Homeland Security: Progress Continues, but Challenges Remain on  
Department's Management of Information Technology (29-MAR-06,	 
GAO-06-598T).							 
                                                                 
Information technology (IT) is a critical tool for the Department
of Homeland Security (DHS), not only in performing its mission	 
today, but also in transforming how it will do so in the future. 
In light of the importance of this transformation and the	 
magnitude of the associated challenges, GAO has designated the	 
implementation of the department and its transformation as high  
risk. GAO has reported that in order to effectively leverage IT  
as a transformation tool, DHS needs to establish certain	 
institutional management controls and capabilities, such as	 
having an enterprise architecture and making informed		 
portfolio-based decisions across competing IT investments. GAO	 
has also reported that it is critical for the department to	 
implement these controls and associated best practices on its	 
many IT investments. In its past work, GAO has made numerous	 
recommendations on DHS institutional controls and on individual  
IT investment projects. The testimony is based on GAO's body of  
work in these areas, covering the state of DHS IT management both
on the institutional level and the individual program level.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-598T					        
    ACCNO:   A50481						        
  TITLE:     Homeland Security: Progress Continues, but Challenges    
Remain on Department's Management of Information Technology	 
     DATE:   03/29/2006 
  SUBJECT:   Decision making					 
	     Enterprise architecture				 
	     Homeland security					 
	     Information resources management			 
	     Information security				 
	     Information technology				 
	     Internal controls					 
	     IT human capital					 
	     IT investment management				 
	     Management information systems			 
	     Risk management					 
	     Strategic planning 				 

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GAO-06-598T

     

     * Background
          * DHS Components and IT Spending
          * GAO Has Reviewed Several of DHS's Mission-Critical IT Progra
          * IT Management Controls and Capabilities Are Important
     * DHS Is Making Progress but Has Yet to Fully Institutionalize
          * Enterprise Architecture
          * IT Investment Management
          * Systems Development and Acquisition Management
          * Information Security Management
          * IT Human Capital Management
          * CIO Leadership
     * DHS Is Making Some Progress in Implementing IT Systems and I
     * Key IT Programs Reflect Mixed Use of Effective IT Management
     * Contacts and Acknowledgments
     * PDF6-Ordering Information.pdf
          * Order by Mail or Phone

Mr. Chairmen and Members of the Subcommittees,

I appreciate the opportunity to participate in today's joint oversight
hearing on Department of Homeland Security (DHS) efforts to effectively
manage information technology (IT). As you know, IT is a critical tool in
DHS's quest to transform 22 diverse and distinct agencies-some with
longstanding management weaknesses-into a single, integrated,
high-performing department. In light of the importance of this
transformation and the magnitude of the associated challenges, in 2003 we
designated the implementation of the department and its transformation as
a high-risk undertaking.1

For DHS to effectively leverage IT as a transformation enabler, we
reported in 2004 that it needed to put firmly in place certain
institutional management controls and capabilities, such as having an
enterprise architecture and a process for making informed portfolio-based
decisions across competing IT investments.2 These controls and
capabilities are interrelated management disciplines that collectively
help an organization to deliver IT systems and infrastructure on time and
on budget, and to do so in a way that minimizes risk and maximizes value
to the organization as a whole.

My testimony today addresses the state of DHS IT management on two levels:
the institutional level and the individual program level. At the
department level, it addresses efforts to establish corporate management
controls, such as enterprise architecture, IT investment management, and
the empowerment of the Chief Information Officer (CIO) to lead the
department's IT activities. At the program level, it addresses the extent
to which the institutional management controls are actually being
implemented on key nonfinancial systems (such as those related to border
and aviation security), pointing out the pitfalls to avoid and best
practices to employ in managing these IT investments.

1 GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: January
2003); High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January
2005).

2 GAO, Department of Homeland Security: Formidable Information and
Technology Management Challenge Requires Institutional Approach,
GAO-04-702 (Washington, D.C.: Aug. 27, 2004).

In summary, DHS continues to work to institutionalize the range of IT
management controls and capabilities that our research and past work have
shown are fundamental to any organization's ability to use technology
effectively to transform itself and accomplish mission goals.3 Among these
IT management controls and capabilities are

           0M having and using an enterprise architecture, or corporate
           blueprint, as an authoritative frame of reference to guide and
           constrain system investments;
           0M defining and following a corporate process for informed
           decision making by senior leadership about competing IT investment
           options;
           0M applying system and software development and acquisition
           discipline and rigor when defining, designing, developing,
           testing, deploying, and maintaining systems;
           0M establishing a comprehensive, departmentwide information
           security program to protect information and systems;
           0M having sufficient people with the right knowledge, skills, and
           abilities to execute each of these areas now and in the future;
           and
           0M centralizing leadership for extending these disciplines
           throughout the organization with an empowered Chief Information
           Officer.

           Despite its efforts over the last 3 years, the department has more
           to do before each of these management controls and capabilities is
           fully in place and is integral to how each system investment is
           managed. In this regard, our reviews of key nonfinancial systems
           show that, for example, DHS IT programs have not consistently
           employed reliable cost estimating practices, effective
           requirements development and test management, meaningful
           performance measurement, strategic workforce management, and
           proactive management of risks, among other recognized program
           management best practices.

           The department also has more to do with respect to deploying and
           operating the mix of IT systems and infrastructure that are needed
           to support core mission operations, such as border and aviation
           security. For example, although a system to identify and screen
           visitors entering the country has been deployed and is operating,
           a related exit capability largely is not. Also, a government-run
           capability to prescreen domestic airline passengers is not yet in
           place. Similarly, while certain system and infrastructure
           capabilities have been delivered, goals related to consolidating
           data centers and networks and employing a common e-mail system,
           for example, remain to be fully accomplished.

           To assist the department in addressing its IT needs and management
           challenges, we have made a series of recommendations for both
           institutional and program-specific improvements. Spanning these
           recommendations is one for ensuring that the CIO is sufficiently
           empowered to extend management discipline and implement common IT
           solutions across the department. We look forward to working with
           DHS leadership as it implements these recommendations.

           In preparing this testimony, we drew extensively from our previous
           work on DHS's IT management controls and capabilities and their
           application on key department programs and projects. In addition,
           we reviewed documentation and interviewed responsible DHS
           officials, including the CIO. All the work on which this testimony
           is based was performed in accordance with generally accepted
           government auditing standards.

3 GAO, Maximizing the Success of Chief Information Officers: Learning from
Leading Organizations, GAO-01-376G (Washington, D.C.: February 2001);
Architect of the Capitol: Management and Accountability Framework Needed
for Organizational Transformation, GAO-03-231 (Washington, D.C.: Jan. 17,
2003).

                                   Background

DHS's mission is to lead the unified national effort to secure America by
preventing and deterring terrorist attacks and protecting against and
responding to threats and hazards to the nation. DHS also is to ensure
safe and secure borders, welcome lawful immigrants and visitors, and
promote the free flow of commerce.

Created in March 2003, DHS has assumed operational control of about
209,000 civilian and military positions from 22 agencies and offices
specializing in one or more aspects of homeland security.4 The intent
behind DHS's merger and transformation was to improve coordination,
communication, and information sharing among the multiple federal agencies
responsible for protecting the homeland. Not since the creation of the
Department of Defense in 1947 has the federal government undertaken a
transformation of this magnitude. As we reported before the department was
created,5 such a transformation is critically important and poses
significant management and leadership challenges. For these reasons, we
designated the implementation of the department and its transformation as
high risk; we also pointed out that failure to effectively address DHS's
management challenges and program risks could have serious consequences
for our national security.

Among DHS's transformation challenges, we highlighted the formidable
hurdle of integrating numerous mission-critical and mission support
systems and associated IT infrastructure. For the department to overcome
this hurdle, we emphasized the need for DHS to establish an effective IT
governance framework, including controls aimed at effectively managing
IT-related people, processes, and tools.

