As computer technology has advanced, federal agencies and our nation's critical infrastructures--such as power distribution, water supply, telecommunications, and emergency services--have become increasingly dependent on computerized information systems to carry out their operations and to process, maintain, and report essential information. Public and private organizations rely on computer systems to transfer increasing amounts of money and sensitive and proprietary information, conduct operations, and deliver services to constituents. The security of these systems and data is essential to protecting national and economic security, and public health and safety. Conversely, ineffective information security controls can result in significant risks, including the loss of resources, such as federal payments and collections; inappropriate access to sensitive information, such as national security information, personal information on taxpayers, or proprietary business information; disruption of critical operations supporting critical infrastructure, national defense, or emergency services; and undermining of agency missions due to embarrassing incidents that diminish public confidence in government. Threats to systems supporting critical infrastructure and federal information systems are evolving and growing. Government officials are concerned about attacks from individuals and groups with malicious intent, such as criminals, terrorists, and foreign nations. Federal law enforcement and intelligence agencies have identified multiple sources of threats to our nation's critical information systems, including foreign nations engaged in espionage and information warfare, criminals, hackers, virus writers, and disgruntled employees and contractors. These groups and individuals have a variety of attack techniques at their disposal that can be used to determine vulnerabilities and gain entry into targeted systems. For example, phishing involves the creation and use of fake e- mails and Web sites to deceive Internet users into disclosing their personal data and other sensitive information. The connectivity between information systems, the Internet, and other infrastructures also creates opportunities for attackers to disrupt telecommunications, electrical power, and other critical services. For example, in May 2008, we reported that the Tennessee Valley Authority's (TVA) corporate network contained security weaknesses that could lead to the disruption of control systems networks and devices connected to that network. We made 19 recommendations to improve the implementation of information security program activities for the control systems governing TVA's critical infrastructures and 73 recommendations to address weaknesses in information security controls. TVA concurred with the recommendations and has taken steps to implement them. As government, private sector, and personal activities continue to move to networked operations, the threat will continue to grow. Consistent with the evolving and growing nature of the threats to federal systems, agencies are reporting an increasing number of security incidents. These incidents put sensitive information at risk. Personally identifiable information about U.S. citizens has been lost, stolen, or improperly disclosed, thereby potentially exposing those individuals to loss of privacy, identity theft, and financial crimes. Agencies have experienced a wide range of incidents involving data loss or theft, computer intrusions, and privacy breaches, underscoring the need for improved security practices. Further, reported attacks and unintentional incidents involving critical infrastructure systems demonstrate that a serious attack could be devastating. When incidents occur, agencies are to notify the federal information security incident center--the United States Computer Emergency Readiness Team (US-CERT). Over the past 5 years, the number of incidents reported by federal agencies to US-CERT has increased dramatically, from 5,503 incidents reported in fiscal year 2006 to about 41,776 incidents in fiscal year 2010 (a more than 650 percent increase). The three most prevalent types of incidents and events reported to US-CERT during fiscal year 2010 were: (1) malicious code (software that infects an operating system or application), (2) improper usage (a violation of acceptable computing use policies), and (3) unauthorized access (where an individual gains logical or physical access to a system without permission). Additionally, according to Department of Homeland Security (DHS) officials, US-CERT detects incidents and events through its intrusion detection system, supplemented by agency reports, for investigation (unconfirmed incidents that are potentially malicious or anomalous activity deemed by the reporting entity to warrant further review). Reports of cyber attacks and information security incidents against federal systems and systems supporting critical infrastructure illustrate the effect that such incidents could have on national and economic security. In July 2010, the Department of Defense (DOD) launched an investigation to identify how thousands of classified military documents (including Afghanistan and Iraq war operations, as well as field reports on Pakistan) were obtained by the group WikiLeaks.org. According to DOD, this investigation was related to an ongoing investigation of an Army private charged with, among other things, transmitting national defense information to an unauthorized source. In 2010, the Deputy Secretary of Defense stated that DOD suffered a significant compromise of its classified military computer networks in 2008. It began when a flash drive's malicious computer code, placed there by a foreign intelligence agency, uploaded itself onto a network and spread on both classified and unclassified systems. In February 2011, media reports stated that computer hackers broke into and stole proprietary information worth millions of dollars from the networks of six U.S. and European energy companies. The federal government has a variety of roles and responsibilities in protecting the nation's cyber-reliant critical infrastructure, enhancing the nation's overall cybersecurity posture, and ensuring the security of federal systems and the information they contain. In light of the pervasive and increasing threats to critical