OMB plays a key role in overseeing how federal agencies manage their investments by working with them to plan, justify, and determine how to best manage their IT projects. 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. Over the last two decades, Congress has enacted several laws to assist agencies and the federal government in managing IT investments. Three key laws are the Paperwork Reduction Act of 1995, the Clinger-Cohen Act of 1996, and the E-Government Act of 2002:  The Paperwork Reduction Act of 1995—The act specifies OMB and agency responsibilities for managing information resources, including the management of information technology. Among its provisions, this law establishes agency responsibility for maximizing the value and assessing and managing the risks of major information systems initiatives. It also requires that OMB develop and oversee policies, principles, standards, and guidelines for federal agency information technology functions, including periodic evaluations of major information systems.  The Clinger-Cohen Act of 1996—The act places responsibility for managing investments with the heads of agencies and establishes chief information officers (CIO) to advise and assist agency heads in carrying out this responsibility. Additionally, this law 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 result of these investments.  The E-Government Act of 2002—The act establishes a federal e- government initiative, which encourages the use of Web-based Internet applications to enhance the access to and delivery of government information and service to citizens, to business partners, to employees, and among agencies at all levels of government. The act also requires OMB to report annually to Congress on the status of e-government initiatives. In these reports, OMB is to describe the administration’s use of e-government principles to improve government performance and the delivery of information and services to the public. OMB subsequently began several initiatives to help fulfill these responsibilities: In February 2002, OMB established the Federal Enterprise Architecture (FEA) program. According to OMB, the FEA is intended to facilitate governmentwide improvement through cross-agency analysis and identification of duplicative investments, gaps, and opportunities for collaboration, interoperability, and integration within and across agency programs. The FEA is composed of five “reference models” describing the federal government’s (1) business (or mission) processes and functions, independent of the agencies that perform them; (2) performance goals and outcome measures; (3) means of service delivery; (4) information and data definitions; and (5) technology standards. The reference models are intended to inform agency efforts to develop their agency-specific enterprise architectures and enable agencies to ensure that their proposed investments are not duplicative with those of other agencies and to pursue, where appropriate, joint projects. In April 2003, OMB established the Office of E-Government to promote better use of the Internet and other information technologies to improve government services for citizens, internal government operations, and opportunities for citizen participation in government. In recent years, OMB e-government initiatives have fostered the establishment of centralized systems across the government. Key efforts target electronically filing annual tax returns, providing a one- stop portal for emergency response information, developing a governmentwide electronic travel system, and consolidating the number of payroll systems to a small number of providers. In March 2004, OMB established multiple “Line of Business” (LOB) initiatives to consolidate redundant IT investments and business processes across the federal government in areas including case management, grants management, human resources management, federal health architecture, information systems security, budget formulation and execution, geospatial information, financial management, and IT infrastructure. Each LOB initiative is led by an individual agency and supported by other relevant agencies. One of the initiatives’ goals is to reduce costs governmentwide through consolidation and standardization, and OMB reports to Congress each year on the costs and benefits of these initiatives. OMB officials explained that the current administration continues to support these LOB initiatives. OMB uses several data collection mechanisms to oversee federal IT spending during the annual budget formulation process. Specifically, OMB requires 26 key federal departments and agencies (agencies) to provide information related to their IT investments, including agency IT investment portfolios (called exhibit 53s) and capital asset plans and business cases (called exhibit 300s). The 26 federal agencies are listed in table 1 and the exhibits are described below.  Exhibit 53. The purpose of the exhibit 53 is to identify all IT investments—both major and nonmajor—and their associated costs 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 the 26 agencies.  Exhibit 300. The purpose of the exhibit 300s 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. To help carry out its oversight role and assist the agencies in carrying out their responsibilities as assigned by the Clinger-Cohen Act, OMB developed a Management Watch List in 2003. This list included mission- critical projects that needed improvements in performance measures, project management, IT security, or their overall justification. Further, in August 2005, OMB established a High-Risk List, which consisted of projects identified by federal agencies, with the assistance of OMB, as requiring special attention from oversight authorities and the highest levels of agency management. More recently, in June 2009, to further improve the transparency into and oversight of agencies’ IT investments, OMB publicly deployed a website, known as the IT Dashboard, which replaced its Management Watch List and High-Risk List. The Dashboard displays information on the cost, schedule, and performance of 828 major federal IT investments at 26 federal agencies. In addition, the Dashboard allows users to download exhibit 53 data, which includes 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 are intended to allow OMB, other oversight bodies, and the general public to hold the government agencies accountable for results and progress. According to OMB officials, the agency’s analysts use the IT Dashboard to identify IT investments that are experiencing performance problems and to select them for a TechStat session—a review of selected IT investments between OMB and agency leadership that is led by the Federal CIO. As of December 2010, OMB had held 58 of these sessions. Further, OMB officials told us that, in mid-2011, TechStat reviews began to occur at the agency level, and as of September 2011, each of the agencies that participated in the IT Dashboard held agency-level TechStat meetings. According to OMB, these sessions have enabled the government to improve or terminate IT investments that are experiencing performance problems. Over the last 5 years, we have issued several reports recommending improvements to the reliability of both the exhibit 300s and the IT Dashboard. In January 2006, we issued a report on the accuracy and reliability of agencies’ exhibit 300s. We found that underlying support for the information in the exhibit 300 was often inadequate. Specifically, we reported that the exhibit 300s had three types of weaknesses: (1) underlying documentation either did not exist or disagreed with the exhibit 300, (2) agencies did not always demonstrate that they complied with federal or departmental requirements or policies with regard to management and reporting processes, and (3) cost data were generally unreliable. We recommended that OMB direct agencies to identify and disclose weaknesses in data accuracy and reliability. We also recommended that OMB develop more explicit guidance for the exhibit 300s and provide training to agency personnel for completing exhibit 300s. In response, OMB issued guidance directing agencies to ensure that they are complying with OMB guidance on information quality, modified exhibit 300 guidance to make it more explicit in certain sections, and provided training to agencies on how to complete their exhibit 300s. More recently, we issued two reports on the IT Dashboard. In July 2010 we reported that the Dashboard had increased the transparency and oversight of federal IT investments; however, the cost and schedule ratings on the Dashboard were not always accurate for selected investments. Specifically, of the eight investments selected for review, we found that four had notable discrepancies on either their cost or schedule ratings. We noted that a primary reason for the data inaccuracies was that while the Dashboard was intended to represent near real-time performance information, the cost and schedule ratings did not take into consideration current performance. As a result, the ratings were based on outdated information. Another issue with the ratings was the wide variation in the number of milestones agencies reported, which was partly because OMB’s guidance to agencies was too general. We recommended that OMB report on its planned changes to the Dashboard to improve the accuracy of performance information and provide guidance to agencies that standardizes milestone reporting. OMB agreed with our recommendations and initiated work to address them. Subsequently, in March 2011, we reported that OMB had initiated several efforts to increase the Dashboard’s value as an oversight tool, and had used the Dashboard’s data to improve federal IT management. These efforts include streamlining key OMB investment reporting tools, eliminating manual monthly submissions, coordinating with agencies to improve data, and improving the Dashboard’s user interface.