Information technology should enable government to better serve the American people. However, OMB stated in 2010 that the federal government had achieved little of the productivity improvements that private industry had realized from IT, despite spending more than $600 billion on IT over the past decade. Too often, federal IT projects run over budget, behind schedule, or fail to deliver promised functionality. Both OMB and federal agencies have key roles and responsibilities for overseeing IT investment management. OMB is responsible for working with agencies to ensure investments are appropriately planned and justified. Federal agencies are responsible for managing their IT investment portfolio, including the risks from their major information system initiatives, in order to maximize the value of these investments to the agency. Additionally, each year, OMB and federal agencies work together to determine how much the government plans to spend on IT projects and how these funds are to be allocated. For fiscal year 2014, federal agencies plan to spend about $82 billion. We have previously reported on the challenges associated with agencies’ efforts to identify duplicative IT investments. For example, in September 2011 we reported that there were hundreds of investments providing similar functions across the federal government, including 1,536 information and technology management investments, 781 supply chain management investments, and 661 human resource management investments. Further, we found that OMB guidance to agencies on how to report their IT investments did not ensure complete reporting or facilitate the identification of duplicative investments. Specifically, agencies differed on what investments they included as an IT investment, and OMB’s guidance requires each investment to be mapped to a single functional category. As a result, agencies’ annual IT investments were likely greater that the $79 billion reported in fiscal year 2011 and OMB’s ability to identify duplicative investments was limited. Further, we found that several agencies did not routinely assess operational systems to determine if they were duplicative. We recommended, among other things, that OMB clarify its guidance to help agencies better identify and categorize their IT investments and require agencies to report the steps they take to ensure that their IT investments are not duplicative. OMB agreed with these recommendations. More recently, we reported on efforts at the Departments of Defense, Energy, and Homeland Security to identify duplicative IT investments. More specifically, we noted that although Defense, Energy, and Homeland Security use various investment review processes to identify duplicative investments, 37 of our sample of 810 investments were potentially duplicative at Defense and Energy. These investments accounted for about $1.2 billion in spending for fiscal years 2007 through 2012. We also noted that investments were, in certain cases, misclassified by function, further complicating agencies’ ability to identify and eliminate duplicative investments. We recommended that Defense and Energy utilize transparency mechanisms, such as the IT Dashboard to report on the results of their efforts to identify and eliminate potentially duplicative investments. The agencies generally agreed with this recommendation. We have also reported on the value of portfolio management in helping to identify duplication and overlap and opportunities to leverage shared services. For example, we have reported extensively on various agencies’ IT investment management capabilities by using GAO’s IT Investment Management Framework, in which stage 3 identifies best practices for portfolio management, including (1) creating a portfolio which involves, among other things, grouping investments and proposals into predefined logical categories so they can be compared to one another within and across the portfolio categories, and the best overall portfolio can then be selected for funding, and (2) evaluating the portfolio by monitoring and controlling it to ensure it provides the maximum benefits at a desired cost and an acceptable level of risk. Recognizing the proliferation of duplicative and low-priority IT investments within the federal government and the need to drive efficiency, OMB launched the PortfolioStat initiative in March 2012, which requires 26 agencies to conduct an annual agency-wide IT portfolio review to, among other things, reduce commodity IT spending and demonstrate how their IT investments align with the agency’s mission and business functions. Toward this end, OMB defined 13 types of commodity IT investments in three broad categories: (1) Enterprise IT systems, which include e-mail; identity and access management; IT security; web hosting, infrastructure, and content; and collaboration tools. (2) IT infrastructure, which includes desktop systems, mainframes and servers, mobile devices, and telecommunications. (3) Business systems, which include financial management, grants- related federal financial assistance, grants-related transfer to state and local governments, and human resources management systems. PortfolioStat is designed to assist agencies in assessing the current maturity of their IT investment management process, making decisions on eliminating duplicative investments, and moving to shared solutions (such as cloud computing) in order to maximize the return on IT investments across the portfolio. It