Information Technology: Departmental Leadership Crucial to	 
Success of Investment Reforms at Interior (12-SEP-03,		 
GAO-03-1028).							 
                                                                 
The Department of the Interior is responsible for diverse and	 
complex missions ranging from managing America's public lands,	 
mineral and water resources, and wildlife to providing satellite 
data to the military and scientific communities. To fulfill these
responsibilities, Interior invests over $850 million		 
annually--about 6 percent of its total annual budget--in	 
communications and computing projects and systems. Interior's	 
Office of the Secretary and its Chief Information Officer (CIO)  
are responsible for overseeing processes for managing these	 
investments to ensure that funds are expended in the most	 
cost-effective way in support of the agency's mission needs. GAO 
was asked to evaluate (1) departmental capabilities for managing 
the agency's information technology (IT) investments and (2) the 
department's actions and plans to improve these capabilities.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-1028					        
    ACCNO:   A08444						        
  TITLE:     Information Technology: Departmental Leadership Crucial  
to Success of Investment Reforms at Interior			 
     DATE:   09/12/2003 
  SUBJECT:   Financial management				 
	     Information technology				 
	     Investment planning				 
	     Strategic planning 				 
	     Agency missions					 
	     Internal controls					 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** 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-03-1028

                                       A

Report to the Subcommittee on Interior and Related Agencies, Committee on
Appropriations, House of Representatives

September 2003 INFORMATION TECHNOLOGY Departmental Leadership Crucial to
Success of Investment Reforms at Interior

GAO- 03- 1028

Contents Letter 1

Results in Brief 1 Background 3 Scope and Methodology 11 Interior*s
Capacity to Effectively Manage IT Investments Is Limited 12

Department*s Efforts to Improve Investment Management Processes and
Oversight Are Fragmented and Inadequate 34 Conclusions 36 Recommendations
37 Agency Comments and Our Evaluation 38

Appendixes

Appendix I: Bureau Missions, Functions, and IT Investments 40

Appendix II: Comments from the Department of the Interior 44

Appendix III: GAO Contact and Staff Acknowledgments 46 GAO Contact 46
Acknowledgments 46

Tables Table 1: Stage 2 Critical Processes* Building the Investment
Foundation 13

Table 2: Status of Stage 2 Critical Processes 15 Table 3: Investment Board
Operation 18 Table 4: IT Project and System Identification 21 Table 5: IT
Project Oversight 23 Table 6: Business Needs Identification 26 Table 7:
Proposal Selection 28 Table 8: Stage 3 Critical Processes* Developing a
Complete

Investment Portfolio 29 Table 9: Status of Stage 3 Critical Processes 30

Figures Figure 1: Interior*s Organizational Structure 4 Figure 2: The Five
Stages of Maturity within ITIM 9

Abbreviations

ALMRS Automated Land and Mineral Record System BIA Bureau of Indian
Affairs BLM Bureau of Land Management CIO Chief Information Officer CPIC
Capital Planning and Investment Control IT Information Technology ITIM
Information Technology Investment Management MMS Minerals Management
Service NBC National Business Center NPS National Park Service OCIO Office
of Chief Information Officer OIG Office of the Inspector General OMB
Office of Management and Budget OSM Office of Surface Mining Reclamation
and Enforcement PMB Policy, Management and Budget SAIC Science
Applications International Corporation TAAMS Trust Asset and Accounting
Management System USBR United States Bureau of Reclamation USFWS United
States Fish and Wildlife Service USGS United States Geological Survey

This is a work of the U. S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

Letter

September 12, 2003 The Honorable Charles H. Taylor Chairman The Honorable
Norman D. Dicks Ranking Minority Member Subcommittee on Interior and
Related Agencies Committee on Appropriations House of Representatives The
Department of the Interior is responsible for diverse and complex missions
ranging from managing America*s public lands, mineral and water resources,
and wildlife to providing satellite data to the military and scientific
communities. To fulfill these responsibilities, Interior invests over $850
million annually* about 6 percent of its total annual budgetary resources*
in communications and computing projects and systems. The Secretary of the
Interior and Interior*s Chief Information Officer (CIO) are responsible
for overseeing processes for managing these investments at all levels of
the organization to ensure that funds are expended in the most cost-
effective way in support of the agency*s mission needs. This report is one
of two in response to your request that we evaluate the

Department of the Interior*s information technology investment management
capabilities. 1 As agreed with your offices, our objectives were to
evaluate (1) departmental capabilities for managing the agency*s
information technology (IT) investments, including its ability to
effectively

oversee bureau processes, and (2) the department*s actions and plans to
improve these capabilities.

Results in Brief The Department of the Interior has limited capacity to
effectively manage its planned and ongoing IT investments. Over the past
few years, Interior has undertaken several initiatives to better
understand its current capabilities and to implement the organizational
processes required for the department to exercise its responsibility to
select, control, and evaluate IT investments. For example, the department
has issued a Capital Planning and Investment Control (CPIC) Guide, which
describes its approach to IT

1 U. S. General Accounting Office, Bureau of Land Management: Plan Needed
to Sustain Progress in Establishing IT Investment Management Capabilities,
GAO- 03- 1025 (Washington, D. C.: Sept. 12, 2003).

investment management. In addition, in order to support the implementation
of effective investment management practices throughout the department,
the Secretary has issued an order aligning bureau CIOs with the department
CIO and specifying that the bureau CIOs will have authority over IT
expenditures within their bureaus. This order acknowledges that effective
bureau processes are necessary to support effective investment management
throughout the department. However, efforts to implement the CPIC Guide
and the secretarial order have not

moved forward as specified in implementing memoranda. Interior has much to
accomplish before it can have confidence that its mix of IT investments
best meets its mission and business needs.

 The first step toward establishing effective investment management is to
put in place foundational, project- level control and selection processes.
Interior has implemented few of these processes. While the

CPIC Guide describes the approach Interior intends to take, and the
department- level boards have begun operating, few other key practices
have been instituted at this time. Until processes are established that
enable executives to select and oversee investments using reliable
information, they cannot be assured that they are consistently selecting

and managing IT investments that meet Interior*s needs and priorities. 
The second major step toward effective investment management is to

continually assess proposed and ongoing projects as an integrated and
competing portfolio of investment options. Interior officials acknowledge
that the agency has made little progress in managing investments as a
complete portfolio. As a result, Interior executives are unable to
adequately assess the relative merits of investment proposals and make
trade- offs among options.

Interior has undertaken a number of initiatives designed to improve its
investment management processes; however, it has not coordinated these
efforts, nor has it assigned the resources to effectively carry them out.
Without a well- defined process improvement plan and controls for
implementing it, it is unlikely that the agency will establish a mature
investment management capability. As a result, Interior will continue to
be

challenged in its ability to make informed and prudent investment
decisions in managing its IT investments to meet its mission objectives.
To strengthen the department*s investment management capability, we are
making a number of recommendations aimed at addressing the weaknesses
discussed in this report. In addition, we are recommending that the

department develop and implement a plan that includes (1) provisions to
improve investment management practices agencywide and (2) a timetable and
milestones for certifying bureau CPIC processes and for implementing the
secretarial order aligning CIO authorities and responsibilities.

In commenting on a draft of this report, the Department of the Interior
concurred with our recommendations and identified actions that it plans to
take to improve IT investment management processes throughout the
department. Among other things, the department stated that it intends to
develop and implement a comprehensive plan, approved by its senior
investment decision- making board, to address specific weaknesses that we
identified in its foundational investment management practices and to move
to strengthen the role of the CIO in oversight and resource allocation.

Background Interior Has Diverse

The Department of the Interior, created by Congress in 1849, is a Missions
and IT Investments

multitiered organization that currently employs approximately 70,000
people in about 2,400 locations throughout the United States. The
Secretary of the Interior heads the agency, which comprises approximately
30 offices and committees and eight bureaus. Five Assistant Secretaries
support the Secretary of the Interior at the department level. One of
these is responsible for Policy, Management and Budget. The others are
responsible for mission- related matters including Land and Minerals
Management, Indian Affairs, Fish and Wildlife and Parks, and Water and
Science.

At the next level of the organization, eight bureaus, 2 aligned with these
Assistant Secretaries, are responsible for achieving Interior*s diverse
missions. Interior*s missions include managing approximately 500 million
acres of land* about one- fifth of the total U. S. land mass* and about
1.8 billion acres of the Outer Continental Shelf; fulfilling the
government*s trust responsibility to American Indians and Alaska Natives;
conserving and protecting fish and wildlife; offering recreational
opportunities; managing the National Park System; providing stewardship of
energy and mineral resources; fostering the sound use of land and water
resources; helping

2 Interior uses the term *bureau* to refer to bureaus and offices and, in
some instances, to its departmental offices.

with the management of the National Fire Plan; ensuring the reclamation
and restoration of surface mining sites; and providing scientific
information on resource, natural hazard, and earth science issues. Figure
1 shows how Interior is organized.

Figure 1: Interior*s Organizational Structure

Information technology (IT) investments play a vital role in Interior*s
ability to fulfill its missions. Given the diversity of these missions and
operating environments, the character of these investments also varies
substantially.

For example, the department uses a land mobile radio infrastructure to
support geographically dispersed public safety and protection missions.
These missions include law enforcement on federal and tribal lands, urban
and wildland firefighting, seismic monitoring, wildlife tracking
management of national parks, and water reclamation activities. In
contrast, Interior*s Minerals Management Service owns systems that track

oil and gas production on public lands and maintains records on royalties
that are due to the federal government and to American Indian tribes.
Interior*s bureaus and associated program offices propose, fund, and
manage these kinds of investments, while certain departmental offices*

such as the Offices of Financial Management and Personnel Policy* propose
and manage other systems that support administrative functions. Interior*s
National Business Center is responsible for managing and operating
departmental information systems on a fee- for- service basis and

for providing other kinds of administrative support, such as facilities
management.

In fiscal year 2003, Interior invested over $850 million in IT* about 6
percent of its total budget. While the Secretary of the Interior has the
ultimate responsibility for managing these investments* including
overseeing and guiding the development, management, and use of information
resources and information technology throughout the

department* Interior*s CIO is responsible for providing leadership and
oversight for IT investment management processes throughout the agency. To
that end, Interior*s CIO serves as the chair of the department*s IT

Management Council, which oversees *major* investments in IT. 3 About
2,255 of Interior*s staff of about 70,000 are classified as IT
professionals. Thirty- four staff provided direct support to the CIO in
the department*s Office of the CIO during fiscal year 2003.

Appendix I provides additional information about each bureau*s missions,
functions, staffing, and total expenditures on IT for fiscal year 2003.

