-adjusted return-on-investment in the department’s project selection criteria; establish a policy requiring modularized IT investments; develop decision-making rules to help guide the investment management board’s oversight of IT investments during the control phase; require that reports of deviations in systems capability in a project be submitted to the IT investment management board; develop an early warning mechanism that enables the investment management board to take corrective action at the first sign of cost, schedule, or performance slippages; and require postimplementation reviews be completed and the results reported to its investment management board.

Defense

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Defense take the following three actions: include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA, align its performance measures with the goals in the plan, and include a description of major IT acquisitions contained in its capital asset plan that bear significantly on its performance goals; establish a documented process for measuring progress against the department’s IT goals; develop IT performance measures related to its IT goals, including, for example, the measures contained in practice 1.9 in our report and track actual-versus-expected performance.

To improve the department’s IT investment management processes, we recommend that the Secretary of Defense take the following action: document, as part of its planned IT portfolio management process, how this process relates to other departmental processes and the department’s enterprise architecture, and document the external and environmental factors that influence the process.

Education

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Education take the following four actions: include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; establish and document a process for measuring progress against the department’s IT goals in its IRM plan and for assigning roles and responsibilities for achieving these goals; develop performance measures related to how IT contributes to program productivity, the effectiveness and efficiency of agency operations, and the effectiveness of controls to prevent software piracy; and track actual-versus-expected performance for the department’s enterprisewide IT performance measures in its IRM plan.

To improve the department’s IT investment management processes, we recommend that the Secretary of Education take the following five actions: document the alignment and coordination of responsibilities of the department’s various IT investment management boards for decision making related to IT investments; establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs; include net risks and risk-adjusted return-on-investment in the department’s project selection criteria; develop a process to use independent verification and validation reviews, when appropriate; and track the resolution of corrective actions for under-performing projects and report the results to the investment management board.

Energy

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Energy take the following six actions: document how its IT management operations and decisions are integrated with human resources management; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a goal related to how IT contributes to program productivity; develop performance measures related to how IT contributes to program productivity and the effectiveness of controls to prevent software piracy; develop and link performance measures to the department’s enterprisewide goals in its IRM plan and track actual-versus-expected performance for these measures; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Energy take the following four actions: include interfaces in its inventory of the agency’s major information systems, implement a standard, documented procedure to maintain this inventory, and develop a mechanism to use the inventory as part of managerial decision making; prioritize the department’s IT proposals; establish a policy requiring modularized IT investments; and document the role, responsibility, and authority of its IT investment management boards, including work processes, alignment, and coordination of decision making among its various boards, and document the processes for controlling and evaluating IT investments, such as those in practices 2.15, 2.16, 2.17, and 2.18.

Environmental Protection Agency

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Administrator of the Environmental Protection Agency take the following six actions: document the agency’s IT strategic management processes and how they are integrated with other major departmental processes, such as the budget and human resources management; include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for the agency’s measures associated with the IT goals in its IRM plan; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Administrator of the Environmental Protection Agency take the following three actions: include net risks, risk-adjusted return-on-investment, and qualitative criteria in the agency’s project selection criteria; establish a policy requiring modularized IT investments; and fully implement an IT investment management control phase, including the elements contained in practices 2.15, 2.16, and 2.17.

General Services Administration

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Administrator of the General Services Administration take the following four actions: include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for each of the agency’s measures associated with the IT goals in its IRM plan; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Administrator of the General Services Administration take the following four actions: develop work processes and decision-making processes for the agency’s investment management boards; establish a policy requiring modularized IT investments; help guide the oversight of IT investments by developing clear decision- making rules for its IT investment management board and by requiring that IT projects report on deviations in system capability; and track the resolution of corrective actions for under-performing projects and report the results to the investment management board.

