USDA Telecommunications: Better Management and Network Planning Could
Save Millions (Chapter Report, 09/22/95, GAO/AIMD-95-203).

Pursuant to a congressional request, GAO reviewed the Department of
Agriculture's (USDA) management and planning of its telecommunications
resources, focusing on whether USDA is: (1) managing its
telecommunications resources cost-effectively; and (2) planning
telecommunications networks to support its information sharing needs.

GAO found that: (1) USDA is not cost-effectively managing its annual
$100 million telecommunications investment; (2) USDA agencies waste
millions of dollars each year paying for unnecessary telecommunications
services and equipment, because the Office of Information Resources
Management (OIRM) has not fulfilled its responsibility to manage and
oversee USDA telecommunications resources; (3) USDA is not effectively
planning its telecommunications networks and ensuring that they can
support its information sharing needs for the future; and (4) OIRM
continues to approve the acquisition and development of costly new
agency networks that overlap and do not support interagency information
sharing.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-95-203
     TITLE:  USDA Telecommunications: Better Management and Network 
             Planning Could Save Millions
      DATE:  09/22/95
   SUBJECT:  Telecommunications operations
             Federal procurement
             Cost effectiveness analysis
             Cost control
             Communications equipment
             Information resources management
             Strategic information systems planning
             Financial management
             Agricultural programs
             Computer networks
IDENTIFIER:  FTS 2000
             Federal Telecommunications System 2000
             
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Cover
================================================================ COVER


Report to Congressional Requesters

September 1995

USDA TELECOMMUNICATIONS - BETTER
MANAGEMENT AND NETWORK PLANNING
COULD SAVE MILLIONS

GAO/AIMD-95-203

USDA Telecommunications

(511375)


Abbreviations
=============================================================== ABBREV

  ALO - Agency Liaison Officer
  APHIS - Animal and Plant Health Inspection Service
  CFSA - Consolidated Farm Service Agencies
  DAR - Designated Agency Representative
  DOD - Department of Defense
  FTS - Federal Telecommunications System
  GSA - General Services Administration
  LAN - local area network
  IRM - information resources management
  LATA - Local Access and Transport Area
  NFC - National Finance Center
  NRCS - Natural Resources and Conservation Service
  OIRM - Office of Information Resources Management
  PRSD - Program Review and Standards Division
  RECD - Rural Economic and Community Development
  RHCDS - Rural Housing and Community Development Service
  SDP - Service Delivery Point
  TSD - Telecommunications Services Division
  USDA - U.S.  Department of Agriculture

Letter
=============================================================== LETTER


B-260600

September 22, 1995

The Honorable Richard G.  Lugar
Chairman, Committee on Agriculture,
  Nutrition, and Forestry
United States Senate

The Honorable Carolyn B.  Maloney
Ranking Minority Member
Subcommittee on Government Management,
  Information and Technology
Committee on Government Reform and Oversight
House of Representatives

As requested, we are reporting to you the results of our review of
the Department of Agriculture's (USDA) management and planning of
telecommunications.  As agreed, we focused on reviewing whether USDA
was managing its telecommunications resources cost-effectively and
whether the Department was planning telecommunications networks to
support its information sharing needs. 

As arranged with your offices, unless you publicly announce the
contents of this report earlier, we plan no further distribution
until 30 days from the date of this letter.  At that time, we will
provide copies of this report to the relevant Chairman and Ranking
Minority Member of your Committees, the Secretary of Agriculture, the
Director of the Office of Management and Budget, the Administrator of
the General Services Administration, and other interested
congressional committees.  Copies will also be made available to
others upon request. 

Please call me at (202) 512-6253 if you or your staff have any
questions concerning the report.  Other major contributors are listed
in appendix II. 

Joel C.  Willemssen
Director, Information Resources
 Management/Resources, Community,
 and Economic Development


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

The U.S.  Department of Agriculture (USDA) relies on
telecommunications systems and services to help it administer federal
programs and serve millions of constituents.  From telephone calls to
video conference meetings to providing nationwide customer access to
information, USDA uses a wide array of telecommunications technology. 
To ensure this technology is used in the most efficient and effective
manner, USDA must manage all its telecommunications resources
prudently and plan future networks that meet the Department's
missions. 

At the request of the Chairman, Senate Committee on Agriculture,
Nutrition, and Forestry and the Ranking Minority Member, Subcommittee
on Government Management, Information and Technology, House Committee
on Government Reform and Oversight, GAO reviewed the effectiveness of
USDA's management and planning of telecommunications.  Specifically,
GAO evaluated whether USDA is (1) managing telecommunications
resources cost-effectively and consolidating services to maximize
savings and (2) effectively planning communications networks to meet
its information sharing needs. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

Assisting farmers, ensuring food safety, conserving natural
resources, and improving nutrition are but a few of the many services
that USDA provides through its many component agencies and network of
thousands of field offices.  To provide services more efficiently and
effectively, in 1994, USDA began a major reorganization, reducing the
number of component agencies from 43 to 29 and initiating plans to
eliminate about 1,200 field offices over the next 3 years.  The
Department reported budget outlays of about $61 billion in fiscal
year 1994, according to the President's fiscal year 1996 budget
request. 

Telecommunications--the electronic transmission of information of any
type, including voice, data, and video--are vital in any organization
and USDA is no exception.  Today, the Department's component agencies
acquire and use over $100 million in telecommunications equipment and
services annually.  Voice and data communications, provided by the
federal government's FTS 2000 program and hundreds of commercial
carrier networks, help the Department's agencies carry out USDA's
broad missions and provide service to millions of customers. 
Although these agencies individually provide day-to-day management of
the telecommunications resources they acquire and use, USDA's Office
of Information Resources Management (OIRM) has overall responsibility
for ensuring that all the Department's telecommunications resources
are managed and planned cost-effectively. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

USDA is not cost-effectively managing its annual $100 million
telecommunications investment.  USDA agencies waste millions of
dollars each year paying for (1) unnecessary telecommunications
services, (2) leased equipment that is not used and services billed
but never provided, and (3) commercial carrier services that cost
more than three times what they would under the FTS 2000 program. 
These problems exist because OIRM has not fulfilled its
responsibility to manage and oversee USDA telecommunications and
ensure that resources are properly used, costs are effectively
controlled, and federal requirements are fully met. 

USDA is also not cost-effectively planning its telecommunications
networks and ensuring that they can support the Department's
information sharing needs for the 21st century.  Instead, OIRM
continues to approve the acquisition and development of costly new
agency networks that overlap and do not support interagency sharing. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      USDA IS NOT EFFECTIVELY
      MANAGING TELECOMMUNICATIONS
      RESOURCES
-------------------------------------------------------- Chapter 0:4.1

OIRM has not met its responsibility to provide USDA agencies with the
necessary guidance and oversight they need to ensure that
telecommunications resources are acquired and managed
cost-effectively.  Moreover, OIRM does not provide sufficient
oversight of telecommunications resources by conducting agency
information resources management (IRM) reviews to ensure that
agencies (1) comply with governmentwide and departmental policies and
regulations, (2) acquire and use resources efficiently and
effectively, and (3) have adequate management controls. 

In the absence of sufficient guidance and oversight, many USDA
component agencies have not instituted sound management practices
necessary for effectively managing the telecommunications resources
they control.  For example, USDA and its agencies lack basic
information describing what telecommunications equipment and services
USDA uses and what it pays for these resources because OIRM has not
developed a departmentwide inventory of telecommunications resources
and has not required agencies to conduct annual surveys to collect
such information. 

USDA agencies also have not established effective management controls
over the acquisition and use of telecommunications resources.  In
this regard, USDA agencies have wasted millions by failing to acquire
FTS 2000 and commercial telephone services cost-effectively, verify
whether telecommunications charges are accurate and appropriate, and
ensure that government-provided resources and services are used
properly.  For example, USDA has hundreds of field offices where
multiple USDA agencies, located in the same building or geographic
area, acquire separate and often redundant telecommunications
services.  In an April 1995 report, GAO noted a similar problem where
USDA was wasting between $5 million to $10 million each year using
redundant FTS 2000 services.\1 According to USDA officials, the
Department is likely wasting as much as three times this amount every
year by not consolidating its redundant commercial services. 

In addition, USDA wastes thousands of dollars each month paying to
lease telephone equipment it does not use.  For example, according to
an April 1995 bill from just one of the over 1,500 commercial
telephone vendors USDA pays each month, the Department wastes as much
as $11,000 each month paying to lease telecommunications equipment,
including hundreds of rotary telephones and modems that agency staff
do not use.  In this one case, GAO noted that USDA has possibly
wasted as much as $1 million paying to lease this unused equipment
since 1987.  Moreover, agencies that continue to pay for this
equipment were often unable to identify or locate it.  For example,
one agency could not find 16 modems, despite having continued to pay
$854.72 each month since 1987 to lease this equipment. 

In another case, agency officials failed to discontinue telephone
service provided by a vendor when an agency office closed in March
1994.  Consequently, USDA wasted more than $6,000 since then by
paying monthly fees to the vendor for telephone service provided to
an unoccupied building.  In addition, because agencies do not always
comply with the government's mandatory use policy requiring use of
FTS 2000-provided services for long-distance telephone calls,
agencies continue to pay more than three times what they should pay
for these calls.  For example, from April 1994 through March 1995,
one agency wasted thousands of dollars using a commercial vendor's
facsimile service instead of FTS 2000. 

USDA has initiatives underway that OIRM officials believe will
improve the Department's management of telecommunications resources,
including efforts to begin consolidating FTS 2000 services.  However,
these actions alone do not effectively address the inadequate
telecommunications management practices that exist across the
Department. 


--------------------
\1 USDA Telecommunications:  Missed Opportunities To Save Millions
(GAO/AIMD-95-97, Apr.  24, 1995). 