3 Major information technology investments include those with total life
cycle costs greater than $35 million; financial systems with a life cycle
cost greater than $500,000; multiple bureau and/ or agency projects;
investments mandated by legislation or executive order or identified by
the Secretary as critical; those reported as major on Exhibit 53 reports
submitted to OMB; those requiring a common infrastructure investment;
department strategic- and mandatory- use systems; those that differ
significantly from or affect department infrastructure, architecture, or
standards and guidelines; high risk investments as determined by OMB, GAO,
Congress and/ or the CIO; investments that directly support

the President*s Management Agenda items of *high executive visibility;*
and those that are related to electronic government or that use E-
business technologies.

Reviews Identified Need for Prior reviews of IT projects performed at
Interior over the past decade* by

Improving IT Investment GAO and the Office of Management and Budget (OMB)
as well as Interior*s Management

Office of the Inspector General (OIG)* have revealed significant
weaknesses in IT investment management practices at both the department
and the bureau levels. Over the last several years, we have issued a
series of reports on Interior*s major IT investments and associated
management practices. In April and July of 1999, we reported that Interior
had not followed sound management practices in the early stages of its
effort to acquire the Trust Asset and Accounting Management System, 4 a
system designed to manage Indian assets and land records. We also reported
that, as a result of poor planning, Interior could not ensure that the
system

would meet financial management needs cost effectively or mitigate system
development risks adequately. In September 2000, we reported that Interior
still needed to address significant remaining risks. 5 Among other

things, we recommended that Interior take steps to strengthen its software
development and acquisition processes and that it regularly assess the
progress being made in implementing this system.

4 U. S. General Accounting Office, Indian Trust Funds: Interior Lacks
Assurance That Trust Improvement Plan Will Be Effective, GAO/ AIMD- 99- 53
(Washington, D. C.: Apr. 28, 1999) and U. S. General Accounting Office,
Indian Trust Funds: Challenges Facing Interior*s Implementation of New
Trust Asset and Accounting Management System, GAO/ T- AIMD99-

238 (Washington, D. C.: July 14, 1999). 5 U. S. General Accounting Office,
Indian Trust Funds: Improvements Made in Acquisition of New Asset and
Accounting System But Significant Risks Remain, GAO/ AIMD- 00- 259
(Washington, D. C.: Sept. 15, 2000).

Between 1995 and 2001, we reported on Interior*s efforts to acquire a land
and mineral case processing system called Automated Land and Mineral
Record System( ALMRS)/ Modernization and raised concerns about the Bureau
of Land Management*s (BLM) and the prime contractor*s abilities to
complete, integrate, and test the new software system and complete the
current schedule. 6 Among other things, we recommended that BLM take

steps to strengthen its IT investment management processes and systems
acquisition capabilities. ALMRS was terminated in 1999, but many of the
management weaknesses we had identified remained. In 2000 and 2001, we
reported that BLM had been working to implement our recommendations, and
we further recommended that BLM develop a plan to integrate all of the
corrective actions necessary to implement our recommendations and

establish a schedule for completing them. In August 2002, Interior*s OIG
reported that the department did not have a process to ensure that IT
capital investments or projects focused on departmental mission objectives
or federal government goals and initiatives* principally because of its
decentralized approach to IT

investment management. 7 The OIG further stated that only 20 investment
projects* representing over 24 percent of the total* were subject to
departmental review and approval in fiscal years 2002 and 2003 through
submission of capital asset plans. Therefore, about $1 billion in Interior
IT investment projects were not subject to department- level review and

approval during those 2 years. 6 U. S. General Accounting Office, Land
Management Systems: Progress and Risks in Developing BLM*s Land and
Mineral Record System, GAO/ AIMD- 95- 180 (Washington, D. C.: Aug. 31,
1995); U. S. General Accounting Office, Land Management Systems: BLM Faces
Risks in Completing the Automated Land and Mineral Records System, GAO/
AIMD- 97- 42 (Washington, D. C.: Mar. 19, 1997); U. S. General Accounting
Office, Land Management

Systems: Information on BLM*s Automated Land and Mineral Record System
Release 2 Project, GAO/ AIMD- 97- 109R (Washington, D. C.: June 6, 1997);
U. S. General Accounting Office, Land Management Systems: Major Software
Development Does Not Meet BLM*s Business Needs, GAO/ AIMD- 99- 135
(Washington, D. C.: Apr. 30, 1999); U. S. General Accounting Office, Land
Management Systems: Status of BLM*s Actions to Improve Information
Technology Management, GAO/ AIMD- 00- 67 (Washington, D. C.: Feb. 24,
2000); and U. S. General Accounting Office, Land Management Systems: BLM*s
Actions to Improve Information Technology Management, GAO- 01- 282
(Washington, D. C.: Feb. 27, 2001).

7 U. S. Department of the Interior, Advisory Report, Developing the
Department of the Interior*s Information Technology Capital Investment
Process: A Framework for Action, No. 2002- I- 0038, August 2002.

Consistent with these reports, OMB reported in the President*s fiscal year
2003 budget that Interior was putting large sums of public funds at high
risk for failure and that it had not complied with applicable legislative
requirements that were established in the Paperwork Reduction Act of 1995
and the Clinger- Cohen Act of 1996. 8 OMB also reported that the
department had not been able to adequately identify major projects within
its IT portfolio or to demonstrate through adequate business cases the
need for all of the major projects that it did identify. In addition, out
of the 23

federal agencies included in the fiscal year 2003 budget supplemental
document entitled Performance Information for Major IT Investments, the
Department of the Interior was one of only two agencies that were

unable to provide the type of information on the actual performance of
their IT investments. In the Presidentis fiscal year 2004 budget, OMB
reported that Interior had made significant strides toward more fully
identifying its IT investments and strengthening the business cases that
it developed for major IT projects, although 20 of its 35 initial
submissions

remained on OMB*s at- risk list. 9 Information Technology

Our IT Investment Management (ITIM) maturity framework, 10 issued in
Investment Management

May 2000, is a useful tool that can help Interior to improve its IT
investment Maturity Framework

management capabilities. The ITIM framework can be used to determine both
the status of an agency*s current IT investment management capabilities
and what additional steps need to be taken to put more effective processes
in place. The ITIM framework establishes a hierarchical set of five
maturity stages. Each stage builds upon the lower stages and

represents increased capabilities toward achieving both stable and
effective (and thus mature) IT investment management processes. Except for
the first stage* which largely reflects ad hoc, undefined, and
undisciplined decision and oversight processes* each maturity stage is

8 The Paperwork Reduction Act of 1995 requires each agency to define its
information needs and develop strategies, systems, and capabilities to
support programs and to improve productivity, efficiency, and
effectiveness. The Clinger- Cohen Act requires agencies to link IT
investments to agency accomplishments and establish a process to select,
manage, and control IT investments.

9 Office of Management and Budget, Analytical Perspectives Budget of the
United States Government, Fiscal Year 2004. 10 U. S. General Accounting
Office, Information Technology Investment Management: A Framework for
Assessing and Improving Process Maturity (Exposure Draft), GAO/ AIMD10.
1.23 (Washington, D. C.: May 2000).

composed of critical processes that are essential to satisfying the
requirements of that stage. These critical processes are defined by key
practices that include organizational commitments (e. g., policies and
procedures), prerequisites (e. g., resource allocation), and activities
(e. g., implementing procedures). Key practices are the specific
conditions that

must be in place and tasks that must be performed for an organization to
effectively implement the necessary critical processes. Figure 2 shows the
five ITIM stages and a brief description of each stage.

Figure 2: The Five Stages of Maturity within ITIM

While the ITIM framework defines critical processes and key practices in
general terms, our work at multitiered organizations, such as the Postal
Service and the Department of Justice, 11 showed that specific roles and

11 U. S. General Accounting Office, United States Postal Service:
Opportunities to Strengthen IT Investment Management Capabilities, GAO-
03- 3 (Washington, D. C.: Oct. 15, 2002) and U. S. General Accounting
Office, Information Technology: Justice Plans to Improve Oversight of
Agency Projects, GAO- 03- 135 (Washington, D. C.: Nov. 22, 2002).

responsibilities may vary by organizational tier. For example, in such
organizations, department- level management has overall responsibility for
a process, while component- level management is responsible for ensuring
that applicable requirements defined by the department are met and that
operational units such as program offices take primary responsibility for
performing the day- to- day activities that are described by ITIM, in
accordance with management expectations. In such an environment, the
presence of well- established and managed processes at lower levels of the
organization can provide a level of assurance to the department concerning

the quality and reliability of proposals for new investments, information
reported on the actual performance of projects, and budget requests. In an
agency like Interior, in which organizations at different levels execute

various aspects of IT investment management, it is essential that top
agency management establish and oversee processes throughout the agency to
ensure that effective investment management practices are being adhered
to. Over the past decade, Congress has enacted a series of laws that
require centralized management and performance reporting to ensure that
agencies can demonstrate that they are making the best funding decisions
to support their mission needs. The Clinger- Cohen Act of 1996
specifically requires that the head of each agency designate a CIO to
implement a process that maximizes the value and assesses and manages the
risk of IT investments. Under the Clinger- Cohen Act, the Department of
the Interior*s CIO has the ultimate responsibility for ensuring the
costeffectiveness of decisions made by program managers to expend funds on
IT in support of the agency*s mission needs. Therefore, even though

individual bureaus have CIOs or similar officers, the department*s CIO
must monitor and evaluate the performance of its IT investment portfolio
as a whole and report to the Secretary on compliance with applicable laws
and policies.

Scope and To determine the department*s capabilities for managing its
information

Methodology technology (IT) investments, including its ability to
effectively oversee

bureau processes, we used several different criteria. To evaluate the
underlying investment management processes we used our Information
Technology Investment Management: A Framework for Assessing and Improving
Process Maturity, Exposure Draft (ITIM Framework). 12 We applied the
framework as it is described in the exposure draft, except that we used a
revised version of the IT Asset Inventory critical process, called

IT Project and System Identification, after discussion with departmental
officials at the beginning of this engagement. This revised critical
process has been used in our evaluations since June 2001. At the start of
our evaluation, we requested that the department conduct a self-
assessment using the ITIM as criteria. Using this self- assessment and the
supporting documentation as a starting point, we worked with Interior
officials to further support their conclusions. Based on the department*s
acknowledgement that it had only executed two of the key practices in
Stage 3, we did not independently assess the capabilities at this stage or
at

Stages 4 and 5 of the framework. In our evaluation, an ITIM key practice
was rated as *executed* only when we found sufficient evidence that the
practice was already in place at the time of the review. We rated all
other key practices as *not executed.* To gain additional insight into the
department*s ability to oversee its

components* IT investment management processes, we reviewed documentation
and conducted interviews on the department*s efforts to put the necessary
management structures in place, whether the department had clearly defined
what was expected of the bureaus, and whether it held the bureaus
accountable to the necessary standards. In order to evaluate the success
of the department*s oversight activities, we also assessed the
capabilities of Interior*s components. To determine the capabilities of
the components, we collected documentation describing bureau CPIC and
investment management processes and spoke with responsible officials at
eight bureaus (the Bureau of Indian Affairs, the Bureau of Land
Management, the Bureau of Reclamation, the Minerals Management Service,
the National Park Service, the Office of Surface Mining

12 U. S. General Accounting Office, Information Technology Investment
Management: A Framework for Assessing and Improving Process Maturity
(Exposure Draft), GAO/ AIMD 10. 1.23 (Washington, D. C.: May 2000).