DHS Components and IT Spending

To accomplish its mission, the department is organized into various
components, each of which is responsible for specific homeland security
missions and for coordinating related efforts with its sibling components,
as well as external entities. Table 1 shows DHS's principal organizations
and their missions. An organizational structure is shown in figure 1.

4 Some of those specialties are intelligence analysis, law enforcement,
border security, transportation security, biological research, critical
infrastructure protection, and disaster recovery.

5 For example, see GAO, Major Management Challenges and Program Risks:
Department of Homeland Security, GAO-03-102 (Washington, D.C.: January
2003) and Homeland Security: Proposal for Cabinet Agency Has Merit, but
Implementation Will be Pivotal to Success, GAO-02-886T (Washington, D.C.:
June 25, 2002).

Table 1: DHS's Principal Organizations and Their Missions

Principal organizations a  Missions                                        
Citizenship and            Responsible for the administration of           
Immigration Services       immigration and naturalization adjudication     
                              functions and establishing immigration services 
                              policies and priorities.                        
Coast Guard                Protects the public, the environment, and U.S.  
                              economic interests in the nation's ports and    
                              waterways, along the coast, on international    
                              waters, and in any maritime region as required  
                              to support national security.                   
Customs and Border         Responsible for protecting the nation's borders 
Protection                 in order to prevent terrorists and terrorist    
                              weapons from entering the United States, while  
                              facilitating the flow of legitimate trade and   
                              travel.                                         
Federal Emergency          Prepares the nation for hazards, manages        
Management Agency          federal response and recovery efforts following 
                              any national incident, and administers the      
                              National Flood Insurance Program.               
Immigration and Customs    The largest investigative arm of the            
Enforcement                department, responsible for identifying and     
                              shutting down vulnerabilities in the nation's   
                              border, economic, transportation, and           
                              infrastructure security.                        
Management Directorate     Responsible for department budgets and          
                              appropriations, expenditure of funds,           
                              accounting and finance, procurement, human      
                              resources, information technology systems,      
                              facilities and equipment, and the               
                              identification and tracking of performance      
                              measurements. This directorate includes the     
                              offices of the Chief Financial Officer and the  
                              Chief Information Officer.                      
Preparedness  Directorate  Works with state, local, and private sector     
                              partners to identify threats, determine         
                              vulnerabilities, and target resources where     
                              risk is greatest, thereby safeguarding borders, 
                              seaports, bridges and highways, and critical    
                              information systems.                            
Science and Technology     Serves as the primary research and development  
Directorate                arm of the department, responsible for          
                              providing federal, state, and local officials   
                              with the technology and capabilities to protect 
                              the homeland.                                   
Secret Service             Protects the President and other high-level     
                              officials and investigates counterfeiting and   
                              other financial crimes (including financial     
                              institution fraud, identity theft, and computer 
                              fraud) and computer-based attacks on the        
                              nation's financial, banking, and                
                              telecommunications infrastructure.              
Transportation Security    Protects the nation's transportation systems to 
Administration             ensure freedom of movement for people and       
                              commerce.                                       
US-VISIT                   Responsible for developing and implementing a   
                              governmentwide program to record the entry into 
                              and exit from the United States of selected     
                              individuals, verify their identity, and confirm 
                              their compliance with the terms of their        
                              admission into and stay in this country.        

Sources: DHS (data); GAO (analysis).

a This table does not show the organizations that fall under each of the
directorates. This table also does not show all organizations that report
directly to the DHS Secretary and Deputy Secretary, such as executive
secretary, legislative and intergovernmental affairs, public affairs,
chief of staff, inspector general, and general counsel.

Figure 1: DHS Organizational Structure (Simplified and Partial)

Within the Management Directorate is the Office of the CIO, which is
expected to leverage best available technologies and IT management
practices, provide shared services, coordinate acquisition strategies,
maintain an enterprise architecture that is fully integrated with other
management processes, and advocate and enable business transformation.
Other DHS entities also are responsible or share responsibility for
critical IT management activities. For example, DHS's major organizational
components (e.g., directorates, offices, and agencies) have their own CIOs
and IT organizations. Control over the department's IT funding is vested
primarily with the components' CIOs, who are accountable to the heads of
their respective components.6

To promote IT coordination across DHS component boundaries, the DHS CIO
established a CIO Council, chaired by the CIO and composed of
component-level CIOs. According to its charter, the specific functions of
the council include establishing a strategic plan, setting priorities for
departmentwide IT, identifying opportunities for sharing resources,
coordinating multibureau projects and programs, and consolidating
activities.

6 GAO, Homeland Security: Information Sharing Responsibilities,
Challenges, and Key Management Issues, GAO-03-715T (Washington, D.C.: May
8, 2003).

To accomplish their respective missions, DHS and its component
organizations rely extensively on IT. For example, in fiscal year 2006 DHS
IT funding totaled about $3.64 billion, and in fiscal year 2007 DHS has
requested about $4.16 billion. For fiscal year 2006, DHS reported that
this funding supported 279 major IT programs. Table 2 shows the fiscal
year 2006 IT funding that was provided to key DHS components.

Table 2: IT Funding for Fiscal Year 2006

Dollars in millions

DHS components and investments                              Funding 
Citizenship and Immigration Services                          388.8 
Coast Guard                                                   201.3 
Customs and Border Protection                                $423.7 
Federal Emergency and Management Agency                        93.5 
Immigration and Customs Enforcement                           166.8 
Management Directorate                                     
eMerge2a                                                       17.8 
Enterprise Application Deliveryb                               20.3 
Enterprise Architecture and Investment Management Programc     34.6 
Enterprise-Geospatial Systemd                                  13.1 
Homeland Secure Data Networke                                  32.7 
Human Resources ITf                                            20.8 
Information Security Programg                                  54.1 
Integrated Wireless Network i                                 261.7 
Watch List and Technical Integration j                          9.9 
OCIO salaries and expenses                                     15.5 
Other IT infrastructure h                                     887.2 
Other                                                          31.6 
Preparedness Directorate                                      215.4 
Science and Technology Directorate                             33.2 
Secret Service                                                  3.8 
Transportation Security Administration                        333.2 
US-VISIT                                                      341.0 
Other DHS components                                           40.2 
Total                                                      $3,640.2 

Source: GAO analysis of DHS data.

a eMerge2 is an initiative planned to integrate the business and financial
management policies, processes and systems of DHS into a single solution
with the goal of meeting the department's financial management,
acquisition, and asset management needs.

b Enterprise Application Delivery is intended to consolidate existing and
planned Web pages and platforms of the DHS component organizations.

c Enterprise Architecture and Investment Management Program is intended to
develop the department's enterprise architecture and implement the
transition strategy through the department's investment management
process.

d Enterprise-Geospatial System is planned to establish a framework,
organizational structure, and requisite resources to enable departmentwide
use of geographic information systems.

e Homeland Secure Data Network is an effort to merge disparate classified
networks into a single, integrated network to enable, among other things,
the secure sharing of intelligence and other information.

f HR IT includes the set of DHS enterprisewide systems to support the
personnel regulations such as MaxHR.

g Information Security Program is intended to establish information
security policies and procedures throughout the department to protect the
confidentiality, integrity, and availability of information.

h Other infrastructure includes initiatives with the goal of creating a
single, consolidated, and secure infrastructure to ensure connectivity
among the department's 22 component organizations.

i The Integrated Wireless Network is to deliver the wireless
communications services required by agents and officers of DHS, Justice,
and Treasury.

j Watch List and Technical Integration is to increase effective
information sharing by consolidating, re-using, and retiring applications
that develop multiple terrorist watch lists being used by multiple
operating entities within the government.