      USDA'S TELECOMMUNICATIONS
      NETWORKS ARE NOT PLANNED TO
      MEET SHARING NEEDS
-------------------------------------------------------- Chapter 0:4.2

USDA has hundreds of stovepipe networks and systems, built by its
agencies over time, that hinder departmentwide information sharing. 
Although the Department has a pressing need to overcome this problem,
its agencies are spending hundreds of millions of dollars continuing
to develop their own networks that overlap and perpetuate
long-standing information sharing problems.  For example, even though
the Forest Service, the farm service agencies, and the Animal and
Plant Health Inspection Service need to work collaboratively on
cross-cutting issues, such as water quality, these agencies are
spending hundreds of millions of dollars developing their own wide
area networks that are not designed for interagency information
sharing.  Also, because some new agency networks connect many of the
same locations, USDA risks wasting money on the purchase of redundant
communications networks and services. 

These problems exist at USDA because OIRM has not fulfilled its
responsibility to adequately plan departmentwide telecommunications
in support of USDA's information sharing goals.  For example,
although OIRM developed the Department's first strategic
telecommunications plan in 1993, calling for the creation of a
departmentwide integrated telecommunications network, the plan does
not define the Department's information sharing needs and a strategy
for addressing these needs.  In addition, OIRM continues to approve
the development of individual agency networks without addressing
information sharing requirements across agencies or identifying
possible redundancies that may exist between networks. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5

GAO is making several recommendations to the Secretary of Agriculture
to improve the management and planning of telecommunications at USDA. 
Chapter 4 provides details on these recommendations. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

In providing written comments on a draft of this report, USDA's
Assistant Secretary for Administration agreed with many of GAO's
recommendations, noting that the draft report contained excellent
recommendations that were well-received.  However, the Assistant
Secretary stated that USDA disagreed with two of the recommendations. 
USDA's comments as well as GAO's evaluation are discussed in chapter
4 and reprinted in appendix I. 


INTRODUCTION
============================================================ Chapter 1

USDA affects the lives of all Americans and millions of people around
the world.  Created 133 years ago to conduct research and disseminate
information, USDA's role has been expanded to include, among other
things, providing billions of dollars annually to support farm
incomes; developing agricultural markets abroad to boost domestic
farm production and exports; ensuring a safe food supply; managing
and conserving the nation's forests, water, and farmland; and
providing education and supplemental resources to the needy to
improve diet and nutrition.  USDA's challenge is to meet its
responsibilities as it also adapts to a rapidly changing global
marketplace. 

During 1994, USDA delivered services through 43 agencies and a
network of more than 14,000 field offices.  Pursuant to Public Law
103-354, the Secretary of Agriculture reorganized the Department by
reducing the number of component agencies from 43 to 29.  The
Secretary has also announced plans to reduce the number of county
field offices by about 1,200 over the next 3 years.  To carry out its
missions, the Department and its component agencies reported budget
outlays of about $61 billion in fiscal year 1994, according to the
President's fiscal year 1996 budget request. 


   TELECOMMUNICATIONS:  A VITAL
   BUT COSTLY RESOURCE
---------------------------------------------------------- Chapter 1:1

Like other federal agencies, USDA's agencies rely on
telecommunications networks\1 and systems to accomplish missions and
serve customers.  The Department and its agencies deliver USDA
services through thousands of field offices in states, cities, and
counties.  These offices acquire and use various types of
telecommunications services and equipment to meet mission needs. 

Because telecommunications plays a vital role at USDA, it is
imperative for the Department to plan and manage all its
telecommunications resources effectively and prudently.  According to
the Department's January 1993 Information Resources Management (IRM)
Strategic Plan, telecommunications systems that provide quick and
reliable voice and data communication throughout the Department are
critical to USDA's success in carrying out its many missions and
necessary for building a network infrastructure capable of sharing
information whenever and wherever it is needed.  The effective and
prudent use of telecommunications technology is also critical to the
success of USDA's efforts to streamline and consolidate its field
office structure and reduce operational costs. 

USDA reports show that it spends about $100 million annually for
telecommunications.  This includes about $37 million for FTS 2000
services in fiscal year 1994.  USDA is required to use FTS 2000
network services for basic long-distance communications (i.e., the
inter-Local Access and Transport Area (LATA) transport of voice and
data communications traffic).\2 Under the federal government's FTS
2000 contract, USDA agencies and offices use basic switched service
for voice, packet switched service for data, video transmission
service, and other types of services to support their communications
needs. 

In addition to FTS 2000, USDA estimates that during fiscal year 1994
it spent another $50 million on local telecommunications and other
services obtained from about 1,500 telephone companies.  USDA
agencies and offices use these services to meet their local telephone
and data communications needs within LATAs.  Other telecommunications
services obtained from commercial carriers that are not available
under the FTS 2000 contract, such as satellite communications, are
also included in these costs.  USDA also estimates that between $10
million and $30 million is spent annually on telecommunications
equipment, such as electronic switches and telephone plant wiring,
and support services, such as maintenance for acquired
telecommunications equipment. 

The Federal Information Resources Management Regulation and USDA's
Telecommunications Policy (DR-3300-1) require that USDA's agencies
maximize use of all government telecommunications resources to
achieve optimum service at the lowest possible cost.  In addition,
Section 215 of the Department of Agriculture Reorganization Act of
1994,\3 requires USDA to reduce expenses by jointly using resources
at field offices where two or more agencies reside.  This includes
sharing telecommunications services and equipment.  Also, section 216
of this act requires that whenever USDA procures or uses information
technology it should do so in a manner that promotes computer
information sharing among its agencies. 


--------------------
\1 Telecommunications is the electronic transmission of information
of any type, such as data, television pictures, sound, and facsimile. 
A telecommunications network is a group of interconnected
communications facilities and devices used to transmit information. 

\2 At the divestiture of the Bell System in 1984, geographically
defined LATAs were established to separate local exchange carrier
business from long-distance or interexchange carrier business. 

\3 The Federal Crop Insurance Reform and Department of Agriculture
Reorganization Act of 1994, Public Law 103-354, Title II, 108 Stat. 
3209 (1994). 


   OIRM IS RESPONSIBLE FOR
   ENSURING USDA'S
   TELECOMMUNICATIONS ARE MANAGED
   AND PLANNED COST-EFFECTIVELY
---------------------------------------------------------- Chapter 1:2

The senior USDA IRM official--the Assistant Secretary for
Administration--has delegated responsibility for managing all aspects
of the Department's telecommunications program to the OIRM Director. 
According to federal regulations, this responsibility includes the
following to ensure that telecommunications resources are maximized
at the lowest possible cost: 

  develop departmental telecommunications guidelines and regulations
     necessary to implement approved principles, policies, and
     objectives,

  review and evaluate telecommunications activities for conformance
     with all applicable federal and USDA telecommunications
     policies, plans, procedures, and guidelines,

  develop and implement a telecommunications planning system that
     integrates short- and long-term objectives and coordinates
     agency and staff office initiatives in support of these
     objectives, and

  monitor agencies' network systems acquisition and development
     efforts to ensure effective and economic use of resources and
     compatibility among systems of various agencies.\4

At USDA, component agencies manage the acquisition and use of
telecommunications services and equipment on a day-to-day basis. 
Because of this, OIRM is principally responsible for providing
departmentwide telecommunications policy and direction and monitoring
the agencies' activities to ensure their compliance.  For example, in
December 1993, OIRM's Telecommunications Policy Division consolidated
all existing telecommunications policy into a comprehensive
directive--Departmental Directive 3300-1--which is USDA's current
policy in this area.  Also, in September 1993, OIRM and the Office of
Assistant Secretary for Administration developed USDA's first
departmentwide Strategic Telecommunications Plan.  According to USDA
policy, this Plan shall serve as guidance to the agencies for
developing their respective agency telecommunications plans. 

With respect to monitoring telecommunications, USDA established a IRM
Review Program, as required by federal law,\5 to periodically review
component agencies' information and telecommunications management
activities.  According to the Federal Information Resources
Management Regulation, such a program is intended to, among other
things, (1) ensure agencies comply with governmentwide and
departmentwide telecommunications policies, regulations, rules,
standards, and guidelines, (2) ensure agencies efficiently acquire
and effectively use resources, and (3) determine whether agencies'
controls over and reviews of their telecommunications resources
provide effective management oversight.  To do this, USDA policy
requires OIRM to conduct periodic reviews at each of USDA's agencies. 

In addition, OIRM established its Agency Liaison Officer (ALO)
Program in late 1992 to, among other things, strengthen coordination
of the agencies' telecommunications projects and planning to ensure
that there are not unnecessary barriers to information exchange.  In
doing so, OIRM obtained additional staff and made them responsible
for (1) analyzing IRM programs to ensure that they are consistent
with Department goals and objectives and (2) maintaining an
understanding of an agency's plans for information and
telecommunications technology investments to ensure there is adequate
departmentwide coordination.  Moreover, under its technical approval
authority,\6 OIRM reviews and approves component agency requests for
procurements of telecommunications resources. 


--------------------
\4 7 CFR Sec.  2.81 (1995). 

\5 See 44 U.S.C.  Sections 3501-3520 (the Paperwork Reduction Act of
1980, as amended). 

\6 U.S.  Department of Agriculture, Acquisition of IRM Resources (DR
3130-1), Apr.  2, 1991. 