Reclamation and Enforcement, the U. S. Fish and Wildlife Service, and the
U. S. Geological Survey) and the National Business Center. To assess
Interior*s plans for improving its IT investment management processes*
including oversight of bureau processes* and to identify potential
barriers to their implementation, we obtained and evaluated documents
showing what management actions had been taken and what initiatives had
been planned by the department. In addition, we interviewed officials in
the Offices of Acquisition and Property Management, Budget, and the Chief
Information Officer. We conducted our work at Interior*s headquarters
offices in Washington,

D. C.; bureaus headquarters offices in Arlington, Virginia; Reston,
Virginia; and Lakewood, Colorado; and at the National Business Center in
Englewood, Colorado, from November 2002 through July 2003, in

accordance with generally accepted government auditing standards.
Interior*s Capacity to

In order to have the capabilities to effectively manage IT investments, a
Effectively Manage IT

department should (1) have basic, project- level control and selection
practices in place and (2) manage its projects as a portfolio of
investments, Investments Is Limited

treating them as an integrated package of competing investment options and
pursuing those that best meet the department*s strategic goals,
objectives, and mission. These practices may be executed at various
organizational levels of the agency* including the bureau level* although
overall responsibility for their success remains at the department level.

The Department of the Interior is executing only 7 of the 38 key practices
that are required by the ITIM framework to establish a foundation for IT
investment management and only 2 of the 38 key practices required to

manage investments as a portfolio. In addition, the department*s ability
to oversee the successful implementation and execution of the required
practices is limited, although a number of initiatives have been
undertaken to address this issue. However, efforts to implement the reform
initiatives have not moved forward as specified in implementing memoranda.
13 Until Interior successfully implements stable investment management
practices

13 U. S. Department of the Interior, *Follow- on Guidance on
Implementation of Secretarial Order Requirements,* Memorandum from W. Hord
Tipton (Jan. 31, 2003) and U. S. Department of the Interior, *Capital
Asset Investment Management Clarification,* Memorandum from P. Lynn
Scarlett (Mar. 13, 2003).

throughout the department, it will lack essential management controls over
its IT investments, and it will be unable to ensure that the mix of
investments it is pursuing is the best to meet the department*s strategic
goals, objectives, and mission.

Department Demonstrates At the ITIM framework*s Stage 2 level of maturity,
an organization has

Few Capabilities for IT attained repeatable, successful investment control
processes and basic

Investment Management selection processes at the project level. Through
these processes, the

organization can identify expectation gaps early and take appropriate
steps to address them. According to the ITIM framework, critical processes
at Stage 2 include (1) defining investment board operations, (2)
collecting information about existing investments, (3) developing project-
level investment control processes, (4) identifying the business needs for
each IT project, and (5) developing a basic process for selecting new IT

proposals. Table 1 describes the purpose for each of the Stage 2 critical
processes.

Tabl e 1: Stage 2 Critical Processes* Building the Investment Foundation
Critical process Description

IT investment board To define and establish the governing board( s)
responsible operation for selecting, controlling, and evaluating
investments.

IT project oversight To regularly determine each IT project's progress
toward cost and schedule milestones, using established criteria, and to
take corrective actions when milestones are not achieved.

IT project and system To create and maintain an IT project and system
inventory identification to assist in managerial decision making.

Business needs To ensure that each IT program and project supports the
identification organization's business needs and meets users' needs.

Proposal selection To ensure that an established, structured process is
used to select new IT proposals. Source: GAO.

In a multitiered organization like Interior, the department is responsible
for providing leadership and oversight for foundational critical processes
by ensuring that written policies and procedures are established,
repositories

of information are created that support IT investment decision making,
resources are allocated, responsibilities are assigned, and all of the
activities are properly carried out where they may be most effectively

executed. In such an organization, the CIO is specifically responsible for
ensuring that the organization is effectively managing its IT investments
at every level. If Interior*s bureaus do not have investment management
processes in place that adequately support the department*s investment
management process, its CIO must take action to ensure that the department
is expending funds on IT investments that will fulfill its mission needs.

The department is executing 7 of the 38 key practices associated with
Stage 2 critical processes (or about 18 percent), primarily as a result of
issuing the IT and Construction Capital Planning and Investment Control

(CPIC) Guide in December 2002 and assigning responsibility for IT
investment management functions to three oversight boards. Among other
things, the CPIC Guide clearly describes the structure of the department*s
IT investment review boards and how authority is to be aligned among

bureau- and department- level boards; it assigns responsibility to the
boards for its proposal selection process.

However, the department has not executed most of the crucial key practices
at the Stage 2 level. For example, information about the expected and
actual cost and schedule for Interior*s IT projects, which could form the
basis for selection decisions, is not being provided to the investment
review boards. In addition, the department has few capabilities for
overseeing IT projects and ensuring that business needs are adequately
identified. Finally, in July 2003 Interior had not yet implemented most of
the investment management processes that it describes in its CPIC Guide,

and thus the members of its boards lacked direct experience in the
execution of ITIM critical processes.

Table 2 summarizes the status of the department*s Stage 2 critical
processes, showing how many associated key practices the agency has
executed. The department*s actions toward implementing each of the
critical processes are discussed in the sections that follow.

Table 2: Status of Stage 2 Critical Processes Total required Key practices
by critical

Percentage of key Critical process executed

process practices executed

IT investment board 2 6 33 operation IT project and system

0 7 0 identification IT project oversight 1 11 9

Business needs 2 8 25 identification Proposal selection 2 6 33

Cumulative 7 38 18 Source: GAO. Boards Are Operating but Have

To help ensure executive management accountability and adequate Limited
Experience

oversight for IT capital planning and investment decisions, an
organization should establish a governing board or boards with
responsibility for selecting, controlling, and evaluating IT investments.
According to the ITIM framework, effective operation of an IT investment
board requires, among other things, that (1) board members have both IT
and business knowledge, (2) board members understand the investment
board*s policies and procedures and exhibit core competencies in using the
agency*s IT investment policies and procedures, (3) the organization*s
executives and

line managers support and carry out board decisions, (4) the organization
develop organization- specific process guidance that includes policies and
procedures to direct the board*s operations, and (5) the investment board
operates according to written policies and procedures. (The full list of
key practices is provided later in table 3.)

The department is executing two of the six key practices needed for its IT
investment boards to operate effectively, as specified in the ITIM
framework. Interior*s new CPIC Guide provides a conceptual framework for
the operation of IT investment boards and a description of a five- phase

investment process. It also specifies the membership of Interior*s IT
investment boards in a way that should ensure the integration of technical
and business knowledge as well as the appointment of senior- level
executives to the boards.

In its new CPIC Guide, Interior provides a conceptual overview of the
department- and bureau- level review boards that are now responsible for

overseeing IT investments. At the department level, these boards and their
decision thresholds include the following:

 the Management Excellence Council, which is responsible for validating
recommendations made to it by the Management Initiatives Team on IT
investments;

 the Management Initiatives Team, which is responsible for reviewing,
evaluating, and approving investments that are expected to cost $35
million or more, and other investments that are otherwise considered to be
major; and

 the IT Management Council, which is responsible for reviewing,
evaluating, and approving IT investments that are expected to cost between
$5 million and $35 million.

The Management Excellence Council, chaired by the Secretary of the
Interior and comprising Assistant Secretaries and bureau heads, was
created to provide leadership, direction, and accountability in meeting
the administration*s goals and to provide overall direction for and
oversight of the department*s management reform activities. Its IT
investment management activities include validating the Management
Initiatives Team*s recommendations and recommending strategic investments
for the Secretary*s approval. The Management Initiatives Team, chaired by
the Assistant Secretary for Policy, Management and Budget and comprising
Deputy Assistant Secretaries and Deputy Bureau Directors, was established
to support the Management Excellence Council in its broad activities. In
the context of IT investment management, the Management Initiatives Team*s
responsibilities include articulating investment strategy, validating
scoring by the IT Management Council, and resolving duplication of effort.
The IT Management Council, chartered in the CPIC Guide, is

cochaired by the department CIO and a rotating cochair who is elected by
IT Management Council annually; it is composed of the bureau CIOs and
representatives from several departmental offices. The IT Management

Council is responsible for scoring potential investments against a
predetermined set of criteria, maintaining the planning process and the
investment portfolio, and identifying duplication of effort. The
department has taken steps to ensure that investment boards are

established at the bureau level also. For example, Interior*s CPIC Guide
requires that investment review boards be established by each of its
bureaus to provide oversight for IT investments that are funded by
Interior.

This multilayered review of investments is designed to increase the
likelihood that Interior*s IT investments will meet mission needs.

However, at the time that we concluded our work in July 2003, the
department could not assert that board members exhibited core competencies
in using the IT investment approach because department level boards had
very limited experience with IT proposal selection

processes. Until the department implements an effective IT investment
board process that is well established and understood throughout the
agency, executives cannot be adequately assured that decisions made by the
boards are being well supported and carried out by its executives and line
managers or that each board is operating according to established policies
and procedures.

Table 3 summarizes our ratings for each key practice and the specific
evidence that supports the ratings.

Tabl e 3: Investment Board Operation Type of practice Key practice Rating
Summary of evidence

Organizational 1. An organizationspecific Executed The department issued a
Capital Planning and Investment Control Guide commitments IT investment
(CPIC) Guide in December 2002 that defined department- and bureau- process
guide is

level IT investment boards and specified their authorities, procedures,
created to direct each

membership, roles, and responsibilities. board's operations.

2. Organization Not executed The CPIC Guide describes a number of controls
or processes for executives and line

ensuring that executives and line managers carry out the decisions of the
managers support and IT investment boards. These include entry and exit
criteria for five carry out IT investment

investment management phases defined in the CPIC Guide and a board
decisions.

description of how CPIC and budget processes are to be linked. However, at
the time of our review these boards had limited experience and their
activities focused on OMB budget reporting. Prerequisites 1. Adequate
resources

Not executed The department indicated in its self- assessment that this
key practice had are provided for

not been executed. operating each IT investment board.

2. Board members Not executed The department*s IT investment boards are
composed of departmental understand the

and bureau office executives who are capable of making investment
investment board's

board decisions. However, at the time of this review, Interior*s
departmentlevel policies and boards had limited experience with the
processes described in its procedures and exhibit

new CPIC Guide.

core competencies in using the IT investment approach through training,
education, or experience. Activities 1. Each IT investment

Executed Interior has three department- level IT investment boards,
including the IT board is created and

Management Council, the Management Initiatives Team, and the defined with
board

Management Excellence Council. The IT Management Council reviews IT
membership integrating

investments from a technical perspective for all three boards, and its
both IT and business

members include both IT and business representatives. The Management
knowledge.

