Critical Infrastructure Protection: Significant Challenges in	 
Safeguarding Government and Privately Controlled Systems from	 
Computer-Based Attacks (26-SEP-01, GAO-01-1168T).		 
								 
Federal agencies, and other public and private groups, rely	 
extensively on computer systems and electronic data. The security
of these systems and data is essential to avoiding disruptions in
critical operations and preventing data tampering, fraud, and	 
inappropriate disclosure of sensitive information. However,	 
federal computer systems contain weaknesses that continue to put 
critical operations and assets at risk. In particular,		 
deficiencies exist in entitywide security programs that are	 
critical to agencies' success in ensuring that risks are	 
understood and	effective controls are implemented. Many efforts 
have been undertaken to implement the nationally critical	 
infrastructure protection strategy outlined in Presidential	 
Decision Directive (PDD) 63. However, progress in key areas has  
been limited. Although outreach efforts by many federal entities 
to establish cooperative relationships with and among private and
other nonfederal entities have raised awareness and prompted	 
information sharing, efforts to perform substantive analyses of  
sector-wide and cross-sector interdependencies and related	 
vulnerabilities have been limited. A major impediment to	 
implementing the strategy outlined in PDD 63 is the lack of a	 
national plan that clearly spells out the roles and		 
responsibilities of federal and nonfederal entities and defines  
interim objectives.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-1168T					        
    ACCNO:   A02048						        
  TITLE:     Critical Infrastructure Protection: Significant	      
             Challenges in Safeguarding Government and Privately Controlled   
             Systems from Computer-Based Attacks                              
     DATE:   09/26/2001 
  SUBJECT:   Computer crimes					 
	     Computer security					 
	     Computer viruses					 
	     Electronic government				 
	     Hackers						 
	     Information systems				 
	     Internal controls					 
	     Internet						 
	     Code Red Computer Worm				 
	     Code Red II Computer Worm				 
	     DOD Department-wide Information			 
	     Assurance Program					 
								 
	     ILOVEYOU Computer Virus				 
	     InfraGard Information-Sharing Program		 
	     Melissa Computer Virus				 
	     Nimda Computer Worm				 
	     SirCam Computer Virus				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Testimony.                                               **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-01-1168T
     
For Release on Delivery Expected at 10 a. m. EDT Wednesday, September 26,
2001

GAO- 01- 1168T

CRITICAL INFRASTRUCTURE PROTECTION

Significant Challenges in Safeguarding Government and Privately Controlled
Systems from ComputerBased Attacks

Statement of Joel C. Willemssen Managing Director, Information Technology
Issues Testimony

Before the Subcommittee on Government Efficiency, Financial Management and
Intergovernmental Relations, Committee on Government Reform, House of
Representatives

United States General Accounting Office

GAO

Page 1 GAO- 01- 1168T

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today
to discuss efforts to protect federal agency information systems and our
nation?s critical computer- dependent infrastructures. Federal agencies, and
other public and private entities, rely extensively on computerized systems
and electronic data to support their missions. Accordingly, the security of
these systems and data is essential to avoiding disruptions in critical
operations, data tampering, fraud, and inappropriate disclosure of sensitive
information. Further, as the Comptroller General stated in testimony last
week, protecting against computer- based attacks on critical infrastructures
is an important aspect of homeland security. 1

Today, I will provide an overview of our recent reports on federal
information security and critical infrastructure protection. Specifically, I
will summarize the pervasive nature of federal system weaknesses, outline
the serious risks to federal operations, and then detail the specific types
of weaknesses identified at federal agencies. I will also discuss the
importance of establishing a strong agencywide security management framework
and how new evaluation and reporting requirements can improve federal
efforts. Next, I will provide an overview of the strategy described in
Presidential Decision Directive (PDD) 63 for protecting our nation?s
critical infrastructures from computer- based attacks. Finally, I will
summarize the results of our recent evaluation of progress in implementing
PDD 63, which was issued last week as part of a broader evaluation of
federal counterterrorism efforts. 2 My summary of PDD 63 progress will also
cover the results of our April report on the National Infrastructure
Protection Center (NIPC), an interagency center housed in the Federal Bureau
of Investigation (FBI), which is responsible for providing analysis,
warning, and response capabilities for combating computer- based attacks. 3

1 Homeland Security: A Framework for Addressing the Nation?s Efforts (GAO-
01- 1158T, September 21, 2001). 2 Combating Terrorism: Selected Challenges
and Related Recommendations (GAO- 01- 822,

September 20, 2001). 3 Critical Infrastructure Protection: Significant
Challenges in Developing National Capabilities (GAO- 01- 323, April 25,
2001).

Page 2 GAO- 01- 1168T

Results in Brief Because of our government?s and our nation?s reliance on
interconnected computer systems to support critical operations and
infrastructures, poor information security could have potentially
devastating implications for our country. Despite the importance of
maintaining the integrity, confidentiality, and availability of important
federal computerized operations, federal computer systems have significant
pervasive weaknesses that continue to put critical operations and assets at
risk. In particular, federal agencies continue to have deficiencies in their
entitywide security programs that are critical to their success in ensuring
that risks are understood and that effective controls are selected and
implemented. The new statutory government information security reform
provisions will be a major catalyst for federal agencies to improve their
security program management. To help maintain the momentum that these
provisions have generated, agencies must act quickly to implement strong
security program management.

An array of efforts has been undertaken to implement the national critical
infrastructure protection strategy outlined in PDD 63. However, progress in
certain key areas has been limited. Outreach efforts by numerous federal
entities to establish cooperative relationships with and among private and
other nonfederal entities have raised awareness and prompted information
sharing. However, efforts to perform substantive analyses of sector- wide
and cross- sector interdependencies and related vulnerabilities have been
limited. In addition, federal agencies have taken initial steps to develop
critical infrastructure protection plans; but, as mentioned above,
significant weaknesses continue to be identified in their computer- based
controls. Further, although the NIPC has initiated a variety of critical
infrastructure protection efforts that have laid a foundation for future
governmentwide efforts, it has not developed the analytical and information-
sharing capabilities that PDD 63 asserted are needed. Developing such
capabilities is a formidable task that experts say will take an intense
interagency effort.

A major impediment to implementing the strategy outlined in PDD 63 is the
lack of a national plan that clearly delineates the roles and
responsibilities of federal and nonfederal entities and defines interim
objectives. In our report on combating terrorism, issued last week, we
recommended that the Assistant to the President for National Security
Affairs ensure that a more fully defined strategy to address computerbased
threats be developed that addresses this impediment. It will be important
that this strategy be coordinated with the counterterrorism efforts
undertaken by the newly established Office of Homeland Security.

Page 3 GAO- 01- 1168T

Background Dramatic increases in computer interconnectivity, especially in
the use of the Internet, are revolutionizing the way our government, our
nation, and much of the world communicate and conduct business. The benefits
have been enormous. Vast amounts of information are now literally at our
fingertips, facilitating research on virtually every topic imaginable;
financial and other business transactions can be executed almost
instantaneously, often on a 24- hour- a- day basis; and electronic mail,
Internet web sites, and computer bulletin boards allow us to communicate
quickly and easily with virtually an unlimited number of individuals and
groups.

In addition to such benefits, however, this widespread interconnectivity
poses significant risks to our computer systems and, more important, to the
critical operations and infrastructures they support. For example,
telecommunications, power distribution, public health, national defense
(including the military?s warfighting capability), law enforcement,
government, and emergency services all depend on the security of their
computer operations. Likewise, the speed and accessibility that create the
enormous benefits of the computer age, if not properly controlled, allow
individuals and organizations to inexpensively eavesdrop on or interfere
with these operations from remote locations for mischievous or malicious
purposes, including fraud or sabotage.

Reports of attacks and disruptions are growing. The number of computer
security incidents reported to the CERT Coordination Centerï¿½ (CERTCC) 4 rose
from 9,859 in 1999 to 21,756 in 2000. For the first 6 months of

2001, 15,476 incidents were reported. As the number of individuals with
computer skills has increased, more intrusion or ?hacking? tools have become
readily available and relatively easy to use. A potential hacker can
literally download tools from the Internet and ?point and click? to start a
hack. According to a recent National Institute of Standards and Technology
publication, hackers post 30 to 40 new tools to hacking sites on the
Internet every month.

Recent attacks over the past 2 months illustrate the risks. These attacks,
referred to as Code Red, Code Red II, and SirCam, have affected millions of
computer users, shut down Web sites, slowed Internet service, and disrupted
business and government operations. They have already reportedly caused
billions of dollars of damage, and their full effects have yet to be
completely assessed. Code Red attacks have reportedly

4 CERT Coordination Centerï¿½ is a center of Internet security expertise
located at the Software Engineering Institute, a federally funded research
and development center operated by Carnegie Mellon University.

Page 4 GAO- 01- 1168T

(1) caused the White House to change its website address, (2) forced the
Department of Defense (DOD) to briefly shut down its public websites, (3)
infected Treasury?s Financial Management Service, causing it to disconnect
its systems from the Internet, (4) caused outages for users of Qwest?s high-
speed Internet service nationwide, and (5) delayed FedEx package deliveries.
Our testimony last month provides further details on the nature and impact
of these attacks. 5

More recently, the Nimda worm uses some of the most significant attack
profile aspects of Code Red II and 1999?s infamous Melissa virus, allowing
it to spread widely in a short amount of time. This worm modifies web
documents (for example, .htm and .html files) and certain executable files
found on the systems it infects, and creates numerous copies of itself under
various file names. It also may create a denial of service as a result of
network scanning and email propagation.

These are just the latest episodes. The cost of last year?s ILOVEYOU virus
is now estimated to be more than $8 billion. Other incidents reported in
2001 illustrate the problem further:

A hacker group by the name of ?PoizonB0x? defaced numerous government web
sites, including those of the Department of Transportation, the
Administrative Office of the U. S. Courts, the National Science Foundation,
the National Oceanic and Atmospheric Administration, the Princeton Plasma
Physics Laboratory, the General Services Administration, the U. S.
Geological Survey, the Bureau of Land Management, and the Office of Science
and Technology Policy. (Source: Attrition. org., March 19, 2001.)