   TELECOMMUNICATIONS MANAGEMENT
   PRACTICES DIFFER AMONG USDA
   AGENCIES
---------------------------------------------------------- Chapter 1:3

Telecommunications management practices vary widely across USDA
agencies because the agencies independently plan, acquire, operate,
and manage telecommunications resources--equipment and services--in
accordance with their own organizational and mission needs.  In this
regard, commercial telecommunications services that USDA agencies
obtain from over 1,500 vendors across the nation are acquired and
managed locally, regionally, or centrally depending on the agency. 
For example, the Consolidated Farm Service Agency (CFSA) has nearly
3,000 county offices that individually acquire commercial
telecommunications services from private vendors.  This contrasts
with the Forest Service, whose 9 regional offices acquire commercial
telecommunications services for about 725 local offices, and the
Agriculture Marketing Service, whose headquarters office acquires
commercial telecommunications services centrally for its field
offices. 

With some exceptions, bills for commercial telephone calls, leased
equipment, and other services for USDA's component agencies are paid
centrally by USDA's National Finance Center (NFC) in New Orleans,
Louisiana.  NFC is reimbursed for these costs by the agencies after
the bills are paid. 

USDA's component agencies also manage FTS 2000 services differently. 
For example, some agencies, such as CFSA, have a few Designated
Agency Representatives (DARs) responsible for centrally acquiring FTS
2000 services for the entire agency.  However, others, such as the
Forest Service and the Rural Economic and Community Development
(RECD) agency, have numerous DARs that order FTS 2000 services for
offices in specific geographical areas.  Bills for all FTS 2000
services acquired and used by USDA's component agencies are paid
directly to the General Services Administration. 

Just as USDA component agencies acquire and manage telecommunications
resources differently, they also plan and develop telecommunications
networks separately in support of their agency-specific missions. 
These networks include telecommunications systems that support local
office communications, regional communications between agency
offices, and nationwide networks. 


   INFORMATION SHARING:  A
   LONG-STANDING PROBLEM AT USDA
---------------------------------------------------------- Chapter 1:4

Historically, USDA agencies have had difficulty sharing information
electronically because they independently acquired information
technology and networks that were not intended to address the
organizational sharing needs of the Department.  As far back as
October 1989, we reported that while many USDA agencies shared
responsibility for policy issues, such as food safety or water
quality, they often were incapable of sharing information
electronically due to their stovepipe systems.\7 Because of this, we
noted that USDA managers had difficulty carrying out programs to
effectively address issues that cut across traditional agency
boundaries.  For example, nine separate USDA agencies shared
responsibility for water quality.  However, agencies could not easily
share information across the separate network systems these agencies
had installed.  Therefore, USDA's water quality programs suffered
because critically important information, necessary to effectively
carry out these programs, often remained inaccessible outside an
agency and was under utilized throughout the Department. 

In late 1993, USDA surveyed its employees and received over 8,000
suggestions for operating more efficiently.  Many respondents said
the information sharing problems adversely affected program delivery
and was a significant problem for the Department.  Specifically, many
respondents reported that USDA's information systems and networks
have too often developed along program and agency lines, causing
information "islands" to develop across the Department. 


--------------------
\7 U.S.  Department of Agriculture:  Interim Report on Ways to
Enhance Management (GAO/RCED-90-19, Oct.  26, 1989). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:5

At the request of the Chairman, Senate Committee on Agriculture,
Nutrition, and Forestry and the Ranking Minority Member, Subcommittee
on Government Management, Information and Technology, House Committee
on Government Reform and Oversight, we reviewed the effectiveness of
USDA's management and planning of telecommunications.  Our objectives
were to determine whether USDA is (1) managing existing
telecommunications resources cost-effectively and consolidating
services to maximize savings and (2) effectively planning future
communications networks to meet the Department's information sharing
needs. 

To determine whether USDA is cost-effectively managing
telecommunications resources, we reviewed federal laws, regulations,
and guidance as well as USDA policies and guidance for establishing
telecommunications management controls.  We interviewed OIRM
management, agency managers, and field personnel to discuss USDA's
telecommunications policy and guidance.  We also discussed OIRM's IRM
review program, the ALO Program, and the technical approval process
to obtain USDA officials views on the effectiveness of these
programs.  We evaluated reports documenting IRM reviews completed by
OIRM since 1990 and assessed the completeness and effectiveness of
these reviews. 

In addition, we interviewed senior-level representatives from 10 USDA
agencies that account for about 70 percent of USDA's
telecommunications costs to identify management practices they
adopted for telecommunications.  Specifically, we discussed their
management controls for establishing telecommunications inventories,
monitoring acquisitions, and reviewing and verifying bills.  We
reviewed users' internal policies and guidelines to determine the
type and extent of management controls that these agencies have
instituted over the use of telecommunications resources. 

We visited three locations where USDA installed consolidated
telecommunications systems, obtained their telephone bills from NFC,
and reviewed them to assess whether telecommunications resources were
managed cost-effectively.  We conducted our review of telephone bills
for USDA agencies at these locations because we had observed
telecommunications activities at each of these sites.  We also
discussed the bill payment process with officials from NFC and
obtained additional information from commercial vendors on these
bills.  In particular, when reviewing bills, we determined whether
agencies (1) used FTS 2000 services as required by GSA to make
long-distance calls and for other available services and (2) obtained
the most cost-effective services available.  In addition, we obtained
and reviewed telephone bills for USDA's Rural Development Agency
regional offices that closed during the past year to determine
whether telephone services had been properly disconnected at these
sites. 

To determine whether USDA is planning its future communications
networks to effectively support its information sharing needs, we
reviewed agency plans to develop new network systems and discussed
these planned systems with agency management and OIRM officials.  We
also reviewed USDA's strategic telecommunications plan to assess
whether it provides guidance to the agencies on what departmentwide
information sharing needs must be met and how to go about doing this. 
To evaluate the effectiveness of USDA's strategic plan in defining
the Department's telecommunications requirements, we interviewed
agency IRM and program officials and reviewed OIRM files and other
supporting documentation.  In addition, we visited field offices
engaged in ongoing network development projects to assess project
planning and management and determine the effectiveness of project
results. 

We also interviewed OIRM officials responsible for oversight of
agencies' telecommunications plans and acquisitions to ascertain how
these officials review agencies' plans to ensure that they, along
with the subsequent acquisitions, meet departmentwide goals and
objectives.  In addition, we reviewed OIRM documentation of its
oversight activities to determine to what extent agencies'
telecommunications projects are coordinated across the department. 

We performed our audit work from March 1994 through July 1995, in
accordance with generally accepted government auditing standards. 
Our work was primarily done at USDA headquarters in Washington, D.C.;
USDA's NFC in New Orleans, Louisiana; and USDA's Telecommunications
Services Division in Fort Collins, Colorado.  We also visited
component agency offices where telecommunications and network
planning activities are administered.  They included state offices of
USDA farm service agencies in Lexington, Kentucky; Richmond,
Virginia; and Columbia, Missouri; district and county offices of USDA
farm service agencies in Mount Sterling, Kentucky and Pendleton,
Oregon.  In addition, we visited Forest Service headquarters in
Arlington, Virginia; the Service's Northwestern Region in Portland,
Oregon; and the Service's National Forest offices in Corvallis and
Pendleton, Oregon; Food and Consumer Service headquarters in
Alexandria, Virginia; Agricultural Research Service, Greenbelt,
Maryland; APHIS headquarters in Hyattsville, Maryland, and regional
office in Fort Collins, Colorado; Consolidated Farm Service Agencies'
office in Kansas City and Rural Economic and Community Development
office in St.  Louis, Missouri. 

We requested written comments on a draft of this report from the
Secretary of Agriculture.  In response, we received written comments
from the Assistant Secretary for Administration.  These comments are
discussed in chapter 4 and are reprinted in appendix I. 


USDA'S TELECOMMUNICATIONS
RESOURCES ARE NOT MANAGED
COST-EFFECTIVELY
============================================================ Chapter 2

OIRM has not fulfilled its management responsibility to provide the
guidance and oversight necessary to ensure that USDA's agencies
maintain basic management data on their telecommunications resources,
obtain telecommunications equipment and services cost-effectively,
verify the accuracy of telecommunications charges, and make proper
use of government-provided resources and services.  Without
sufficient guidance and oversight, many USDA component agencies have
not instituted sound management practices necessary to effectively
manage the telecommunications resources they control.  As a result,
these agencies waste millions of dollars each year paying for (1)
unnecessary telecommunications services and equipment, (2) leased
equipment that is not used and services billed for but never
provided, and (3) commercial carrier services that are more expensive
than those provided under the FTS 2000 contract.  Although USDA has
some initiatives underway to improve telecommunications management,
its actions do not fully resolve these inadequacies. 


   USDA AGENCIES LACK
   TELECOMMUNICATIONS INVENTORIES
   AND SUFFICIENT MANAGEMENT
   CONTROLS
---------------------------------------------------------- Chapter 2:1

Federal laws and regulations require agencies to manage
telecommunications resources cost-effectively.  One of the most
fundamental steps is maintaining current and complete inventory
information on all telecommunications services and equipment. 
Without this, agencies lack the basic information they need to manage
these resources cost-effectively.  In addition to maintaining
inventories, agencies also need to have appropriate management
controls to ensure that all government-provided telecommunications
resources are properly used.  However, OIRM has not required USDA's
component agencies to maintain inventories of telecommunications
resources and has not provided guidance to the agencies for
establishing effective telecommunications management controls. 


      DEPARTMENT AND AGENCIES LACK
      BASIC DATA NECESSARY TO
      MANAGE TELECOMMUNICATIONS
-------------------------------------------------------- Chapter 2:1.1

To ensure the cost-effective use of telecommunications equipment and
services, the Federal Information Resources Management Regulation
requires each agency to establish inventories of telecommunications
resources and annually survey existing telecommunications systems to
ensure that information on these systems is current, accurate, and
complete.  These surveys and inventories are fundamental to sound
telecommunications management.  According to the Federal Information
Resources Management Regulation, inventories and surveys are
necessary to, among other things, identify telecommunications
resources that are outdated or no longer used and ensure that
agencies pay for only those resources that they use. 