is also intended to assist agencies in meeting the targets and requirements under other OMB initiatives aimed at eliminating waste and duplication and promoting shared services, such as the Federal Data Center Consolidation Initiative, the Cloud Computing Initiative, and the IT Shared Services Strategy. PortfolioStat is structured around five phases: (1) baseline data gathering in which agencies are required to complete a high-level survey of their IT portfolio status and establish a commodity IT baseline; (2) analysis and proposed action plan in which agencies are to use the data gathered in phase 1 and other available agency data to develop a proposed action plan for consolidating commodity IT; (3) PortfolioStat session in which agencies are required to hold a face-to-face, evidence-based review of their IT portfolio with the Federal Chief Information Officer (CIO) and key stakeholders from the agency to discuss the agency’s portfolio data and proposed action plan, and agree on concrete next steps to rationalize the agency’s IT portfolio that would result in a final plan; (4) final action plan implementation, in which agencies are to, among other things, migrate at least two commodity IT investments; and (5) lessons learned, in which agencies are required to document lessons learned, successes, and challenges. Each of these phases is associated with more specific requirements and deadlines. OMB has reported that the PortfolioStat effort has the potential to save the government $2.5 billion through fiscal year 2015 by consolidating and eliminating duplicative systems. In its memo on implementing PortfolioStat, OMB established several key requirements for agencies: (1) designating a lead official with responsibility for implementing the process; (2) completing a high-level survey of their IT portfolio; (3) developing a baseline of the number, types, and costs of their commodity IT investments; (4) holding a face-to-face PortfolioStat session with key stakeholders to agree on actions to address duplication and inefficiencies in their commodity IT investments; (5) developing final action plans to document these actions; (6) migrating two commodity IT areas to shared services; and (7) documenting lessons learned. In addition, in guidance supporting the memo, agencies were asked to report estimated savings and cost avoidance associated with their consolidation and shared service initiatives through fiscal year 2015. All 26 agencies that were required to implement the PortfolioStat process took actions to address OMB’s requirements. However, there were shortcomings in their implementation of selected requirements, such as addressing all required elements of the final action plan and migrating two commodity areas to a shared service by the end of 2012. Table 1 summarizes the agencies’ implementation of the requirements in the memo, which are discussed in more detail below. In the memo for implementing the PortfolioStat initiative, OMB required each agency’s chief operating officer (COO) to designate and communicate within 10 days of the issuance of the memo an individual with direct reporting authority to the COO to lead the agency’s PortfolioStat implementation efforts. Consistent with a recent OMB memo requiring chief information officers (CIO) to take responsibility for commodity IT, 19 of the 26 agencies designated the CIO or chief technology officer to lead their PortfolioStat efforts. The remaining 7 agencies designated the Assistant Attorney General for Administration (Department of Justice), the deputy CIO (Department of Transportation), the Assistant Secretary for Management (Department of the Treasury), the Office of Information and Technology Chief Financial Officer (Department of Veterans Affairs), the Director, Office of Information Resources Management, Chief Human Capital Officer (National Science Foundation), the Senior Advisor to the Deputy Commissioner/Chief Operating Officer (Social Security Administration), and the Senior Deputy Assistant Administrator (U.S. Agency for International Development). As part of the baseline data-gathering phase, OMB required agencies to complete a high-level survey of the status of their IT portfolio. The survey asked agencies to provide information related to implementing OMB guidance, including information on the CIO’s explicit authority to review and approve the entire IT portfolio, the percentage of IT investments that are reflected in the agency’s EA (required in OMB Circular A-130), and the percentage of agency IT investments (major and non-major) that have gone through the TechStat process, both agency-led and OMB-led (required in OMB M-11-29). While all 26 agencies completed the survey, the survey responses highlighted that agencies varied in the maturity of their IT portfolio management practices. In particular, 6 agencies reported varying levels of CIO authority, 5 agencies reported that less than 100 percent of investments were reflected in the agency’s EA, and most agencies noted that less than 50 percent of their major and non-major investments had gone through the TechStat process. Following are highlights of their responses: CIO authority: Twenty of the 26 agencies stated that they either had a formal memorandum or policy in place explicitly noting the CIO’s authority to review and approve the entire agency IT portfolio or that the CIO collaborated with others (such as members of an investment review board) to exercise this authority.