The ?Russian Hacker Association? offered over the Internet an e- mail
bombing system that would destroy a person?s ?web enemy? for a fee. (Source:
UK Ministry of Defense Joint Security Coordination Center.)

Even before the tragic events of September 11, government officials were
concerned about attacks from individuals and groups with malicious intent,
such as crime, terrorism, foreign intelligence gathering, and acts of war.
According to the FBI, terrorists, transnational criminals, and intelligence
services are quickly becoming aware of and using information exploitation
tools such as computer viruses, Trojan horses, worms, logic bombs, and
eavesdropping sniffers that can destroy, intercept, or degrade

5 Information Security: Code Red, Code Red II, and SirCam Attacks Highlight
Need for Proactive Measures (GAO- 01- 1073T, August 29, 2001).

Page 5 GAO- 01- 1168T

the integrity of and deny access to data. 6 As greater amounts of money are
transferred through computer systems, as more sensitive economic and
commercial information is exchanged electronically, and as the nation?s
defense and intelligence communities increasingly rely on commercially
available information technology, the likelihood that information attacks
will threaten vital national interests increases. In addition, the
disgruntled organization insider is a significant threat, since such
individuals with little knowledge about computer intrusions often have
knowledge that allows them to gain unrestricted access and inflict damage or
steal assets. Since September 11, the NIPC has warned of an expected upswing
in incidents and encouraged system administrators to follow best practices
to limit the potential damage from any cyber attacks. In particular, the
NIPC warned against political hacking by self- described ?patriot? hackers
targeted at those perceived to be responsible for the terrorist attacks as
well as virus propagation, in which old viruses are renamed to appear
related to recent events.

Weaknesses in Federal Systems Remain Pervasive

Since 1996, our analyses of information security at major federal agencies
have shown that federal systems were not being adequately protected from
computer- based threats, even though these systems process, store, and
transmit enormous amounts of sensitive data and are indispensable to many
federal agency operations. In September 1996, we reported that serious
weaknesses had been found at 10 of the 15 largest federal agencies, and we
concluded that poor information security was a widespread federal problem
with potentially devastating consequences. 7 In 1998 and in 2000, we
analyzed audit results for 24 of the largest federal agencies; both analyses
found that all 24 agencies had significant

6 These terms are defined as follows: Virus: a program that ?infects?
computer files, usually executable programs, by inserting a copy of itself
into the file. These copies are usually executed when the ?infected? file is
loaded into memory, allowing the virus to infect other files. Unlike the
computer worm, a virus requires human involvement (usually unwitting) to
propagate. Trojan horse: a computer program that conceals harmful code. A
Trojan horse usually masquerades as a useful program that a user would wish
to execute. Worm: an independent computer program that reproduces by copying
itself from one system to another across a network. Unlike computer viruses,
worms do not require human involvement to propagate. Logic bombs: in
programming, a form of sabotage in which a programmer inserts code that
causes the program to perform a destructive action when some triggering
event occurs, such as terminating the programmer?s employment. Sniffer:
synonymous with packet sniffer. A program that intercepts routed data and
examines each packet in search of specified information, such as passwords
transmitted in clear text. 7 Information Security: Opportunities for
Improved OMB Oversight of Agency Practices (GAO/ AIMD- 96- 110, September
24, 1996).

Page 6 GAO- 01- 1168T

information security weaknesses. 8 As a result of these analyses, we have
identified information security as a governmentwide high- risk issue in
reports to the Congress since 1997- most recently in January 2001. 9

Our most recent analysis, last April, of reports published since July 1999,
continued to show significant weaknesses in federal computer systems that
put critical operations and assets at risk. 10 Weaknesses continued to be
reported in each of the 24 agencies covered by our review, and they covered
all six major areas of general controls- the policies, procedures, and
technical controls that apply to all or a large segment of an entity?s
information systems and help ensure their proper operation. These six areas
are (1) security program management, which provides the framework for
ensuring that risks are understood and that effective controls are selected
and properly implemented, (2) access controls, which ensure that only
authorized individuals can read, alter, or delete data, (3) software
development and change controls, which ensure that only authorized software
programs are implemented, (4) segregation of duties, which reduces the risk
that one individual can independently perform inappropriate actions without
detection, (5) operating systems controls, which protect sensitive programs
that support multiple applications from tampering and misuse, and (6)
service continuity, which ensures that computer- dependent operations
experience no significant disruptions.

Our April analysis also showed that the scope of audit work performed has
continued to expand to more fully cover all six major areas of general
controls at each agency. Not surprisingly, this has led to the
identification of additional areas of weakness at some agencies. These
increases in reported weaknesses do not necessarily mean that information
security at federal agencies is getting worse. They more likely indicate
that information security weaknesses are becoming more fully understood- an
important step toward addressing the overall problem. Nevertheless, the
results leave no doubt that serious, pervasive weaknesses persist. As
auditors increase their proficiency and the body of audit evidence expands,
it is probable that additional significant deficiencies will be identified.

8 Information Security: Serious Weaknesses Place Critical Federal Operations
and Assets at Risk (GAO/ AIMD- 98- 92, September 23, 1998) and Information
Security: Serious and Widespread Weaknesses Persist at Federal Agencies
(GAO/ AIMD- 00- 295, September 6, 2000). 9 High- Risk Series: Information
Management and Technology (GAO/ HR- 97- 9, February 1,

1997); High- Risk Series: An Update (GAO/ HR- 99- 1, January 1999); High
Risk Series: An Update (GAO- 01- 263, January 2001). 10 Computer Security:
Weaknesses Continue to Place Critical Federal Operations and Assets at Risk
(GAO- 01- 600T, April 5, 2001).

Page 7 GAO- 01- 1168T

Most of the audits covered in our analysis were performed as part of
financial statement audits. At some agencies with primarily financial
missions, such as the Department of the Treasury and the Social Security
Administration, these audits covered the bulk of mission- related
operations. However, at agencies whose missions are primarily nonfinancial,
such as DOD and the Department of Justice, the audits may provide a less
complete picture of the agency?s overall security posture because the audit
objectives focused on the financial statements and did not include
evaluations of systems supporting nonfinancial operations. In response to
congressional interest, since fiscal year 1999, we expanded our audit focus
to cover a wider range of nonfinancial operations. We expect this trend to
continue.

Risks to Federal Operations are Substantial

To fully understand the significance of the weaknesses we identified, it is
necessary to link them to the risks they present to federal operations and
assets. Virtually all federal operations are supported by automated systems
and electronic data, and agencies would find it difficult, if not
impossible, to carry out their missions and account for their resources
without these information assets. Hence, the degree of risk caused by
security weaknesses is extremely high.

The weaknesses identified place a broad array of federal operations and
assets at risk of fraud, misuse, and disruption. For example, weaknesses at
the Department of the Treasury increase the risk of fraud associated with
billions of dollars of federal payments and collections, and weaknesses at
DOD increase the vulnerability of various military operations. Further,
information security weaknesses place enormous amounts of confidential data,
ranging from personal and tax data to proprietary business information, at
risk of inappropriate disclosure. For example, in 1999, a Social Security
Administration employee pled guilty to unauthorized access to the
administration?s systems. The related investigation determined that the
employee had made many unauthorized queries, including obtaining earnings
information for members of the local business community.

More recent audits in 2001 show that serious weaknesses continue to be a
problem and that critical federal operations and assets remain at risk.

In August, we reported that significant and pervasive weaknesses placed
Commerce?s systems at risk. Many of these systems are considered critical

Page 8 GAO- 01- 1168T

to national security, national economic security, and public health and
safety. Nevertheless, we demonstrated that individuals, both within and
outside of Commerce, could gain unauthorized access to Commerce systems and
thereby read, copy, modify, and delete sensitive economic, financial,
personnel, and confidential business data. Moreover, intruders could disrupt
the operations of systems that are critical to the mission of the
department. 11 Also, Commerce?s inspector general has also reported
significant computer security weaknesses in several of the department?s
bureaus and, in February 2001, reported multiple material information
security weaknesses affecting the department?s ability to produce accurate
data for financial statements. 12

In July, we reported serious weaknesses in systems maintained by the
Department of Interior?s National Business Center, a facility processing
more than $12 billion annually in payments that place sensitive financial
and personnel information at risk of unauthorized disclosure, critical
operations at risk of disruption, and assets at risk of loss. While Interior
has made progress in correcting previously identified weaknesses, the newly
identified weaknesses impeded the center?s ability to (1) prevent and detect
unauthorized changes, (2) control electronic access to sensitive
information, and (3) restrict physical access to sensitive computing areas.
13

In March, we reported that although the DOD?s Department- wide Information
Assurance Program had made progress in addressing information assurance, it
had not yet met its goals of integrating information assurance with mission
readiness criteria, enhancing information assurance capabilities and
awareness of department personnel, improving monitoring and management of
information assurance operations, and establishing a security management
infrastructure. As a result, DOD was unable to accurately determine the
status of information security across the department, the progress of its
improvement efforts, or the effectiveness of its information security
initiatives. 14

In February, the Department of Health and Human Services? Inspector General
again reported serious control weaknesses affecting the integrity,

11 Information Security: Weaknesses Place Commerce Data and Operations at
Serious Risk (GAO- 01- 751, August 13, 2001). 12 Department of Commerce?s
Fiscal Year 2000 Consolidated Financial Statements, Inspector General Audit
Report No. FSD- 12849- 1- 0001. 13 Information Security: Weak Controls Place
Interior's Financial and Other Data at Risk (GAO- 01- 615, July 3, 2001).

14 Information Security: Progress and Challenges to an Effective Defense-
wide Information Assurance Program (GAO- 01- 307, March 30, 2001).