Health and Human Services

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Health and Human Services take the following six actions: document the department’s IT strategic management processes and how they are integrated with its budget processes; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA and include a description of major IT acquisitions contained in its capital asset plan that bear significantly on its performance goals; establish a documented process for measuring progress against the department’s IT goals; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for its enterprisewide IT performance measures in its IRM plan; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Health and Human Services take the following 10 actions: revise the department’s IT investment management policy to include (1) how this process relates to other agency processes, (2) an identification of external and environmental factors, (3) a description of the relationship between the process and the department’s enterprise architecture, and (4) the use of independent verification and validation reviews, when appropriate. develop procedures for the department’s enterprisewide investment management board to document and review IT investments; document the alignment and coordination of responsibilities of the department’s various IT investment management boards for decision making related to IT investments; implement a standard, documented procedure to maintain the department’s inventory of major information systems and develop a mechanism to use the inventory as part of managerial decision making; establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness; implement a structured IT selection process that includes processes and criteria such as those in practices 2.12 and 2.13; develop decision-making rules to help guide the investment management board’s oversight of IT investments during the control phase; require the investment management board to review projects at major track the resolution of corrective actions for under-performing projects and report the results to the investment management board; and revise the department’s investment management policy to require postimplementation reviews to address validating benefits and costs, and conduct such reviews.

Housing and Urban Development

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Housing and Urban Development take the following six actions: document the roles and responsibilities of the chief financial officer and program managers in IT strategic planning and how the department’s IT management operations and decisions are integrated with human resources management; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to how IT contributes to program productivity and the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for the department’s enterprisewide IT performance measures in its IRM plan; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Housing and Urban Development take the following five actions: establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; include net risks and risk-adjusted return-on-investment in the department’s project selection criteria; establish a policy requiring modularized IT investments; require IT projects to report on deviations in system capability and monitor IT projects at key milestones; and develop a process to use independent verification and validation reviews, when appropriate.

Interior

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of the Interior take the following six actions: document the department’s IT strategic management processes and how they are integrated with other major departmental processes, including organizational planning, budget, financial management, human resources management, and program decisions; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA and include a description of major IT acquisitions contained in its capital asset plan that bear significantly on its performance goals; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for the department’s enterprisewide IT performance measures in its IRM plan; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of the Interior take the following five actions: establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness; include cost and schedule in the department’s project selection criteria and prioritize its IT proposals; establish a policy requiring modularized IT investments; require that corrective actions be undertaken, tracked, and reported to the investment management board for under-performing projects; and implement an evaluation process for IT investments that addresses the elements of practice 2.18.

Justice

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Attorney General take the following six actions: document the department’s IT strategic management processes; document how the department’s IT management operations and decisions are integrated with human resources management processes; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to the department’s IT goals in its IRM plan, and track actual-versus-expected performance for these IT performance measures; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Attorney General take the following five actions: develop work processes and procedures for the department’s investment management boards, including aligning and coordinating IT investment decision making among its various boards; establish a policy requiring that IT investments be in compliance with the agency’s enterprise architecture; include net risks and risk-adjusted return-on-investment in the department’s project selection criteria; implement a scoring model and develop a prioritized list of investments as part of the department’s project selection process; and require that corrective actions be undertaken, tracked, and reported to the investment management board for under-performing projects.

Labor

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Labor take the following five actions: include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop a goal related to how IT contributes to program productivity; develop performance measures related to how IT contributes to program productivity, efficiency, and the effectiveness of controls to prevent software piracy, and track actual-versus-expected performance; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Labor take the following five actions: include a description of the relationship between the IT investment management process and the department’s enterprise architecture in the department’s IT capital planning and investment control guide; include net risks and risk-adjusted return-on-investment in its project selection criteria; establish a policy requiring modularized IT investments; develop decision-making rules to help guide the investment management board’s oversight of IT investments during the control phase; and develop an early warning mechanism that enables the investment management board to take corrective action at the first sign of cost, schedule, or performance slippages.

National Aeronautics and Space Administration

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Administrator of the National Aeronautics and Space Administration take the following seven actions: document the agency’s IT strategic management processes; document how the agency’s IT management operations and decisions are integrated with human resources management processes; include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for the agency’s enterprisewide IT performance measures in its IRM plan; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Administrator of the National Aeronautics and Space Administration take the following four actions: revise the agency’s IT investment management policy and guidance to describe the relationship of this process to the agency’s enterprise architecture; include interfaces in its inventory of the agency’s major information systems, implement a standard, documented procedure to maintain this inventory, and develop a mechanism to use the inventory as part of managerial decision making; within the agency’s IT investment selection process, implement a mechanism to identify possible conflicting, overlapping, strategically unlinked, or redundant proposals; implement a scoring model; and develop a prioritized list of investments; and document the role, responsibility, and authority of its IT investment management boards, including work processes, alignment, and coordination of decision making among its various boards, and document the processes for controlling and evaluating IT investments, such as those in practices 2.15, 2.16, 2.17, and 2.18.

