Accountability

Agencies promise better investment oversight

GAO Seal

Officials from several agencies —including the Office of Management and Budget—have assured the Government Accountability Office they will do a better job of analyzing their legacy IT systems. GAO on Nov. 15 released a report on agencies’ handling of IT investments, which included the agency responses promising change.

The Veterans Affairs Department, for example, “understands and acknowledges the need for appropriate officials to develop an operational analyses (OA) policy, annually perform OAs on all investments, and ensure the assessments include all key factors required by the Office of Management and Budget,” VA chief of staff John R. Gingrich wrote in a Sept. 13 letter to GAO.

Gingrich’s comment was echoed by other departments that responded to the GAO report. Treasury, Defense and OMB said they would redouble their efforts to develop OA guidance. VA and Treasury plan to complete their OA guidance in early 2013, and DOD said it would work with OMB on its guidance. Homeland Security Department officials are circulating draft guidance already.

Federal agencies spent $54 billion on operating and maintaining existing legacy IT systems in Fiscal 2011, the report states – nearly 70 percent of the $79 billion budgeted for IT. OMB requires annual checks on the performance of these steady-state investments through OAs. But GAO found many agencies failing to do them. Overall, five departments—Defense, Homeland Security, Health and Human Services, Treasury, and the VA -- have budgeted more than $3 billion in fiscal 2011 on steady-state investments that have not undergone the necessary analyses.

For instance, DOD, Treasury, and the VA did not have a policy or perform analyses on their 23 major steady-state investments with annual budgets totaling $2.1 billion.

“Until agencies address these shortcomings, there is increased risk that these agencies will not know whether the multibillion dollar investments fully meet their intended objectives,” GAO wrote.

In an interview, David Powner, director of information technology management issues at GAO, said OAs are essential because they ensure agencies get a return on the $54 billion they invest in maintaining their systems.

Agencies “want to move that money out of operations and into development. If we could be more efficient on money spent in operations, we could move more of it into modernizing,” he said. However, “we spend a lot keeping old systems up and running.”

Defense and VA officials said in their letters to the GAO that OAs are not always necessary, because the departments develop plans and business cases, called exhibit 300s, as part of their annual budget processes. But GAO said exhibit 300s do not cover all the aspects of determining how a steady state investment is performing. Relying on exhibits alone, agencies would not consider different approaches to achieving the same mission through better use of technology. Nor would agencies study why problems occurred or make recommendations to modify, or even end, an investment. Of the 23 aspects of OAs, exhibit 300s would only cover 17 of them.

Staff from OMB’s Office of E-Government and Information Technology agreed too with GAO to revise existing guidance to direct agencies to report on the IT Dashboard the results from the OAs of their steady state investments. Officials have begun work on it. Furthermore, OMB said fiscal 2014 budget guidance directs agencies to include OAs as part of the exhibit 300 submissions to OMB.

In a separate report, GAO criticized DOD for inadequate transparency on high-risk IT investments.

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