Page 9 GAO- 01- 1168T

confidentiality, and availability of data maintained by the department. 15
Most significant were weaknesses associated with the department?s Centers
for Medicare and Medicaid Services (CMS), formerly known as the Health Care
Financing Administration, which was responsible, during fiscal year 2000,
for processing more than $200 billion in Medicare expenditures. CMS relies
on extensive data processing operations at its central office to maintain
administrative data, such as Medicare enrollment, eligibility and paid
claims data, and to process all payments for managed care. Significant
weaknesses were also reported for the Food and Drug Administration and the
department?s Division of Financial Operations.

These types of risks, if inadequately addressed, may limit the government?s
ability to take advantage of new technology and improve federal services
through electronic means. For example, this past February, we reported on
serious control weaknesses in the Internal Revenue Service?s (IRS)
electronic filing system, noting that failure to maintain adequate security
could erode public confidence in electronic filing, jeopardize the Service?s
ability to meet its goal of 80 percent of returns being filed electronically
by 2007, and deprive it of financial and other anticipated benefits.

Specifically, we found that, during the 2000 tax filing season, IRS did not
adequately secure access to its electronic filing systems or to the
electronically transmitted tax return data those systems contained. We
demonstrated that unauthorized individuals, both within and outside IRS,
could have gained access to these systems and viewed, copied, modified, or
deleted taxpayer data. In addition, the weaknesses we identified jeopardized
the security of the sensitive business, financial, and taxpayer data on
other critical IRS systems that were connected to the electronic filing
systems. The IRS Commissioner has stated that, in response to
recommendations we made, IRS completed corrective action for all the
critical access control vulnerabilities we identified before the 2001 filing
season and that, as a result, the electronic filing systems now
satisfactorily meet critical federal security requirements to protect the
taxpayer. 16 As part of our audit follow up activities, we plan to evaluate
the effectiveness of IRS? corrective actions.

Addressing weaknesses such as those we identified in the IRS?s electronic
filing system is especially important in light of the administration?s plans
to improve government services by expanding use of the Internet and other
computer- facilitated operations- collectively referred to as

15 Report on the Financial Statement Audit of the Department of Health and
Human Services for Fiscal Year 2000, A- 17- 00- 00014, February 26, 2001. 16
Information Security: IRS Electronic Filing Systems (GAO- 01- 306, February
16, 2001).

Page 10 GAO- 01- 1168T

electronic government, or E- government. 17 Specific initiatives proposed
for fiscal year 2002 include expanding electronic means for (1) providing
information to citizens, (2) handling procurement- related transactions, (3)
applying for and managing federal grants, and (4) providing citizens
information on the development of specific federal rules and regulations.
Anticipated benefits include reducing the expense and difficulty of doing
business with the government, providing citizens improved access to
government services, and making government more transparent and accountable.
Success in achieving these benefits will require agencies and others
involved to ensure that the systems supporting E- government are protected
from fraud, inappropriate disclosures, and disruption. Without this
protection, confidence in E- government may be diminished, and the related
benefits never fully achieved.

Control Weaknesses Across Agencies are Similar

Although the nature of agency operations and their related risks vary,
striking similarities remain in the specific types of general control
weaknesses reported and in their serious adverse impact on an agency?s
ability to ensure the integrity, availability, and appropriate
confidentiality of its computerized operations. Likewise, similarities exist
in the corrective actions they must take. The following sections describe
the six areas of general controls and the specific weaknesses that have been
most widespread at the agencies covered by our analysis.

Security Program Management Each organization needs a set of management
procedures and an organizational framework for identifying and assessing
risks, deciding what policies and controls are needed, periodically
evaluating the effectiveness of these policies and controls, and acting to
address any identified weaknesses. These are the fundamental activities that
allow an organization to manage its information security risks in a cost
effective manner rather than reacting to individual problems in an ad- hoc
manner only after a violation has been detected or an audit finding
reported.

Despite the importance of this aspect of an information security program,
poor security program management continues to be a widespread problem.
Virtually all the agencies for which this aspect of security was reviewed
had deficiencies. Specifically, many had not (1) developed

17 The President?s Management Agenda, Fiscal Year 2002, www. whitehouse.
gov/ omb/ budget.

Page 11 GAO- 01- 1168T

security plans for major systems based on risk (2) documented security
policies, and (3) implemented a program for testing and evaluating the
effectiveness of the controls they relied on. As a result, these agencies

were not fully aware of the information security risks to their operations,

had accepted an unknown level of risk by default rather than consciously
deciding what level of risk was tolerable,

had a false sense of security because they were relying on ineffective
controls, and

could not make informed judgments as to whether they were spending too
little or too much of their resources on security.

Access Controls Access controls limit or detect inappropriate access to
computer resources (data, equipment, and facilities), thereby protecting
these resources against unauthorized modification, loss, and disclosure.
Access controls include physical protections- such as gates and guards- as
well as logical controls, which are controls built into software that
require users to authenticate themselves (through the use of secret
passwords or other identifiers) and limit the files and other resources that
authenticated users can access and the actions that they execute. Without
adequate access controls, unauthorized individuals, including outside
intruders and former employees, can surreptitiously read and copy sensitive
data and make undetected changes or deletions for malicious purposes or
personal gain. Also, authorized users can intentionally or unintentionally
modify or delete data or execute changes that are outside their span of
authority.

For access controls to be effective, they must be properly implemented and
maintained. First, an organization must analyze the responsibilities of
individual computer users to determine what type of access (e. g., read,
modify, delete) they need to fulfill their responsibilities. Then, specific
control techniques, such as specialized access control software, must be
implemented to restrict access to these authorized functions. Such software
can be used to limit a user?s activities associated with specific systems or
files and keep records of individual users? actions on the computer.
Finally, access authorizations and related controls must be maintained and
adjusted on an ongoing basis to accommodate new and departing employees, as
well as changes in users? responsibilities and related access needs.

Significant access control weaknesses were reported for all the agencies
covered by our analysis, as shown by the following examples:

Page 12 GAO- 01- 1168T

Accounts and passwords for individuals no longer associated with the agency
were not deleted or disabled nor were they adjusted for those whose
responsibilities, and thus need to access certain files, changed. As a
result, at one agency, former employees and contractors could still and in
many cases did read, modify, copy, or delete data. At this same agency, even
after 160 days of inactivity, 7,500 out of 30,000 users? accounts had not
been deactivated.

Users were not required to periodically change their passwords.

Managers did not precisely identify and document access needs for individual
users or groups of users. Instead, they provided overly broad access
privileges to very large groups of users. As a result, far more individuals
than necessary had the ability to browse and, sometimes, modify or delete
sensitive or critical information. At one agency, all 1,100 users were
granted access to sensitive system directories and settings. At another
agency, 20,000 users had been provided access to one system without written
authorization.

Use of default, easily guessed, and unencrypted passwords significantly
increased the risk of unauthorized access. During testing at one agency, we
were able to guess many passwords based on our knowledge of commonly used
passwords and were able to observe computer users? keying in passwords and
then use those passwords to obtain ?high level? system administration
privileges.

Software access controls were improperly implemented, resulting in
unintended access or gaps in access- control coverage. At one agency data
center, all users, including programmers and computer operators, had the
ability to read sensitive production data, increasing the risk that such
sensitive information could be disclosed to unauthorized individuals. Also,
at this agency, certain users had the unrestricted ability to transfer
system files across the network, increasing the risk that unauthorized
individuals could gain access to the sensitive data or programs.

To illustrate the risks associated with poor authentication and access
controls, in recent years we have begun to incorporate network vulnerability
testing into our audits of information security. Such tests involve
attempting- with agency cooperation- to gain unauthorized access to
sensitive files and data by searching for ways to circumvent existing
controls, often from remote locations. Our auditors have been successful, in
almost every test, in readily gaining unauthorized access that would allow
both internal and external intruders to read, modify, or delete data for
whatever purpose they had in mind. Further, user activity was inadequately
monitored. Also, much of the activity associated with our intrusion testing
has not been recognized and recorded, and the problem

Page 13 GAO- 01- 1168T

reports that were recorded did not recognize the magnitude of our activity
or the severity of the security breaches we initiated.

Software Development and Change Controls

Controls over software development and changes prevent unauthorized software
programs or modifications to programs from being implemented. Key aspects of
such controls are ensuring that (1) software changes are properly authorized
by the managers responsible for the agency program or operations that the
application supports, (2) new and modified software programs are tested and
approved before they are implemented, and (3) approved software programs are
maintained in carefully controlled libraries to protect them from
unauthorized changes and ensure that different versions are not
misidentified.

Such controls can prevent errors in software programming as well as
malicious efforts to insert unauthorized computer program code. Without
adequate controls, incompletely tested or unapproved software can result in
erroneous data processing that, depending on the application, could lead to
losses or faulty outcomes. In addition, individuals could surreptitiously
modify software programs to include processing steps or features that could
later be exploited for personal gain or sabotage.

Weaknesses in software program change controls were identified for almost
all the agencies for which these controls were evaluated. Examples of
weaknesses in this area included the following:

Testing procedures were undisciplined and did not ensure that implemented
software operated as intended. For example, at one agency, senior officials
authorized some systems for processing without testing access controls to
ensure that they had been implemented and were operating effectively. At
another agency, documentation was not retained to demonstrate user testing
and acceptance.

Implementation procedures did not ensure that only authorized software was
used. In particular, procedures did not ensure that emergency changes were
subsequently tested and formally approved for continued use and that
implementation of ?locally developed? (unauthorized) software programs was
prevented or detected.

Agencies? policies and procedures frequently did not address the maintenance
and protection of program libraries.

Page 14 GAO- 01- 1168T

Segregation of Duties Segregation of duties refers to the policies,
procedures, and organizational structure that help ensure that one
individual cannot independently control all key aspects of a process or
computer- related operation and thereby conduct unauthorized actions or gain
unauthorized access to assets or records without detection. For example, one
computer programmer should not be allowed to independently write, test, and
approve program changes.

