HUD’s mission is to increase home ownership, support community development, and increase access to affordable housing free from discrimination. To these ends, it has established six strategic goals: (1) increasing home ownership opportunities; (2) promoting decent affordable housing; (3) strengthening communities; (4) ensuring equal opportunity in housing; (5) embracing high standards of ethics, management, and accountability; and (6) promoting participation of faith- based and community organizations. HUD works with other federal agencies and branches of government, as well as with local governments, faith-based and community organizations, and the private sector to achieve these goals. To carry out its mission, HUD is organized into five main program areas: Housing, Community Planning and Development, Fair Housing and Equal Opportunity, Public and Indian Housing, and the Government National Mortgage Association. Office of Housing: This office oversees the Federal Housing Administration (FHA) and regulates certain aspects of the housing industry. Among other things, its mission is to contribute to building and preserving healthy neighborhoods and communities; maintain and expand home ownership, rental housing, and health care opportunities; and stabilize credit markets in times of economic disruption. The office is composed of two mission areas: single-family housing and multifamily housing. Single-family housing programs provide mortgage insurance on loans to purchase homes. Multifamily programs provide mortgage insurance to lenders on loans for the development of housing projects and health care facilities. Office of Community Planning and Development: The office’s mission is to provide decent housing, a suitable living environment, and economic opportunities for people of low and moderate income. To accomplish this, it engages in partnerships with all levels of government, the private sector, and nonprofit organizations. Office of Fair Housing and Equal Opportunity: The office’s mission is to administer and enforce federal laws that prohibit discrimination in housing, such as the Fair Housing Act and the Civil Rights Act of 1964. To accomplish this, it establishes and enforces policies intended to ensu that all Americans have equal access to housing of their choice. Office of Public and Indian Housing: The office’s mission is to ensure safe, decent, and affordable housing and create opportunities for residents’ self-sufficiency and economic independence. Among other things, this office administers and manages programs authorized by the Housing Act of 1937 to provide housing to over 1.3 million households. Government National Mortgage Association (Ginnie Mae): This HUD- owned corporation’s mission is to expand affordable housing by linking global capital markets to the nation’s housing markets. While Ginnie Mae does not issue loans or mortgage-backed securities, it guarantees investors timely payment and interest on mortgage-backed securities backed by federally insured or guaranteed loans. HUD also consists of a number of mission support offices, such as the Office of Healthy Homes and Lead Hazard Control and the Office of Faith- Based and Community Initiatives, as well as administrative offices, such as the Office of the Chief Procurement Officer and the Office of the Chief Information Officer (OCIO). Figure 1 provides a simplified view of the department’s organizational structure. HUD’s fiscal year 2008 appropriation was about $37.6 billion, while its fiscal year 2009 appropriation is about $41.5 billion. HUD’s budget request for fiscal year 2010 is about $46.3 billion. The department has approximately 8,500 employees in 81 field offices that are resident in all 50 states, the District of Columbia, and Puerto Rico. During the past year, legislation has been enacted to stimulate our nation’s economy, in part through strengthening the housing market. Under this legislation, HUD was given new responsibilities and additional funding to help meet these new responsibilities. Specifically, the Housing and Economic Recovery Act of 2008 established a program at FHA intended to help families avoid home foreclosure by refinancing them into FHA- insured mortgages. The act also authorized $25 million for each of fiscal years 2009 through 2013 for improvements to FHA’s IT, among other things. In addition, the American Recovery and Reinvestment Act of 2009 provided roughly $11.6 billion to HUD across a range of programs, and authorized HUD to, depending on the program, use either up to 1/2 percent or up to 1 percent of the funds for IT and other administrative costs related to most of these programs. As such, the act recognizes that HUD’s ability to effectively implement these programs depends in part on its simultaneous delivery of enhanced IT support. According to OCIO officials, of the approximately $61 million made available for IT under this act, about 2.5 percent or $1.5 million will be spent on the development of a new system supporting reporting requirements mandated by the act, while the remainder is planned to be used to maintain or enhance existing systems. IT plays a critical role in HUD’s ability to carry out its missions, supporting data collection and dissemination throughout the department and to external partners. For instance, the department reports that its