systems, the executive branch is taking a number of steps to strengthen the nation's approach to cybersecurity. For example, in its role as the focal point for federal efforts to protect the nation's cyber critical infrastructures, DHS issued a revised national infrastructure protection plan in 2009 and an interim national cyber incident response plan in 2010. Executive branch agencies have also made progress instituting several governmentwide initiatives that are aimed at bolstering aspects of federal cybersecurity, such as reducing the number of federal access points to the Internet, establishing security configurations for desktop computers, and enhancing situational awareness of cyber events. Despite these efforts, the federal government continues to face significant challenges in protecting the nation's cyber- reliant critical infrastructure and federal information systems. The administration and executive branch agencies have not yet fully implemented key actions that are intended to address threats and improve the current U.S. approach to cybersecurity. Implementing actions recommended by the president's cybersecurity policy review. In February 2009, the president initiated a review of the government's cybersecurity policies and structures, which resulted in 24 near- and mid-term recommendations to address organizational and policy changes to improve the current U.S. approach to cybersecurity. In October 2010, we reported that 2 recommendations had been implemented and 22 were partially implemented. Officials from key agencies involved in these efforts (e.g., DHS, DOD, and the Office of Management and Budget (OMB)) stated that progress had been slower than expected because agencies lacked assigned roles and responsibilities and because several of the mid-term recommendations would require action over multiple years. We recommended that the national Cybersecurity Coordinator (whose role was established as a result of the policy review) designate roles and responsibilities for each recommendation and develop milestones and plans, including measures to show agencies' progress and performance. Updating the national strategy for securing the information and communications infrastructure. In March 2009, we testified on the needed improvements to the nation's cybersecurity strategy. In preparation for that testimony, we convened a panel of experts that included former federal officials, academics, and private sector executives. The panel highlighted 12 key improvements that are, in its view, essential to improving the strategy and our national cybersecurity posture, including the development of a national strategy that clearly articulates strategic objectives, goals, and priorities. Developing a comprehensive national strategy for addressing global cybersecurity and governance. In July 2010, we reported that the U.S. government faced a number of challenges in formulating and implementing a coherent approach to global aspects of cyberspace, including, among other things, providing top-level leadership and developing a comprehensive strategy. Specifically, we found that the national Cybersecurity Coordinator's authority and capacity to effectively coordinate and forge a coherent national approach to cybersecurity were still under development. In addition, the U.S. government had not documented a clear vision of how the international efforts of federal entities, taken together, support overarching national goals. We recommended that, among other things, the national Cybersecurity Coordinator develop with other relevant entities a comprehensive U.S. global cyberspace strategy. The coordinator and his staff concurred with our recommendations and stated that actions had already been initiated to address them. Finalizing cybersecurity guidelines and monitoring compliance related to electricity grid modernization. In January 2011, we reported on efforts by the National Institute of Standards and Technology (NIST) to develop cybersecurity guidelines and Federal Energy Regulatory Commission (FERC) efforts to adopt and monitor cybersecurity standards related to the electric industry's incorporation of IT systems to improve reliability and efficiency--commonly referred to as the smart grid. We determined that NIST had not addressed all key elements of cybersecurity in its initial guidelines or finalized plans for doing so. We also determined that FERC had not developed an approach for monitoring industry compliance with its initial set of voluntary standards. Further, we identified six key challenges with respect to securing smart grid systems, including a lack of security features being built into certain smart grid systems and an ineffective mechanism for sharing information on cybersecurity within the industry. We recommended that NIST finalize its plans for updating its cybersecurity guidelines to incorporate missing elements and that FERC develop a coordinated approach to monitor voluntary standards and address any gaps in compliance. Both agencies agreed with these recommendations. Creating a prioritized national and federal cybersecurity research and development (R&D) agenda. In June 2010, we reported that while efforts to improve cybersecurity R&D were under way by the White House's Office Science and Technology Policy (OSTP) and other federal entities, six major challenges impeded these efforts. Among the most critical was the lack of a prioritized national cybersecurity research and development agenda. We found that despite its legal responsibility and our past recommendations, a key OSTP subcommittee had not created a prioritized national R&D agenda, increasing the risk that research pursued by individual organizations will not reflect national priorities. We recommended that OSTP direct the subcommittee to take several actions, including developing a national cybersecurity R&D agenda. OSTP agreed with our recommendation and provided details on planned actions. We are in the process of verifying actions taken to implement our recommendations. In addition, we have ongoing work related to cyber CIP efforts in several other areas including (1) cybersecurity-related standards used by critical infrastructure sectors, (2) federal efforts to recruit, retain, train, and develop cybersecurity professionals, and (3) federal efforts to address risks to the information technology supply