Although segregation of duties alone will not ensure that only authorized
activities occur, inadequate segregation of duties increases the risk that
erroneous or fraudulent transactions could be processed, improper program
changes implemented, and computer resources damaged or destroyed. For
example,

an individual who was independently responsible for authorizing, processing,
and reviewing payroll transactions could inappropriately increase payments
to selected individuals without detection or

a computer programmer responsible for authorizing, writing, testing, and
distributing program modifications could either inadvertently or
deliberately implement computer programs that did not process transactions
in accordance with management?s policies or that included malicious code.

Controls to ensure appropriate segregation of duties consist mainly of
documenting, communicating, and enforcing policies on group and individual
responsibilities. Segregation of duties can be enforced by a combination of
physical and logical access controls and by effective supervisory review. We
identified weaknesses in segregation of duties at most agencies covered by
our analysis. Common problems involved computer programmers and operators
who were authorized to perform a variety of duties, thus providing them the
ability to independently modify, circumvent, and disable system security
features. For example, at one data center, a single individual could
independently develop, test, review, and approve software changes for
implementation.

Segregation of duties problems were also identified related to transaction
processing. For example, at one agency, 11 staff members involved with
procurement had system access privileges that allowed them to individually
request, approve, and record the receipt of purchased items. In addition, 9
of the 11 staff members had system access privileges that allowed them to
edit the vendor file, which could result in fictitious vendors being added
to the file for fraudulent purposes. For fiscal year

Page 15 GAO- 01- 1168T

1999, we identified 60 purchases, totaling about $300,000, that were
requested, approved, and receipt- recorded by the same individual.

Operating System Software Controls Operating system software controls limit
and monitor access to the powerful programs and sensitive files associated
with the computer systems operation. Generally, one set of system software
is used to support and control a variety of applications that may run on the
same computer hardware. System software helps control and coordinate the
input, processing, output, and data storage associated with all applications
that run on the system. Some system software can change data and program
code on files without leaving an audit trail or can be used to modify or
delete audit trails. Examples of system software include the operating
system, system utilities, program library systems, file maintenance
software, security software, data communications systems, and database
management systems.

Controls over access to and modification of system software are essential in
providing reasonable assurance that operating system- based security
controls are not compromised and that the system will not be impaired. If
controls in this area are inadequate, unauthorized individuals might use
system software to circumvent security controls to read, modify, or delete
critical or sensitive information and programs. Also, authorized users of
the system may gain unauthorized privileges to conduct unauthorized actions
or to circumvent edits and other controls built into application programs.
Such weaknesses seriously diminish the reliability of information produced
by all applications supported by the computer system and increase the risk
of fraud, sabotage, and inappropriate disclosure. Further, system software
programmers are often more technically proficient than other data processing
personnel and, thus, have a greater ability to perform unauthorized actions
if controls in this area are weak.

The control concerns for system software are similar to the access control
issues and software program change control issues discussed earlier.
However, because of the high level of risk associated with system software
activities, most entities have a separate set of control procedures that
apply to them. Weaknesses were identified at each agency for which operating
system controls were reviewed. A common type of problem reported was
insufficiently restricted access that made it possible for knowledgeable
individuals to disable or circumvent controls in a variety of ways. For
example, at one agency, system support personnel had the ability to change
data in the system audit log. As a result, they could have

Page 16 GAO- 01- 1168T

engaged in a wide array of inappropriate and unauthorized activity and could
have subsequently deleted related segments of the audit log, thus
diminishing the likelihood that their actions would be detected.

Further, pervasive vulnerabilities in network configuration exposed agency
systems to attack. These vulnerabilities stemmed from agencies? failure to
(1) install and maintain effective perimeter security, such as firewalls and
screening routers, (2) implement current software patches, and (3) protect
against commonly known methods of attack.

Service Continuity Controls Finally, service continuity controls ensure that
when unexpected events occur, critical operations will continue without
undue interruption and that crucial, sensitive data are protected. Losing
the capability to process, retrieve, and protect electronically maintained
information can significantly affect an agency?s ability to accomplish its
mission. If service continuity controls are inadequate, even relatively
minor interruptions can result in lost or incorrectly processed data, which
can cause financial losses, expensive recovery efforts, and inaccurate or
incomplete information. For some operations, such as those involving health
care or safety, system interruptions could even result in injuries or loss
of life.

Service continuity controls should address the entire range of potential
disruptions including relatively minor interruptions, such as temporary
power failures or accidental loss or erasure of files, as well as major
disasters, such as fires or natural disasters, that would require
reestablishing operations at a remote location. It is also essential that
the related controls be understood and supported by management and staff
throughout the organization. Senior management commitment is especially
important to ensure that adequate resources are devoted to emergency
planning, training, and related testing.

To establish effective service continuity controls, agencies should first
assess the criticality and sensitivity of their computerized operations and
identify supporting resources. At most agencies, since the continuity of
certain automated operations is more important than others, it is not
costeffective to provide the same level of continuity for all operations.
For this reason, it is important that management, based on an overall risk
assessment of agency operations, identify which data and operations are most
critical, determine their priority in restoring processing, and identify the
minimum resources needed to recover and support them. Agencies should then
take steps to prevent and minimize potential damage and interruption. These
steps include routinely duplicating or backing up data files, computer
programs, and critical documents with off- site storage;

Page 17 GAO- 01- 1168T

installing environmental controls, such as fire suppression systems or
backup power supplies; arranging for remote backup facilities that can be
used if the entity?s usual facilities are damaged beyond use; and ensuring
that staff and other users of the system understand their responsibilities
in case of emergencies. Taking such steps, especially implementing thorough
backup procedures and installing environmental controls, are generally
inexpensive ways to prevent relatively minor problems from becoming costly
disasters.

Agencies should also develop a comprehensive contingency plan for restoring
critical applications that includes arrangements for alternative processing
facilities in case the usual facilities are significantly damaged or cannot
be accessed. This plan should be documented, tested to determine whether it
will function as intended in an emergency situation, adjusted to address
identified weaknesses, and updated to reflect current operations. Both user
and data processing departments should agree on the plan, and it should be
communicated to affected staff. The plan itself should identify and provide
information on supporting resources that will be needed, roles and
responsibilities of those who will be involved in recovery activities,
arrangements for off- site disaster recovery location 18 and travel and
lodging for necessary personnel, off- site storage location for backup
files, and procedures for restoring critical applications and their order in
the restoration process. In testing the plan, it is most useful to simulate
a disaster situation that tests overall service continuity, including
whether the alternative data processing site functions as intended and
whether critical computer data and programs recovered from off- site storage
are accessible and current. Such testing not only helps managers identify
weaknesses, it also assesses how well employees have been trained to carry
out their roles and responsibilities in a disaster situation. Generally,
contingency plans for very critical functions should be fully tested about
once every year or two, whenever significant changes to the plan have been
made, or when significant turnover of key people has occurred.

Of importance is that contingency planning be considered within the larger
context of restoring the organization?s core business processes. Federal
agencies depend not only on their own internal systems, but also on data
provided by their business partners and services provided by the public
infrastructure (e. g., power, water, transportation, and voice and

18 Depending on the degree of service continuity needed, choices for
alternative facilities will range from an equipped site ready for immediate
backup service, referred to as a ?hot

site,? to an unequipped site that will take some time to prepare for
operations, referred to as a ?cold site.? In addition, various types of
services can be prearranged with vendors, such as making arrangements with
suppliers of computer hardware and telecommunications services as well as
with suppliers of business forms and other office supplies.

Page 18 GAO- 01- 1168T

data telecommunications). One weak link anywhere in the chain of critical
dependencies can cause major disruptions to business operations. During the
Year 2000 computing challenge, it was essential that agencies develop
business continuity and contingency plans for all critical core business
processes and supporting systems regardless of whether these systems were
owned by the agency. As we reported in September 2000 on the lessons learned
from this challenge, developing these plans was one of a number of
management practices that, if continued, could improve federal agencies?
overall information technology management, particularly in areas such as
critical infrastructure protection and security. 19

The September 11 tragedies demonstrated just how unexpected and disastrous
events can be and how absolutely essential it is for the government to be
able to continue critical operations and services during emergency
situations. In the aftermath of these events, news reports indicate that
business continuity and contingency planning has been a critical factor in
restoring operations for New York?s financial district, with some
specifically attributing companies? preparedness to the contingency planning
efforts begun for the Year 2000 challenge. In particular, the Year 2000
challenge increased management attention on continuity and risk management.
It also gave companies a chance to rehearse a disaster beforehand.

However, while the Year 2000 challenge increased the focus on business
continuity and contingency planning, our analysis of reports since July 1999
showed that most federal agencies covered by our review had service
continuity control weaknesses. Examples of common weaknesses included the
following:

Plans were incomplete because operations and supporting resources had not
been fully analyzed to determine which were the most critical and would need
to be resumed as soon as possible should a disruption occur.

Disaster recovery plans were not fully tested to identify their weaknesses.
For example, agencies had not performed periodic walkthroughs or unannounced
tests of the disaster recovery plan- tests that provide a scenario more
likely to be encountered in the event of an actual disaster.

Our more recent work also confirms that service continuity weaknesses
continue to exist. For example, in July, we reported that while the
Department of the Interior?s National Business Center had conducted
comprehensive tests of its disaster recovery plan for its computer center,

19 Year 2000 Computing Challenge: Lessons Learned Can Be Applied to Other
Management Challenges (GAO/ AIMD- 00- 290, September 12, 2000).

Page 19 GAO- 01- 1168T

improvements were still needed in some areas of its overall plan. 20 One of
the weaknesses was that the center had not conducted unannounced tests or
walkthroughs of its disaster recovery plan. Instead, all tests had been
planned with participants fully aware of the disaster recovery test
scenario, unlike in an actual disaster, when there is usually little or no
warning. In addition, critical backup files for financial and sensitive
agency personnel programs, data, and software stored off site were not
inventoried. As a result, if a disaster befell the center?s main computer
facility, there were no assurances that all critical and sensitive system
resources would be available to fully restore all key systems.

As another example, in August, we reported that of the seven Department of
Commerce (Commerce) bureaus we reviewed, 21 none had developed comprehensive
plans to ensure the continuity of service in the event of a service
disruption. 22 Specific service continuity weaknesses identified included
the following:

None of the seven bureaus had completed recovery plans for all their
sensitive systems.