GAO Has Reviewed Several of DHS's Mission-Critical IT Programs

In view of the importance of major IT programs to the department's
mission, the Congress has taken a close interest in certain
mission-critical programs, often directing us to review and evaluate
program management, progress, and spending. Among the programs that we
have reviewed are the following:

           0M US-VISIT (the United States Visitor and Immigrant Status
           Indicator Technology) has several major goals: to enhance the
           security of our citizens and visitors and ensure the integrity of
           the U.S. immigration system, and at the same time to facilitate
           legitimate trade and travel and protect privacy. To achieve these
           goals, US-VISIT is to record the entry into and exit from the
           United States of selected travelers, verify their identity, and
           determine their compliance with the terms of their admission and
           stay. As of October 2005, US-VISIT officials reported that about
           $1.4 billion had been appropriated for the program.
           0M The Automated Commercial Environment (ACE) is a Customs and
           Border Protection (CBP) program to modernize trade processing
           systems and support border security. Its goals include enhancing
           analysis and information sharing with other government agencies;
           providing an integrated, fully automated information system for
           commercial import and export data; and reducing costs for the
           government and the trade community though streamlining. To date,
           CBP reports that the program has received almost $1.7 billion in
           funding.
           0M The America's Shield Initiative (ASI) program (now cancelled)
           was to enhance DHS's ability to provide surveillance and
           protection of the U.S. northern and southern borders through a
           system of sensors, databases, and cameras. The program was also to
           address known limitations of the current Integrated Surveillance
           Intelligence System (ISIS) and to support DHS's antiterrorism
           mission, including its need to exchange information with state,
           local, and federal law enforcement organizations. As of September
           2005, ASI officials reported that about $340.3 million had been
           spent on the program. As of December 2005, the program was
           subsumed within the Secure Border Initiative, the department's
           broader border and interior enforcement strategy.
           0M The Secure Flight program is developing a system to perform
           passenger prescreening for domestic flights: that is, the matching
           of passenger information against terrorist watch lists to identify
           persons who should undergo additional security scrutiny. The goal
           is to prevent people suspected of posing a threat to aviation from
           boarding commercial aircraft in the United States, while
           protecting passengers' privacy and civil liberties. The program
           also aims to reduce the number of people unnecessarily selected
           for secondary screening. To date, TSA officials report that about
           $144 million has been spent on the program.
           0M The Atlas program is intended to modernize the IT
           infrastructure of Immigration and Customs Enforcement (ICE). The
           goals of the program are to, among other things, improve
           information sharing, strengthen information security, and improve
           workforce productivity. ICE estimates the life cycle cost of Atlas
           to be roughly $1 billion.
           0M The Student and Exchange Visitor Information System (SEVIS) is
           an Internet-based system that is to collect and record information
           on foreign students, exchange visitors, and their
           dependents-before they enter the United States, when they enter,
           and during their stayThrough fiscal year 2006, the department
           expects to have spent, in total, about $133.5 million on this
           program. The Rescue 21 program is to replace and mo
           Guard's 30-year-old search and rescue communication system,
           National Distress and Response System. The modernization is to,
           among other things, increase the Coast Guard's communication
           coverage area in the United States; allow electronic tracking of
           department vessels and other mobile assets; enable better
           communication with other federal and state systems; and pfor
           secure communication of sensitive information. The Coast Guard
           reports that it plans to spend about $373.1 million on theprogram
           by the end of fiscal year 2006. It also estimates programlife
           cycle cost to be $710 million.

Our research on leading private a

well as our past work at federal departments and agencies, shows that
successful organizations embrace the central role of IT as an enabler for
enterprisewide transformation.7 These leading organizations develop and
implement institutional or agencmanagement controls and capabilities
(people, processes, and tools) that help ensure that the vast potential of
technology is applied effectively to achieve desired mission outcomes.
Among these ITmanagement controls and capabilities are

           0M IT investment management,
           0M system development and acq
           0M information security management, and
           0M IT human capital management.8 
           In addition, these organizations e

           capabilities within a governance structure that centralizes
           leadership in an empowered CIO. These controls and capabilities
           are interdep

           IT management disciplines, as shown in figure 2. If effectively
           established and implemented, they can go a long way in determining
           how successfully an organization leverages IT to achieve mission
           goals and outcomes.

Management and Accountability Framework Needed for Organizational
Transformation, GAO-03-231 (Washington, D.C.: Jan. 17, 2003). 8 Other
important IT management controls and capabilities are not
addressetestimony, such as IT strategic planning and information manage

DHS Is Making Progress but Has Yet to Fully Institutionalize IT Management
                           Controls and Capabilities

Over the last 3 years, our work has shown that the department has
continued to work to establish effective corporate governance and
associated IT management controls and capabilities, but progress in each
of the key areas has been uneven, and more remains to be accomplished.
Until it fully institutionalizes effective governance controls and
capabilities, it will be challenged in its ability to leverage IT to
support transformation and mission results.

Enterprise Architecture

Leading organizations recognize the importance of having and using an
enterprise architecture, or corporate blueprint, as an authoritative
operational and technical frame of reference to guide and constrain IT
investments. In brief, an enterprise architecture provides systematic
structural descriptions-in useful models, diagrams, tables, and
narrative-of how a given entity operates today and how it plans to operate
in the future, and it includes a road map for transitioning from today to
tomorrow. Our experience with federal agencies has shown that attempting
to modernize systems without having an enterprise architecture often
results in systems that are duplicative, not well integrated,
unnecessarily costly to maintain, and limited in terms of optimizing
mission performance.9

To assist agencies in effectively developing, maintaining, and
implementing an enterprise architecture, we published a framework for
architecture management, grounded in federal guidance and recognized best
practices.10 The underpinning of this framework is a five-stage maturity
framework outlining steps toward achieving a stable and mature enterprise
architecture program. The framework describes 31 practices or conditions,
referred to as core elements, that are needed for effective architecture
management.

9 See for example, GAO, DOD Business Systems Modernization: Improvements
to Enterprise Architecture Development and Implementation Efforts Needed,
GAO-03-458 , (Washington, D.C.: Feb. 28, 2003); Information Technology:
DLA Should Strengthen Business Systems Modernization Architecture and
Investment Activities, GAO-01-631 (Washington, D.C.: June 29, 2001); and
Information Technology: INS Needs to Better Manage the Development of Its
Enterprise Architecture, AIMD-00-212 (Washington, D.C.: Aug. 1, 2000).

We have previously reported on DHS's effort to develop its enterprise
architecture from two perspectives. First, in November 2003, we reported
on DHS's architecture management program relative to the framework
described above.11 At that time, we found that the department had
implemented many of the practices described in our framework. For example,
the department had, among other things, assigned architecture development,
maintenance, program management, and approval responsibilities; created
policies governing architecture development and maintenance; and
formulated plans to develop architecture products and begun developing
them. Second, in August 2004, we reported on DHS's effort to develop
enterprise architecture products, relative to well-established, publicly
available criteria on the content of enterprise architectures.12 At that
time, we concluded that the department's initial enterprise architecture
provided a foundation upon which to build, but that it was nevertheless
missing important content that limited its utility. Thus, it could not be
considered a well-defined architecture. In particular, the content of this
initial version was not systematically derived from a DHS or national
corporate business strategy; rather, it was more the result of an
amalgamation of the existing architectures that several of DHS's
predecessor agencies already had, along with their respective portfolios
of system investment projects. To its credit, the department recognized
the limitations of the initial architecture and has developed a new
version. To assist DHS in evolving its architecture, we recommended 41
actions aimed at having DHS add needed architecture content and ensure
that architecture development best practices are employed.

10 GAO, Information Technology: A Framework for Assessing and Improving
Enterprise Architecture Management (Version 1.1), GAO-03-584G (Washington,
D.C.: April 2003).

