The President’s fiscal year 2014 budget request included plans for the federal government to spend over $82 billion on IT. The stated goal of the President’s IT budget request is to support making federal agencies more efficient and effective for the American people; it also states that the strategic use of IT is critical to success in achieving this goal. Of the $82 billion budgeted for IT, the budget provides that 26 key agencies plan to spend the bulk of it, approximately $76 billion. Further, of the $76 billion, over $59 billion is to be spent on O&M investments with the remainder ($17 billion) being budgeted for development of new capabilities. As shown in figure 1, the $59 billion represents a significant majority (i.e., 77 percent) of total budgeted spending for these agencies ($76 billion). Although O&M spending by these agencies is about 77 percent of total IT spending, the amount spent by each agency varies from a high of 98 percent to a low of 46 percent (as shown in the following table). Development spending, which is intended for the inclusion of new capabilities, accounts for approximately 23 percent of the total amount to be spent on IT in fiscal year 2014 by these agencies. However, the investments in development vary greatly, from 54 percent by the Department of Transportation to a low of 2 percent by the National Aeronautics and Space Administration. Further, in addition to including amounts to be spent on IT development and O&M, the budget also further specifies how the total $76 billion budgeted for IT is to be spent on agency IT investments by the following three categories: those solely under development ($6 billion), those involving activities and systems that are in both development and O&M—known as mixed life cycle ($40 billion), and those existing operational systems—commonly referred to by OMB as steady state investments—that are solely in O&M ($30 billion). To assist agencies in managing their investments, Congress enacted the Clinger-Cohen Act of 1996, which requires OMB to establish processes to analyze, track, and evaluate the risks and results of major capital investments in information systems made by federal agencies and report to Congress on the net program performance benefits achieved as a Further, the act places responsibility for result of these investments.managing investments with the heads of agencies and establishes chief information officers to advise and assist agency heads in carrying out this responsibility. In carrying out its responsibilities, OMB uses several data collection mechanisms to oversee federal IT spending during the annual budget formulation process. Specifically, OMB requires federal departments and agencies to provide information to it related to their IT investments (called exhibit 53s) and capital asset plans and business cases (called exhibit 300s). Exhibit 53. The purpose of the exhibit 53 is to identify all IT investments—both major and nonmajor within a federal organization. Information included on agency exhibit 53s is designed, in part, to help OMB better understand what agencies are spending on IT investments. The information also supports cost analyses prescribed by the Clinger-Cohen Act. As part of the annual budget, OMB publishes a report on IT spending for the federal government representing a compilation of exhibit 53 data submitted by agencies. According to OMB guidance, a major IT investment requires special management attention because of its importance to the mission or function to the government; significant program or policy implications; high executive visibility; high development, operating, or maintenance costs; unusual funding mechanism; or definition as major by the agency’s capital planning and investment control process. Exhibit 300. The purpose of the exhibit 300 is to provide a business case for each major IT investment and to allow OMB to monitor IT investments once they are funded. Agencies are required to provide information on each major investment’s cost, schedule, and performance. In addition, in June 2009, to further improve the transparency into and oversight of agencies’ IT investments, OMB publicly deployed a website, known as the Federal IT Dashboard (Dashboard), which replaced its Management Watch List and High-Risk List. As part of this effort, OMB issued guidance directing federal agencies to report, via the Dashboard, the performance of their IT investments. Currently, the Dashboard publicly displays information on the cost, schedule, and performance of major federal IT investments at key federal agencies. In addition, the Dashboard allows users to download exhibit 53 data, which include information on both major and nonmajor investments. According to OMB, these data are intended to provide a near real-time perspective of the performance of these investments, as well as a historical perspective. Further, the public display of these data is intended to allow OMB, other oversight bodies, and the general public to hold the government agencies accountable for results and progress. Since the Dashboard has been implemented, we have reported and made recommendations to improve the data accuracy and reliability. In 2010, 2011, and 2012, we reported on the progress of the Dashboard and made recommendations to further improve how it rates investments