Initiatives Team includes representatives from the bureaus, as well as the
department*s Offices of the Chief Information Officer, Financial
Management, and Planning and Performance Management. Finally, the
Management Excellence Council is made up of Assistant Secretaries
responsible for Interior*s programs and the heads of its bureaus. 2. Each
IT investment

Not executed Although the department issued a CPIC Guide in December 2002
that board operates contains written policies and procedures for the
organization*s IT according to written

investment management process, Interior*s IT investment boards had not
policies and yet fully implemented these at the time of this review.
procedures in the organization- specific IT investment process guide.

Source: GAO.

No Project and System Inventory Agency boards, managers, and staff at all
levels who are responsible for

Exists to Support Investment decisions about IT investment management must
have at their disposal

Decision Making information about existing investments as well as new ones
that are being

proposed. Besides the fundamental business justification for each of the
individual investments, decision makers must also consider the interaction
of each continuing or proposed project with other projects that comprise
the agency*s overall IT environment. In addition, opportunities to
consolidate projects or systems and avoid redundant investments may be

found when proposals are evaluated in this context. The information that
could be used in this analysis includes current and planned system
functions, physical location, organizational owners, and how funds are
being expended toward acquiring, maintaining, and deploying these assets.

A project and system inventory can take many forms and does not have to be
centrally located or consolidated. The guiding principles for developing
the inventory are that the information maintained should be both
accessible* located where it is of the most value to investment decision
makers* and relevant to the management processes and decisions that are

being made. In multitiered organizations, information from an IT project
and system inventory should be accessible and relevant to the decision
processes of boards at all levels of the organization that are responsible
for

ITIM activities. An IT project and system inventory is also essential to
successfully implementing certain other critical processes, including IT
Project Oversight and Proposal Selection, and developing a comprehensive

IT investment portfolio. According to the ITIM framework, 14 organizations
at the Stage 2 level of maturity allocate adequate resources for tracking
IT projects and systems, designate responsibility for managing the project
and system identification process, and develop related written policies
and procedures. Resources required for this purpose typically include
managerial attention to the process; staff; supporting tools, such as an
inventory database; inventory reporting, updating, and query tools; and a
method for communicating inventory changes to affected parties. Stage 2
organizations also maintain information on their IT projects and systems
in one or more inventories according to written procedures, recording
changes in data as required, 14 For this critical process, we used a
revised version of the IT Asset Inventory critical

process included in the Exposure Draft of the ITIM framework. We discussed
the revision with departmental officials at the start of this engagement,
and they agreed to use it as the basis for our review of Interior*s IT
investment management capabilities.

and maintaining historical records. Access to this information is provided
on demand to decision makers and other affected parties. (The full list of
key practices is provided in table 4.)

However, the department is not executing any of the seven key practices in
this critical process. It does not have any written standards or existing
repositories of information on Interior*s IT investments that meet ITIM

standards, and it has not assigned responsibility or allocated resources
for this purpose. In April 2003, departmental officials indicated that
they are planning to use the Exhibit 53 report they prepared for OMB as
their IT project and system inventory. However, according to the same
officials, the current Exhibit 53 report for Interior does not constitute
a comprehensive

list of its IT investments. Moreover, this report does not include
information on actual project cost and schedule or other information
needed to support IT investment decisions.

Developing an adequate project and system inventory has only recently
become a priority at Interior. As a result, Interior*s IT investment
boards do not currently have the information they need to make well-
informed decisions regarding selecting, controlling, and evaluating
investment decisions. Without information from such an inventory, the
department- and bureau- level boards cannot ensure that duplication among
existing and proposed IT investments is eliminated. In addition, the
boards cannot compare actual project performance with expectations and
determine whether corrective actions should be taken.

Table 4 summarizes our ratings for each key practice.

Table 4: IT Project and System Identification Type of practice Key
practice Rating Summary of evidence

Organizational 1. The organization has written policies Not executed The
department indicated that it plans to use its Exhibit commitments and
procedures for identifying its IT

53 report to OMB as its IT project and system inventory. projects and
systems and collecting, in an While the Exhibit 53 is designed to list all
of Interior*s IT inventory, information about the IT projects projects and
systems, this report does not contain and systems that is relevant to the

sufficient information to constitute an IT project and investment
management process.

system inventory as described by the ITIM framework. Therefore, any of the
department*s current policies and procedures on the Exhibit 53 do not meet
the requirements of this key practice.

2. An official is assigned responsibility for Not executed Although the
department has assigned responsibility for managing the IT project and
system preparing the Exhibit 53 to the Office of the Budget, the
identification process and ensuring that Exhibit 53 does not provide
sufficient information to the inventory meets the needs of the

support the investment management process as investment management
process. described in the ITIM framework. Prerequisite 1. Adequate
resources are provided for

Not executed The department indicated in its self- assessment that this
identifying IT projects and systems and

key practice had not been executed. collecting relevant information into
an inventory.

Activities 1. The organization's IT projects and Not executed The
department indicated in its self- assessment that it systems are
identified, and specific

intends to merge several inventories of IT projects and information about
them is collected in an

systems into the Exhibit 53 in order to develop a inventory. comprehensive
list of investments. However, the Exhibit

53 does not include all of the kinds of information that are required to
support IT investment management decisions.

2. Changes to IT projects and systems are Not executed The department does
not have an adequate inventory in identified, and change information is

which changes to information on IT projects and systems maintained in the
inventory.

can be identified. 3. Information from the inventory is

Not executed The department plans to use the Exhibit 53 as its available
on demand to decision makers

investment inventory, but this document does not include and other
affected parties.

the necessary information to constitute an adequate IT project and system
inventory, according to the ITIM framework. 4. The IT project and system
inventory and

Not executed The department does not maintain an IT project and its
information records are maintained to system inventory with records that
could contribute to contribute to future investment selections

future IT investment board decisions. and assessments.

Source: GAO.

Department Lacks Fundamental According to the ITIM framework, effective
project oversight requires,

Capabilities for IT Project among other things, (1) having written
policies and procedures for project

Oversight management; (2) developing and maintaining an approved
management plan for each IT project; (3) having written policies and
procedures for

oversight of IT projects; (4) making up- to- date cost and schedule data
for

each project available to the oversight boards; (5) reviewing each
project*s performance by regularly comparing actual cost and schedule data
to expectations; (6) ensuring that corrective actions for each
underperforming project are documented, agreed to, implemented, and
tracked until the desired outcome is achieved; and (7) using information
from the IT projects and systems inventory. (The complete list of key
practices is provided in table 5.) For all IT projects, performance
reviews should be conducted at least at each major life cycle milestone.
In an organization such as Interior, it is essential that the department
provide leadership and oversight of IT project management even though the
day- to- day management of IT investments may be handled by bureau- level
staff and the National Business Center.

The department is executing 1 of the 11 key practices in this critical
process by operating department- level IT investment boards. However, the
other 10 key practices are not being executed, such as those requiring the

development of written policies and procedures for project management or
management oversight of IT projects. Moreover, the department currently
has no consistent way of knowing the extent to which project management
plans are being developed, approved, maintained, and reviewed. As a
result, the department has no mechanisms for ensuring that up- to- date

information on actual costs and schedule are being provided to the IT
investment boards. Finally, Interior lacks an IT projects and systems
inventory to capture performance information that can be used by its
boards in the investment decision process. According to Interior
officials, the department is not executing many of the

key practices for Stage 2 IT project oversight because it currently relies
on the bureaus to perform these management functions. However, since the
department has not developed policies and procedures for the bureaus to
follow in conducting IT project oversight, Interior is running the risk
that under performing projects will not be reported to the appropriate IT
investment board. In the absence of effective board oversight, Interior
executives do not have adequate assurance that projects are being
developed on schedule and within budget. Table 5 summarizes our ratings
for each key practice and the evidence that

supports the ratings.

Table 5: IT Project Oversight Type of practice Key practice Rating Summary
of evidence

Organizational 1. The organization has Not executed The department has not
developed any written policies and commitments written policies and

procedures for IT project management. procedures for IT project
management. 2. The organization has

Not executed The department has not developed any written policies and
written policies and procedures for management oversight of IT projects.
procedures for management oversight of IT projects.

Prerequisites 1. Adequate resources are Not executed The department
indicated in its self- assessment that this key practice provided to
assist the

had not been executed. board( s) in overseeing IT projects.

2. Each IT project has and Not executed The department does not have any
guidance or requirements for maintains an approved

developing, approving, or maintaining IT project plans to ensure that
project management plan these exist and that they include cost and
schedule controls. The that includes cost and department also lacks a
reporting mechanism to determine which schedule controls.

existing IT projects may now have such a plan. 3. An IT investment board

Executed The department*s IT Management Council, Management Initiatives is
operating. Team, and Management Excellence Council began operating in

support of the new CPIC processes in July 2002 and reviewing Exhibit 300
reports for IT investments during the fiscal year 2004 budget formulation
process. 4. Information from the IT

Not executed The department does not have an IT project and system
inventory. project and system inventory is used by the IT investment board
as applicable.

(Continued From Previous Page)

Type of practice Key practice Rating Summary of evidence

Activities 1. Each project*s up- todate Not executed Up- to- date cost and
schedule data for all IT investments had not been cost and schedule

provided to the department*s boards at the time of our review. The data
are provided to the boards did, however, receive information on major
investments shown appropriate IT investment

in the Exhibit 300 reports that are prepared annually for OMB. board.

2. Using established Not executed At the time of our review, Interior*s IT
investment boards did not criteria, the IT investment oversee the
performance of all IT projects because information on board oversees each
IT

actual cost and schedule for some investments was not available for
project's performance review. regularly by comparing actual cost and
schedule data to expectations.

3. The IT investment board Not executed At the time of our review,
Interior*s department- level IT investment performs special reviews of

boards had not performed special reviews of any IT projects. projects that
have not met predetermined performance standards.

4. Appropriate corrective Not executed Since the department level boards
had not conducted reviews of IT actions for each underperforming project
performance, corrective actions had not been defined.

project are defined, documented, and agreed to by the IT investment board
and the project manager.

5. Corrective actions are Not executed Corrective actions for
underperforming IT projects had not been implemented and tracked

defined by department- level IT investment boards at the time of our until
the desired outcome

review. is achieved. Source: GAO. Department Is Not Able to Defining
business needs for each project helps to ensure that projects

Clearly Link IT Investments to support the organization*s mission goals
and meet users* needs. This

Business Needs critical process creates the link between the
organization*s business

objectives and its IT management strategy. According to our ITIM
framework, effectively identifying business needs requires, among other
things, (1) defining the organization*s business needs or stated mission
goals, (2) identifying users for each project who will participate in the

project*s development and implementation, (3) training IT staff adequately
in identifying business needs, and (4) defining business needs for each
project. (The complete list of key practices is provided in table 6.)