Although one bureau had developed two recovery plans, one for its data
center and another for its software development installation center, the
bureau did not have plans to cover disruptions to the rest of its critical
systems, including its local area network.

Systems at six of the seven bureaus did not have documented backup
procedures.

One bureau stated that it had an agreement with another Commerce bureau to
back it up in case of disruptions; however, this agreement had not been
documented.

One bureau stated in its backup strategy that tapes used for system recovery
were neither stored off- site nor protected from destruction. For example,
backup for its network file servers is kept in a file cabinet in a bureau
official?s supply room, and backup tapes for a database and web

20 GAO- 01- 615 (July 3, 2001). 21 The seven Commerce bureaus we reviewed
were the Bureau of Export Administration, the Economic Development
Administration, the Economics and Statistics Administration, the
International Trade Administration, the Minority Business Development
Agency, the National Telecommunications and Information Administration, and
the Office of the Secretary. [For the sake of simplification, we use the
term ?bureaus? to refer to all seven Commerce organizations, although the
Office of the Secretary is not a bureau.] All of these bureaus are based at
the Hoover Building in Washington, D. C., and have missions related to or
support for trade development, reporting, assistance, regulation, and
oversight. 22 GAO- 01- 751 (August 13, 2001).

Page 20 GAO- 01- 1168T

server are kept on the shelf above the server. In case of a destructive
event, the backups could be subject to the same damage as the primary files.

Two bureaus had no backup facilities for key network devices such as
firewalls.

Security Program Management Can Be Improved With New Evaluation and
Reporting Requirements

Our prior information security reports include many recommendations to
individual agencies that address specific weaknesses in the areas I have
just described. Agencies have taken steps to address problems, and many have
remedial efforts underway. However, these efforts will not be fully
effective and lasting unless they are supported by a strong agencywide
security management framework.

Establishing such a management framework requires that agencies take a
comprehensive approach that involves both (1) senior agency program managers
who understand which aspects of their missions are the most critical and
sensitive and (2) technical experts who know the agencies? systems and can
suggest appropriate technical security control techniques. We studied the
practices of organizations with superior security programs and summarized
our findings in a May 1998 executive guide entitled Information Security
Management: Learning From Leading Organizations (GAO/ AIMD- 98- 68). Our
study found that these organizations managed

their information security risks through a cycle of risk management
activities that included

assessing risks and determining protection needs,

selecting and implementing cost- effective policies and controls to meet
these needs,

promoting awareness of policies and controls and of the risks that prompted
their adoption among those responsible for complying with them, and

implementing a program of routine tests and examinations for evaluating the
effectiveness of policies and related controls and reporting the resulting
conclusions to those who can take appropriate corrective action.

Page 21 GAO- 01- 1168T

In addition, a strong, centralized focal point can help ensure that the
major elements of the risk management cycle are carried out and serve as a
communications link among organizational units. Such coordination is
especially important in today?s highly networked computing environments.

Implementing this cycle of risk management activities is the key to ensuring
that information security risks are adequately considered and addressed on
an ongoing, agencywide basis. Included within it are several steps that
agencies can take immediately. Specifically, they can (1) increase
awareness, (2) ensure that existing controls are operating effectively, (3)
ensure that software patches are up- to- date, (4) use automated scanning
and testing tools to quickly identify problems, (5) propagate their best
practices, and (6) ensure that their most common vulnerabilities are
addressed. Although none of these actions alone will ensure good security,
they take advantage of readily available information and tools and, thus, do
not involve significant new resources. As a result, they are steps that can
be made without delay.

Due to concerns about the repeated reports of computer security weaknesses
at federal agencies, in late 2000, Congress enacted government information
security reform legislation as part of the Fiscal Year 2001 National Defense
Authorization Act to require agencies to implement the activities I have
just described. In addition to requiring security program management
improvements, the new provisions require that both management and agency
inspectors general annually evaluate agency information security programs.
The Office of Management and Budget (OMB) asked agencies to submit the
results of their program reviews and the results of their inspector
general?s independent evaluation by September 10. In accordance with the new
law, OMB plans to develop a summary report to the Congress later this year.
This summary report, and the subordinate agency reports, should provide a
more complete picture of the status of federal information security than has
previously been available, thereby providing the Congress and OMB with an
improved means of overseeing agency progress and identifying areas needing
improvement.

This annual evaluation and reporting process is an important mechanism,
previously missing, for holding agencies accountable for implementing
effective security and managing the problem from a governmentwide
perspective. We are currently reviewing agency implementation of the new
provisions.

Page 22 GAO- 01- 1168T

Critical Infrastructure Protection Efforts Supplement Traditional
Information Security

Beyond the risks of computer- based attacks on critical federal operations,
the federal government has begun to address the risks of computer- based
attacks on our nation?s computer- dependent critical infrastructures, such
as electric power distribution, telecommunications, and transportation
systems. Although these efforts pertain to many traditional computer
security issues, such as maintaining the integrity, confidentiality, and
availability of important computerized operations, they focus primarily on
risks of national importance and encompass efforts to ensure the security of
privately controlled critical infrastructures.

The history of federal initiatives to address these computer- based risks
includes the following.

In June 1995, a Critical Infrastructure Working Group, led by the Attorney
General, was formed to (1) identify critical infrastructures and assess the
scope and nature of threats to them, (2) survey existing government
mechanisms for addressing these threats, and (3) propose options for a full-
time group to consider long- term government responses to threats to
critical infrastructures. The working group identified critical
infrastructures, characterized threats to them, and recommended creating a
commission to investigate such issues.

In February 1996, the National Defense Authorization Act required the
executive branch to provide a report to the Congress on the policies and
plans for developing capabilities to defend against computer- based attacks,
such as warnings of strategic attacks against the national information
infrastructure. 23 Later that year, the Permanent Subcommittee on
Investigations, Senate Committee on Governmental Affairs, began to hold
hearings on security in cyberspace. Since then, congressional interest in
protecting national infrastructures has remained strong.

In July 1996, in response to the recommendation of the 1995 working group,
the President?s Commission on Critical Infrastructure Protection was
established to further investigate the nation?s vulnerability to both cyber
and physical threats.

23 National Defense Authorization Act of Fiscal Year 1996 , Pub. L. 104-
106, Div. A, Title X, Subtitle E, Section 1053.

Page 23 GAO- 01- 1168T

In October 1997, the President?s Commission issued its report, 24 which
described the potentially devastating implications of poor information
security from a national perspective.

In response to the commission?s report, the President initiated actions to
implement a cooperative public/ private approach to protecting the nation?s
critical infrastructures by issuing PDD 63 in May 1998. The directive called
for a range of activities to improve federal agency security programs,
establish a partnership between the government and private sector, and
improve the nation?s ability to detect and respond to serious attacks. The
directive established critical infrastructure protection as a national goal,
stating that, by the close of 2000, the United States was to have achieved
an initial operating capability and, no later than 2003, the capability to
protect the nation's critical infrastructures from intentional destructive
acts.

To accomplish its goals, PDD 63 designated the National Coordinator for
Security, Infrastructure Protection, and Counter- Terrorism, who reports to
the Assistant to the President for National Security Affairs, to oversee the
development and implementation of national policy in this area. The
directive also established the National Plan Coordination staff, which
became the Critical Infrastructure Assurance Office, an interagency office
housed in the Department of Commerce responsible for planning infrastructure
protection efforts. It further authorized the FBI to expand its National
Infrastructure Protection Center (NIPC) and directed the NIPC to gather
information on threats and coordinate the federal government?s response to
incidents affecting infrastructures.

In addition, the directive designated ?lead agencies? to work with
privatesector and government entities in each of eight infrastructure
sectors and five special function areas. For example, the Department of the
Treasury is responsible for working with the banking and finance sector, and
the Department of Energy is responsible for working with the electric power
industry. Similarly, regarding special function areas, DOD is responsible
for national defense, and the Department of State is responsible for foreign
affairs. To facilitate private- sector participation, PDD 63 encouraged the
creation of Information Sharing and Analysis Centers (ISACs) that could
serve as mechanisms for gathering, analyzing, and appropriately sanitizing
and disseminating information to and from infrastructure sectors and the
NIPC. Figure 1 depicts the entities with critical infrastructure protection
responsibilities as outlined by PDD 63.

24 Critical Foundations: Protecting America's Infrastructures, the Report of
the President's Commission on Critical Infrastructure Protection, October
1997.

Page 24 GAO- 01- 1168T

Figure 1: Critical Infrastructure Protection Responsibilities as Outlined by
PPD 63

Source: The Critical Infrastructure Assurance Office. Infrastructure

Sectors Critical

Infrastructure Coordination

Group Lead Agencies

for Sector Liaison

Lead Agencies for Special

Functions Information and communication

Banking and finance Water supply Aviation, highway, mass

transit, pipelines, rail, waterborne commerce

Emergency law enforcement Emergency fire services, continuity of government

Electric power, oil and gas production and storage

Public health services Commerce

Treasury EPA

Transportation Justice/ FBI

FEMA Energy

HHS Justice/ FBI

(Law enforcement internal security)

CIA (Intelligence)

State (Foreign affairs)

DOD (National defense)

OSTP (Research and

development) Information Sharing and

Analysis Center( s) National Infrastructure

Protection Center National Infrastructure

Assurance Council Assistant to the

President for National Security Affairs

National Coordinator

Critical Infrastructure Assurance Office

Principals Committee President

Page 25 GAO- 01- 1168T

Shortly after the initial issuance of PDD 63, we reported on the importance
of developing a governmentwide strategy that clearly defines and coordinates
the roles of new and existing federal entities to ensure governmentwide
cooperation and support for PDD 63. 25 Specifically, we noted that several
of PDD 63?s provisions appeared to overlap with existing requirements
prescribed in the Paperwork Reduction Act; OMB Circular A- 130, Appendix
III; the Computer Security Act; and the ClingerCohen Act. In addition, some
of the directive?s objectives were similar to objectives being addressed by
other federal entities, such as developing a federal incident- handling
capability, which was then in the process of being addressed by the National
Institute of Standards and Technology and the federal Chief Information
Officers Council. 26 At that time, we recommended that OMB, which, by law,
is responsible for overseeing federal information security, and the
Assistant to the President for National Security Affairs ensure such
coordination.