relative to current performance. OMB concurred with our recommendations and has actions planned and underway to address them. Further, OMB has developed guidance that calls for agencies to develop an OA policy for examining the ongoing performance of existing legacy IT investments to measure, among other things, that the investment is continuing to meet business and customer needs and is contributing to meeting the agency’s strategic goals.provide for an annual OA of each investment that addresses the following: cost, schedule, customer satisfaction, strategic and business results, financial goals, and innovation. To address these areas, the guidance specifies the following 17 key factors that are to be addressed: This guidance calls for the policy to assessment of current costs against life-cycle costs; a structured schedule assessment (i.e., measuring the performance of the investment against its established schedule); a structured assessment of performance goals (i.e., measuring the performance of the investment against established goals); identification of whether the investment supports customer processes as designed and is delivering goods and services it was designed to deliver; a measure of the effect the investment has on the performing a measure of how well the investment contributes to achieving the organization’s business needs and strategic goals; a comparison of current performance with a pre-established cost areas for innovation in the areas of customer satisfaction, strategic and business results, and financial performance; indication if the agency revisited alternative methods for achieving the same mission needs and strategic goals; consideration of issues, such as greater utilization of technology or consolidation of investments to better meet organizational goals; an ongoing review of the status of the risks identified in the investment’s planning and acquisition phases; identification of whether there is a need to redesign, modify, or terminate the investment; an analysis on the need for improved methodology (i.e., better ways for the investment to meet cost and performance goals); lessons learned; cost or schedule variances; recommendations to redesign or modify an asset in advance of potential problems; and overlap with other investments. With regard to overseeing the agencies’ development of policies and annual performance, OMB officials responsible for governmentwide OA policy stated that they expect agencies to perform all the steps specified in the guidance and to be prepared to show documentation as evidence of compliance with the guidance. In October 2012 we reported on five agencies’ use of OAs (during fiscal year 2011) and how they varied significantly. Specifically, of the five agencies, we found that three—namely, DOD, Treasury, and VA—did not perform analyses on their 23 major steady state investments with annual budgets totaling $2.1 billion. The other two agencies—DHS and HHS— performed analyses but did not do so for all investments. For example, DHS analyzed 16 of its 44 steady state investments, meaning 28 investments with annual budgets totaling $1 billion were not analyzed; HHS analyzed 7 of its 8 steady state investments, thus omitting a single investment totaling $77 million from being assessed. We also found that of those OAs performed by these two agencies, none fully addressed all the key factors. Specifically, our analysis showed that only about half of the key factors were addressed in these assessments. Consequently, we recommended, among other things, that the agencies conduct annual OAs and in doing, ensure they are performed for all investments and that all factors are fully assessed. To ensure this is done and to provide transparency into the results of these analyses, we also recommended that OMB revise its guidance to include directing agencies to post the results on the Dashboard. OMB and the five agencies agreed with our recommendations and have efforts planned and underway to address them. In particular, OMB issued guidance (dated August 2012) to the agencies directing them to report OA results along with their fiscal year 2014 budget submission documentation (e.g., exhibit 300) to OMB. According to OMB officials, they are currently establishing a process on how agencies are to provide the information to OMB which they plan to have in place over the next 6 months. As part of this, OMB is defining a process for what they plan to do with the information once they receive it. The 10 federal IT O&M investments with the largest budgets, identified during our review, support agencies in a variety of ways such as providing worldwide telecommunications infrastructure and information transport for DOD operations; enabling HHS to conduct research, award grants, and disseminate biomedical research and health information to the public and National Institutes of Health stakeholders; and providing SSA the capability to maintain demographic, wage, and benefit information on all American citizens. Including ensuring the availability, changeability, stability, and security of SSA’s IT operations for the entire agency. These investments are operated by eight agencies, such as the Department of Energy (DOE), the National Aeronautics and Space Administration (NASA), and Social Security Administration (SSA).