11 GAO, Information Technology: Leadership Remains Key to Agencies Making
Progress on Enterprise Architecture Efforts, GAO-04-40 (Washington, D.C.:
Nov. 17, 2003).

12 GAO, Homeland Security: Efforts Under Way to Develop Enterprise
Architecture, but Much Work Remains, GAO-04-777 (Washington, D.C.: Aug. 6,
2004).

Since then, DHS reported that it had taken steps in response to our
recommendations. For example, the department issued version 2 of its
enterprise architecture in October 2004. According to DHS, this version
contained additional business/mission, service, and technical
descriptions. Also, this version was submitted to a group of CIOs of major
corporations and an enterprise architecture consulting firm, both of which
found the architecture meritorious. Earlier this month (March 2006), the
department issued another new version of its enterprise architecture,
which it calls HLS EA 2006.

Our analysis of version 2 of the department's architecture indicates that
DHS has made progress toward development of its architecture products,
particularly descriptions of both the "as-is" and "to-be" environments.
Specifically, the scope of the "as-is" and "to-be" environments extends to
descriptions of business operations, information and data needs and
definitions, application and service delivery vehicles, and technology
profiles and standards. With respect to the depth and detail of these
descriptions (which are the focus of most of our 41 prior
recommendations), the department has reported progress, such as (1)
completing its first inventory of information technology systems, a key
input to its description of the "as-is" environment; (2) establishing
departmentwide technology standards; (3) developing and beginning to
implement a plan for introducing a shared services orientation to the
architecture, particularly with regard to information services (e.g.,
network, data center, e-mail, help desk, and video operations); and (4)
finalizing content for the portion of its architecture that relates to
certain border security functions (e.g., the alien detention and removal
process that is a major facet of the department's new Strategic Border
Initiative).

IT Investment Management

Through IT investment management, organizations define and follow a
corporate process to help senior leadership make informed decisions on
competing options for investing in IT. Such investments, if managed
effectively, can have a dramatic impact on performance and accountability.
If mismanaged, they can result in wasteful spending and lost opportunities
for improving delivery of services.

Based on our research, we have issued an IT investment management
framework13 that encompasses the best practices of successful public and
private sector organizations, including investment selection and control
policies and procedures. Our framework identifies, among other things,
effective policies and procedures for developing and using an
enterprisewide collection-or portfolio-of investments; using such
portfolios enables an organization to determine priorities and make
decisions among competing options across investment categories based on
analyses of the relative organizational value and risks of all
investments.14

A central tenet of the federal approach to IT investment management is the
select/control/evaluate model. During the select phase, the organization
(1) identifies and analyzes each project's risks and returns before
committing significant funds and (2) selects those projects that will best
support its mission needs. In the control phase, the organization ensures
that the project continues to meet mission needs at the expected levels of
cost and risks. If the project is not meeting expectations or if problems
have arisen, steps are quickly taken to address the deficiencies. During
the evaluate phase, actual versus expected results are compared after a
project has been fully implemented.

13 GAO, Information Technology Investment Management: A Framework for
Assessing and Improving Process Maturity, Exposure Draft, GAO/AIMD-10.1.23
(Washington, D.C.: May 2000); Information Technology Investment
Management: A Framework for Assessing and Improving Process Maturity,
version 1.1, GAO-04-394G (Washington, D.C.: March 2004).

14 Our ITIM framework is also consistent with the Clinger-Cohen Act of
1996 (40 U.S.C. S:S: 11101-11703), in which Congress enacted provisions
requiring federal agencies to focus on results achieved through IT
investments and to improve their IT acquisition processes. The act also
introduces more rigor and structure into how agencies select and manage IT
projects.

In August 2004, we reported15 that DHS had established an investment
management process that included departmental oversight of major IT
programs. However, this process was not yet institutionalized: for
example, most programs (about 75 percent) had not undergone the
departmental oversight process, and resources were limited for completing
control reviews in a timely manner. At that time, the CIO and other DHS
officials attributed these shortfalls, in part, to the fact that the
department's process was maturing and needed to improve. Based on our
findings, we made recommendations aimed at strengthening the process.

In March 2005,16 we again reported on this investment review process,
noting that it incorporated many best practices and provided its senior
leaders with the information required to make well-informed investment
decisions at key points in the investment life cycle. However, we also
concluded that at some key investment decision points, DHS's process did
not require senior management attention and oversight. For example,
management reviews are not required at key system and subsystem decision
points, although such reviews (especially with complex systems that
incorporate new technology like US-VISIT) are critical to ensuring that
risk is reduced before the organization commits to the next phase of
investment. Accordingly, we made further recommendations to improve the
process.

Further, the CIO recently reported additional steps being taken to
strengthen IT investment management. According to the CIO, DHS has

           0M established an acquisition project performance reporting
           system, which requires periodic reporting of cost, schedule, and
           performance measures as well as earned value metrics, as means to
           monitor and control major acquisitions;
           0M aligned the investment management cycle and associated
           milestones with the department's annual budget preparation process
           to allow business cases for major investments to be submitted to
           department headquarters at the same time as the budget, rather
           than as a follow-on;
           0M linked investment management systems to standardize and make
           consistent the financial data used to make investment decisions;
           0M verified alignment of approximately $2 billion worth of
           investments via the department's portfolio management framework;
           and
           0M completed investment oversight reviews (by total dollar value)
           of over 75 percent of the department's major investments.

           The department has also developed a standard template for
           capturing information about a given IT program to be used in
           determining the investment's alignment with the enterprise
           architecture. Such alignment is important because it ensures that
           programs will be defined, designed, and developed in a way that
           avoids duplication and promotes interoperability and integration.
           However, the department has yet to document a methodology, with
           explicit criteria, for making its judgments about the degree of
           alignment. Instead, it relies on the undocumented and subjective
           determinations of individuals in its Enterprise Architecture
           Center of Excellence.

15 GAO, Department of Homeland Security: Formidable Information and
Technology Management Challenge Requires Institutional Approach,
GAO-04-702 (Washington, D.C.: Aug. 27, 2004).

16 GAO, Homeland Security: Successes and Challenges in DHS's Efforts to
Create an Effective Acquisition Organization, GAO-05-179 (Washington,
D.C.: Mar. 29, 2005).

Systems Development and Acquisition Management

Managing systems development and acquisition effectively requires applying
engineering and acquisition discipline and rigor when defining, designing,
developing and acquiring, testing, deploying, and maintaining IT systems
and services. Our work and other best practice research have shown that
applying such rigorous management practices improves the likelihood of
delivering expected capabilities on time and within budget. In other
words, the quality of IT systems and services is largely governed by the
quality of the management processes involved in developing and acquiring
them.

Best practices in systems development and acquisition include following a
disciplined life cycle management process, in which key orderly process
and are fully documented. Such a life cycle procesbegins with initial
concept definition and continues through requirements determination to
design, development, various of testing, implementation, and maintenance.
For example, expectedsystem capabilities should be defined in terms of
requirements for functionality (what the system is to do), performance
(how well thesystem is to execute functions), data (what data are needed
by what functions, when, and in what form), interface (what interactions
with related and dependent systems are needed), and security. Further,
system requirements should be unambiguous, consistewith one another,
linked (that is, traceable from one source level toanother),17 verifiable,
understood by stakeholders, and fully documented.

and they have inherent dependencies among themselves. Thus, if earlier
steps are omitted or deficient, later steps will be affected, resulting in
costly and time-consuming rework. For example, a system can be effectively
tested to determine whether it meets requirements only if these
requirements have already been completely and correctly defined.
Concurrent, incomplete, aomitted activities in life cycle management
exacerbate the progrrisks. Life cycle management weaknesses become even
more criticalas the program continues, because the size and complexity of
the program will likely only increase, and the later problems are foundthe
harder and more costly they will likely be to fix.

systems development life cycle (SDLC) methodology, which sets forth the
multistep process of developing information systems froinvestigation of
initial requirements through analysis, design, implementation,
maintenance, and disposal. Organizations genformalize their SDLC in
policies, procedures, and guidance. Currently, many of the major DHS
components are followingprocesses established under their predecessor
organizations. For example, both the Transportation Security
Administration and CBPhave their own SDLCs. As part of our reviews of DHS
IT management and specific IT programs, we have not raiseissues or
identified any shortcomings with these SDLCs.