National Science Foundation

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Director of the National Science Foundation take the following five actions: document the agency’s IT strategic management processes; include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; implement a process for assigning roles and responsibilities for achieving its IT goals; develop performance measures related to the effectiveness of controls to prevent software piracy; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Director of the National Science Foundation take the following four actions: develop an IT investment management guide that includes a description of the relationship between the IT investment management process and the agency’s other organizational plans and processes and its enterprise architecture, and identify external and environmental factors that influence the process in the agency’s IT capital planning and investment control policy; implement a structured IT selection process that includes the elements of practices 2.12 and 2.13; involve the department’s IT investment management board in controlling and evaluating IT investments, including the development and documentation of oversight processes such as those in practices 2.15, 2.16, 2.17, and 2.18; and define and document the elements of the agency’s postimplementation reviews.

Navy

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of the Navy take the following three actions: develop a documented process to measure progress against the department’s enterprisewide IT goals and assign roles and responsibilities for achieving these goals; develop an IT goal related to service delivery to the public; and develop IT performance measures related to the department’s IT goals, including, at a minimum, measures contained in practice 1.9 in our report, and track actual-versus-expected performance.

To improve the department’s IT investment management processes, we recommend that the Secretary of the Navy take the following four actions: include net risks and risk-adjusted return-on-investment in the department’s project selection criteria; implement a structured IT selection process that includes the elements involve all elements of the department’s IT investment management board governance process in selecting, controlling, and evaluating IT investments; and document the role, responsibility, and authority of its IT investment management boards, including work processes, alignment, and coordination of decision making among its various boards, and document the processes for controlling and evaluating IT investments, such as those outlined in practices 2.15, 2.16, 2.17, and 2.18.

Nuclear Regulatory Commission

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Commissioner of the Nuclear Regulatory Commission take the following five actions: document the agency’s roles and responsibilities for its IT strategic management processes and how IT planning is integrated with its budget and human resources planning; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to assign roles and responsibilities for achieving its enterprisewide IT goals; develop performance measures related to the effectiveness of controls to prevent software piracy; and develop performance measures for the agency’s enterprisewide goals in its IRM plan, and track actual-versus-expected performance for these measures.

To improve the agency’s IT investment management processes, we recommend that the Commissioner of the Nuclear Regulatory Commission take the following five actions: include a description of the relationship between the IT investment management process and the department’s other organizational plans and processes and its enterprise architecture, and identify external and environmental factors that influence the process in the agency’s IT capital planning and investment control policy; develop work processes and procedures for the agency’s investment implement a standard, documented procedure to maintain its IT asset inventory, and develop a mechanism to use the inventory as part of managerial decision making; develop a structured IT investment management selection process that includes project selection criteria, a scoring model, and prioritization of proposed investments; and document the role, responsibility, and authority of its IT investment management boards, including work processes and control, and evaluate processes that address the oversight of IT investments, such as what is outlined in practices 2.15, 2.16, 2.17, and 2.18.

Office of Personnel Management

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Director of the Office of Personnel Management take the following four actions: include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop performance measures related to the effectiveness of controls to prevent software piracy; track actual-versus-expected performance for the agency’s enterprisewide IT performance measures in its IRM plan; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Director of the Office of Personnel Management take the following four actions: develop work processes and procedures for the agency’s investment management board, including establishing criteria for defining major systems and documenting a process for handling cross-functional investments; implement a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; establish a policy requiring modularized IT investments; and require that corrective actions be undertaken, tracked, and reported to the investment management board for under-performing projects.

Small Business Administration

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Administrator of the Small Business Administration take the following five actions: document the agency’s IT strategic management processes; include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a documented process to develop IT goals in support of agency needs, measure progress against these goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to the agency’s IT goals in its IRM plan, including, at a minimum, measures related to how IT contributes to program productivity, efficiency, effectiveness, the overall performance of its IT programs, and the effectiveness of controls to prevent software piracy, and track actual-versus-expected performance for these IT performance measures; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Administrator of the Small Business Administration take the following two actions: document a process that the investment management board can invoke final decision-making authority over IT investments addressed by lower- level boards; and implement a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs.