USDA's telecommunications policy does not require agencies to
maintain inventories or conduct surveys of all their
telecommunications resources.  OIRM officials also acknowledge that
USDA does not have a departmentwide inventory for telecommunications
equipment and services and has not done surveys to collect such
information.  Although USDA has a directive requiring agencies to
maintain inventories on property and has a property management
system, the system lacks information on many types of
telecommunications systems and services.  Specifically, it does not
record information on the types of voice, data, and video services
used by the Department and where these services are located.  It also
lacks information on circuits, communications software, and many
types of equipment, such as on-premises wiring, interface cards,
modems, and other communications devices. 

Even though OIRM officials agree that USDA telecommunications policy
does not require agencies to maintain inventories or conduct annual
surveys, they told us that agencies nonetheless should be doing this
as part of their telecommunications management activities.  However,
agencies we contacted do not maintain agencywide inventories or
conduct annual surveys of telecommunications resources, and OIRM has
not followed up with these agencies to ensure they do so. 

A lack of inventory information severely impairs USDA's ability to
ensure that resources are properly acquired, used, and maintained. 
OIRM does not know basic information, such as how much USDA pays for
telecommunications, the type of services and equipment being used,
and communications traffic volumes.  Because of this, OIRM cannot
effectively plan the future use of telecommunications resources, help
agencies avoid acquiring redundant and overlapping equipment and
services, and identify and eliminate systems and services that are
not cost-effective. 

For example, for years, USDA wasted thousands of dollars paying for
numerous FTS 2000 Service Delivery Points (SDPs)\1 within its
headquarters office in Washington, D.C.  Because USDA does not
maintain a telecommunications inventory, OIRM did not know that
headquarters had over 27 SDPs, many of which were redundant and
unnecessary, until after the Secretary of Agriculture announced in
November 1993 that the Department would reduce telecommunications
costs at USDA headquarters by $1 million.  In response to the
Secretary's direction, OIRM began collecting data on SDPs at
headquarters and began eliminating these duplicate services.  As a
result, OIRM records show that USDA has achieved several hundreds of
thousands of dollars in savings. 

Also, a lack of inventory information hinders USDA's effort to
cost-effectively consolidate farm service agency offices.  After the
enactment of the Department of Agriculture Reorganization Act of
1994, the Secretary announced that 1,274 field offices would be
closed, USDA personnel would be reduced by 11,000, and about 2,500
new field service centers would be established by September 1997. 
However, because basic inventory information is not available, USDA
must now devote valuable time obtaining this information.  Until this
is done, USDA cannot effectively plan how to make the best use of
existing equipment from offices that will close, what services need
to be disconnected at these offices, and what additional equipment
and services will need to be acquired for the new Service Centers. 


--------------------
\1 SDPs are places where the agency connects its equipment to receive
FTS 2000 services. 


      AGENCIES LACK THE GUIDANCE
      NEEDED TO ESTABLISH ADEQUATE
      MANAGEMENT CONTROLS
-------------------------------------------------------- Chapter 2:1.2

OIRM has not provided agencies with guidance on establishing
management controls that are necessary for ensuring the proper
planning and use of telecommunications resources.  Specifically, OIRM
has not provided the agencies with guidance for (1) monitoring
acquisitions to ensure that telecommunications services and equipment
are obtained cost-effectively, and (2) reviewing bills to verify the
accuracy of telecommunications charges and ensure the proper use of
government-provided resources and services. 

Without such guidance, USDA agencies lack sufficient
telecommunications management controls.  For example, USDA has
hundreds of field office sites where multiple USDA agencies, located
in the same building or geographic area, obtain or use separate and
often redundant commercial carrier services.  This situation exists
because agencies often acquire telecommunications services and
equipment to meet their own needs without first determining what
already exists and whether there are opportunities to share
resources.  Even within some agencies, telecommunications resources
are sometimes purchased separately by different offices, and these
purchases are not tracked agencywide to identify opportunities for
sharing telecommunications resources. 

Because of this, as we reported in April 1995, USDA is wasting
millions on redundant FTS 2000 services.\2 We reported that OIRM
officials estimate that USDA could save between $5 million and $10
million annually by sharing
FTS 2000 services.  USDA has an even larger problem acquiring
redundant commercial telecommunications services and equipment
because agencies do not monitor and coordinate these purchases. 
According to OIRM officials, USDA could save as much as $15 million
to $30 million annually by eliminating these redundancies and by
sharing resources. 

USDA also wastes millions more because many agencies do not verify
whether they pay accurate charges for FTS 2000 and commercial
telecommunications services and leased equipment and do not determine
whether these resources are properly and cost-effectively used. 
According to the Federal Information Resources Management Regulation,
agencies should establish call detail programs to verify usage of
government-provided FTS 2000 and commercial long-distance services
for which they are charged and deter or detect possible misuse of
long-distance services.\3 The regulation also requires agencies to
pay for only those telecommunications resources being used and to
cancel leases of underutilized resources. 

To its credit, in October 1993, OIRM issued a policy establishing a
program to review call detail reports\4 for FTS 2000 services, and
the office currently provides USDA agencies with these reports. 
However, many USDA agencies have not yet established an automated
billing process for distributing
FTS 2000 bills to each of their offices for the timely verification
of the more than $36 million USDA pays annually for FTS 2000
services. 

In addition, the Department also pays another $50 million each year
for commercial telecommunications services and leased equipment that
are not obtained under the FTS 2000 program.  Currently, USDA pays
over 23,000 bills each month for services obtained and equipment
leased from over 1,500 private vendors across the country.  However,
very few of these commercial bills are ever reviewed because the
Department and its agencies have not established sufficient
procedures, such as those for reviewing call detail records, to
verify charges by private vendors and ensure cost-effective use of
telecommunications resources.  Consequently, USDA is paying
unnecessary and inappropriate charges.  For example, our review of
bills for the agencies at three locations we visited found that: 

  OIRM and USDA agencies pay tens of thousands of dollars each year
     to lease telephone equipment that is either no longer used or
     cannot be located.  In some cases, we noted that fees for unused
     equipment have been paid for many years.  For example, one
     commercial carrier's bill for March 1995 showed that OIRM pays
     $6,262 a year to lease three unused 4800 baud modems at USDA
     headquarters.  Although USDA has leased these modems since 1985,
     OIRM staff working at OIRM's headquarters office told us that no
     one has used the modems for several years.

     In this same bill, we found hundreds of cases where USDA
     agencies continue to pay exorbitant fees to lease outdated
     equipment.  For example, we noted that USDA agencies pay about
     $7,800 dollars each year to lease 214 out-of-date rotary
     telephones.

     More serious is that agencies were unable to locate some of this
     equipment.  For example, although one agency pays over $10,000 a
     year to lease 16 2400 baud modems, telecommunications staff were
     unable to find any of them.  The staff stated that, because no
     one uses this type of equipment any longer, it is likely that
     the equipment was disposed of many years ago. 

  USDA agencies often pay more than twice the cost charged under FTS
     2000 by using commercial carriers to place toll calls within
     Local Access Transport Areas (LATAs) in states where such
     practices are allowed.\5 Federal agencies have had the ability
     to use FTS 2000 service for intra-LATA calls since August 1993. 
     In this particular instance, OIRM had notified agencies about
     this opportunity but agencies continued placing commercial calls
     within the LATAs.  By not using FTS 2000 for intra-LATA toll
     calls, OIRM officials estimate that USDA is losing as much as $2
     million each year. 

  Agencies pay about three times the amount charged under the FTS
     2000 program for making long-distance calls.  For example,
     according to March 1995 billing data, one USDA office in Fort
     Collins, Colorado, paid about $186 for long-distance calls that
     would have cost about $63 using FTS 2000 service.  We noted many
     similar instances in which USDA agencies do not comply with the
     government's mandatory FTS 2000 use.  As a result, agencies pay
     significantly more than necessary for long-distance calls. 

  USDA also pays more than necessary for facsimile transmissions by
     obtaining these services from commercial vendors rather than FTS
     2000.  A March 1995 commercial carrier's bill showed that one
     agency paid over $728 a month for commercial facsimile service. 
     This represents more than 3 times the amount that is charged
     under the FTS 2000 program. 

  USDA agencies pay more for international calls than necessary
     because many agencies do not use the services available to USDA
     under the Department of Defense's contract for international
     telephone service.  According to OIRM officials, this contract
     offers a 34-percent savings over commercial rates.  We noted
     many instances where agencies obtain such services outside of
     this contract. 


--------------------
\2 (GAO/AIMD-95-97, Apr.  24, 1995). 

\3 Federal Information Resources Management Regulation (FIRMR
Bulletin C-13). 

\4 Call detail reports are records of long-distance telephone calls
showing the originating number, destination number, city and state,
date and time of the call, duration, and cost. 

\5 Calls between two locations within a LATA, but not within the
"free" calling area for the caller's telephone number, are defined as
intra-LATA toll calls.  These calls were originally classified as
local exchange carrier business, while calls from one LATA to another
(inter-LATA) belong to the interexchange carrier selected by the
caller.  Recent changes enacted by 44 state legislatures offer
federal government agencies the use of FTS 2000 services in lieu of
local exchange carriers for intra-LATA toll calls. 


      FAILURE TO TERMINATE
      TELECOMMUNICATIONS SERVICES
      AT OFFICES BEING CLOSED
      RESULTS IN FURTHER WASTE
-------------------------------------------------------- Chapter 2:1.3

USDA also wastes thousands of dollars paying for telecommunications
services at field offices that have closed.  This situation exists
because office staff sometimes do not terminate vendor-provided
services when they close offices.  Since USDA does not generally
review telephone bills, charges incurred after an office closes are
not identified and USDA will continue to pay fees for vendor-provided
services at these locations. 