17Examples of higher order sources include legislation, which may dictate
certain requirements, and other system documentation, such as the
operational concept. When requirements are managed well, traceability can
be established from the source requirements to lower level requirements
and from the lower level back to their source. Such bidirectional
traceability helps determine that all source requirements have been
addressed completely and that all lower level requirements can be verified
as derived from a valid source.

departmentwide SDLC methodology and thus provide a commonmanagement
approach to systems development and acquisition. According to DHS, the
goals of the SDLC are to help

           0M incorporate accepted industry and government standards, best
           practices, and disciplined engineering methods, including IT
           maturity model concepts; ensure that formal reviews
           are consistent with DHS's investment management process; and
           institute disciplined life cycle management practices, including
           planning and evaluation in each phase of the information
           systemcycle. T

           IT portfolio as well as other capital asset acquisitions. Under
           the SDLC, each program will be expected to, among other things,
           follow disciplined project planning and management processes

           balanced by effective management controls; have a comprehensive
           project management pl
           0M base project plans on user requirements that are c
           testable, and traceable to the work products produced; and
           integrate information security activities throughout the SDLC

Effecti

a comprehensive program to protect the information and information systems
that support an organization's operations and assets. The overall
framework for ensuring the effectiveness of federal information security
controls is provided by the Federal Information Security Management Act of
2002.18 In addition, OMBCircular No. A-130 requires agencies to provide
information and systems with protection that is commensurate with the risk
and magnitude of the harm that would result from unauthorized acceto these
assets or their loss, misuse, or modification.

weaknesses in the controls over computerized federal operationswe have
designated information security as a governmentwide highrisk issue since
1997.19 Moreover, related risks continue to escalate, in part because the
government is increasingly relying on the Internet and on commercially
available IT products. Concernsincreasing regarding attacks for the
purpose of crime, terrorism, foreign intelligence gathering, and acts of
war, as well as by the disgruntled insider, who may not need particular
expertise to gaiunrestricted access and inflict damage or steal assets.
Without an effective security management program, an organization has no
assurance that it can withstand these and other threats.

general (IG) have reported that although the department continueto improve
its IT security, it remains a major management challengeFor example,
within its first year the department had appointed a chief information
security officer and developed and disseminatedinformation system security
policies and procedures, but it had not completed a comprehensive
inventory of its major IT systems-a prerequisite for effective security
management.

a comprehensive, departmentwide information security program to protect
the information and information systems that support its operations and
assets. 20 In particular, although it had developed andocumented
departmental policies and procedures that could provide a framework for
implementing such a program, certaindepartmental components had not yet
fully implemented key information security practices and controls.
Examples of weaknesses in components' implementation included incomissing
elements in risk assessments, security plans, and remedial action plans,
as well as incomplete, nonexistent, or untested continuity of operations
plans. To address these weaknesses,made recommendations aimed at ensuring
that DHS fully implemethe key information security practices and controls.

18 Pub. L. No. 107-347, tit. III, S: 301, 116 Stat. 2946, 2946-55 (Dec.
17, 2002) (codified at 44 U.S.C. S:S: 3541-3549).

19 See GAO, High-Risk Series: Protecting Information Systems Supporting
the Federal Government and the Nation's Critical Infrastructures,
GAO-03-121 (Washington, D.C.: January 2003).

not completely aligned their respective information security programs with
DHS's overall policies, procedures, and practicHowever, the IG also
reported progress. According to the IG, DHS completed actions to eliminate
two obstacles that had significantly impeded the department in
establishing its security program: First, icompleted the comprehensive
system inventory mentioned earlier, including major applications and
general support systems for all DHS components. Second, it implemented a
departmentwide toolthat incorporates the guidance required to adequately
complete security certification and accreditation for all systems. The IG
alsreported that the CIO had developed a plan to accredit all systems by
September 2006.

in implementing the department's certification and accreditation plan,
stating that the department is well on its way to achieving itsSeptember
2006 target for full system accreditation.22 The CIO also stated that by
the end of February 2006, more than 60 percent of the over 700 systems in
its inventory were fully accredited, up from about 26 percent 5 months
earlier.

20 GAO, Information Security: Department of Homeland Security Needs to
Fully Implement Its Security Program, GAO-05-700 (Washington, D.C.: June
17, 2005).

21 DHS Office of Inspector General, Major Management Challenges Facing the
Department of Homeland Security, OIG-06-14 (Washington, D.C.: December
2005).

22 Statement by Scott Charbo, DHS CIO, before the House Committee on
Government Reform (Washington, D.C.: Mar. 16, 2006).

IT Human Capital Management

A strategic approach to human capital management includes viewing people
as assets whose value to an organization can be enhanced by investing in
them,23 and thus increasing both their value and the performance capacity
of the organization. Based on our experience with leading organizations,
we issued a model24 encompassing strategic human capital management, in
which strategic human capital planning was one cornerstone.25 Strategic
human capital planning enables organizations to remain aware of and be
prepared for current and future needs as an organization, ensuring that
they have the knowledge, skills, and abilities needed to pursue their
missions. We have also issued a set of key practices for effective
strategic human capital planning.26 These practices are generic, applying
to any organization or component, such as an agency's IT organization.
They include

           0M involving top management, employees, and other stakeholders in
           developing, communicating, and implementing a strategic workforce
           plan;
           0M determining the critical skills and competencies needed to
           achieve current and future programmatic results;
           0M developing strategies tailored to address gaps between the
           current workforce and future needs;
           0M building the capability to support workforce strategies; and
           0M monitoring and evaluating an agency's progress toward its human
           capital goals and the contribution that human capital results have
           made to achieving programmatic goals.

           In June 2004, we reported that DHS had begun strategic planning
           for IT human capital at the headquarters level, but it had not yet
           systematically gathered baseline data about its existing
           workforce. Moreover, the DHS CIO expressed concern over staffing
           and acknowledged that progress in this area had been slow.27 In
           our report, we recommended that the department analyze whether it
           had appropriately allocated and deployed IT staff with the
           relevant skills to obtain its institutional and program-related
           goals. In response, DHS stated that on July 30, 2004, the CIO
           approved funding for an IT human capital Center of Excellence.
           This center was tasked with delivering plans, processes, and
           procedures to execute an IT human capital strategy and to conduct
           an analysis of the skill sets of DHS IT professionals.

           Since that time, DHS has undertaken a departmentwide human capital
           initiative, MAXHR, which is to provide greater flexibility and
           accountability in the way employees are paid, developed,
           evaluated, afforded due process, and represented by labor
           organizations. Part of this initiative involves the development of
           departmentwide workforce competencies. According to the DHS IG,
           the department intended to implement MAXHR in the summer of 2005,
           but federal district court decisions have delayed the department's
           plans. However, the IG stated that the classification, pay, and
           performance management provisions of the new program are moving
           forward, with implementation of the new performance management
           system beginning in October 2005. According to the IG, the new pay
           system is planned for implementation by January 2007 for some DHS
           components.

23 See GAO, Human Capital: Attracting and Retaining a High-Quality
Information Technology Workforce, GAO-02-113T (Washington, D.C.: Oct. 4,
2001); A Model of Strategic Human Capital Management, GAO-02-373SP
(Washington, D.C.: Mar. 15, 2002); Key Principles for Effective Strategic
Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003).