Social Security Administration

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Commissioner of the Social Security Administration take the following three actions: include in its annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop performance measures related to the performance of the agency’s IT programs and the effectiveness of controls to prevent software piracy; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Commissioner of the Social Security Administration take the following four actions: develop work processes and procedures for the agency’s investment establish a policy requiring modularized IT investments; document the role, responsibility, and authority of its IT investment management board for the oversight of IT investments, such as what is outlined in practices 2.15, 2.16, and 2.18; and require that corrective actions be tracked and reported to the investment management board for under-performing projects.

State

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of State take the following two actions: include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of State take the following five actions: implement a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; establish a policy requiring modularized IT investments; include risk-adjusted return-on-investment in the department’s project revise the department’s draft IT investment management policy to include reviewing projects at major milestones; and fully implement an IT investment management control phase, including the elements contained in practices 2.16 and 2.17.

Transportation

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Transportation take the following five actions: document its IT strategic planning process; include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop a goal related to how IT contributes to program productivity; develop performance measures related to the department’s IT goals in its IRM plan, and track actual-versus-expected performance for these IT performance measures; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of Transportation take the following six actions: document the alignment and coordination of responsibilities of the department’s various IT investment management boards for decision making related to IT investments; implement a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; prioritize the department’s IT proposals; establish a policy requiring modularized IT investments; develop and document decision-making rules to help guide the investment management board’s oversight of IT investments during the control phase; and as part of the department’s control phase, employ an early warning mechanism, and use independent verification and validation reviews, when appropriate.

Treasury

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of the Treasury take the following four actions: include in the department’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; develop performance measures related to the effectiveness of controls to prevent software piracy; develop performance measures related to the department’s IT goals in its IRM plan, and track actual-versus-expected performance for these IT performance measures; and develop a mechanism for benchmarking the department’s IT management processes, when appropriate.

To improve the department’s IT investment management processes, we recommend that the Secretary of the Treasury take the following eight actions: develop a capital planning and investment control guide that includes, for example, the elements of practice 2.1; develop work processes and procedures for the agency’s IT investment management board, and document the alignment and coordination of responsibilities of its various boards for decision making related to investments, including the criteria for which investments—including cross-cutting investments—will be reviewed by the enterprisewide board; use the department’s IT asset inventory as part of managerial decision making, including using it to identify the potential for asset duplication; establish a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; implement a structured IT selection process that includes the elements of practices 2.12 and 2.13; establish a policy requiring modularized IT investments; implement an IT investment management process that includes a control phase that addresses, for example, the elements of practices 2.15, 2.16, and 2.17; and implement an IT investment management process that includes an evaluation phase that addresses, for example, the elements of practice 2.18.

U.S. Agency for International Development

To improve the agency’s IT strategic planning/performance measurement processes, we recommend that the Administrator of the U.S. Agency for International Development take the following two actions: include in the agency’s annual performance plan the resources and time periods required to implement the information security program plan required by FISMA; and develop a mechanism for benchmarking the agency’s IT management processes, when appropriate.

To improve the agency’s IT investment management processes, we recommend that the Administrator of the U.S. Agency for International Development take the following nine actions: develop work processes and procedures for the agency’s IT investment establish a policy requiring that IT investments be in compliance with the agency’s enterprise architecture; develop a policy requiring that proposed IT investments support work processes that have been simplified or redesigned to reduce costs and improve effectiveness and that makes maximum use of COTS software; include net risks, risk-adjusted return-on-investment, and qualitative criteria in the agency’s project selection criteria; within the agency’s IT investment selection process, implement a mechanism to identify possible conflicting, overlapping, strategically unlinked, or redundant proposals; develop a policy requiring modularized IT investments; develop decision-making rules, review projects at major milestones, and require projects to report on deviations in system capability to help guide the oversight of IT investments by the agency’s investment management board during the control phase; as part of the agency’s control phase, employ an early warning mechanism, and use independent verification and validation reviews, when appropriate; and require that corrective actions be undertaken, tracked, and reported to the investment management board for under-performing projects.