For example, in one case, USDA has continued to pay $483.78 each
month for telephone services at a Rural Development Administration
office in Levelland, Texas, even though the office closed in March
1994--over a year ago.  According to staff who worked at the office
until it closed, USDA's lease on the building was discontinued in
March 1994 and all telecommunications devices, such as telephones,
were removed.  However, no one terminated the telephone service at
this office or followed up with the vendor to be sure that the
account was closed.  Consequently, USDA has so far paid about $6,200
for services being provided to an unoccupied building. 

The Secretary's streamlining plans, which include closing about 1,200
field offices over the next 3 years, further underscore the need to
ensure that, when offices are closed, USDA is no longer billed for
vendor-provided services at these locations.  During our review, on
February 28, 1995, the Assistant Secretary for Administration sent a
departmental memorandum to all Under and Assistant Secretaries
requesting their assistance in ensuring that telecommunications
services are properly terminated at all the field offices that close. 
Specifically, the Assistant Secretary stated: 

     Offices that are being closed require a detailed analysis of
     billing records and an inventory of telecommunications lines and
     services.  The analysis and inventory are essential for
     preparing orders for termination of services.  Experience has
     shown that termination orders should be followed through several
     billing cycles to ensure that termination actually occurred. 

However, as the Levelland office case illustrates, unless these steps
are fully implemented at each office to be closed, USDA could incur
thousands of dollars in vendor charges for services that are no
longer needed. 


      OPTIONS AVAILABLE FOR
      REVIEWING COMMERCIAL
      TELEPHONE BILLS
-------------------------------------------------------- Chapter 2:1.4

OIRM officials told us that, although they have done so for services
and equipment acquired under FTS 2000, they have not established a
call detail program or prepared guidance on what options exist for
reviewing commercial bills because these bills are handled
differently.  Bills for commercial carrier services are sent directly
from the carriers to NFC where the bills are processed and paid.  NFC
receives thousands of bills in paper form each month and, in most
cases, does not forward copies to the agencies for verification of
charges. 

While handling thousands for paper bills each month is a laborious
task, it does not preclude agencies from reviewing commercial carrier
bills or absolve OIRM of its responsibility to provide agencies
proper guidance.  According to NFC officials, agencies can obtain
bills from NFC upon request.  For example, a Forest Service office we
visited recently began requesting monthly bills from NFC for review. 
At the time of our visit, the office reported that it had recently
found a $1,400 overcharge for commercial services.  After notifying
the telephone company of the inaccurate bill, the charge was removed. 
Employees at the office also told us that several similar billing
mistakes had been identified over the previous few months since they
began to verify bills and estimated that about $10,000 annually could
be saved at just this one site by reviewing bills.  However,
according to NFC records, during the month of April 1995, only 80 out
of about 23,000 commercial carrier bills had been requested by USDA
agencies for review. 

Besides requesting specific bills from NFC, agencies have other
options for obtaining bills for review.  For example, NFC requires
USDA agencies to set limits on bills and notifies agencies when bills
exceed these limits.  However, OIRM has not provided USDA agencies
with guidance on setting limits and NFC officials reported that
agencies often deliberately set these limits at unreasonably high
dollar levels to avoid having to review bills.  Consequently, many
bills never exceed the limit and few are reviewed.  NFC officials
also noted that they regularly select a sample of about one percent
of the bills and send them to the agency for review.\6

However, these officials reported that agencies do not confirm that
they reviewed the bills and found them to be accurate. 

Without effective telecommunications policy and guidelines, such as
guidance to establish a call detail program for verifying charges by
private vendors, USDA agencies lack the management direction they
need to institute effective management controls over
telecommunications resources.  In this regard, USDA agency officials
cited the lack of guidance as a key problem, noting that they were
often unaware of telecommunications management requirements or what
such practices would entail.  OIRM's Associate Director of Policy
agreed that USDA's telecommunications policy has not been
comprehensive enough to ensure that agencies have the necessary
policy guidelines to effectively manage telecommunication resources. 
The Associate Director also stated that OIRM recognizes this problem
and plans to develop additional agency guidance. 


--------------------
\6 We did not assess the reasonableness of this sample size as part
of our review. 


   OVERSIGHT OF AGENCIES
   TELECOMMUNICATIONS MANAGEMENT
   HAS NOT BEEN ADEQUATE
---------------------------------------------------------- Chapter 2:2

To monitor agencies' management of IRM resources, including
telecommunications, USDA established its IRM Review Program in
accordance with federal requirements for conducting periodic reviews
of IRM activities.\7 USDA's "IRM Review Program" is intended to (1)
ensure that agencies comply with governmentwide and departmentwide
IRM policies, regulations, rules, standards, and guidelines, (2)
ensure that agencies efficiently acquire and effectively use
resources, and (3) determine whether agencies' controls over and
reviews of their IRM resources provide effective management
oversight.  USDA policy states that OIRM's Program Review Standards
Division (PRSD) is required to conduct periodic selective reviews at
each of USDA's 29 agencies to validate the management of IRM and
telecommunications resources, assure the Secretary that IRM policy is
working as intended, and recommend agency improvement. 

However, PRSD conducts very few IRM selective agency reviews, and in
the cases when reviews were performed, agency management of
telecommunications resources was not adequately addressed.  For
example, since 1990 PRSD has conducted only five selective agency
reviews, of which only one addressed telecommunications management,
but did not evaluate whether (1) adequate inventories of equipment
and services had been established and annual surveys were conducted,
(2) the acquisition of services are monitored to avoid redundancies,
and (3) FTS 2000 and commercial telecommunications charges are
verified to control costs. 

By not conducting reviews, OIRM has no assurance that USDA agencies
are following federal regulations or departmental policy, such as
using mandatory services, or are making cost-effective use of
telecommunications resources and sharing resources when there are
opportunities to do so.  The General Services Administration (GSA),
which periodically reviews federal agencies' IRM activities, and
USDA's Office of Inspector General have previously raised concerns
about USDA's inadequate agency review program.  After reviewing
USDA's IRM program in 1990, GSA reported that OIRM needed to be more
proactive and did not place adequate emphasis on performing agency
reviews.\8 In 1994, after returning to review USDA's IRM program, GSA
reported that OIRM had not made sufficient progress to improve its
IRM selective review program.\9 In 1993, USDA's Office of Inspector
General also reported the need for OIRM to perform IRM reviews.\10

PRSD's Chief agreed that OIRM needs to conduct more selective
reviews.  According to this official, OIRM plans to have the ALOs
develop IRM review proposals for selective reviews and participate on
review teams for agencies. 


--------------------
\7 See 44 U.S.C.  Sections 3501-3520 (the Paperwork Reduction Act of
1980, as amended). 

\8 Information Resources Procurement and Management Review: 
Department of Agriculture, GSA, Fiscal Year 1990. 

\9 Information Resources Procurement and Management Review: 
Department of Agriculture, GSA, Fiscal Year 1994. 

\10 Office of Information Resources Management Controls Over Major
IRM Acquisitions, Audit Report No.  58001-1-FM, USDA Office of
Inspector General, March 1993. 


   USDA ACTIONS TO STRENGTHEN
   TELECOMMUNICATIONS MANAGEMENT
   FALL SHORT
---------------------------------------------------------- Chapter 2:3

Senior OIRM officials recognize the need to improve
telecommunications management across the Department.  To make
improvements, OIRM has several initiatives either planned or
underway.  For example, in response to our April 1995 report, OIRM
has shown more leadership on efforts to consolidate and optimize
USDA's FTS 2000 telecommunications services.  Specifically, OIRM

  developed and issued policy requiring component agencies to order
     and use optimum service configurations and consolidate service
     access and

  met with USDA senior managers and has begun a process to
     systematically identify sites across the Department where FTS
     2000 services could be consolidated and optimized. 

With respect to strengthening controls over how telecommunications
resources are acquired and managed by agencies, in early 1995 OIRM
used an existing contract to begin developing a life-cycle management
process for all IRM resources.\11 OIRM's Associate Director for
Policy believes this initiative should provide agencies with more
direction on what management practices are expected USDA-wide and
therefore should ultimately improve management of telecommunications. 
In addition, USDA plans to collect inventory information and has
begun investigating the possibility of establishing an electronic
billing process to provide agencies with commercial call detail
information for review and verification. 


--------------------
\11 This process, according to USDA documents, would provide direct
support to USDA agency missions.  It is based on a concept that the
integrity and effectiveness of information resource implementation
can be ensured only by applying a systematic, comprehensive
management program across the entire life cycle from beginning to
end. 


      OIRM'S INITIATIVES WILL NOT
      FULLY RESOLVE
      TELECOMMUNICATIONS
      MANAGEMENT WEAKNESSES
-------------------------------------------------------- Chapter 2:3.1

OIRM's initiatives are encouraging and, if fully carried out, they
should generate departmentwide benefits.  However, these efforts will
not fully resolve the widespread telecommunications management
weaknesses we found.  This is because OIRM's initiatives do not focus
on the root causes of the weaknesses:  a lack of comprehensive policy
and implementing guidelines, and inadequate oversight of the
agencies' telecommunications management activities.  For example,
USDA has opportunities to save millions under its initiatives to
consolidate and optimize
FTS 2000 telecommunications services.  However, although OIRM has
prepared and issued a new policy requiring agencies to consolidate
and optimize FTS 2000 services, OIRM has not (1) provided the
agencies with specific guidelines for implementing these policies,
such as procedures for regularly monitoring telecommunications
purchases to consolidate services when it is cost-effective to do so
or (2) devised a method for reviewing agency activities to ensure
that this policy is effectively carried out.  Consequently, agencies
will likely continue making telecommunications purchases as they have
in the past and perpetuate the use of redundant and duplicative
telecommunications services. 