24 GAO-02-373SP .

25 The other three are leadership; acquiring, developing, and retaining
talent; and results-oriented organizational culture.

26 GAO-04-39 .

27 GAO, Human Capital: DHS Faces Challenges In Implementing Its New
Personnel System, GAO-04-790 (Washington, D.C.: June 18, 2004).

CIO Leadership

According to our research on leading private and public sector
organizations and experience at federal agencies, leading organizations
adopt and use an enterprisewide approach to IT governance under the
leadership of a CIO or comparable senior executive, who has responsibility
and authority, including budgetary and spending control, for IT across the
entity.28

In May 2004, we reported that the DHS CIO did not have authority and
control over departmentwide IT spending.29 Control over the department's
IT budget was vested primarily with the CIO organizations within each DHS
component, and the components' CIO organizations were accountable to the
heads of the components. As a result, DHS's CIO did not have authority to
manage IT assets across the department. Accordingly, we recommended that
the Secretary examine the sufficiency of spending authority vested in the
CIO and take appropriate steps to correct any limitations in authority
that constrain the CIO's ability to effectively integrate IT investments
in support of departmentwide mission goals.

Since then, the DHS IG has reported that the DHS CIO is not well
positioned to accomplish IT integration objectives.30 According to the IG,
despite federal laws and requirements, the CIO is not a member of the
senior management team with authority to strategically manage
departmentwide technology assets and programs. The IG reported that steps
were taken to formalize reporting relationships between the DHS CIO and
the CIOs of major component organizations, but that the CIO still does not
have sufficient staff resources to assist in carrying out the planning,
policy formation, and other IT management activities needed to support
departmental units. The IG expressed the view that although the CIO
currently participates as an integral member at each level of the
investment review process, the department would benefit from following the
successful examples of other federal agencies in positioning their CIOs
with the authority and influence needed to guide executive decisions on
departmentwide IT investments and strategies.

28 For example, see GAO, Architect of the Capitol: Management and
Accountability Framework Needed for Organizational Transformation,
GAO-03-231 (Washington, D.C.: Jan. 17, 2003) and Maximizing the Success of
Chief Information Officers: Learning from Leading Organizations,
GAO-01-376G (Washington, D.C.: February 2001).

29 GAO, Information Technology: Homeland Security Should Better Balance
Need for System Integration Strategy with Spending for New and Enhanced
Systems, GAO-04-509 (Washington, D.C.: May 21, 2004).

30 DHS Office of Inspector General, Major Management Challenges Facing the
Department of Homeland Security, OIG-06-14 (Washington, D.C.: December
2005).

In response to the IG's comments, the DHS CIO stated that his office is
properly positioned and has the authority it needs to accomplish its
mission. According to the CIO, the office is the principal IT authority to
the Secretary and Deputy Secretary, and it will continue to hold that
leadership role within the department.

DHS Is Making Some Progress in Implementing IT Systems and Infrastructure

A gauge of DHS's progress in managing its IT investments is the extent to
which it has deployed and is currently operating more modern IT systems
and infrastructure. To the department's credit, our reviews have shown
progress in these areas, and DHS has reported other progress. However, our
reviews have also shown that IT programs have not met stated goals for
deployed capabilities, and DHS's own reporting shows that infrastructure
goals have yet to be fully met.

To expedite the implementation of IT systems, the department has developed
and deployed system capabilities incrementally, which we support, as this
is a best practice and consistent with our recommendations.31 For example,
the department has successfully delivered visitor entry identification and
screening capabilities with the first three increments of its US-VISIT
program, and it is currently implementing release four of its ACE program.
At the same time, however, US-VISIT exit capabilities are not in place,
and release four of ACE does not include needed functionality. Further,
some IT programs that either were or have been under way for years have
not delivered any functionality, such as the canceled ASI program and the
Secure Flight program.

31 Clinger-Cohen Act of 1996, Pub. L. 104-106; OMB, Management of Federal
Information Resources, Circular A-130 (Nov. 28, 2000).

In addition, the department has recently reported a number of
accomplishments relative to IT infrastructure; however, what has been
reported also shows that much remains to be accomplished before
infrastructure-related efforts produce deployed and operational
capabilities. For example, the department reports that it has begun its
Infrastructure Transformation Program (ITP), which is its approach to
moving to a consolidated, integrated, and services-oriented IT
infrastructure. According to the department, the CIO developed and has
begun implementing the ITP plan, which is to be centrally managed but
executed in a distributed manner, with various DHS components taking the
lead for different areas of infrastructure transformation.32 The ITP is to
create a highly secure and survivable communications network (OneNet) for
Sensitive but Unclassified data across the department, and it is also to
establish a common and reliable e-mail system across the department. The
department reported that it had deployed the initial core of the DHS
OneNet and built the primary Network Operation Center to monitor OneNet
performance. Among the other goals of the program are consolidated data
centers to reduce costs and provide a highly survivable and reliable
computing environment. In this regard, the department reported that it has
now established an interim data center.

In addition, the department stated that it has extended its classified
networking capabilities by fielding 56 Secret sites on the department's
Homeland Secure Data Network and by completing the connection of this
network to SIPRNet (the Defense Department's Secret Internet Protocol
Routed Network). DHS also reported that it has established an Integrated
Wireless Program Plan, which provides a program management framework to
ensure the on-time cost and schedule performance of wireless programs and
projects.

32 For instance, CBP is the lead for network services and data centers;
the Coast Guard is the lead for e-mail and help desk services; and the
Federal Emergency Management Agency is the lead on video operations
services.

     Key IT Programs Reflect Mixed Use of Effective IT Management Practices

A key measure of how well an organization is managing IT is the degree to
which its IT-dependent programs actually implement corporate management
controls and employ associated best practices. In this regard, our reviews
of several nonfinancial DHS IT programs provide examples of both strengths
and weaknesses in program management. In summary, they show that DHS IT
programs are not being managed consistently: some programs are at least
partially implementing certain program management best practices, but
others are largely disregarding most of the practices. Further, they show
that most of the programs are considerably challenged in certain key
areas, such as measuring progress and performance against program
commitments and establishing human capital capabilities.

IT investment alignment with the enterprise architecture. An important
element of enterprise architecture management is ensuring that IT
investments comply with the architecture. However, in several of the
programs that we have reviewed, investments have been approved without
documented analysis to support these judgments and to permit the judgments
to be independently verified. For example, DHS approved the ACE program's
alignment with the department's architecture on the recommendation of its
Enterprise Architecture Center of Excellence and Enterprise Architecture
Board. However, the Center's evaluators did not provide a documented
analysis that would allow independent verification. According to DHS
officials, they do not have a documented methodology for evaluating
programs' architecture compliance, and instead rely on the professional
expertise of Center staff. In contrast, the ASI program provides an
example of an instance in which the reviews required to ensure
architecture alignment resulted in the discovery of a significant problem:
the program had not adequately defined its relationships and dependencies
with other department programs.33 As a result, the program was
reconsidered and later subsumed within the new Secure Border Initiative,
the department's broader strategy for border and interior enforcement.

Reliable cost estimates. Reliable cost estimates are prerequisites both
for developing an economic justification for a program and for
establishing cost baselines against which to measure progress. DHS IT
programs that we reviewed have demonstrated mixed results in this regard.
For example, the ACE program has made considerable progress in
implementing our recommendation to ensure that its development 
contractor's cost estimates are reconciled with independent cost
estimates, and that the derivation of both estimates is consistent with
published best practices. However, cost estimating remains a major
challenge for other DHS IT programs. For example, Secure Flight did not
have cost estimates for either initial or full operating capability, nor
did it have a life-cycle cost estimate (estimated costs over the expected
life of a program, including direct and indirect costs and costs of
operation and maintenance). Also, for the US-VISIT program's analysis of
proposed alternatives for monitoring the exit of travelers, cost estimates
did not meet key criteria for reliable cost estimating as established in
the published best practices mentioned above. For example, they did not
include detailed work breakdown structures defining the work to be
performed, so that associated costs could be identified and estimated.
Such a work breakdown structure provides a reliable basis for ensuring
that estimates include all relevant costs. Without reasonable cost
estimates, it is not possible to produce an adequate economic
justification for choosing among alternatives, and program performance
cannot be adequately measured.