Veterans Affairs

To improve the department’s IT strategic planning/performance measurement processes, we recommend that the Secretary of Veterans Affairs take the following four actions: include in the department’s annual performance plan the resources required to implement the information security program plan required by FISMA; develop a documented process to measure progress against the department’s IT goals, and assign roles and responsibilities for achieving these goals; develop performance measures related to the effectiveness of controls to prevent software piracy; and track actual-versus-expected performance for the department’s enterprisewide IT performance measures in its IRM plan.

To improve the department’s IT investment management processes, we recommend that the Secretary of Veterans Affairs take the following two actions: document the alignment and coordination of responsibilities of the department’s various IT investment management boards for decision making related to IT investments, including cross-cutting investments; and within the agency’s IT investment selection process, implement a mechanism to identify possible conflicting, overlapping, strategically unlinked, or redundant proposals, and prioritize its IT investments.

Comments from the Department of Agriculture

Comments from the Department of Commerce

Comments from the Department of Defense (including comments from the Departments of the Air Force, Army, and Navy)

The following are GAO’s comments on the Department of Defense’s (DOD) letter dated December 5, 2003.

GAO Comments

1. DOD provided its annual report to the President and the Congress, which included its fiscal year 2004 performance plan. Based on a review of this plan, we modified our report. 2. We disagree that the cited objective fully addresses this issue.

Specifically, although this objective addresses e-government, the wording of the objective, its description, and the discussion of related initiatives do not explicitly address service delivery to the public. Accordingly, we did not modify our report. 3. Our review of the acquisition management process documentation provided by the Navy did not support that the department’s selection criteria include net risks and risk-adjusted return-on-investment. Accordingly, we did not modify our report.

Comments from the Department of Education

The following are GAO’s comments on the Department of Education’s letter dated December 10, 2003.

GAO Comments

1. We agree that Education requires IT investments to have performance measures. However, our practice dealt with enterprise-level measures, such as those found in the department’s IRM plan, not project-specific measures. Education reported that the performance measures in its IRM plan do not measure how IT contributes to program productivity and the efficiency and effectiveness of agency operations. Accordingly, we did not modify our report. 2. We modified our assessment of practice 2.6 in this report and deleted the related recommendation based on our evaluation of additional documentation provided by Education.

Comments from the Environmental Protection Agency

The following are GAO’s comments on the Environmental Protection Agency’s (EPA) letter dated December 9, 2003.

GAO Comments

1. As we reported and EPA acknowledged, its documentation on IT strategic planning and investment management was not complete or finalized. For example, the partial rating we gave EPA for its IT management and strategic planning practices—practices 1.1 and 1.2— matched the agency’s own self-assessment in these areas. Specifically, our review of planning documents cited by EPA in its self-assessment found that while the agency had documented agencywide roles and responsibilities for planning and managing IT resources and had documented its process to integrate the IT investment management process with the budget, EPA had not addressed other key elements of the practices. As an example, EPA had not fully documented the method by which it defines program information needs and develops strategies, systems, and capabilities to meet those needs. Since EPA provided no additional documentation, our practice assessment and our related recommendations remain unchanged. 2. As stated in our report, practice 1.7 refers to the documentation of the process used to develop IT goals and measures and the responsibility for achieving them. As EPA states in its comments, it is currently working on documenting this process. Accordingly, we did not modify our report.

Comments from the General Services Administration

The following are GAO’s comments on the General Services Administration’s (GSA) letter dated December 9, 2003.