In July 2000, we reported that a variety of activities had been undertaken
in response to PDD 63, including developing and reviewing individual agency
critical infrastructure protection plans, identifying and evaluating
information security standards and best practices, and the White House?s
issuing its National Plan for Information Systems Protection 27 as a first
major element of a more comprehensive strategy to be developed. 28 At that
time, we reiterated the importance of defining and clarifying organizational
roles and responsibilities, noting that numerous federal entities were
collecting, analyzing, and disseminating data or guidance on computer
security vulnerabilities and incidents and that clarification would help
ensure a common understanding of (1) how the activities of these many
organizations interrelate, (2) who should be held accountable for their
success or failure, and (3) whether such activities will effectively and
efficiently support national goals.

The administration is currently reviewing the federal strategy for critical
infrastructure protection that was originally outlined in PDD 63. On May 9,
the White House issued a statement saying that it was working with federal
agencies and private industry to prepare a new version of a

?national plan for cyberspace security and critical infrastructure
protection? and reviewing how the government is organized to deal with

25 Information Security: Serious Weaknesses Place Critical Federal
Operations and Assets at Risk (GAO/ AIMD- 98- 92, September 23, 1998). 26
The federal incident handling program is now operated by the Federal
Computer Incident Response Center at the General Services Administration. 27
Defending America?s Cyberspace: National Plan for Information Systems
Protection: Version 1.0: An Invitation to a Dialogue, The White House,
January 7, 2000.

28 Critical Infrastructure Protection: Challenges to Building a
Comprehensive Strategy for Information Sharing and Coordination (GAO/ T-
AIMD- 00- 268, July 26, 2000).

Page 26 GAO- 01- 1168T

information security issues. Administration officials are currently
discussing how the government?s strategy for protecting critical
computerdependent infrastructures will relate to the responsibilities of the
recently established Office of Homeland Security.

Progress in Implementing PDD 63 Has Been Limited

Last week, as part of our broader report on counterterrorism, we reported
that efforts were underway by lead federal agencies, the Critical
Infrastructure Assurance Office, and the NIPC to foster cooperative
relationships between the federal government and nonfederal sectors.
However, efforts to perform substantive analyses of infrastructure
vulnerabilities and implementation of remedial actions had been limited. 29

To assist in establishing relationships with major infrastructure owners and
operators, PDD 63 requires lead agencies to assign a high- ranking official,
as an agency sector liaison, to lead efforts in cooperation with the sector
owners and operators in addressing problems related to critical
infrastructure protection and, in particular, in recommending components of
a national infrastructure assurance plan. Similarly, the directive required
the agency sector liaison officials, after discussions and coordination with
entities of their infrastructure sector, to identify infrastructure sector
coordinators to represent their sector. In addition, PDD 63 outlined tasks
that the lead agencies were to encourage and assist the infrastructure
sectors in accomplishing, including developing vulnerability education and
outreach programs, establishing ISACs, performing vulnerability assessments
of the sectors, and developing related remediation plans.

As of March 2001, each of the eight lead agencies we reviewed had designated
sector liaisons, and seven of the eight major infrastructure sectors had
identified one or more individuals or groups as sector coordinators for
their respective infrastructure sector. Infrastructure sector coordinators
had not been selected for the public health services sector because,
according to officials at the Department of Health and Human Services, the
infrastructure owners and operators had not been fully identified due to the
large and diverse communities involved. Also, most infrastructure sectors
had planned or held education and outreach events, such as workshops,
conferences, and industry meetings to address

29 Combating Terrorism: Selected Challenges and Related Recommendations
(GAO- 01- 822, September 20, 2001).

Page 27 GAO- 01- 1168T

broad CIP needs and specific concerns. Further, six ISACs within five
infrastructures had been established to gather and share information about
vulnerabilities, attempted intrusions, and attacks within their respective
infrastructures and to meet specific sector objectives.

However, beyond building partnerships, raising awareness, and improving
information sharing, efforts to perform substantive, comprehensive analyses
of infrastructure sector vulnerabilities and development of related remedial
plans had been limited. While some assessments had been performed for
individual sector components, interdependencies within and among the
infrastructures had not been fully considered. For example, within the
banking and finance sector, while most large institutions had undergone
vulnerability assessments, a vulnerability assessment of banking and finance
institutions as a group to identify interdependencies and events that could
cause a system failure across the infrastructure had not occurred. Such
sector- wide assessments had not yet been performed because sector
coordinators were still establishing the necessary relationships,
identifying critical assets and critical entities, and researching and
identifying appropriate methodologies. In addition, some federal officials
stated that their agencies did not have the resources to assist in the
completion of sector vulnerability assessments.

Factors cited by the private sector as impeding progress in building the
necessary government/ private- sector partnerships and identifying and
addressing vulnerabilities included concerns that (1) organizations
potentially could face antitrust violations for sharing information with
other industry partners or face potential liabilities for information shared
in good faith, (2) sensitive information may be disclosed under the Freedom
of Information Act, (3) an inadvertent release of confidential business
information, such as trade secrets or proprietary information, could damage
reputations, lower consumer confidence, and hurt competitiveness, (4) some
senior executives were not fully aware of the importance of their assets to
the national and economic security of the nation, and (5) organizations
capable of coordinating actions across large and complex infrastructures did
not exist.

However, other efforts have supplemented lead agency efforts. For example,
in December 1999, the Critical Infrastructure Assurance Office helped
establish the Partnership for Critical Infrastructure Security as a forum of
private- sector member companies for raising awareness and understanding of
cross- industry critical infrastructure issues and as a catalyst for action
among the owners and operators of the critical infrastructures. As of March
2001, the Partnership had 51 members from various infrastructure sectors. It
also had created working groups to address interdependency vulnerability
assessment; information sharing,

Page 28 GAO- 01- 1168T

awareness, and education; legislation and public policy objectives; research
and development and workforce development; and organization issues/ public
private cooperation. Further, the Critical Infrastructure Assurance Office
has worked with the audit community to produce and distribute a guide for
corporate boards on managing information security risks and coordinated or
sponsored a series of conferences to raise awareness- including conferences
for the legal community to advance the understanding of legal issues
associated with information security.

In addition, the NIPC, which is responsible for analysis, warning, and
response related to cyber incidents, had made some progress in establishing
cooperative relationships with the private sector. Specifically, in April
2001, 30 we reported that the NIPC had worked to build information- sharing
relationships with the private sector through the adoption and expansion of
the InfraGard Program, which started in 1996, to provide a secure mechanism
for two- way information sharing about intrusion, incidents, and system
vulnerabilities. By early January 2001, 518 entities were InfraGard members-
up from 277 members in October 2000. Members included representatives from
private industry, other government agencies, state and local law
enforcement, and the academic community.

Further, PDD 63 called for a plan to expand international cooperation on
critical infrastructure protection and designated the Department of State as
the lead agency in this area. According to Department of State officials and
the President?s Status Report on CIP, an international strategy is being
implemented that coordinates CIP outreach to other governments and
international intergovernmental organizations and promotes CIP awareness,
vigilance in security standards and practices, and law enforcement
cooperation. As part of this strategy, the Department had organized meetings
with key allies to discuss common issues related to infrastructure
protection and developed a United Nations Resolution on cybercrime, which
passed unanimously in the United Nations General Assembly. In addition,
Department of Justice officials were negotiating a Council of Europe
convention intended to facilitate international law enforcement issues
related to computer crime and, as of March 2001, this treaty still was being
negotiated. The Department of Justice also chairs the G- 8 High Tech Crime
Subgroup that is focused on enhancing law enforcement?s abilities to
prevent, investigate, and prosecute hightechnology crime. 31 Further,
Commerce officials had participated in

30 Critical Infrastructure Protection: Significant Challenges in Developing
National Capabilities (GAO- 01- 323, April 25, 2001). 31 Eight major
industrialized countries comprise the G- 8, which includes Canada, France,
Germany, Italy, Japan, Russia, the United Kingdom, and the United States.

Page 29 GAO- 01- 1168T

meetings with representatives from other countries to discuss and negotiate
CIP issues, including the Council of Europe treaty.

In addition to requiring federal departments and agencies to work with the
private sector, PDD 63 required them to (1) establish plans for protecting
their own critical infrastructure that were to be implemented within 2
years, or by May 2000, and (2) develop procedures and conduct vulnerability
assessments. In response, federal agencies have taken initial steps to
develop critical infrastructure protection plans, but, as discussed earlier,
independent audits continue to identify persistent, significant information
security weaknesses that place federal operations at high risk of tampering
and disruption.

A March 2001 report by the President?s Council on Integrity and Efficiency
and the Executive Council on Integrity and Efficiency (PCIE/ ECIE)
identified significant deficiencies in agencies? implementation of PDD 63
based on reviews conducted by agency inspectors general. 32 Specifically,

many agency critical infrastructure protection plans were incomplete and
some agencies had not developed such plans,

most agencies had not completely identified their mission- essential
infrastructure assets, and

few agencies had completed vulnerability assessments of their minimum
essential infrastructure assets or developed remediation plans.

The PCIE/ ECIE report concluded that the federal government could improve
its PDD 63 planning and assessment activities and questioned the federal
government?s ability to protect the nation?s critical infrastructures from
intentional destructive acts by May 2003, as required in PDD 63.

Our subsequent review of PDD 63- related activities at eight lead agencies
found similar problems, although some agencies had made progress since their
respective inspectors general reviews. 33 For example, while five agencies
had or were in the process of updating their plans, three were not revising
their plans to address reported deficiencies. In addition, while most of the
agencies we reviewed had identified critical assets, many had not completed
related vulnerability assessments. Further, most of the eight agencies we
reviewed had not taken the additional steps to identify

32 The PCIE primarily is comprised of the presidentially appointed
inspectors general and the ECIE is primarily comprised of the agency head-
appointed inspectors general. In November 1999, PCIE and ECIE formed a
working group to review the adequacy of federal agencies? implementation of
PDD 63. The March 2001 report is based on reviews by 21 inspectors general
of their respective agencies? PDD 63 planning and assessment activities. 33
GAO- 01- 822 (September 20, 2001).