33 In February 2006, we reported that the DHS Deputy Secretary had
directed that the program be reevaluated within the department's broader
border and interior enforcement strategy, now referred to as the Secure
Border Initiative. See GAO, Border Security: Key Unresolved Issues Justify
Reevaluation of Border Surveillance Technology Program, GAO-06-295
(Washington, D.C.: Feb. 22, 2006).

Earned value management. To help ensure that reliable processes are used
to measure progress against cost and schedule commitments, OMB requires
agencies to manage and measure major IT projects34 through use of an
earned value management (EVM) system that is compliant with specified
standards.35 On programs we reviewed, however, the use of EVM was as yet
limited. For example, although the ACE program had instituted the use of
EVM on recent releases, its use for one release was suspended in June
2005, because staff assigned to the release were unfamiliar with the
technique. For another release, EVM was not used because, according to
program officials, the release had not established the necessary cost and
schedule baseline estimates against which earned value could be measured.
ACE officials told us that they plan to establish baselines and use EVM
for future work. With regard to the US-VISIT program, although EVM is to
be used in managing the prime integration contract, it has not been used
in a number of US-VISIT related contracts over the last 3 years. According
to DHS, in fiscal year 2005, 30 percent of departmental programs were
using EVM.

Performance management and accountability. To ensure that programs manage
their performance effectively, it is important that they define and
measure progress against program commitments and hold themselves
accountable for results. These program commitments include expected or
estimated (1) capabilities and associated use and quality; (2) benefits
and mission value; (3) costs; and (4) milestones and schedules. To be
accountable, projects need first to develop and maintain reliable and
current expectations and then to define and select metrics to measure
progress against these. However, in our reviews of DHS programs (such as
those that are required to prepare expenditure plans for Senate and House
appropriations subcommittees before obligating funding), we have reported
that program performance and accountability has been a challenge. For
example, the fiscal year 2004 expenditure plan for the Atlas program did
not provide sufficient information on program commitments to allow the
Congress to perform effective oversight. On the other hand, although the
ACE program office is still not where it needs to be in this regard, it
has made progress in this area: it has now prepared an initial version of
a program accountability framework that includes measuring progress
against costs, milestones and schedules, and risks for select releases.
However, ACE benefit commitments are still not well defined, and the
performance targets being used were not always realistic. On other
programs, such as SEVIS, we found that while some performance aspects of
the system were being measured, others were not such as network usage.

34 Specifically, OMB requires agencies to use this method on all new major
IT projects, ongoing major IT developmental projects, and high-risk
projects.

35 EVM is a project management tool that integrates the investment scope
of work with schedule and cost elements for investment planning and
control. This method compares the value of work accomplished during a
given period with that of the work expected in the period. Differences in
expectations are measured in both cost and schedule variances.

Disciplined acquisition and development processes. Our reviews of DHS
programs have disclosed numerous weaknesses in key process areas related
to system acquisition and management, such as requirements development and
management, test management, project planning, validation and
verification, and contract management oversight. For example, we reported
that the Atlas program office, which had been recently established, had
not yet implemented any of these key process areas.36 For the ACE program,
weaknesses in requirements definition were a major reason for recent
problems and delays, including the realization during pilot testing that
key functionality had not been defined and built into the latest release.
For US-VISIT, test plans were incomplete in that they did not, among other
things, adequately demonstrate traceability between test cases and the
requirement to be verified by testing. Also, both ASI and Secure Flight
were proceeding without complete and up-to-date program management plans,
and Secure Flight's requirements were not well developed. In addition, key
ASI acquisition controls, such as contract management oversight, were not
yet defined. This led to a number of problems in ASI deploying, operating,
and maintaining ISIS technology. Further, ACE and US-VISIT projects have
not always effectively employed independent verification and validation.

36 GAO, Information Technology: Management Improvements Needed on
Immigration and Customs Enforcement's Infrastructure Modernization
Program, GAO-05-805 (Washington, D.C.: Sept. 7, 2005).

Risk management. Effective risk management is vital to the success of any
system acquisition. Accordingly, best practices37 advocate establishing
management structures and processes to proactively identify facts and
circumstances that can increase the probability of an acquisition's
failing to meet cost, schedule, and performance commitments and then
taking steps to reduce the probability of their occurrence and impact. Our
work on the ACE, US-VISIT, and ASI programs, for example, showed that risk
management programs were in place, but not all risks were being
effectively addressed. In particular, key risks on the ACE program were
not being effectively addressed. Specifically, the ACE program schedule
had introduced significant concurrency in the development and deployment
of releases; as both prior experience on the ACE program and best
practices show, such concurrency causes contention for common resources,
which in turn produces schedule slips and cost overruns. Also, the ACE
program was passing key milestones with known severe system defects-that
is, allowing development to proceed to the next stage even though
significant problems remained to be solved. This led to a recurring
pattern of addressing quality problems with earlier releases by borrowing
resources from future releases, which led to schedule delays and cost
overruns. Moreover, it led the program to deploy one release prematurely
with the intention of gaining user acceptance sooner. However, this
premature deployment actually produced a groundswell of user complaints
and poor user satisfaction scores with the release.

Similar risks were experienced on the Coast Guard's Rescue 21 program. For
example, we reported that the Coast Guard's plan to compress and overlap
key tests introduced risks, and subsequently the Coast Guard decided to
postpone several tests.38

37 Software Engineering Institute, Software Acquisition Capability
Maturity Model(R) version 1.03, CMU/SEI-2002-TR-010 (Pittsburgh, PA: March
2002).

38 GAO, Coast Guard: New Communication System to Support Search and Rescue
Faces Challenges, GAO-03-1111 (Washington, D.C.: Sept. 30, 2003).

Security. The selection and employment of appropriate security and privacy
controls for an information system are important tasks that can have major
implications for the operations and assets and for the protection of
personal information that is collected and maintained in the system.
Security controls are the management, operational, and technical
safeguards prescribed for an information system to protect the
confidentiality, integrity, and availability of the system and its
information. Privacy controls limit the collection, use, and disclosure of
personal information.

For several IT programs, security and privacy has been a challenge. For
example, we reported39 in September 2003 and again in May 2004 that the
US-VISIT program office had yet to develop a security plan as required by
OMB and other federal guidance, although the program later developed a
plan that was generally consistent with applicable guidance. However, the
program office had not conducted a security risk assessment or included in
the plan when such an assessment would be completed. OMB and other federal
guidance specifies that security plans should describe the methodology
that is used to identify system threats and vulnerabilities and to assess
the risks, and include the date the assessment was completed.

In addition, we reported that the Atlas program was relying on a
bureauwide security plan that did not address Atlas infrastructure
requirements. Further, Atlas had yet to develop a privacy impact
assessment to determine what effect, if any, the system would have on
individual privacy, the privacy consequences of processing certain
information, and alternatives considered to collect and handle the
information.

On TSA's Secure Flight program, although the agency had taken steps to
implement security to protect system information and assets, we recently
reported that these steps were individually incomplete and collectively
fell short of a comprehensive program consistent with federal guidance and
associated best practices. More specifically, OMB and other federal
guidance and relevant best practices call for agencies to, among other
things, (1) conduct a systemwide risk assessment that is based on system
threats and vulnerabilities and (2) then develop system security
requirements and related policies and procedures that govern the operation
and use of the system and address identified risks. Although TSA developed
two system security plans-one for the underlying infrastructure (hardware
and software) and another for the Secure Flight system application-neither
was complete. Specifically, the infrastructure plan only partially defined
the requirements to address the risks, and the application plan did not
include any requirements addressing risks. Furthermore, we also recently
reported40 that TSA did not fully disclose to the public, as required by
privacy guidance, its use of personal information during the testing phase
of Secure Flight until after many of the tests had been completed.