Likewise, OIRM and the farm service agencies have begun collecting
inventory information at sites scheduled for consolidation under the
Secretary's plan to establish Field Office Service Centers.  While we
agree this step is needed, OIRM has not defined how this inventory
information will be updated and managed after it is collected. 
Moreover, according to OIRM's Associate Director for Operations,
there are no plans to advise the agencies' senior managers about
requirements to conduct regular surveys of telecommunications
resources or to assist agencies in maintaining inventory information
needed for implementing fundamental telecommunications management
controls.  By not doing so, it is highly unlikely agencies will take
the initiative on their own to begin obtaining and maintaining
inventory information that is essential to planning and managing
resources. 

OIRM has also not developed any action plans for providing guidance
to USDA agencies to help them establish billing review practices. 
Although OIRM has made FTS 2000 billing data available for agency
review, this information does not include commercial carrier bills
for millions of dollars in services.  OIRM officials, who have
investigated electronic billing opportunities with several commercial
carriers, have no plan for providing such capabilities nationwide and
OIRM has done little to establish interim guidelines and procedures
for agencies to follow to request and review paper bills on a
periodic basis. 

OIRM's Associate Director for Policy agreed that these initiatives
alone will not be enough to correct shortcomings in the Department's
management of telecommunications.  However, this official noted that
OIRM has just begun an effort to define a telecommunications
management program for the Department, which he believes will provide
improved telecommunications guidance to the agencies.  This official
also added that USDA needs to modernize its IRM program, including
instituting performance measures to evaluate the agencies' management
practices and then holding the agencies directly accountable for
needed improvements. 

We agree with OIRM's Associate Director that performance measures and
accountability are critical for improving management of
telecommunications resources.  In May 1994, after reviewing how
leading public and private organizations improved mission
performance, we reported that increasing line accountability and
involvement works because it immediately focuses information
management decision-making on measurable mission outcomes of
strategic importance.\12 However, before setting measures and
increasing accountability, an organization needs to first gain an
understanding of its current performance, telecommunications systems
and services spending, and major information management problems. 

OIRM has not completed a thorough, systematic review of the agencies'
current telecommunications management practices to determine what
management deficiencies exist and the reason for these deficiencies. 
Without such a review, OIRM does not know what actions are necessary
to fully resolve management weaknesses, articulate what management
practices are expected, and then define who is accountable for these
processes.  In 1991, the Department of Defense (DOD) established a
program to analyze its communications management deficiencies and
develop ways to solve those deficiencies.  The goal of this program
was similar to USDA's initiatives--to improve communications
management processes.  We reported that for DOD's effort to succeed,
besides analyzing management deficiencies, the organization must (1)
clearly articulate how telecommunications management processes are to
be conducted DOD-wide and (2) precisely define the roles and
responsibilities of all components involved in the telecommunications
business and management processes.\13

OIRM's efforts to define a telecommunications management program for
the Department and establish an IRM life-cycle management program
have potential for sustained departmentwide management improvements
if developed and implemented properly.  However, because OIRM is in
the early stages of these efforts, it is unclear what impact these
will have on resolving the management weaknesses we found. 

Nevertheless, USDA's failure to cost-effectively manage its annual
$100 million telecommunications investment constitutes a material
internal control weakness under the Federal Managers' Financial
Integrity Act of 1982 (31 U.S.C.  3512(b)and(c)).\14 As previously
discussed, federal regulations require agencies to establish
inventories of telecommunications resources to, among other things,
identify resources that are outdated or no longer used and ensure
that agencies pay for only those resources that they use.  These
regulations also require agencies to establish adequate management
controls to ensure the cost-effective use of telecommunications
resources and detect possible misuse of government-provided FTS 2000
and commercial long-distance services for which they are charged. 
Because USDA does not maintain inventories or have adequate
management controls established over its telecommunications resources
and expenditures, the Department continues to pay millions for
telecommunications services that are unnecessary or never used and
equipment that is outdated or no longer needed. 


--------------------
\12 Executive Guide:  Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994). 

\13 Defense Communications:  Defense's Program to Improve
Telecommunications Management Is at Risk (GAO/IMTEC-93-15, Feb.  19,
1993). 

\14 The Office of Management and Budget has defined a material
weakness as a specific instance of noncompliance with the Financial
Integrity Act of sufficient importance to be reported to the
President and the Congress.  Such weaknesses would significantly
impair the fulfillment of an agency component's mission; deprive the
public of needed service; violate statutory or regulatory
requirements; significantly weaken safeguards against waste, loss,
unauthorized use or misappropriation of funds, property, or other
assets; result in a conflict of interest; merit the attention of the
agency head/senior management, the Executive Office of the President,
or the relevant congressional oversight committee; or are of a nature
that omission from the report could reflect adversely on the actual
or perceived management integrity of the agency. 


NETWORKS ARE NOT PLANNED TO
SUPPORT USDA'S INFORMATION AND
RESOURCE SHARING NEEDS
============================================================ Chapter 3

USDA has many heterogeneous, independent networks acquired and
developed over time by USDA agencies.  As discussed in chapter 1,
these "stovepipe" systems make it difficult for agencies to share
information necessary to address complex, cross-cutting issues and
effectively execute USDA programs.  Despite the need to address this
problem, USDA's agencies continue developing their own networks that
are often redundant and perpetuate information sharing problems
rather than resolve them. 

This is allowed to occur because OIRM continues to approve agencies'
plans for new network systems without (1) determining what
information sharing needs USDA agencies have and what opportunities
exist to share other agencies' existing or planned networks and (2)
ensuring that the planned networks adequately address the need to
share information and resources.  Consequently, USDA spends millions
of dollars developing networks that do not make efficient use of the
Department's telecommunications resources and cannot support
information sharing without costly modifications. 


   AGENCIES PLAN THEIR OWN
   NETWORKS WITHOUT CONSIDERING
   INFORMATION AND RESOURCE
   SHARING NEEDS
---------------------------------------------------------- Chapter 3:1

Increasing demands for efficiency and for collaborative agency work
on complex agricultural and environmental issues prompted the former
Secretary to call for integrating networks and systems to increase
data and resource sharing among agencies.  Also, federal law requires
that (1) USDA reduce expenses by jointly using resources, such as
telecommunications services and equipment, at field offices where two
or more agencies reside and (2) whenever USDA procures or uses
information technology, it does so in a manner that promotes computer
information sharing among agencies of the Department.\1

However, USDA agencies continue to plan and acquire their own costly
new networks without incorporating requirements for sharing
information among agencies.  Also, agencies overlook opportunities to
share resources because they independently design, build, and operate
their own networks without considering whether other USDA agencies'
existing or planned networks would meet their communication needs. 

For example, the Forest Service plans to spend almost $1 billion
modernizing its information technology, part of which will be spent
establishing a new agencywide network.  However, specific
requirements for sharing data with other agencies and how these
requirements will be met are not addressed in planning documentation. 
Although Natural Resources and Conservation Service (NRCS) officials
told us they could benefit from the exchange of ecosystem and natural
resources information with the Forest Service, current plans do not
address these needs. 

In another example, the Animal and Plant Health Inspection Service
(APHIS) plans to spend about $267 million modernizing its technology,
which includes acquiring a new network that provides connectivity
among its offices.  These network plans do not take into account that
APHIS offices are often collocated with other USDA agencies at field
sites throughout the country.  Instead, APHIS plans to acquire its
own network to connect over 1,200 agency office sites, rather than
exploit opportunities for sharing with other agencies' existing or
planned networks.  Therefore, USDA risks losing an important
opportunity to reduce communications costs by consolidating network
resources. 

In addition to the Forest Service and APHIS, other USDA agencies have
developed or plan to develop their own networks.  These include: 

  Over 2,500 field service centers--which house the Consolidated Farm
     Service Agencies, the Rural Housing and Community Development
     Service, and the Natural Resources and Conservation Service--are
     to be interconnected by a new $90 million network over the next
     3 years. 

  During 1994, the Agriculture Marketing Service completed
     integrating 113 field offices and its Washington headquarters
     into a single network. 

  The National Agriculture Statistics Service is connecting 43 state
     statistical offices and the Washington and Fairfax headquarters
     via local area and wide area networks. 

  The Agriculture Research Service is providing local area networks
     in each of its 8 area offices and 122 research sites and plans
     to link these LANs via dedicated lines between area offices and
     dial-up access at the research centers. 

Like the Forest Service and APHIS, these agencies are planning their
own new networks without considering departmentwide interagency data
and resource sharing needs.  For example, each of the agencies listed
above, except for RECD and NRCS, participate in USDA's Integrated
Pest Management Program to coordinate the Department's research and
extension programs with customers who implement pest management
practices.  This cross-cutting program requires the agencies to
exchange information on pesticide use and research.  However, the
agencies' network plans do not address this requirement.  Therefore,
the interagency sharing that must take place to consolidate this
information for customers at a farm service center location will not
occur.  As a result, customers will be unable to obtain the
information they need on pest management practices from a single
location. 


--------------------
\1 The Federal Crop Insurance Reform and Department of Agriculture
Reorganization Act of 1994, Public Law 103-354, Title II, 108 Stat. 
3209, 3211, and 3212 (1994). 


   MONITORING NETWORK PLANNING AND
   DEVELOPMENT DOES NOT ENSURE
   DATA AND RESOURCE SHARING NEEDS
   ARE ADDRESSED
---------------------------------------------------------- Chapter 3:2

Development of individual agency networks, such as the ones discussed
above, is allowed to continue because OIRM approves each of these
networks separately without having (1) determined whether some or all
of the telecommunications services could be provided by other agency
networks, (2) determined what information sharing needs USDA agencies
have and what opportunities exist to share resources and (3) ensured
that the planned networks adequately address these needs. 