Page 30 GAO- 01- 1168T

interdependencies and, as a result, some agency officials said that they
were not sure which of their assets were critical from a national
perspective and, therefore, subject to PDD 63. Identifying interdependencies
is important so that infrastructure owners can determine when disruption in
one infrastructure may result in damage to other infrastructures.

We identified several factors that had impeded federal agency efforts to
comply with this aspect of PDD 63. First, no clear definitions had been
developed to guide development and implementation of agency plans and
measure performance. For example, PDD 63 established December 2000 as the
deadline for achieving an initial operating capability and May 2003 for
achieving full operational capability of key functions. However, the
specific capabilities to be achieved at each milestone had not been defined.
The PCIE/ ECIE report noted that agencies had used various interpretations
of initial operating capability and stated that, without a definition, there
is no consistent measure of progress toward achieving full security
preparedness. In addition, several agency officials said that funding and
staffing constraints contributed to their delays in implementing PDD 63
requirements. Further, the availability of adequate technical expertise to
provide information security has been a continuing concern to agencies.

Progress in the NIPC Has Been Mixed

A key element of the strategy outlined in PPD 63 was the establishment of
the NIPC as ?a national focal point? for gathering information on threats
and facilitating the federal government?s response to computer- based
incidents. Specifically, the directive assigned the NIPC the responsibility
for providing comprehensive analyses on threats, vulnerabilities, and
attacks; issuing timely warnings on threats and attacks; facilitating and
coordinating the government?s response to computer- based incidents;
providing law enforcement investigation and response, monitoring
reconstitution of minimum required capabilities after an infrastructure
attack; and promoting outreach and information sharing.

In April, we reported on the NIPC?s progress in developing national
capabilities for analyzing threat and vulnerability data and issuing
warnings, responding to attacks, and developing information- sharing
relationships with government and private- sector entities. 34 Overall, we
found that while progress in developing these capabilities was mixed, the

34 GAO- 01- 323 (April 25, 2001).

Page 31 GAO- 01- 1168T

NIPC had initiated a variety of critical infrastructure protection efforts
that had laid a foundation for future governmentwide efforts. In addition,
the NIPC had provided valuable support and coordination related to
investigating and otherwise responding to attacks on computers. However, at
the close of our review, the analytical and information- sharing
capabilities that PDD 63 asserted are needed to protect the nation?s
critical infrastructures had not yet been achieved, and the NIPC had
developed only limited warning capabilities. Developing such capabilities is
a formidable task that experts say will take an intense interagency effort.

Multiple Factors Have Limited Development of Analysis and Warning
Capabilities

PDD 63 assigns the NIPC responsibility for developing analytical
capabilities to provide comprehensive information on changes in threat
conditions and newly identified system vulnerabilities, as well as timely
warnings of potential and actual attacks. This responsibility requires
obtaining and analyzing intelligence, law enforcement, and other information
to identify patterns that may signal that an attack is underway or imminent.

Since its establishment in 1998, the NIPC has issued a variety of analytical
products, most of which have been tactical analyses pertaining to individual
incidents. These analyses have included (1) situation reports related to law
enforcement investigations, including denial- of- service attacks that
affected numerous Internet- based entities, such as eBay and Yahoo, and (2)
analytical support of a counterintelligence investigation. In addition, the
NIPC has issued a variety of publications, most of which were compilations
of information previously reported by others with some NIPC analysis.

However, the use of strategic analysis to determine the potential broader
implications of individual incidents has been limited. Such analysis looks
beyond one specific incident to consider a broader set of incidents or
implications that may indicate a potential threat of national importance.
Identifying such threats assists in proactively managing risk, including
evaluating the risks associated with possible future incidents and
effectively mitigating the impact of such incidents.

Three factors have hindered the NIPC?s ability to develop strategic
analytical capabilities.

Page 32 GAO- 01- 1168T

First, there is no generally accepted methodology for analyzing strategic
cyber- based threats. For example, there is no standard terminology, no
standard set of factors to consider, and no established thresholds for
determining the sophistication of attack techniques. According to officials
in the intelligence and national security community, developing such a
methodology would require an intense interagency effort and dedication of
resources.

Second, the NIPC has sustained prolonged leadership vacancies and does not
have adequate staff expertise, in part because other federal agencies have
not provided the originally anticipated number of detailees. For example, at
the close of our review in February, the position of Chief of the Analysis
and Warning Section, which was to be filled by the Central Intelligence
Agency, had been vacant for about half of the NIPC?s 3- year existence. In
addition, the NIPC had been operating with only 13 of the 24 analysts that
NIPC officials estimate are needed to develop analytical capabilities.

Third, the NIPC did not have industry- specific data on factors such as
critical system components, known vulnerabilities, and interdependencies.
Under PDD 63, such information is to be developed for each of eight industry
segments by industry representatives and the designated federal lead
agencies. However, at the close of our work in February 2001, only three
industry assessments had been partially completed, and none had been
provided to the NIPC.

To provide a warning capability, the NIPC established a Watch and Warning
Unit that monitors the Internet and other media 24 hours a day to identify
reports of computer- based attacks. As of February, the unit had issued 81
warnings and related products since 1998, many of which were posted on the
NIPC?s Internet web site. While some warnings were issued in time to avert
damage, most of the warnings, especially those related to viruses, pertained
to attacks underway. The NIPC?s ability to issue warnings promptly is
impeded because of (1) a lack of a comprehensive governmentwide or
nationwide framework for promptly obtaining and analyzing information on
imminent attacks, (2) a shortage of skilled staff, (3) the need to ensure
that the NIPC does not raise undue alarm for insignificant incidents, and
(4) the need to ensure that sensitive information is protected, especially
when such information pertains to law enforcement investigations underway.

However, I want to emphasize a more fundamental impediment in the NIPC?s
progress. Specifically, evaluating its progress in developing analysis and
warning capabilities was difficult because the entities involved in the
government?s critical infrastructure protection efforts did not share a
common interpretation of the NIPC?s roles and responsibilities.

Page 33 GAO- 01- 1168T

Further, the relationships between the Center, the FBI, and the National
Coordinator for Security, Infrastructure Protection, and CounterTerrorism at
the National Security Council were unclear regarding who has direct
authority for setting NIPC priorities and procedures and providing NIPC
oversight. In addition, NIPC?s own plans for further developing its
analytical and warning capabilities were fragmented and incomplete. As a
result, no specific priorities, milestones, or program performance measures
existed to guide NIPC?s actions or provide a basis for evaluating its
progress.

In our April report, we recognized that the administration was reviewing the
government?s infrastructure protection strategy and recommended that, as the
administration proceeds, the Assistant to the President for National
Security Affairs, in coordination with pertinent executive agencies,

establish a capability for strategically analyzing computer- based threats,
including developing related methodology, acquiring staff expertise, and
obtaining infrastructure data,

require development of a comprehensive data collection and analysis
framework and ensure that national watch and warning operations for
computer- based attacks are supported by sufficient staff and resources, and

clearly define the role of the NIPC in relation to other government and
private- sector entities.

In commenting on a draft of the report, the Special Assistant to the
President and Senior Director for Legislative Affairs at the National
Security Council stated that our report highlighted the need for a review of
the roles and responsibilities of the federal agencies involved in U. S.
critical infrastructure protection support. In addition, he stated that the
administration will consider our recommendations as it reviews federal cyber
activities to determine how the critical infrastructure protection function
should be organized. The Special Assistant to the President added that some
functions might be better accomplished by distributing the tasks across
several existing federal agencies, creating a ?virtual analysis center? that
would not only provide a governmentwide analysis and reporting capability,
but also support rapid dissemination of cyber threat and warning
information.

Page 34 GAO- 01- 1168T

NIPC Coordination and Technical Support Have Benefited Investigative and
Response Capabilities

PDD 63 directed the NIPC to provide the principal means of facilitating and
coordinating the federal government?s response to computer- based incidents.
In response, the NIPC undertook efforts in two major areas: providing
coordination and technical support to FBI investigations and establishing
crisis- management capabilities.

First, the NIPC provided valuable coordination and technical support to FBI
field offices that established special squads and teams and one regional
task force in its field offices to address the growing number of computer
crime cases. The NIPC supported these investigative efforts by (1)
coordinating investigations among FBI field offices, thereby bringing a
national perspective to individual cases, (2) providing technical support in
the form of analyses, expert assistance for interviews, and tools for
analyzing and mitigating computer- based attacks, and (3) providing
administrative support to NIPC field agents. For example, the NIPC produced
over 250 written technical reports during 1999 and 2000, developed
analytical tools to assist in investigating and mitigating computer- based
attacks, and managed the procurement and installation of hardware and
software tools for NIPC field squads and teams.

While these efforts benefited investigative efforts, FBI and NIPC officials
told us that increased computer capacity and data transmission capabilities
would improve their ability to promptly analyze the extremely large amounts
of data that are associated with some cases. In addition, FBI field offices
were not yet providing the NIPC with the comprehensive information that NIPC
officials say is needed to facilitate prompt identification and response to
cyber incidents. According to field office officials, some information on
unusual or suspicious computer- based activity had not been reported because
it did not merit opening a case and was deemed to be insignificant. To
address this problem, the NIPC established new performance measures related
to reporting.

Second, the NIPC developed crisis- management capabilities to support a
multiagency response to the most serious incidents from the FBI?s
Washington, D. C., Strategic Information Operations Center. From 1998
through early 2001, seven crisis- action teams had been activated to address
potentially serious incidents and events, such as the Melissa virus in 1999
and the days surrounding the transition to the year 2000, and related
procedures have been formalized. In addition, the NIPC coordinated the
development of an emergency law enforcement plan to guide the response of
federal, state, and local entities.