The department is responsible for providing leadership and oversight for
the identification and documentation of business needs for IT investments
by issuing written guidance for this critical process and executing the
associated key practices. However, given that knowledge of the actual

business needs of Interior*s departmental offices and programs resides in
the sponsors of IT investments, much of the work of identifying business
processes must necessarily be performed at those levels of the
organization.

The department is executing two of the eight key practices for this
critical process by defining mission goals in strategic planning documents
and by ensuring that appropriately trained individuals identify the needs
for its IT projects. However, the department is not executing the
remaining key practices, such as those that involve ensuring that adequate
resources are being provided and identifying all of its IT projects and
systems in an inventory. As a result, the department could not identify
specific users and

business needs for all of Interior*s IT investments at the time of our
review. In April 2003, the department provided training in linking
projects to Interior*s IT strategic plan, but written policies and
procedures for business needs identification have not been formalized.
Also, the Exhibit 300 reports on IT investments that the department
produces for OMB in support of the President*s budget* and which it
identifies as the mechanism for capturing business needs* are not required
for nonmajor IT investments. Because nonmajor projects comprised
approximately 67 percent of Interior*s projects and 45 percent of its
total IT expenditures in fiscal year 2003,

business needs were not captured for many of Interior*s projects. The
department was also unable to demonstrate that identified users
participated in project management throughout a project*s life cycle.

Office of Chief Information Officer (OCIO) officials explained that the
department has not provided oversight of the process of identifying
business needs, because it has historically relied on its IT investment
sponsors to determine the business needs of the investments. However,
until the department provides adequate leadership and oversight for this

critical process that is well established and understood throughout the
agency, executives cannot be adequately assured that sponsors of IT
investments are consistently and objectively identifying user needs and
linking investment proposals to the agency*s strategic goals.

Table 6 summarizes our ratings for each key practice and the evidence that
supports the ratings.

Table 6: Business Needs Identification Type of practice Key practice
Rating Summary of evidence

Organizational 1. The organization has written Not

Written policies and procedures for identifying business needs have
commitment policies and procedures for executed not been formally
approved, although training has been initiated identifying the business
needs

which includes identifying business needs for major projects, to (and the
associated users) of familiarize individuals with the preparation of OMB
Exhibit 300s. each IT project. Prerequisites 1. Adequate resources are

Not The department indicated in its self- assessment that this key
provided for identifying business

executed practice had not been executed. needs and associated users.

2. The organization has defined Executed The department issued a Strategic
Plan for FY 2000* 2005 and a business needs or stated

draft Strategic Plan for FY 2003* 2008. Both of these documents mission
goals.

contain information on Interior*s stated mission goals and business needs.

3. IT staff are trained in Executed Since individuals responsible for
identifying business needs and business needs identification. preparing
Exhibit 300 reports work in departmental and bureau offices that sponsor
IT investments, their work experience gives

them sufficient knowledge regarding the business needs of those units. In
addition, the department has provided supplemental training in business
needs identification for major projects. 4. IT projects and systems are

Not The department indicated in its self- assessment that this key
identified in the IT project and executed practice had not been executed.
The department does not have an system inventory.

IT project and system inventory. Activities 1. The business needs for each

Not Business needs are identified for major projects in Exhibit 300 IT
project are clearly identified executed reports that are prepared annually
for OMB. However, these reports and defined.

are not prepared for nonmajor IT investments. 2. Specific users are
identified Not

Exhibit 300 reports include a section for identifying users of IT for each
IT project. executed systems. However, these are not prepared for nonmajor
IT

investments. 3. Identified users participate in Not

The department indicated in its self- assessment that this key project
management throughout

executed practice had not been executed. In addition, the department lacks
a project*s life cycle.

written policies and procedures for IT project management that could help
ensure that users participate in project management throughout a project*s
life cycle. Source: GAO.

Selection Process Is Established, Selecting new IT proposals requires an
established and structured process

but Boards Lack Implementation to ensure informed decision making and
management accountability. Experience

According to our ITIM framework, this critical process requires, among
other things, (1) making funding decisions for new IT proposals according
to an established process, (2) providing adequate resources for proposal
selection activities, (3) using an established proposal selection process,
(4) analyzing and ranking new IT proposals according to established
selection criteria* including cost and schedule criteria* and

(5) designating an official to manage the proposal selection process.
While initial selection decisions may be made at the bureau level, the
department should have in place clear, established criteria for selection
and guidance regarding the structure and content of IT proposals. (The
complete list of key practices is provided in table 7.)

The department is executing two of the six key practices for this critical
process by identifying the IT Management Council cochairs as the
responsible authorities for the proposal selection process and by using
the

CPIC Guide*s funding process to make decisions on IT proposals. These
achievements notwithstanding, the department has yet to implement most key
practices* such as using established criteria to analyze each investment
and prioritizing these investments accordingly. The CPIC Guide does
contain requirements that address several of the objectives of the

critical process for proposal selection, such as establishing a consistent
approach to assessing the costs and benefits of proposed investments and
developing clear performance expectations with quantifiable performance
measures. If implemented, the CPIC Guide would satisfy many of the
requirements of the key practices in this critical process.

Until now, the department has focused on other aspects of its IT
investment management process, such as the review of OMB Exhibit 300s for
each major project, without using the selection criteria that are defined
in the

CPIC Guide. Moreover, while fundamental processes for proposal selection
are described in the CPIC Guide, these had not been fully implemented at
the time of our review. In the meantime, Interior*s bureaus have retained
responsibility for selecting IT investments* without benefit of
departmental review. Until the department implements the key practices
described in the ITIM framework, and they are well established and
understood throughout the agency, Interior cannot be adequately assured
that it is consistently and objectively developing and selecting proposals
that best meet the needs and priorities of the agency.

Table 7 summarizes our ratings for the proposal selection critical
process.

Table 7: Proposal Selection Type of practice Key practice Rating Summary
of evidence

Organizational 1. Executives and managers follow Not executed The
department*s CPIC Guide established a selection commitments an established
selection process. process for IT investments. However, because the

department only began implementing this process in 2002, to formulate its
request for fiscal year 2004 funding, executives and managers have not yet
fully implemented the selection process. 2. An official is designated to

Executed The department*s self- assessment states that the cochairs manage
the proposal selection

of the IT Management Council review board are designated process. as the
responsible officials for the proposal selection process. Prerequisite 1.
Adequate resources are Not executed The department indicated in its self-
assessment that this key

provided for proposal selection practice had not been executed.
activities.

Activities 1. The organization uses a Not executed The department*s CPIC
Guide established a structured structured process to develop new process
for developing IT proposals. However, the IT proposals.

department had not implemented this process at the time of our review.

2. Executives analyze and prioritize Not executed The department*s CPIC
Guide established criteria for new IT proposals according to

prioritizing IT proposals. However, the department had not established
selection criteria.

used these criteria to prioritize new IT proposals at the time of our
review.

3. Executives make funding Executed The department*s CPIC Guide
established a process for decisions for new IT proposals making funding
decisions for IT proposals, which the according to an established

department used in its 2004 budget formulation process. process. Source:
GAO.

Department Is Not An IT investment portfolio is an integrated, agencywide
collection of

Managing Interior IT investments that are assessed and managed
collectively based on common

Investments as a Portfolio criteria. Managing investments within the
context of such a portfolio is a conscious, continuous, and proactive
approach to expending limited

resources on an organization*s competing initiatives in light of the
relative benefits expected from these investments. Taking an agencywide
perspective enables an organization to consider its investments
comprehensively, so that collectively the investments optimally address
the organization*s missions, strategic goals, and objectives. Managing IT
investments with a portfolio approach also allows an organization to
determine priorities and make decisions about which projects to fund based
on analyses of the relative organizational value and risks of all

projects, including projects that are proposed, under development, and in
operation. According to the ITIM framework, Stage 3 maturity includes (1)
defining portfolio selection criteria, (2) engaging in project- level
investment analysis, (3) developing a complete portfolio based on the
investment analysis, (4) maintaining oversight over the investment
performance of the portfolio, and (5) aligning the authority of the IT
investment boards.

Table 8 summarizes the purposes of each of the critical processes in Stage
3.

Tabl e 8: Stage 3 Critical Processes* Developing a Complete Investment
Portfolio Critical process Description

Authority alignment of IT To ensure that IT investments are selected and
managed by investment boards the appropriate investment board. Portfolio
selection criteria To ensure that the organization develops and maintains
IT definition portfolio selection criteria that support its mission,

organizational strategies, and business priorities. Investment analysis To
ensure that all IT investments are consistently analyzed and prioritized
according to the organization*s portfolio

selection criteria. Portfolio development To ensure that an optimal IT
investment portfolio with

manageable risks and returns is selected and funded. Portfolio performance

To ensure that each IT investment portfolio achieves its oversight cost,
benefit, schedule, and risk expectations.

Source: GAO.

The department provided evidence that it is executing 2 of the 38 key
practices for Stage 3 by establishing and maintaining in its CPIC Guide
written policies and procedures and associated criteria for aligning the

decision- making authority of its IT investment review boards. In its
selfassessment, Interior did not claim to be fully executing any other
Stage 3 key practices.

At the time of our review, the department*s efforts to implement ITIM were
in the initial stages, since the CPIC Guide had been issued in December
2002. Moreover, OCIO efforts at IT management reform had to compete for
resources with other ongoing priorities. Until now, Interior has focused
its improvement activities in the preselect and select phases described by
its

CPIC Guide. Until the department fully implements the foundational

critical processes in Stage 2 and then the critical processes for
portfolio management in Stage 3, it will lack the capability to consider
Interior*s investments in a comprehensive manner and determine whether it
has the

mix of IT investments that best meet the agency*s mission needs and
priorities.

Table 9 summarizes the status of the department*s Stage 3 critical
processes, showing how many associated key practices the agency has
executed.

Tabl e 9: Status of Stage 3 Critical Processes Tot al requi red Key
practices by critical Percentage of key Critical process executed

process practices executed

Authority alignment of IT 2 7 29 investment boards Portfolio selection
criteria 0 6 0

definition Investment analysis 0 7 0 Portfolio development 0 9 0 Portfolio
performance

0 9 0 oversight Cumulative 2 38 5

Source: GAO.