Besides its responsibilities for establishing USDA-wide
telecommunications policy and overseeing telecommunications resources
(discussed in chapter 2), OIRM is also required to review and approve
agency IRM strategic plans and information and telecommunications
technology acquisition plans.\2 Among other things, such monitoring
is necessary to ensure that agencies plan and acquire
telecommunications networks cost-effectively and in accordance with
departmental needs.  Unlike PRSD's IRM Review Program that is
supposed to validate management of existing IRM and
telecommunications resources, the ALO program and technical approval
process provide OIRM with direct involvement in agencies' IRM
projects as they are being planned. 

OIRM monitors agency IRM activities under the ALO program and
Technical Approval process.  OIRM formed its ALO program to improve
coordination of agency IRM planning across the Department.  Among
other things, this program is intended to help ensure that agencies
plan their use of information and telecommunications technology to
meet departmental needs.  However, the OIRM manager for this program
told us that ALOs do not review agencies' network plans to ensure
that they incorporate information sharing needs and network sharing
opportunities. 

In addition, OIRM reviews of component agencies' acquisition plans
under USDA's technical approval process have not ensured that data
and resource sharing needs are being effectively addressed.  For
example, OIRM staff responsible for technical approvals told us that
they evaluate proposed procurements individually and do not review
them to assess whether or not data sharing requirements and
opportunities to share network services among agencies have been
addressed before approving acquisitions. 

OIRM's Associate Director for Policy, who has responsibility for
USDA's ALO program and also the technical approval process, told us
that OIRM needs to do a better job determining whether data sharing
needs and resource sharing opportunities are adequately addressed by
agencies as part of ALO and technical approval staff monitoring
activities.  The Associate Director noted that in most cases,
however, these staff often cannot effectively make such
determinations because they lack detailed information describing
agencies' data sharing requirements and the composition and current
configuration of all existing agency networks.  According to this
official, OIRM and the agencies have not taken sufficient steps to
obtain the information that defines data sharing requirements and
identifies what networks exist.  Further, this official stated that
OIRM needs to enhance staff expertise in telecommunications to
improve monitoring activities. 

Although the Associate Director acknowledged that more needs to be
done by OIRM, he said that the Office has taken an important step by
developing USDA's strategic telecommunications plan.\3 The plan,
issued in September 1993, called for integrating existing USDA agency
networks to achieve interoperability and enable agencies to share
data where they need to and share resources where they can. 
According to the plan, OIRM, in cooperation with USDA agencies, would
undertake initiatives that include (1) defining interagency data
sharing requirements, (2) identifying all existing agency networks,
and (3) aggregating networks and other telecommunications resources
where opportunities exist for cost savings. 

However, at the conclusion of our review, little progress had been
made by OIRM and the agencies to carry out the Plan's initiatives and
gather detailed information necessary for identifying data sharing
requirements and network sharing opportunities across the Department. 
Progress had been delayed because OIRM and the agencies have not yet
developed a strategy for carrying out this critically important work. 
However, as mentioned in chapter 2, OIRM and the agencies have
recently made some progress identifying opportunities to share
existing network resources at some collocated agency office sites,
such as USDA's headquarters offices, and have begun to act on these
opportunities. 


--------------------
\2 U.S.  Department of Agriculture, Telecommunications (DR 3300-1),
Dec.  27, 1993, and U.S.  Department of Agriculture, Acquisition of
IRM Resources (DR 3130-1), Apr.  2, 1991. 

\3 United States Department of Agriculture Strategic
Telecommunications Plan, Sept.  1993. 


   CONTINUED DEVELOPMENT OF
   INDIVIDUAL AGENCY NETWORKS
   POSES COSTLY RISKS
---------------------------------------------------------- Chapter 3:3

OIRM is continuing to approve individual agency networks without
determining whether agency network plans meet departmental
information and resource sharing goals.  This poses costly risks to
USDA.  First, because agencies have planned their new networks
separately and no one has ensured that these efforts are properly
coordinated, the agencies may install new communications lines and
circuits that overlap or are redundant, resulting in unnecessary
costs.  For example, collocated agencies at some offices in Kansas
City, Missouri, and Washington, D.C., were wasting about $41,000 per
year because they were maintaining networks with dedicated
transmission service lines that were redundant or unnecessary.  This
occurred because the agencies acquired these circuits separately
without identifying opportunities to share existing circuits with
other collocated agencies.  Following our April 1995 report, OIRM
took action to eliminate these redundant or unnecessary lines. 

Also, by allowing agencies to continue to develop networks without
assurance that they incorporate data sharing requirements, USDA may
need to spend millions in the future making modifications to
interconnect networks so they can exchange data.  For example, a May
1994 report\4 developed for the National Institute of Standards and
Technology noted that over the past 20 years organizations have
evolved to support a wide variety of networks that cannot support
required data exchange capabilities.  The report states that attempts
by organizations to interconnect their incompatible networks after
the fact--rather than planning for network interface
requirements--typically produced expensive but unsatisfactory
results, characterized as "functionally disparate islands of
technology."


--------------------
\4 Report of the Federal Internetworking Requirements Panel, National
Institute of Standards and Technology, May 31, 1994. 


CONCLUSIONS, RECOMMENDATIONS,
AGENCY COMMENTS AND OUR EVALUATION
============================================================ Chapter 4


   CONCLUSIONS
---------------------------------------------------------- Chapter 4:1

USDA lacks the basic telecommunications inventory information and
management controls necessary to properly plan and manage
telecommunications resources.  Consequently, the Department has
wasted millions of dollars by not making cost-effective use of the
$100 million it spends each year on these resources.  This is because
OIRM has not demonstrated effective departmentwide leadership by
providing USDA agencies with the guidance and oversight they need to
help them ensure that the Department's telecommunications resources
are used effectively and prudently.  Without sufficient
telecommunications guidance and oversight, many agencies have not
established the fundamental management controls necessary to ensure
that USDA does not (1) acquire separate telecommunications equipment
and services that are redundant and unnecessary, (2) pay for leased
equipment that is not used and for services billed but never
provided, and (3) use more expensive commercial services than those
services already provided under FTS 2000. 

Although OIRM is aware of these problems, which are long-standing, it
has done little to address the agency management shortfalls that
allow these problems to persist.  Until OIRM (1) provides the
guidance and direction necessary to help USDA agencies establish
adequate management controls and (2) takes additional actions to
oversee that agencies effectively implement such controls and other
telecommunications requirements in compliance with federal and
departmental policies, the serious and widespread problems we found
are likely to continue. 

Further, if USDA is ever to successfully share information whenever
and wherever it is needed, the Department must prevent agencies from
planning and building their own stovepipe networks.  However, because
OIRM has not fulfilled its departmental responsibility to identify
agencies' information sharing needs and determine with the agencies
how to address these sharing requirements, OIRM cannot ensure that
new agency networks are compatible.  Therefore, USDA risks wasting
millions more building new networks that are redundant and may not
provide the capabilities necessary for sharing information among
agencies. 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 4:2

We recommend that the Secretary of Agriculture report the
Department's management of telecommunications as a material internal
control weakness under the Federal Managers' Financial Integrity Act. 
This weakness should remain outstanding until USDA fully complies
with federal regulations for managing telecommunications and
institutes effective management controls. 

We also recommend that the Secretary of Agriculture direct the Under
Secretaries and Assistant Secretaries to immediately conduct --in
cooperation with USDA's Chief Financial Officer, the National Finance
Center, and OIRM--a one-time review of commercial telephone bills for
accounts over 3 years old to identify instances where USDA may be
paying for telecommunications services or leased equipment that are
unnecessary or no longer used.  Further, all accounts associated with
any USDA office that has closed or moved within the last 3 years
should also be reviewed to identify telephone services that private
vendors may still be providing to closed offices.  On the basis of
this review, USDA should (1) take appropriate action with vendors to
disconnect any unnecessary or unused telecommunications services and
terminate leases for equipment no longer needed or in use by agencies
and (2) seek recovery of expenditures for any vendor charges deemed
inappropriate. 

The Secretary should also direct the Under Secretaries and Assistant
Secretaries to establish and implement procedures for reviewing
telecommunications resources at offices USDA plans to either close or
relocate to ensure that (1) all unneeded telecommunications services
are terminated promptly and vendor accounts closed and (2)
telecommunications equipment is properly accounted for and reused
where it is practical and cost-beneficial to do so. 

We further recommend that the Secretary of Agriculture direct the
Assistant Secretary for Administration to take immediate and
necessary action to address and resolve the Department's
telecommunications management and network planning weaknesses.  At a
minimum, the Assistant Secretary should require the Office of
Information Resources Management to

  revise departmental policies to require USDA agencies to establish
     and maintain agencywide telecommunications inventories that
     contain, at a minimum, circuit information, equipment and
     service types, network usage levels, costs, and other
     information agencies need to effectively manage and plan
     telecommunications resources in accordance with federal
     requirements;

  develop additional departmental policy requiring agencies to
     establish management controls over the acquisition and use of
     telecommunications resources and assist agencies in carrying out
     these requirements by completing a systematic review of the
     agencies' current telecommunications management practices to (1)
     identify and correct telecommunications management deficiencies
     that exist and (2) establish an agency telecommunications
     management program that sets performance expectations over
     agency telecommunications activities and assigns responsibility
     and accountability necessary to ensure these activities are
     effectively carried out;

  provide USDA agencies with explicit guidelines that include, at a
     minimum, procedures to (1) monitor acquisitions of
     telecommunications services and equipment and coordinate
     purchases with other agencies to ensure that resources are
     cost-effectively obtained and (2) implement call detail programs
     and other necessary procedures to regularly review
     vendor-provided bills for telecommunications services and leased
     equipment to verify the accuracy of these charges and ensure the
     proper use of FTS 2000 and other government-provided resources
     and services;

  strengthen oversight by conducting periodic reviews of agency
     telecommunications management activities in accordance with
     federal requirements to ensure that (1) inventories of
     telecommunications equipment and services are properly
     maintained, (2) sufficient management controls exist over
     telecommunications resources and expenditures, and (3) redundant
     or uneconomical services are eliminated;

  determine, with assistance from the Under Secretaries and Assistant
     Secretaries for USDA's seven mission areas, interagency
     information sharing requirements necessary to effectively carry
     out the Department's cross-cutting programs and include these
     data sharing requirements in departmental and agency strategic
     IRM and telecommunications plans;

  enhance the ALO and technical approval programs by increasing the
     technical focus of reviews of agency telecommunications
     strategic plans and network acquisition plans, and providing
     explicit implementing guidance to ensure that information
     sharing requirements and opportunities to share network
     resources are identified; and

  preclude USDA component agencies from developing networks that do
     not address departmentwide sharing needs by requiring that OIRM
     technical approvals be made contingent on the component agencies
     having considered and sufficiently addressed information sharing
     requirements and opportunities to share network resources. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 4:3

USDA's Assistant Secretary for Administration provided written
comments on a draft of this report.  The Assistant Secretary agreed
with most of our recommendations, noting that the draft report
contained many excellent recommendations which were well received by
the Department. 