GAO Comments

1. We based our evaluation on the agency’s self-assessment and comments made by GSA’s Director, Office of Policy and Plans. However, based on GSA’s representation in commenting on our draft, we changed our evaluation of the referenced practice. 2. The Clinger-Cohen Act requires agencies to include in its information resources management (IRM) plan the identification of a major IT acquisition program(s), or any phase or increment of that program, that significantly deviated from cost, performance, or schedule goals established by the program. As we acknowledge in this report, agencies, which would include GSA, identified other mechanisms that they use to track and report cost, schedule, and performance deviations. Moreover, we evaluated agencies as a “partially” instead of a “no” in this practice to take into account that the agency had the required information, although it was not in the prescribed format. Accordingly, we did not modify our report. 3. The Federal Information Security Management Act of 2002 requires agencies to include in the performance plans required by the Government Performance and Results Act the resources and time periods to implement their information security program. As we noted in this report, agencies, which would include GSA, commonly stated that they had this information but that it was in another document. Nevertheless, this does not negate the need for having the agency report to the Congress in the form that it requires. This is particularly important since performance plans are public documents. Accordingly, we did not modify our report. 4. GSA’s new documentation illustrates that it has performance measures for each of the IT goals in its IRM plan. However, GSA did not provide evidence that it was tracking actual versus expected performance for measures associated with one of its goals. We revised our report to reflect GSA’s new documentation and our evaluation. 5. We revised our report on the basis of this new documentation. 6. GSA’s highest-level IT investment management board is its Executive Committee. GSA did not provide a charter or any other evidence of policies and procedures for this committee. We therefore did not modify our report. 7. The additional documentation provided by GSA (1) does not address decision-making rules and (2) illustrates that GSA uses a monthly project control report on cost, schedule, and performance status, but the report does not explicitly address deviations in system capability. In addition, according to GSA’s capital planning and investment control order, the format of the report is left to the applicable organization, thereby making it less likely that the investment management boards are obtaining consistent information. We therefore did not modify our report. 8. We agree that GSA’s capital planning and investment control order requires that projects that have significant variances are to provide “get well” plans and that monthly control reports are used to report on project cost, schedule, and performance status. However, it is not clear that these status reports can be used to systemically track corrective actions. Moreover, according to GSA’s capital planning and investment control order, the format of the monthly control report is left to the applicable organization, thereby making it less likely that the status of corrective actions is being consistently reported. We therefore did not modify our report. 9. See comment 8. 10. We modified our recommendations based on our evaluation of GSA’s documentation. See comment 4 for our assessment. 11. Executive Order 13103 requires agencies to use software piracy performance measures that comply with guidance issued by the federal CIO Council. The Council, in turn, called on the agencies to develop such measures. The additional documentation that GSA provided was an order requiring agency employees to use properly licensed software, but it does not include performance measures that would demonstrate that this requirement is being honored. Measuring how well agencies are combating software piracy is important because it can verify that the controls that they have put in place are working. Accordingly, we did not change this part of the recommendation. 12. We modified our recommendation to reflect that GSA requires projects that have significant variances to develop corrective action plans. However, the other elements of the recommendation pertaining to the tracking and reporting on corrective actions remain outstanding. See comment 8 for additional information.

Comments from the Department of Health and Human Services

Comments from the Department of Housing and Urban Development

Comments from the Department of the Interior

Comments from the Department of Justice

The following are GAO’s comments on the Department of Justice’s letter dated December 2, 2003.

GAO Comments

1. GAO has ongoing work looking at OMB’s initiative. However, the Federal Information Security Management Act of 2002 requires agencies to include in the performance plans required by the Government Performance and Results Act the resources and time periods to implement its information security program. Accordingly, we did not change the recommendation.

Comments from the Department of Labor

The following are GAO’s comments on the Department of Labor’s letter dated December 2, 2003.

GAO Comments

1. Because Labor did not disagree with our characterization of its IT goal, no changes were made to our report. 2. We agree with Labor’s characterization of its IT strategic goal and order 3-2003. Nevertheless, the recommendation, and related practice 1.7, refers to the documentation of the process used to develop IT goals and measures and the responsibility for achieving them. Labor neither provided documentation of such a process nor took issue with our assessment of practice 1.7, in which we stated that the agency did not have this practice in place. Moreover, Labor’s self-assessment referenced a draft performance measurement guidebook and quarterly review process in support of this practice. However, these mechanisms relate to performance measures associated with IT projects, not Labor’s enterprisewide IT goal. Finally, as we noted in our report, unlike other agencies in our review, Labor does not have goals in its IRM plan. Accordingly, we did not change this recommendation.

Comments from the National Aeronautics and Space Administration

The following are GAO’s comments on the National Aeronautics and Space Administration’s (NASA) letter dated December 8, 2003.

GAO Comments

1. Our practice dealt with enterprise-level measures, not project-specific measures. In addition, although we agree that NASA’s IRM plan included performance measures, the agency generally does not track actual-versus-expected performance for these enterprisewide measures.