chain. In addition to improving our national capability to address cybersecurity, executive branch agencies, in particular DHS, also need to improve their capacity to protect against cyber threats by, among other things, advancing cyber analysis and warning capabilities and strengthening the effectiveness of the public-private sector partnerships in securing cyber critical infrastructure. Enhancing cyber analysis and warning capabilities. In July 2008, we reported that DHS's US-CERT had not fully addressed 15 key attributes of cyber analysis and warning capabilities. As a result, we recommended that the department address shortfalls associated with the 15 attributes in order to fully establish a national cyber analysis and warning capability as envisioned in the national strategy. DHS agreed in large part with our recommendations and has reported that it is taking steps to implement them. We are currently working with DHS officials to determine the status of their efforts to address these recommendations. Strengthening the public-private partnerships for securing cyber critical infrastructure. In July 2010, we reported that the expectations of private sector stakeholders were not being met by their federal partners in areas related to sharing information about cyber-based threats to critical infrastructure. Federal partners, such as DHS, were taking steps that may address the key expectations of the private sector, including developing new information-sharing arrangements. We also reported that public sector stakeholders believed that improvements could be made to the partnership, including improving private sector sharing of sensitive information. We recommended that the national Cybersecurity Coordinator and DHS work with their federal and private sector partners to enhance information-sharing efforts, including leveraging a central focal point for sharing information among the private sector, civilian government, law enforcement, the military, and the intelligence community. DHS officials stated that they have made progress in addressing these recommendations, and we will be determining the extent of that progress as part of our audit follow-up efforts. Federal systems continue to be afflicted by persistent information security control weaknesses. Specifically, agencies did not consistently implement effective controls to prevent, limit, and detect unauthorized access or manage the configuration of network devices to prevent unauthorized access and ensure system integrity. Most of the 24 major federal agencies had information security weaknesses in five key internal control categories, as illustrated in figure 1. In addition, GAO determined that serious and widespread information security control deficiencies were a governmentwide material weakness in internal control over financial reporting as part of its audit of the fiscal year 2010 financial statements for the United States government. Over the past several years, we and inspectors general have made hundreds of recommendations to agencies for actions necessary to resolve prior significant control deficiencies and information security program shortfalls. For example, we recommended that agencies correct specific information security deficiencies related to user identification and authentication, authorization, boundary protections, cryptography, audit and monitoring, physical security, configuration management, segregation of duties, and contingency planning. We have also recommended that agencies fully implement comprehensive, agencywide information security programs by correcting weaknesses in risk assessments, information security policies and procedures, security planning, security training, system tests and evaluations, and remedial actions. The effective implementation of these recommendations will strengthen the security posture at these agencies. Agencies have implemented or are in the process of implementing many of our recommendations. In addition, the White House, OMB, and selected federal agencies have undertaken governmentwide initiatives to enhance information security at federal agencies. For example, the Comprehensive National Cybersecurity Initiative, a series of 12 projects, is aimed primarily at improving DHS's and other federal agencies' efforts to reduce vulnerabilities, protect against intrusion attempts, and anticipate future threats against federal executive branch information systems. However, the projects face challenges in achieving their objectives related to securing federal information, including better defining agency roles and responsibilities, establishing measures of effectiveness, and establishing an appropriate level of transparency. These challenges require sustained attention, which agencies have begun to provide. In summary, the threats to information systems are evolving and growing, and systems supporting our nation's critical infrastructure and federal systems are not sufficiently protected to consistently thwart the threats. Administration and executive branch agencies need to take actions to improve our nation's cybersecurity posture, including implementing the actions recommended by the president's cybersecurity policy review and enhancing cyber analysis and warning capabilities. In addition, actions are needed to enhance security over federal systems and information, including fully developing and effectively implementing agencywide information security programs and implementing open recommendations. Until these actions are taken, our nation's federal and nonfederal cyber critical infrastructure will remain vulnerable. Mr. Chairman, this completes my statement. I would be happy to answer any questions you or other members of the Subcommittee have at this time. If you have any questions regarding this statement, please contact Gregory C. Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Other key contributors to this statement include Michael Gilmore (Assistant Director), Anjalique Lawrence (Assistant Director), Larry Crosland, Kush Malhotra, Bradley Becker, Lee McCracken, and Jayne Wilson. High-Risk Series: An Update. GAO-11-278. Washington, D.C.: February 2011. Electricity Grid Modernization: Progress Being Made on Cybersecurity Guidelines, but Key Challenges Remain to be Addressed. GAO-11-117. Washington, D.C.: January 12, 2011. Information Security: Federal Agencies Have Taken Steps to Secure Wireless Networks, but Further Actions Can Mitigate Risk. GAO-11-43. Washington, D.C.: November 30, 2010. Cyberspace Policy: Executive Branch Is Making Progress Implementing 2009 Policy Review Recommendations, but Sustained Leadership Is Needed. GAO-11-24. Washington, D.C.: October 6, 2010. Information Security: Progress Made on Harmonizing Policies and Guidance for National Security and Non-National Security Systems. GAO-10-916. Washington, D.C.: September 15, 2010. Information Management: Challenges in Federal Agencies' Use of Web 2.0 Technologies. GAO-10-872T. Washington, D.C.: July 22, 2010. Critical Infrastructure Protection: Key Private and Public Cyber Expectations Need to Be Consistently Addressed. GAO-10-628. Washington, D.C.: July 15, 2010. Cyberspace: United States Faces Challenges in Addressing Global Cybersecurity and Governance. GAO-10-606. Washington, D.C.: July 2, 2010. Cybersecurity: Continued Attention Is Needed to Protect Federal Information Systems from Evolving Threats. GAO-10-834T. Washington, D.C.: June 16, 2010. Cybersecurity: Key Challenges Need to Be Addressed to Improve Research and Development. GAO-10-466. Washington, D.C.: June 3, 2010. Information Security: Federal Guidance Needed to Address Control Issues with Implementing Cloud Computing. GAO-10-513. Washington, D.C.: May 27, 2010. Information Security: Agencies Need to Implement Federal Desktop Core Configuration Requirements. GAO-10-202. Washington, D.C.: March 12, 2010. Information Security: Concerted Effort Needed to Consolidate and Secure Internet Connections at Federal Agencies. GAO-10-237. Washington, D.C.: March 12, 2010. Cybersecurity: Progress Made but Challenges Remain in Defining and Coordinating the Comprehensive National Initiative. GAO-10-338. Washington, D.C.: March 5, 2010. National Cybersecurity Strategy: Key Improvements Are Needed to Strengthen the Nation's Posture. GAO-09-432T. Washington, D.C.: March 10, 2009. Information Security: TVA Needs to Address Weaknesses in Control Systems and Networks. GAO-08-526. Washington, D.C.: May 21, 2008. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary:
Pervasive and sustained cyber attacks continue to pose a potentially devastating threat to the systems and operations of our nation's critical infrastructure and the federal government. In recent testimony, the Director of National Intelligence stated that there had been a dramatic increase in malicious cyber activity targeting U.S. computers and networks. In addition, recent reports of cyber attacks and incidents affecting federal systems and critical infrastructures illustrate the potential impact of such events on national and economic security. The nation's ever-increasing dependence on information systems to carry out essential everyday operations makes it vulnerable to an array of cyber-based risks. Thus it is increasingly important that federal and nonfederal entities carry out concerted efforts to safeguard their systems and the information they contain. GAO is providing a statement describing (1) cyber threats to cyber-reliant critical infrastructures and federal information systems and (2) the continuing challenges facing federal agencies in protecting the nation's cyber-reliant critical infrastructure and federal systems. In preparing this statement, GAO relied on its previously published work in the area, which included many recommendations for improvements. Cyber-based threats to critical infrastructure and federal systems are evolving and growing. These threats can come from a variety of sources, including criminals and foreign nations, as well as hackers and disgruntled employees. These potential attackers have a variety of techniques at their disposal that can vastly expand the reach and impact of their actions. In addition, the interconnectivity between information systems, the Internet, and other infrastructure presents increasing opportunities for such attacks. Consistent with this, reports of security incidents from federal agencies are on the rise, increasing over 650 percent over the past 5 years. In addition, reports of cyber attacks and information security incidents affecting federal systems and systems supporting critical infrastructure illustrate the serious impact such incidents can have on national and economic security, including the loss of classified information and intellectual property worth millions of dollars. The administration and executive branch agencies continue to act to better protect cyber-reliant critical infrastructures, improve the security of federal systems, and strengthen the nation's cybersecurity posture. However, they have not yet fully implemented key actions that are intended to address threats and improve the current U.S. approach to cybersecurity, such as (1) implementing near- and mid-term actions recommended by the cybersecurity policy review directed by the president; (2) updating the national strategy for securing the information and communications infrastructure; (3) developing a comprehensive national strategy for addressing global cybersecurity and governance; and (4) creating a prioritized national and federal research and development agenda for improving cybersecurity. Federal systems continue to be afflicted by persistent information security control weaknesses. For example, as part of its audit of the fiscal year 2010 financial statements for the U.S. government, GAO determined that serious and widespread information security control deficiencies were a governmentwide material weakness. Over the past several years, GAO and agency inspectors general have made hundreds of recommendations to agencies for actions necessary to resolve prior significant control deficiencies and information security program shortfalls. The White House, the Office of Management and Budget, and selected federal agencies have undertaken additional governmentwide initiatives intended to enhance information security at federal agencies. However, these initiatives face challenges, such as better defining agency roles and responsibilities and establishing measures of effectiveness, and require sustained attention, which agencies have begun to provide. As such, GAO continues to identify protecting the federal government's information systems and the nation's cyber critical infrastructure as a governmentwide high-risk area.