Department Has Limited The ability of a department- level CIO to
effectively oversee IT investment

Ability to Oversee IT management processes throughout the agency depends
on the existence of

Investments in the Bureaus appropriate management structures with adequate
authorities and

sufficient guidance. To its credit, Interior has taken several crucial
initial steps to make this possible; it conducted a study of existing
organizational structures, issued a secretarial order providing broad
authorities to its CIOs, and issued a capital planning and investment
control guide that provided a conceptual framework for improvements to the
IT investment management process. However, Interior*s CIO has taken
limited action to ensure that the secretarial order was implemented and
that other required improvements to the process were made. The department
had envisioned a

certification process through which it would hold bureaus accountable for
improving their investment management capabilities, but it has yet to
implement this concept. Until sound management structures and a

certification process are in place, the department*s ability to oversee
the bureaus* practices for investment management will be limited.

Department and Bureau CIOs Under the Clinger- Cohen Act of 1996, the CIO
of each agency is responsible

Are Not Positioned to Provide for effectively managing all of the agency*s
IT resources. 15 To comply with

Leadership for IT Investment the act, Interior*s CIO is responsible for
ensuring that the bureaus are

Processes implementing effective investment management processes that are

appropriately aligned with the department*s processes. Our report on

Maximizing the Success of Chief Information Officers 16 describes the
principles of successful CIO management in leading organizations. In such
organizations, the CIO has been positioned for success, having been

assigned clearly defined roles, responsibilities, and accountabilities.
Because Interior has multiple levels of IT investment management
authority, it is especially critical that the roles, responsibilities, and
accountabilities of all the CIOs be clearly defined.

In 2002, Interior contracted with Science Applications International
Corporation (SAIC) to study the department and bureau CIO organizations
and determine whether it was in compliance with the requirements of the
Clinger- Cohen Act. SAIC concluded that, in the current environment,
Interior*s CIO did not have adequate power* or the leverage of a formal
structure with clear lines of authority and control of resources* to carry
out its responsibilities under the act. The study pointed to a general
lack of authority and resource control at the bureau level as well, which
further

inhibited the CIO*s ability to function. According to SAIC, in most of the
bureaus, the CIOs lacked the authority to effect change among their
subordinate IT staff and decision areas because they cannot allocate or
withdraw funds and do not control hiring, training, or performance
appraisals. On the basis of these findings, SAIC recommended that Interior
establish formal lines of authority from the department*s CIO to the
bureau CIOs and to IT staff at lower levels.

15 The fiscal year 1997 Omnibus Consolidated Appropriations Act, Pub. L.
104- 208, renamed both Divisions D and E of the 1996 DOD Authorization
Act, Pub. L. 104- 106, the ClingerCohen Act of 1996.

16 U. S. General Accounting Office, Maximizing the Success of Chief
Information Officers: Learning From Leading Organizations, GAO- 01- 376G
(Washington, D. C.: Mar. 1, 2001).

On the basis of the SAIC study, and because of its desire to comply with
the Clinger- Cohen Act, Interior issued Secretarial Order 3244, 17 which
acknowledged that authority and control over management of IT resources
had not been fully established or coordinated in the department, resulting
in significant variability among bureaus and offices in implementing IT
functions and setting funding priorities. To rectify this situation, the
order provides broad authorities to all of Interior*s CIOs. Among other
things, the order requires all bureaus 18 to standardize their IT
functional areas to achieve continuity of responsibility and
accountability throughout the department. Specifically, the order calls
for establishing a function described as technology management, which
encompasses IT investment management. 19

The order assigns approval authority and management responsibility for all
IT assets to bureau CIOs. On the basis of the order, every Interior
organization with 5,000 or more employees must have a separate CIO

position at the Senior Executive Service level. The individual in this
position must be a fully participating member of the executive leadership/
management teams and must report to the Deputy Director or Director of the
bureau. For any office that reports directly to the Secretary

or the Deputy Secretary of the Interior, the department*s CIO will serve
as the CIO if those offices have not designated one. Consistent with the
Clinger- Cohen Act, the order states that the department*s CIO is
responsible for approving all IT expenditures.

Interior*s CIO issued specific direction to the bureaus in November 2002
and in January 2003, indicating how to implement Secretarial Order 3244
and establishing a process for monthly status reporting, which was to
begin on January 31, 2003. However, at the time of our review, only two
bureaus

17 U. S. Department of the Interior, Standardization of Information
Technology Functions and Establishment of Funding Authorities, Office of
the Secretary Order No. 3244 (Washington, D. C.: Nov. 12, 2002). 18 For
purposes of this order, *bureaus and offices* refers collectively to the
bureaus of the department, the Secretarial Offices, and the immediate
offices of the Secretary and the Deputy Secretary.

19 Secretarial Order 3244 requires that each bureau CIO organization
include the following IT management functions: technology, security,
information management, telecommunications, inventory and asset
management, strategic planning, project management, and IT career and
skills management. Technology management is defined to include enterprise
architecture, capital planning and investment control processes, and IT
acquisition.

had provided the required monthly status reports, and none of the bureaus
had fully implemented the order. This lack of responsiveness is consistent
with concerns described in the SAIC report that Interior*s CIO currently
lacks adequate support from bureau CIOs to ensure that departmental
efforts at improving IT investment management will be effectively
implemented.

Department Does Not Follow According to the Clinger- Cohen Act and
Interior*s own CPIC Guide, the

Through with Certification of the department should take steps to ensure
that Interior's bureaus implement

Bureaus* IT Investment effective capital planning and investment control
processes. To execute

Management Processes this responsibility according to project management
best practices, the

department should clearly define its expectations for these processes and
then hold the bureaus accountable to the standards it has established.

At the time of our review, the department had specified initial
expectations for the bureaus* processes. On January 15, 2003, the
department CIO issued a memorandum that called for the bureaus to
immediately begin implementing more formal IT processes, using the CPIC
Guide. The department held training sessions in which bureaus were
informed that the Exhibit 300s they provide to the department for review
as part of the annual budget formulation process must first be reviewed by
their own IT investment review boards. The department emphasized during
these sessions that the bureaus should work on making their Exhibit 53
reports on IT investments more complete and reliable. Although the Exhibit
53 reports do not include adequate information for IT investment
management purposes* according to the ITIM framework* improving the
reports will bring Interior one step closer to identifying and tracking IT
projects and systems. This is a critical aspect of the investment
management process that will provide better visibility of all IT projects
to the department.

Despite this initial instruction on its expectations, the department has
yet to fully implement a certification process through which it can hold
bureaus accountable for their IT investment management processes. With the
issuance of its CPIC Guide in December 2002, the department began to
define some criteria for certification of these processes. The guide
states that, at a minimum, a bureau*s investment review board must
maintain a documented description or charter outlining the bureau*s CPIC
process and

the roles and responsibilities of the board, the bureau offices, and any
other entities that are involved in CPIC. In addition, the guide outlines
other departmental expectations* such as six steps that need to be
accomplished in the short term, along with establishing a bureau- level
investment review board* but it does not explicitly state whether these
are

required for certification. During our interviews with staff from
Interior*s IT Portfolio Management Division, officials confirmed that the
certification process is still only a concept at Interior and that it has
not been well defined. More specifically, the department has not
established a date for the certification to begin or specified what
corrective action will be taken if a bureau fails to be certified.
Implementation of an effective certification

process will provide the department with a mechanism for ensuring that the
bureaus are operating in a manner that is consistent with the policies and
procedures it establishes for ITIM key practices.

Departmental officials confirmed that at the time of our review, OCIO
efforts were concentrated on providing training for the preparation of
bureau Exhibit 300 reports, discussed above, rather than on implementing
the CPIC Guide*s provisions for a certification process. Until the
department focuses resources on defining and enforcing standards for
certifying bureau processes, the risk is high that bureaus may implement
IT investment management processes that do not sufficiently support the
departmental investment management process. Only by institutionalizing
effective processes at both the department and the bureau levels can
Interior ensure that it is optimizing its investments in IT and
effectively assessing and managing the risks of these investments.
Department*s Efforts to

Achieving successful reform of IT management requires an organization to
Improve Investment

develop a complete and well- prioritized plan for systematically
correcting weaknesses in its existing capabilities. To properly focus and
target this Management Processes

plan, an organization should first fully identify and assess current
strengths and Oversight Are

and weaknesses (i. e., create an investment management capability
baseline). As we have previously reported, 20 this plan should, at a
Fragmented and

minimum, (1) specify measurable goals, objectives, milestones, and needed
Inadequate

resources and (2) clearly assign responsibility and accountability for
accomplishing well- defined tasks. The plan should also be documented and
approved by agency leadership. In implementing such a plan, it is
important

that the organization measure and report progress against planned
commitments and take appropriate corrective action to address deviations.

In order to develop a focus for its reform efforts, Interior has made
several attempts to document existing conditions and identify weaknesses
in its

20 U. S. General Accounting Office, Information Technology: DLA Needs to
Strengthen Its Investment Management Capability, GAO- 02- 314 (Washington,
D. C.: Mar. 15, 2002).

organization. Between 2001 and 2003, OCIO hired three different
contractors to perform studies of existing IT projects and systems,
organizational reporting relationships and functions, and IT investment

management practices. The META Group performed the first study, after
which the SAIC study, described earlier, was completed to assess the
earlier results. G& B Solutions was then contracted to further elaborate
and validate the earlier work, focusing on technical solutions and CIO
authorities. In a separate effort in 2002, the department directed the
bureaus to rate themselves in a number of areas that correspond to areas
evaluated by OMB in the budget process. Further, on January 15, 2003, OCIO
issued a memorandum that required bureaus to submit descriptions of their
capital planning and investment control processes and IT investment board
charters and to perform self- assessments of their IT investment
management capabilities. However, the effectiveness of this particular
effort was limited because no specific instructions were given on how to
perform the self- assessments; this will lead to difficulties in comparing
results across bureaus.

The Department of the Interior has indicated that it intends to create a
comprehensive reform plan with target goals and measurement criteria, but
this plan has not been fully developed. In November 2002, the department
created a Program Management Office to implement IT management reforms by
pulling together various improvement efforts and prioritizing them.
However, as of July 2003, the Program Management Office did not have a
formal charter or a budget, and its manager did not have a clearly defined
role. In addition, this individual*s attention was being diverted away
from issues of IT investment management to address other concerns, such as
Interior*s court- ordered efforts to resolve issues with the Indian Trust
Fund and related information security problems.

The lack of clear accountability and responsibility for improvement
efforts that an office such as this would have provided has resulted in
initiatives that are not well integrated and do not support a unified
plan. For example, no steps have been taken to integrate the requirements
of Secretarial Order 3244 for CIO organizations with the bureau
certification process established in the CPIC Guide. In addition, the
multiple efforts to develop an understanding of current conditions and
identify weaknesses in the existing organization, described above, have
not yielded a coherent view, despite the expenditure of considerable
resources.

Without committing to a plan that allows it to systematically prioritize,
sequence, and evaluate improvement efforts, Interior jeopardizes its
ability

to establish mature investment processes, which include selection and
control capabilities that would result in greater certainty about the
outcomes of future IT investments.