39 Homeland Security: First Phase of Visitor and Immigration Status
Program Operating, but Improvements Needed, GAO-04-586 (Washington, D.C.:
May 11, 2004); and Homeland Security: Risks Facing Key Border and
Transportation Security Program Need to Be Addressed, GAO-03-1083
(Washington, D.C.: Sept. 19, 2003).

Establishing and maintaining adequate staffing. Implementing the IT
management processes that I have been describing requires that programs
have the right people-not only people who have the right knowledge,
skills, and abilities, but also enough of them to do the job. Generally,
all the programs we reviewed were challenged, particularly in their
initial stages, to assemble sufficient staff with the right skill mix and
to treat workforce (human capital) planning as a management imperative.
For example, we reported that both the Atlas and the ASI programs were
initiated without being adequately staffed. In addition, in September 2003
we reported that the US-VISIT program office had assessed its staffing
needs for acquisition management at 115 government and 117 contractor
personnel, but that at the time the program had 10 staff within the
program office and another 6 staff working closely with them.41 Since
then, US-VISIT has filled 102 of its 115 planned government positions
(with plans in place to fill the remaining positions) and all of its
planned 117 contractor positions.42

40 GAO, Aviation Security: Transportation Security Administration Did Not
Fully Disclose Uses of Personal Information during Secure Flight Program
Testing in Initial Privacy Notices, but Has Recently Taken Steps to More
Fully Inform the Public, GAO-05-864R (Washington, D.C.: July 22, 2005).

41 GAO, Homeland Security: Risks Facing Key Border and Transportation
Security Program Need to Be Addressed, GAO-03-1083 (Washington, D.C.:
Sept. 19, 2003);

However, to ensure that staffing needs continue to be met, organizations
need to manage human capital strategically, which entails identifying the
program functions that need to be performed and the associated numbers and
skill sets (core competencies) needed to perform them, assessing the
on-board workforce relative to these needs, identifying gaps, and
developing and implementing strategies (i.e., hiring, retention, training,
contracting) for filling these gaps over the long-term. In this regard,
the US-VISIT program has made considerable progress. Specifically, we
recently reported that it has analyzed the program office's workforce to
determine diversity trends, retirement and attrition rates, and
mission-critical and leadership competency gaps, and it has updated the
program's core competency requirements to ensure alignment between the
program's human capital and business needs. In contrast, although the ACE
program has taken various informal steps to bolster its workforce (such as
providing training), it has been slow to document and implement a human
capital strategy that compares competency-based staffing needs to on-board
capabilities and includes plans for closing shortfalls.

In closing, let me reiterate that we have made a series of recommendations
to the department aimed at addressing both the department's institutional
IT management challenges and its IT program-specific weaknesses. To the
department's credit, it has largely agreed with these recommendations.
Although some of these have been implemented, most are still works in
process. In my view, these recommendations provide a comprehensive
framework for strengthening DHS's management of IT and increasing the
chances of delivering promised system capabilities and benefits on time
and within budget. We look forward to working constructively with the
department in implementing these recommendations and thereby maximizing
the role that IT can play in DHS's transformation efforts.

42 GAO, Homeland Security: Recommendations to Improve Management of Key
Border Security Program Need to Be Implemented, GAO-06-296 (Washington,
D.C.: Feb. 14, 2006).

Mr. Chairmen, this concludes my statement. I would be happy to answer any
questions at this time.

                          Contacts and Acknowledgments

For future information regarding this testimony, please contact Randy
Hite, Director, Information Technology Architecture and Systems Issues, at
(202) 512-3439, or hiter @gao.gov. Other individuals who made key
contributions to this testimony were Mathew Bader, Mark Bird, Justin
Booth, Barbara Collier, Deborah Davis, Michael Holland, Ash Huda, Gary
Mountjoy, and Scott Pettis.

(310622)

www.gao.gov/cgi-bin/getrpt? GAO-06-598T .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Randolph C. Hite at (202) 512-3439 or
[email protected].

Highlights of GAO-06-598T , a testimony before congressional subcommittees

March 29, 2006

HOMELAND SECURITY

Progress Continues, but Challenges Remain on Department's Management of
Information Technology

Information technology (IT) is a critical tool for the Department of
Homeland Security (DHS), not only in performing its mission today, but
also in transforming how it will do so in the future. In light of the
importance of this transformation and the magnitude of the associated
challenges, GAO has designated the implementation of the department and
its transformation as high risk.

GAO has reported that in order to effectively leverage IT as a
transformation tool, DHS needs to establish certain institutional
management controls and capabilities, such as having an enterprise
architecture and making informed portfolio-based decisions across
competing IT investments. GAO has also reported that it is critical for
the department to implement these controls and associated best practices
on its many IT investments.

In its past work, GAO has made numerous recommendations on DHS
institutional controls and on individual IT investment projects. The
testimony is based on GAO's body of work in these areas, covering the
state of DHS IT management both on the institutional level and the
individual program level.

DHS continues to work to institutionalize IT management controls and
capabilities (disciplines) across the department. Among these are

           o  having and using an enterprise architecture, or corporate
           blueprint, as an authoritative frame of reference to guide and
           constrain IT investments;
           o  defining and following a corporate process for informed
           decision making by senior leadership about competing IT investment
           options;
           o  applying system and software development and acquisition
           discipline and rigor when defining, designing, developing,
           testing, deploying, and maintaining systems;
           o  establishing a comprehensive information security program to
           protect its information and systems;
           o  having sufficient people with the right knowledge, skills, and
           abilities to execute each of these areas now and in the future;
           and
           o  centralizing leadership for extending these disciplines
           throughout the organization with an empowered Chief Information
           Officer.

Over the last 3 years, the department has made efforts to establish and
implement these IT management disciplines, but it has more to do. Despite
progress, for instance, in developing its enterprise architecture and its
investment management processes, much work remains before these and the
other disciplines are fully mature and institutionalized. For example,
although the department recently completed a comprehensive inventory of
its major information systems-a prerequisite for effective security
management-it has not fully implemented a comprehensive information
security program, and its other institutional IT disciplines are still
evolving.

The department also has more to do in deploying and operating IT systems
and infrastructure in support of core mission operations, such as border
and aviation security. For example, a system to identify and screen
visitors entering the country has been deployed and is operating, but a
related exit capability largely is not. Also, a government-run system to
prescreen domestic airline passengers is not yet in place. Similarly, some
infrastructure has been delivered, but goals related to consolidating
networks and e-mail systems, for example, remain to be fully accomplished.

Similarly, GAO's review of key nonfinancial systems show that DHS has more
to do before the IT disciplines discussed above are consistently employed.
For example, these programs have not consistently employed reliable cost
estimating practices, effective requirements development and test
management, meaningful performance measurement, strategic workforce
management, and proactive risk management, among other recognized program
management best practices.

Until the department fully establishes and consistently implements the
full range of IT management disciplines embodied in best practices and
federal guidance, it will be challenged in its ability to manage and
deliver programs.

United States Government Accountability Office

GAO

Testimony

Before Congressional Subcommittees

For Release on Delivery

Expected at 3:00 p.m. EST Wednesday, March 29, 2006

HOMELAND SECURITY

Progress Continues, but Challenges Remain on Department's Management of
Information Technology

Statement of Randolph C. Hite, Director

Information Technology Architecture and Systems Issues

GAO-06-598T

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