The Assistant Secretary stated, however, that he disagreed with two
of our recommendations.  Regarding our recommendation to determine
interagency information sharing requirements, the Assistant Secretary
stated that USDA's existing policy is adequate to meet departmental
requirements.  This statement is not consistent with the facts. 
USDA's written policy does not require OIRM and the component
agencies to identify the interagency information sharing requirements
that must be met to effectively and fully carry out cross-cutting
programs.  Therefore, this recommendation remains unchanged. 

The Assistant Secretary also disagreed with our recommendation to
enhance ALO and technical reviews of agency telecommunications plans
and activities, noting that USDA's ALO and selective review programs
are not technical functions.  However, when the ALO program was
established, USDA told the Congress that ALOs would perform the
in-depth tasks necessary to improve system compatibility and data
sharing across agencies and would strengthen coordination of the
agencies' telecommunications projects.  Further, the report addressed
technical reviews, not the selected GSA reviews USDA discusses in its
comments.  We revised the report to clarify this, but the
recommendation remains unchanged. 

The Assistant Secretary also raised questions about how much money is
wasted due to ineffective departmental management and planning of
telecommunications.  The dollar amounts included in our report are
based on USDA documentation and on interviews with USDA's OIRM staff. 
For example: 

  We obtained USDA commercial telephone billing records, which are
     maintained at NFC, showing that USDA pays tens of thousands of
     dollars each year to lease telephone equipment that is either no
     longer used or cannot be located.  We also obtained billing
     records showing that USDA pays more than it should because
     agencies fail to make long-distance telephone calls using
     available FTS 2000 services and fail to terminate
     telecommunications services at offices being closed. 

  OIRM's Telecommunications Services Division staff, who are
     responsible for identifying opportunities to consolidate
     telecommunications, told us USDA could save as much as $15
     million to $30 million annually by eliminating redundant
     commercial telecommunications services and by sharing resources,
     and save as much as $2 million each year by using FTS 2000 to
     make intra-LATA telephone calls. 

We held numerous meetings with OIRM and NFC staff during our review
in which these amounts were discussed in great detail.  We also
included these dollar amounts in the information we provided to the
Assistant Secretary, the Deputy Assistant Secretary, and the OIRM
Director during an exit conference held with these officials on July
12, 1995.  At that time, we also provided copies of the billing
records that contained the dollar amounts we cite in the report to
USDA's Deputy Chief Financial Officer and the NFC Director, so the
Department could discontinue payments for leased equipment and
services that are not being used. 

Finally, the Assistant Secretary said the draft report did not give
USDA sufficient credit for OIRM actions recently taken to improve
departmentwide telecommunications management.  The report discusses
each improvement initiative undertaken by OIRM that we could
substantiate with available USDA documentation. 

The Assistant Secretary's written comments and our response are
provided in appendix I. 




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
AGRICULTURE
============================================================ Chapter 4



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


The following are GAO's comments on the Department of Agriculture's
letter dated August 10, 1995. 


   GAO COMMENTS
---------------------------------------------------------- Chapter 4:4

1.  The discussion in the report on the Department's lack of
telecommunications inventories is accurate and consistent with our
recommendations.  As noted in the report, some inventory information
is being collected.  However, USDA and its agencies do not have the
comprehensive telecommunications inventories needed to effectively
manage these resources, as we have recommended.  Further, during our
review, OIRM was unable to substantiate that it had work underway
implementing a process and an underlying system for agency
inventories. 

2.  The report does not state nor does it intend to imply that every
USDA agency should be organized in the same manner.  The discussion
of different agency management practices illustrates the complexities
faced in managing telecommunications across USDA's rather broad
spectrum of agencies. 

In addition, the report acknowledges actions taken by OIRM to
consolidate and optimize FTS 2000 telecommunications services and
gives OIRM credit for taking more leadership in this regard. 
However, these actions were only recently taken and it is too early
to tell whether USDA will implement them successfully. 

Finally, while OIRM has informed agencies about opportunities that
exist to achieve telecommunications cost-savings, which are
recognized in the report, OIRM did not follow up with the agencies to
ensure such opportunities were exploited. 

3.  The report accurately describes USDA's call detail program for
FTS 2000 services.  While OIRM may have provided management reports
to agencies since 1990, USDA had no policy requiring component
agencies to review call detail reports for FTS 2000 services until
October 1993, as the report discusses.  In fact, as OIRM recognizes,
agencies still need to establish an automated billing process for
distributing FTS 2000 billing information for the timely verification
of the millions paid each year for FTS 2000 services. 

4.  Although the report is consistent with information provided by
OIRM staff, we clarified language in the report to reflect that the
vendor's billing was for three unused modems rather than leased
circuits. 

5.  If properly planned and fully carried out, such actions should
help to determine requirements for telecommunications inventories. 
However, as we recommend, OIRM needs to go further by developing
departmental policy requiring agencies to establish management
controls for telecommunications resources and providing USDA agencies
with guidelines for implementing call detail programs for reviewing
vendor-provided bills for telecommunications services and leased
equipment to verify the accuracy of these charges and ensure the
proper use these resources.  Without this, OIRM cannot ensure that
the new processes and systems they are designing will effectively
address all federal and departmental call detail program
requirements. 

6.  OIRM could not provide us with documentation at the time of our
review substantiating that there was an approved plan for advising
the agencies' senior managers about requirements to conduct regular
surveys of telecommunications resources or assisting agencies in
maintaining inventory information needed for implementing fundamental
telecommunications management controls.  Without such a plan,
agencies are unlikely to develop and maintain inventories that are
essential to planning and managing telecommunications resources. 

7.  Most of USDA's 23,000 monthly commercial telephone bills are paid
without any review.  Therefore, it is essential that OIRM immediately
develop and provide USDA agencies with guidance for establishing
billing review practices.  Until this is done, USDA risks continuing
to make payments to vendors for outdated and unused equipment and
unnecessary services. 

8.  The report is correct in stating that USDA agencies are acquiring
their own networks.  As noted in the report, "a telecommunications
network is a group of interconnected communications facilities and
devices used to transmit information." In its comments, USDA
acknowledges that the agencies are acquiring such resources including
"hardware and software for local office use...", "local area network
systems and devices to connect to long-distance (wide area)
networks...", and "wide area network services from FTS 2000...". 

In addition, USDA's contention that agencies are not acquiring wide
area network components is inaccurate.  For example, the Consolidated
Farm Service Agency, the Rural Housing and Community Development
Service, and the Natural Resources and Conservation Service are
acquiring a $90 million network system that includes wide area
network components. 

As noted in the report, failing to consider opportunities for sharing
resources before new networks are installed has already wasted
network resources.  Further, while these agency network solutions may
not pose "insurmountable obstacles" to meeting future interagency
data sharing needs, it is often very costly and inefficient to
retrofit incompatible systems and networks after they are built.  It
is for this reason that OIRM must provide leadership in monitoring
and assisting USDA agencies to identify information and resources
sharing needs and define a departmentwide strategy for addressing
these needs. 

Finally, the report does not state or conclude that a significant
portion of the funds for modernizing Forest Service and APHIS
information technology will be spent to purchase new network
components and services.  Rather, it notes that part of the total
funds for these modernization efforts will be spent establishing new
networks. 

9.  The report accurately reflects OIRM's and the agencies' progress
in carrying out USDA's strategic telecommunications initiatives.  For
example, although the Strategic Telecommunications Plan was issued in
September 1993, OIRM did not begin work on Strategic
Telecommunications Plan Initiative #1 (defining a telecommunications
management program for the Department) until April 1995, and, as of
July 1995, OIRM was still unable to provide documentation
substantiating its work on this initiative. 

Furthermore, the formal actions taken to begin consolidating and
optimizing FTS 2000 services described in USDA's comment were not
initiated until after GAO completed a prior audit and briefed USDA's
Assistant Secretary for Administration on the results of its work. 
Our findings as well and conclusions and recommendations are
discussed in our report entitled USDA Telecommunications:  Missed
Opportunities To Save Millions (GAO/AIMD-95-97, Apr.  24, 1995). 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   ACCOUNTING AND INFORMATION
   MANAGEMENT DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Stephen A.  Schwartz, Senior Assistant Director
Mark D.  Shaw, Assistant Director
William D.  Hadesty, Technical Assistant Director
Tomï¿½s Ramirez, Senior Evaluator


   KANSAS CITY REGIONAL OFFICE
-------------------------------------------------------- Appendix II:2

Troy G.  Hottovy, Senior Evaluator