Conclusions The Department of the Interior lacks most of the fundamental
IT investment management practices necessary to effectively and
efficiently manage its IT resources. Only by effectively and efficiently
managing these resources can the department gain opportunities to further
leverage its IT

investments and make better allocation decisions among many investment
alternatives. Recent moves by senior executives to define an IT investment
management approach* and to align the IT investment decision review
process with the CIOs at both the department and bureau levels*
demonstrate Interior*s realization that reform is necessary. Nonetheless,
the department still finds itself without many of the capabilities it
needs to

ensure that Interior*s mix of IT investments best meets the agency*s
mission and business priorities.

Interior*s ability to guide and oversee investment practices throughout
the agency is limited by its lack of mature investment management
processes. The department has recognized that it needs to oversee bureau
activities, and it has begun to establish the authority of bureau CIOs to
manage IT investments and to implement certification of standard
investment processes in the bureaus. However, until the department is able
to ensure mature investment management capabilities at all levels, its
ability to wisely select and effectively manage IT investments will be
limited.

Interior*s success in resolving the weaknesses described in this report
will depend on the department*s ability to plan and execute the
implementation of robust investment management and related practices
throughout the agency. However, the department*s efforts have suffered
from a lack of unified planning, clear implementation guidance, supporting
resources, and follow- up on requirements that have been established by
the CIO. Until the department develops a comprehensive plan, supported by
top management, that delineates performance expectations for process
improvements, Interior*s prospects will remain limited for successfully
developing the management capabilities that are necessary to make prudent
decisions that maximize the benefits and minimize the risks of its IT
investments.

Recommendations To strengthen Interior*s capabilities for IT investment
management and address the weaknesses discussed in this report, we
recommend that the Secretary of the Interior direct Interior*s CIO to do
the following:

 Develop a unified, comprehensive plan for implementing departmentwide
improvements to the IT investment management process that are based on the
Stage 2 and Stage 3 critical processes of our ITIM framework.

 Ensure that the plan focuses first on the weaknesses that this report
identifies in the Stage 2 critical processes, before addressing those
associated with higher stages of ITIM maturity, because Stage 2 processes
collectively provide the foundation for building a mature IT investment
management process. Specifically:

 Establish a timetable for the IT Management Council, Management
Initiatives Team, and Management Excellence Council to begin operating
according to the guidance described in the CPIC Guide.

 Develop and issue policies and procedures to guide the IT project
oversight as described by our ITIM framework, including the review of
actual performance information against expected performance by

the investment boards and the implementation of corrective actions when
performance falls below acceptable levels. Implement these policies and
procedures to accomplish the purpose of project oversight.

 Develop and issue policies and procedures to guide the project and
system identification processes as described by the ITIM framework,
including the specification of information required by the investment

management process, the sources of such information, and the methods for
collecting and retaining this information. Implement these policies and
procedures to accomplish the purpose of IT project and system
identification.

 Develop and issue policies and procedures to guide the identification of
business needs as described by the ITIM framework, including the
identification of business needs for all projects and the inclusion of
users in project management throughout a project*s life cycle.

Implement these policies and procedures to accomplish the purpose of
identifying business needs.

 Establish a timetable for implementing IT proposal selection as
described by Interior*s CPIC Guide.

 Ensure that the plan next focuses on Stage 3 critical processes, which
are necessary for portfolio management, because, along with the Stage 2
foundational processes, these processes are necessary for effective
management of IT investments.

 To further strengthen the department*s ability to oversee bureau
investment management processes so that it may ensure that investment
management is effectively carried out throughout the

organization, the plan should also  establish a timetable and specific
implementation milestones for

Secretarial Order 3244, and  describe acceptable criteria for
certification of bureau CPIC

processes and establish a time frame for the certification of these
processes at all bureaus.

 Ensure that the plan establishes a baseline of the agency*s
capabilities, specifies measurable goals and time frames, and establishes
review milestones.

 Establish a well- defined management structure for directing and
controlling the unified plan with clear authority and responsibility.

 Ensure that the Management Excellence Council, which holds
responsibility for department management reform activities, approves the
plan.

 Implement the approved plan and report on progress made against the
plan*s goals and time frames to the Secretary of the Interior every 6
months.

Agency Comments and The Department of the Interior*s Assistant Secretary
for Policy, Our Evaluation

Management and Budget provided written comments on a draft of this report
(reprinted in appendix II). In these comments, the Department of the
Interior concurred with our recommendations and identified actions that it
plans to take to improve IT investment management processes throughout the
department. Specifically, it intends to leverage lessons learned in BLM*s

implementation of the ITIM framework to accelerate the maturing of
department practices. It also intends to develop and implement a
comprehensive plan, approved by the Management Excellence Council, to
address specific weaknesses that we identified in its foundational
investment management practices and to move to full implementation of
Secretarial Order 3244. In response to the department*s comments, we
removed all descriptions of

national critical infrastructure or Trust. In its comments the department
also provided us with additional information that reflects the ongoing
progress it is making in implementing more mature investment management
practices. As we have described in this report, Interior*s progress has
been evident and is ongoing. In particular, the establishment

of the ITMC and the release of the CPIC Guide have provided an
organizational point of focus and a set of procedures to guide IT
investment management. This has enabled the department to begin to
implement new practices with a departmentwide scope. The information the
department provided to us in its comments on the completed evaluation
reflects the

continuing implementation of plans described in this report. We strongly
support this ongoing progress, and we will reflect the successful
execution of key practices in following up on our recommendations.

We are sending copies of this report to interested committees of Congress,
to the Secretary of the Department of the Interior, and to the Chief
Information Officer of the Department of the Interior. Copies will be made
available to others upon request. In addition, the report will be made
available at no charge on the GAO Web site at http:// www. gao. gov.

If you have any questions regarding this report, please contact me at 202-
512- 6240 or at koontzl@ gao. gov. Additional GAO contact and staff
acknowledgments are listed in appendix III. . Linda D. Koontz Director,
Information Management Issues

Appendi xes Bureau Missions, Functions, and IT

Appendi x I

Investments Dollars in millions

IT Budget FTEs Investments authority

FY 2003 Bureau Mission FY 2003 a FY 2003 b estimate Description

Bureau of To fulfill BIA's trust $32.6 $2, 252.0 9, 667 BIA provides
federal services to approximately 1. 4 million Indian Affairs
responsibilities and

American Indians and Alaska Natives who are members (BIA)

promote self of 562 federally recognized tribes in the 48 contiguous

determination on United States and in Alaska. The bureau administers
behalf of Tribal

43,450, 267 acres of tribally owned land, 11, 000,000 acres Governments,
of individually owned land, and 443,000 acres of federally American
Indians, owned land held in trust status. The bureau*s mission is to and
Alaska Natives.

promote and support tribes on their future path through self-
determination and to reduce administration by the bureau in nontrust
areas. Bureau of To sustain the health,

$88.2 $1, 660.0 10, 739 BLM administers over 264 million surface acres of
public Land

diversity, and land, about one- eighth of the land in the U. S., and
Management productivity of the

approximately 700 million acres of federal subsurface (BLM)

public lands for the mineral estate. Most of these lands are in the West
and

use and enjoyment of Alaska, and they are dominated by extensive
grasslands,

present and future forests, high mountains, arctic tundra, and deserts.
BLM is generations.

responsible for the management and use of a variety of resources on these
lands, including energy and minerals, timber, forage, wild horse and burro
populations, fish and wildlife habitat, recreation sites, wilderness
areas, and archeological and historical sites. BLM balances the goals of
providing opportunities for environmentally responsible recreation and
commercial activities; preserving natural and cultural heritage resources;
reducing threats to public

health, safety, and property; providing land, resource, and title
information; providing economic and technical assistance to Indian tribes
and island communities; understanding and planning for the condition and
use of the public lands; and restoring at- risk resources and maintaining
functioning systems.

(Continued From Previous Page)

Dollars in millions

IT Budget FTEs Investments authority

FY 2003 Bureau Mission FY 2003 a FY 2003 b estimate Description

U. S. Fish and To work with others

$3. 5 $1, 281.0 8, 928 USFWS is the primary federal agency responsible for
the Wildlife

to conserve, protect, protection, conservation, and renewal of fish,
wildlife, Service and enhance fish,

plants, and their habitats. It manages migratory bird (USFWS) wildlife,
plants and

populations, restores interjurisdictional fisheries, their habitats for
the conserves and restores wildlife habitat, administers the continuing
benefit of Endangered Species Act, and assists foreign the American
people.

governments with their conservation efforts. USFWS oversees the Federal
Aid in Fish and Wildlife Restoration Programs, which distribute hundreds
of millions of dollars earned from excise taxes on fishing and hunting
equipment to state fish and wildlife agencies. USFWS is the steward for
nearly 93 million acres of public lands, including 529 refuges of the
National Wildlife Refuge

System, and it manages 67 national fish hatcheries for the restoration of
the nation's fishery resources. USFWS also works closely with partnership
activities for assisting voluntary habitat development and fostering
aquatic conservation for fish and wildlife habitat on nonfederal lands.

Minerals To manage the $29.6 $170.0 1, 747 MMS manages the nation's
natural gas, oil, and other

Management mineral resources on mineral resources on the Outer Continental
Shelf. The

Service the Outer Continental agency also collects, accounts for, and
disburses more (MMS) Shelf in an than $5 billion per year in revenues from
federal offshore environmentally

mineral leases and from onshore mineral leases on sound and safe federal
and Indian lands. MMS includes two major manner and to timely programs,
Offshore Minerals Management and Minerals collect, verify, and

Revenue Management. Offshore Minerals Management distribute mineral

manages the mineral resources on the Outer Continental revenues from

Shelf and has three regions: Alaska, the Gulf of Mexico, federal and
Indian

and the Pacific. Minerals Revenue Management collects, lands.

accounts for, and distributes revenues associated with mineral production
from leased federal and Indian lands.

(Continued From Previous Page)

Dollars in millions

IT Budget FTEs Investments authority

FY 2003 Bureau Mission FY 2003 a FY 2003 b estimate Description

National Park To preserve $36.3 $2, 354.0 20, 369 NPS manages 379 parks
and various historic Service unimpaired the

preservation, conservation and recreation programs, and (NPS)

natural and cultural hosts 287 million visitors annually. The National
Park resources and values System encompasses approximately 83.6 million
acres in of the national park over three hundred areas, of which more than
4.3 million system for the

acres remain in private ownership. There are three enjoyment, principal
categories used in classification: natural areas, education, and
historical areas, and recreational areas. NPS's four goal inspiration of
this and

categories are to preserve park resources; to provide for future
generations.

the public enjoyment and visitors* experience of parks; to The Park
Service strengthen and preserve natural and cultural resources cooperates
with and enhance recreational opportunities managed by partners to extend

partners; and to ensure organizational effectiveness in the benefits of
supporting NPS's mission. natural and cultural resource

conservation and outdoor recreation throughout this country and the world.