Page 35 GAO- 01- 1168T

To help ensure an adequate response to the growing number of computer
crimes, we recommended in our April report that the Attorney General, the
FBI Director, and the NIPC Director take steps to (1) ensure that the NIPC
has access to needed computer and communications resources and (2) monitor
the implementation of new performance measures to ensure that field offices
fully report information on potential computer crimes to the NIPC.

Progress in Establishing Information- Sharing Relationships Has Been Mixed

Information sharing and coordination among private- sector and government
organizations are essential for thoroughly understanding cyber threats and
quickly identifying and mitigating attacks. However, as we testified in July
2000, 35 establishing the trusted relationships and information- sharing
protocols necessary to support such coordination can be difficult.

The NIPC?s success in this area has been mixed. For example, as discussed
earlier, the InfraGard Program, which provides the FBI and the NIPC with a
means of securely sharing information with individual companies, has
expanded substantially. However, at the close of our review in February
2001, the NIPC had established a two- way, information- sharing partnership
with only one industry ISAC- the electric power industry. The NIPC?s
dealings with two other ISACs consisted of providing information to them
without receiving any in return, and no procedures had been developed for
more interactive information sharing. According to NIPC and ISAC officials,
the relationships have improved since our report.

Similarly, the NIPC and the FBI made only limited progress in developing a
database of the most important components of the nation?s critical
infrastructures- an effort referred to as the Key Asset Initiative. Although
FBI field offices had identified over 5,000 key assets, at the time of our
review, the entities that own or control the assets generally had not been
involved in identifying them. As a result, the key assets recorded may not
be the ones that infrastructure owners consider the most important. Further,
the Key Asset Initiative was not being coordinated with other similar
federal efforts at DOD and Commerce.

35 Critical Infrastructure Protection: Challenges to Building a
Comprehensive Strategy for Information Sharing and Cooperation (GAO/ T-
AIMD- 00- 268, July 26, 2000). Testimony before the Subcommittee on
Government Management, Information and Technology, Committee on Government
Reform, House of Representatives.

Page 36 GAO- 01- 1168T

In addition, the NIPC and other government entities had not developed fully
productive information- sharing and cooperative relationships. For example,
federal agencies have not routinely reported incident information to the
NIPC, at least in part because guidance provided by the federal Chief
Information Officers Council, which is chaired by the Office of Management
and Budget, directs agencies to report such information to the General
Services Administration?s Federal Computer Incident Response Center.
Further, NIPC and Defense officials agreed that their information- sharing
procedures needed improvement, noting that protocols for reciprocal
exchanges of information had not been established. In addition, the
expertise of the U. S. Secret Service regarding computer crime had not been
integrated into NIPC efforts. According to the NIPC director, the
relationship between the NIPC and other government entities has improved
since our review. In recent testimony, officials from the Federal Computer
Incident Response Center and the U. S. Secret Service discussed the
collaborative and cooperative relationships between their agencies and the
NIPC.

The NIPC has been more successful in providing training on investigating
computer crime to government entities, which is an effort that it considers
an important component of its outreach efforts. From 1998 through 2000, the
NIPC trained about 300 individuals from federal, state, local, and
international entities other than the FBI. In addition, the NIPC has advised
several foreign governments that are establishing centers similar to the
NIPC.

To improve information sharing, we recommended in our April report that the
Assistant to the President for National Security Affairs

direct federal agencies and encourage the private sector to better define
the types of information necessary and appropriate to exchange in order to
combat computer- based attacks and to develop procedures for performing such
exchanges,

initiate development of a strategy for identifying assets of national
significance that includes coordinating efforts already underway, and

resolve discrepancies in requirements regarding computer incident reporting
by federal agencies.

We also recommended that the Attorney General task the FBI Director to

formalize information- sharing relationships between the NIPC and other
federal entities and industry sectors and

Page 37 GAO- 01- 1168T

ensure that the Key Asset Initiative is integrated with other similar
federal activities.

In commenting on a draft of this report, the Special Assistant to the
President and Senior Director for Legislative Affairs at the National
Security Council said that the administration will consider our
recommendations as it reviews federal cyber activities to determine how the
critical infrastructure protection function should be organized.

Lack of A National Plan Is a Severe Impediment to Progress

Last week we reported that, in addition to the specific impediments
previously identified, an underlying deficiency in the implementation of the
strategy outlined in PDD 63 is the lack of a national plan that clearly
delineates the roles and responsibilities of federal and nonfederal entities
and defines interim objectives. 36 We first identified the need for a
detailed plan in September 1998, when we reported that developing a
governmentwide strategy that clearly defined and coordinated the roles of
new and existing federal entities was important to ensure governmentwide
cooperation and support for PDD 63. 37 At that time, we recommended that OMB
and the Assistant to the President for National Security Affairs ensure such
coordination.

In January 2000, the President issued Defending America?s Cyberspace:
National Plan for Information Systems Protection: Version 1.0: An Invitation
to a Dialogue as a first major element of a more comprehensive effort to
protect the nation?s information systems and critical assets from future
attacks. The plan proposed achieving the twin goals of making the U. S.
government a model of information security and developing a public/ private
partnership to defend our national infrastructures by achieving three
crosscutting infrastructure protection objectives:

minimize the possibility of significant and successful attacks,

identify, assess, contain, and quickly recover from an attack, and

create and build strong foundations, including people, organizations, and
laws, for preparing, preventing, detecting and responding to attacks.

36 GAO- 01- 822 (September 20, 2001). 37 GAO/ AIMD- 98- 92 (September 23,
1998).

Page 38 GAO- 01- 1168T

However, this plan focused largely on federal CIP efforts, saying little
about the private- sector role. Subsequently, in July 2000, we reiterated
the importance of defining and clarifying organizational roles and
responsibilities, noting that numerous federal entities were collecting,
analyzing, and disseminating data or guidance on computer security
vulnerabilities and incidents and that clarification would help ensure a
common understanding of (1) how the activities of these many organizations
interrelate, (2) who should be held accountable for their success or
failure, and (3) whether such activities will effectively and efficiently
support national goals. 38

A more complete plan is needed because, although some progress has been made
in implementing PDD 63, questions have surfaced regarding specific roles and
responsibilities and the time frames within which objectives are to be met.
For example, the PCIE/ ECIE reported that several agencies had decided not
to implement PDD 63 requirements because they believed that they were exempt
from the directive. As a result, these agencies had not prepared CIP plans,
identified critical assets, performed related vulnerability assessments, or
developed remediation plans. However, according to the Critical
Infrastructure Assurance Office, PDD 63 requirements apply to all
departments and agencies. Also, as I previously discussed, we found that
various officials involved in critical infrastructure protection did not
consistently interpret the NIPC?s role.

In addition, without clearly defined interim objectives and milestones, the
success of efforts to improve federal and nonfederal critical infrastructure
protection cannot be measured. The PCIE/ ECIE report noted that, as of March
2001, agencies still needed guidance for measuring their progress in
identifying critical assets, performing vulnerability assessments, and
developing and implementing remedial plans.

A May 2001 White House press statement announced that the administration was
reviewing how it was organized to deal with information security issues and
that recommendations would be made on how to structure an integrated
approach to cyber security and critical infrastructure protection.
Specifically, the announcement stated that the White House, federal
agencies, and private industry had begun to collaboratively prepare a new
version of a ?national plan for cyberspace security and critical
infrastructure protection? and reviewing how the government is organized to
deal with information security issues.

However, as of early September, a more complete strategy had not been
announced. Accordingly, in our report on combating terrorism, issued last

38 GAO/ T- AIMD- 00- 268 (July 26, 2000).

Page 39 GAO- 01- 1168T

week, we made several recommendations to supplement those we had made in the
past, including those regarding the NIPC. Specifically, we recommended that
the Assistant to the President for National Security Affairs ensure that the
federal government?s strategy to address computerbased threats, define

specific roles and responsibilities of organizations involved in critical
infrastructure protection and related information security activities,

interim objectives and milestones for achieving critical infrastructure
protection goals and a specific action plan for achieving these objectives,
including implementation of vulnerability assessments and related remedial
plans, and

performance measures for which entities can be held accountable. Last week,
in response to the September 11 terrorist attacks, the President announced
the creation of the Office of Homeland Security to coordinate and strengthen
counterterrorism efforts. As yet, it is not clear precisely how efforts to
protect against computer- based attacks will be incorporated into this new
office?s activities. Protecting against computerbased attacks requires
vigilance against a broad array of threats that include not only terrorists,
but nation states, criminals, and others. Therefore, it is likely that a
separate strategy will be needed to ensure that critical computer systems
are also protected from other malicious acts and damaging events, such as
fraud, espionage, and disruptions stemming from natural disasters. However,
it will be essential to link the government?s strategy for combating
computer- based attacks to the national strategy for combating terrorism.

* * * * * In conclusion, efforts are underway to mitigate the risks of
computerbased attacks on federal information systems and on our national
computer- dependent infrastructures. However, recent reports and events
indicate that these efforts are not keeping pace with the growing threats
and that critical operations and assets continue to be highly vulnerable to
computer- based attacks. The evaluation and reporting requirements of the
new Government Information Security Reform provisions should help provide a
more complete and accurate picture of federal security weaknesses and a
means of measuring progress. In addition, it is important that the
government ensure that our nation has the capability to deal with the
growing threat of computer- based attacks in order to mitigate the risk of
serious disruptions and damage to our critical infrastructures. However,
developing the needed capabilities will require overcoming many challenges.
Meeting these challenges will not be easy

Page 40 GAO- 01- 1168T

and will require clear central direction and dedicated expertise and
resources from multiple federal agencies, as well as support from the
private sector.

Mr. Chairman, this concludes my statement. I would be pleased to answer any
questions that you or other members of the Committee may have at this time.
If you should have any questions later about this testimony, please contact
me at (202) 512- 6253. I can also be reached by e- mail at willemssenj@ gao.
gov.

310138
*** End of document. ***