Comments from the Nuclear Regulatory Commission

Comments from the Social Security Administration

The following are GAO’s comments on the Social Security Administration’s (SSA) letter dated December 3, 2003.

GAO Comments

1. We agree that SSA needs to consider the level of detail that is appropriate to include in its performance plans so as not to compromise security. 2. We requested documentation to support SSA’s assertion that it has performance measures associated with the performance of IT programs (e.g., the percentage of IT projects that are meeting cost, schedule, and performance goals), but none were provided. Accordingly, we did not modify our report. 3. We agree that it is not appropriate to include measures related to the effectiveness of controls to prevent software piracy in agency performance plans. Neither our practice nor our recommendation specifies the document or process that should be used to address software piracy. 4. As we noted in this report, SSA performs benchmarking in an ad hoc manner. We believe that taking a more systematic approach is necessary to ensure that benchmarking is performed at suitable times using an appropriate methodology. Without a systematic approach, it is not possible to validate that the agency performs benchmarking “when appropriate.” Accordingly, we did not modify our report. 5. References to OMB’s Circular A-11 in agency policy documentation alone do not ensure that these practices are met. In particular, we believe that agency policies related to modularized IT investments should be explicit and that it is neither prudent nor practical to rely on users of SSA’s documentation of its capital planning and investment control process to review a secondary source.

Comments from the Department of State

The following are GAO’s comments on the Department of State’s letter dated December 9, 2003.

GAO Comments

1. We based our evaluation on the agency’s draft Capital Planning and Investment Control Program Guide that was provided during our review. However, based on State’s newly finalized Capital Planning and Investment Control Program Guide, we changed this evaluation in our report. 2. We based our evaluation on the agency’s draft Capital Planning and Investment Control Program Guide that was provided at the time of our review. Based on the final version of the Capital Planning and Investment Control Program Guide provided by State in its response, we modified the language in our report, as appropriate. 3. See comment 2. 4. See comment 2.

Comments from the U.S. Agency for International Development

The following are GAO’s comments on the U.S. Agency for International Development’s (USAID) letter dated December 9, 2003.

GAO Comments

1. References to OMB’s Circular A-11 in agency policy documentation alone do not ensure that these practices are met. In particular, we believe that agency policies related to practices 2.11 and 2.14 should be explicit and that it is neither prudent nor practical to rely on users of USAID’s directives to review a secondary source. Regarding USAID’s comments that it uses the criteria in practices 2.11 and 2.14 as part of its evaluation and scoring of investments, we agree that the agency does ask some questions on the use of commercial-off-the-shelf software and whether the agency uses “successive chunks” within its proposed IT investment scoring model. However, addressing these criteria as part of a scoring model does not address our practice because scoring projects on the basis of the questions asked does not necessarily preclude projects from continuing if they do not fully meet the criteria. Additionally, the questions asked as part of the scoring model do not fully meet the requirements of the practices. Accordingly, we did not modify our report.

Comments from the Department of Veterans Affairs

The following are GAO’s comments on the Department of Veterans Affairs’ (VA) letter dated December 5, 2003.

GAO Comments

1. VA’s response indicates that the department will address this recommendation in the future and, therefore, we did not remove this recommendation. 2. See comment 1. 3. See comment 1. 4. VA’s monthly performance reports track project-specific measures, not enterprisewide IT performance measures. VA’s draft IRM plan states that it will establish metrics to measure performance for IT strategic initiatives. However, progress toward doing so was not addressed by VA in its comments. Therefore, we do not believe this recommendation has been fully addressed. 5. See comment 1. 6. Although VA describes a process followed for reviewing investment proposals, it did not provide evidence to support that this practice was actually followed. In addition, VA did not address the element of our recommendation related to prioritizing its IT investments. Therefore, we did not remove this recommendation. 7. On the basis of the additional information provided, we agree that the recommendation has been implemented and modified our report accordingly.

GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

Joseph P. Cruz, Lester P. Diamond, Laurence P. Gill, David B. Hinchman, Robert G. Kershaw, David F. Plocher, Susan S. Sato, and Patricia D. Slocum made key contributions to this report.

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