Office of To carry out the

$1. 3 $279.0 630 OSM is the lead federal agency for carrying out the
Surface

requirements of the mandates of the Surface Mining Control and Reclamation
Mining Surface Mining Act, whose goal is to protect society and the
environment (OSM)

Control and from the adverse effects of surface coal mining

Reclamation Act in operations. OSM*s mission goal of Environmental
cooperation with Restoration addresses mining that occurred prior to the
states and tribes.

passage of Surface Mining Control and Reclamation Act in 1977, while its
goal of Environmental Protection addresses mining since 1977.
Environmental Restoration is accomplished through the Abandoned Mine Land
Program, whose main purpose is to restore a safe and clean environment. As
part of this, the Appalachian Clean

Streams Initiative supports local efforts to eliminate environmental and
economic impacts of acid mine drainage from abandoned coal mines.
Environmental Protection focuses on current coal mining and is
accomplished with the Surface Mining Program, which oversees 4.4 million
acres of surface coal mines in 26 states and on the lands of three Indian
tribes. The

principal means of delivering environmental protection is through 24
primacy states that receive federal grant funding.

(Continued From Previous Page)

Dollars in millions

IT Budget FTEs Investments authority

FY 2003 Bureau Mission FY 2003 a FY 2003 b estimate Description

U. S. Bureau To manage, develop, $9. 8 $855.0 5, 628 USBR has developed
and manages a limited natural of

and protect water water supply in the 17 western states. USBR works to

Reclamation and related meet the increasing water demands while protecting
the (USBR)

resources in an environment and the public's investment. USBR has 348

environmentally and reservoirs with a total storage capacity of 245
million acre economically sound feet of water, 58 hydroelectric power
plants, and over 300 manner in the

recreation sites. USBR is the nation*s second largest interest of the
producer of hydroelectric power in the western United American public.

States, generating more than 40 billion kilowatt hours of energy annually.
USBR is the nation's largest water wholesaler; its water usage includes
irrigation for one out of every five western farmers (140, 000)* about 10
million acres of irrigated land; 10 trillion gallons of municipal,

rural, and industrial water for over 31 million people; habitat support
for wildlife refuges, migratory waterfowl, fish, and threatened and
endangered species; and irrigation projects and potable water supplies for
Indian tribes. USBR provides flood control benefits and drought
contingency planning and assistance, and it provides water- based
recreation activities for about 90 million

visitors a year. U. S. The USGS serves

$198. 6 $867.0 9, 397 USGS is the nation*s principal natural science and
Geological

the nation by information agency. USGS conducts research, monitoring,
Survey providing reliable and assessments to contribute to understanding
the (USGS)

scientific information natural world* lands, water, and biological
resources. to describe and USGS provides reliable, impartial information
in the form understand the

of maps, data, and reports containing analyses and Earth; minimize loss
interpretations of water, energy, mineral and biological of life and
property

resources, land surfaces, marine environments, geologic from natural

structures, natural hazards, and dynamic processes of the disasters;
manage

Earth; this information is used to understand, respond to, water,
biological,

and plan for changes in the environment. USGS energy, and mineral

describes, documents, and gains understanding of natural resources; and

hazards and their risks through the study of earthquakes, enhance and
protect

volcanoes, landslides, geomagnetic field changes, floods, our quality of
life.

droughts, coastal erosion, tsunamis, wild land fire, and wildlife disease.
Environmental and natural resources activities deal with physical,
chemical, biological, and geological processes in nature and the impact of
human actions on natural systems through studies including data
collection, long- term assessments, ecosystems analysis, and the
forecasting of future changes.

Total $399. 9 $9, 718.0 67,105 Source: Department of the Interior (data),
GAO (presentation). a Department of the Interior*s Exhibit 53, Agency IT
Investment Portfolio for fiscal year 2003. b Department of the Interior,
Fiscal Year 2004: The Interior Budget in Brief.

Comments from the Department of the

Appendi x II Interior

Appendi x III

GAO Contact and Staff Acknowledgments GAO Contact Lester Diamond, (202)
512- 7957, diamondl@ gao. gov Acknowledgments In addition to the
individual named above, William G. Barrick, Joanne

Fiorino, Peggy A. Hegg, Alison Jacobs, Mary Beth McClanahan, and Nik
Rapelje made key contributions to this report.

(310356)

GAO*s Mission The General Accounting Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities

and to help improve the performance and accountability of the federal
government for the American people. GAO examines the use of public funds;
evaluates federal programs and policies; and provides analyses,
recommendations, and other assistance to help Congress make informed
oversight, policy, and funding decisions. GAO*s commitment to good
government is reflected in its core values of accountability, integrity,
and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost is

through the Internet. GAO*s Web site (www. gao. gov) contains abstracts
and fulltext GAO Reports and

files of current reports and testimony and an expanding archive of older
Testimony

products. The Web site features a search engine to help you locate
documents using key words and phrases. You can print these documents in
their entirety, including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail this

list to you every afternoon, go to www. gao. gov and select *Subscribe to
e- mail alerts* under the *Order GAO Products* heading. Order by Mail or
Phone The first copy of each printed report is free. Additional copies are
$2 each. A check

or money order should be made out to the Superintendent of Documents. GAO
also accepts VISA and Mastercard. Orders for 100 or more copies mailed to
a single address are discounted 25 percent. Orders should be sent to:

U. S. General Accounting Office 441 G Street NW, Room LM Washington, D. C.
20548 To order by Phone: Voice: (202) 512- 6000 TDD: (202) 512- 2537 Fax:
(202) 512- 6061

To Report Fraud, Contact:

Waste, and Abuse in Web site: www. gao. gov/ fraudnet/ fraudnet. htm E-
mail: fraudnet@ gao. gov Federal Programs

Automated answering system: (800) 424- 5454 or (202) 512- 7470 Public
Affairs Jeff Nelligan, Managing Director, NelliganJ@ gao. gov (202) 512-
4800 U. S. General Accounting Office, 441 G Street NW, Room 7149
Washington, D. C. 20548

a

GAO United States General Accounting Office

The Department of the Interior has limited capability to manage its IT
investments. Based on GAO*s IT Investment Management (ITIM) Framework,
which measures the maturity of an organization*s investment

management processes, the department is carrying out few of the activities
that support critical foundational processes (see table below). As an
initial step to improve its investment management capability, the
department has issued a Capital Planning and Investment Control Guide,
which describes its approach to IT investment management. However, it has
thus far implemented few of the processes described in its own guide. In
addition, it has yet to develop an adequate approach to identify existing
projects and systems. In order to ensure strong investment management at
all levels, the department has also specified a requirement for certifying
bureau- level investment processes, but certification has not yet begun.
Finally, in order to strengthen the CIO*s ability to manage IT investments
at all levels, the Secretary of the Interior has issued an order
establishing the authority of the bureau- level CIOs; however, the order
has not been fully implemented.

In order to improve investment management processes, an organization needs
to develop and implement a coherent plan, supported by senior management,
which defines and prioritizes enhancements to its investment processes.
While Interior has undertaken a number of initiatives designed to improve
its investment management processes, the department has not yet developed
a unified, comprehensive plan to achieve its objective of establishing
effective investment management processes, nor has it committed the
resources to successfully implement the necessary reforms. Without a well-
defined process improvement plan and controls for

implementing it, Interior will continue to be challenged in its ability to
make informed and prudent investment decisions.

Interior*s Current IT Investment Management Capabilities ITIM critical
process Purpose Percentage of key

practices executed

IT investment board operation

To define and establish the governing board( s) responsible for selecting,
controlling, and evaluating investments

33 IT project and system identification

To regularly determine each IT project's progress toward cost and schedule
milestones, using established criteria, and to take corrective actions
when milestones are not achieved 0 IT project oversight To create and
maintain an IT project and system

inventory to assist in managerial decision- making 9 Business needs
identification

To ensure that each IT program and project supports the organization's
business needs and meets users' needs 25 Proposal selection To ensure that
an established, structured process

is used to select new IT proposals 33 Source: GAO. The Department of the
Interior is responsible for diverse and

complex missions ranging from managing America*s public lands, mineral and
water resources, and

wildlife to providing satellite data to the military and scientific
communities. To fulfill these responsibilities, Interior invests over $850
million annually* about 6 percent of its total annual budget* in
communications and

computing projects and systems. Interior*s Office of the Secretary and its
Chief Information Officer (CIO) are responsible for

overseeing processes for managing these investments to ensure that funds
are expended in the most cost- effective way in support of the agency*s
mission needs. GAO was asked to evaluate (1) departmental capabilities for
managing the agency*s information technology (IT) investments and (2) the

department*s actions and plans to improve these capabilities. To
strengthen the department*s investment management capability, GAO
recommends that the Secretary of the Interior direct Interior*s CIO to
develop and implement a plan aimed at addressing the weaknesses discussed
in this report, including a

timetable and specific milestones for implementation of appropriate
investment management processes at all levels of the agency. In commenting
on a draft of this report, Interior concurred with

GAO*s recommendations.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 1028. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Linda Koontz at (202) 512- 6240 or koontzl@ gao. gov.
Highlights of GAO- 03- 1028, a report to

Chairman and Ranking Minority Member of the Subcommittee on Interior and
Related Agencies, House Committee on Appropriations

September 2003

INFORMATION TECHNOLOGY

Departmental Leadership Crucial to Success of Investment Reforms at
Interior

Page i GAO- 03- 1028 Interior*s Governance of IT Investment Management

Contents

Page ii GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 1 GAO- 03- 1028 Interior*s Governance of IT Investment Management
United States General Accounting Office Washington, D. C. 20548

Page 1 GAO- 03- 1028 Interior*s Governance of IT Investment Management

A

Page 2 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 3 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 4 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 5 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 6 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 7 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 8 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 9 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 10 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 11 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 12 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 13 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 14 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 15 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 16 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 17 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 18 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 19 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 20 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 21 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 22 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 23 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 24 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 25 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 26 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 27 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 28 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 29 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 30 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 31 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 32 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 33 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 34 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 35 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 36 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 37 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 38 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 39 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 40 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Appendix I

Appendix I Bureau Missions, Functions, and IT Investments

Page 41 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Appendix I Bureau Missions, Functions, and IT Investments

Page 42 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Appendix I Bureau Missions, Functions, and IT Investments

Page 43 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Page 44 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Appendix II

Appendix II Comments from the Department of the Interior Page 45 GAO- 03-
1028 Interior*s Governance of IT Investment Management

Page 46 GAO- 03- 1028 Interior*s Governance of IT Investment Management

Appendix III

United States General Accounting Office Washington, D. C. 20548- 0001
Official Business Penalty for Private Use $300 Address Service Requested

Presorted Standard Postage & Fees Paid

GAO Permit No. GI00
*** End of document. ***