business areas rely on IT to process over 50,000 loan requests per week, over 12,000 service calls per month, and more than 7,000 grant requests annually for each of its major grant programs. Further, the department’s increased responsibilities under the Housing and Economic Recovery Act of 2008 will introduce greater processing requirements for FHA loan applications and new budget reporting requirements, and thus further increase its reliance on IT. OCIO is responsible for supporting HUD programs, services, and management processes by providing high-quality IT solutions and services. To this end, OCIO has established four IT strategic goals: (1) rapidly modernizing IT to support key HUD business initiatives; (2) transforming the IT infrastructure to adapt to and adopt emerging technologies; (3) developing a cadre of highly capable IT professionals with mission critical competencies; and (4) providing secure, rapid, and reliable data and information to customers, citizens, and business partners. OCIO consists of the Chief Information Officer (CIO), two Deputy Chief Information Officers, and eight offices. These offices are responsible for systems integration and efficiency; policy and E-government; IT governance and investment; IT operations; enterprise architecture (EA); IT strategic planning and communication; administrative services; and IT security. (See fig. 2 for an OCIO organizational chart depicting key positions; see table 1 for a summary of each office’s roles and responsibilities.) HUD’s current IT environment does not effectively support its ongoing business operations. According to the department’s recent operating plans and budget submissions to Congress, its information systems are overlapping and duplicative, are not integrated, necessitate manual workloads, and employ antiquated technologies that are costly to maintain. More specifically: It consists of over 200 information systems, many of which perform the same functions and thus are duplicative. For example, it has at least 16 financial management systems that it plans to consolidate. It consists of stove-piped, nonintegrated systems. For example, multiple systems support grants management and cannot share related data. It provides insufficient support for key business processes, such as grants management, thus necessitating reliance on manual processing. Specifically, four of its offices perform most of their own grants management operations manually, about $7 billion in annual low-income, housing, project-based contracts are renewed using a paper intensive process, and about $16 billion per year is managed using a spreadsheet application. It consists of antiquated and complex systems that are costly to maintain. For example, HUD relies on several different operating systems and 35 different programming languages, each of which requires specialized skills to operate and maintain. In addition, a 2007 study of HUD’s IT environment found that the average age of its information systems was nearly 15 years, which is more than twice that of other agencies (6 years). HUD funds its IT operations through its working capital fund (WCF). The WCF is funded through both direct appropriations and program transfers from HUD mission-focused programs. As illustrated in figure 3, the majority of WCF funding has consistently been through direct appropriations, although funding from program transfers has increased steadily. As also illustrated, until fiscal year 2009, the level of total IT funding had declined. Funding for HUD’s IT environment can be split into two categories: maintenance and development. Maintenance of its existing IT environment includes application operations support for approximately 200 existing systems; infrastructure costs for shared IT services across the department and regional locations, such as hardware support, disaster recovery, and facilities management; and salaries and indirect expenses for 255 full-time equivalent OCIO positions, as well as certain staff who provide management support to IT services from the Office of the Chief Procurement Officer and the Office of the Chief Financial Officer. Development includes modernizing systems to better support HUD’s mission and business priorities. As illustrated in figure 4, the percentage of funds obligated for new development (i.e., modernization) has consistently been a small percentage of total IT obligations, particularly in fiscal year 2008 when only about 2 percent of IT obligations was for development. HUD’s fiscal year 2010 budget request provides for increases in IT funding under what it refers to as its “Transformation Initiative.” This initiative consists of four related components, one of which focuses on modernizing IT systems in order to decrease HUD’s reliance on its legacy environment. According to the budget request, the initiative’s funding is to be 1 percent of HUD’s total budget, or approximately $434 million. HUD officials stated that the potential exists for as much as one-half of this amount (or about $217 million) to be used for modernization of its IT systems. A federal agency’s ability to effectively and efficiently maintain and modernize its existing IT environment depends in large part on how well it employs certain IT management controls that are embodied in statutory requirements, federal guidance, and best practices.