Information Technology: Further Improvements Needed to identify  
and Oversee Poorly Planned and Performing Projects (20-SEP-07,	 
GAO-07-1211T).							 
                                                                 
The Office of Management and Budget (OMB) plays a key role in	 
overseeing federal information technology (IT) investments. The  
Clinger-Cohen Act, among other things, requires OMB to establish 
processes to analyze, track, and evaluate the risks and results  
of major capital investments in information systems made by	 
agencies and to report to Congress on the net program performance
benefits achieved as a result of these investments. OMB has	 
developed several processes to help carry out its role. For	 
example, OMB began using a Management Watch List several years	 
ago as a means of identifying poorly planned projects based on	 
its evaluation of agencies' funding justifications for major	 
projects, known as exhibit 300s. In addition, in August 2005, OMB
established a process for agencies to identify high risk projects
and to report on those that are performing poorly. GAO testified 
last year on the Management Watch List and high risk projects,	 
and on GAO's recommendations to improve these processes. GAO was 
asked to (1) provide an update on the Management Watch List and  
high risk projects and (2) identify OMB's efforts to improve the 
identification and oversight of these projects. In preparing this
testimony, GAO summarized its previous reports on initiatives for
improving the management of federal IT investments. GAO also	 
analyzed current Management Watch List and high risk project	 
information.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-1211T					        
    ACCNO:   A76590						        
  TITLE:     Information Technology: Further Improvements Needed to   
identify and Oversee Poorly Planned and Performing Projects	 
     DATE:   09/20/2007 
  SUBJECT:   Federal agencies					 
	     Information management				 
	     Information systems				 
	     Information systems investments			 
	     Information technology				 
	     Internal controls					 
	     IT investment management				 
	     Performance measures				 
	     Program evaluation 				 
	     Reporting requirements				 
	     Risk assessment					 
	     Risk management					 
	     GAO High Risk Series				 
	     OMB Management Watch List				 

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GAO-07-1211T

   

     * [1]Results in Brief
     * [2]Background

          * [3]Prior Reviews on Federal IT Investment Management Have Ident
          * [4]OMB's Management Watch List Is Intended to Correct Project W
          * [5]OMB's High Risk Projects Process Intended to Correct and Imp

     * [6]Poorly Planned and Performing Projects Total at Least $10 Bi

          * [7]Hundreds of Projects Totaling Billions of Dollars Are Placed
          * [8]Poorly Performing Projects Total About $6 Billion in Estimat
          * [9]Several Projects are Both Poorly Planned and Poorly Performi

     * [10]OMB Has Taken Steps to Improve the Identification and Oversi

          * [11]Exhibit 300s Are Now Reported Publicly but Their Accuracy an
          * [12]High Risk Criteria Are Being Applied More Consistently, but
          * [13]Management Watch List and High Risk Projects Made Public, bu

     * [14]GAO Contact and Acknowledgments
     * [15]GAO's Mission
     * [16]Obtaining Copies of GAO Reports and Testimony

          * [17]Order by Mail or Phone

     * [18]To Report Fraud, Waste, and Abuse in Federal Programs
     * [19]Congressional Relations
     * [20]Public Affairs

Testimony

Before the Subcommittee on Federal Financial Management, Government
Information, Federal Services, and International Security, Committee on
Homeland Security and Governmental Affairs, U.S. Senate

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 2:30 p.m. EDT
Thursday, September 20, 2007

INFORMATION TECHNOLOGY

Further Improvements Needed to Identify and Oversee Poorly Planned and
Performing Projects

Statement of David A. Powner
Director, Information Technology Management
Issues

GAO-07-1211T

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the federal government's key
processes for improving the management of information technology (IT)
investments totaling $65 billion for fiscal year 2008. Effective
management of these investments is essential to the health, economy, and
security of the nation. The Office of Management and Budget (OMB) plays a
key role in overseeing federal IT investments. In particular, as required
by the Clinger-Cohen Act, OMB must establish processes to analyze, track,
and evaluate the risks and results of major capital investments in
information systems made by executive agencies and to report to Congress
on the net program performance benefits achieved as a result of these
investments.

To help carry out its oversight role, OMB has developed several processes,
including its Management Watch List and high risk projects.^1 The
Management Watch List identifies projects that are poorly planned
(projects with weaknesses in their funding justifications, known as
exhibit 300s). High risk projects require special attention from oversight
authorities and the highest level of agency management, and include
projects that are poorly performing (projects experiencing performance
shortfalls, meaning that they do not meet one or more of four performance
evaluation criteria).^2 The Management Watch List and high risk processes
are instrumental in helping to identify and improve oversight of poorly
planned and poorly performing projects.

Last September, we testified on OMB's oversight of federal IT projects. We
highlighted the number and dollar value of the projects identified as
poorly planned and/or poorly performing as a result of the Management
Watch List and high risk processes. Given the importance of OMB's
oversight processes, you asked us to (1) provide an update on the
Management Watch List and High Risk projects, and (2) identify OMB's
efforts to improve the identification and oversight of these projects. In
preparing this testimony, we summarized our previous reports on
initiatives for improving the management of federal IT investments and
interviewed OMB staff on their efforts to better identify and oversee
Management Watch List and high risk projects.^3 We also analyzed current
Management Watch List and high risk project information. We performed our
work in accordance with generally accepted government auditing standards.

^1While not a subject of my testimony, OMB also uses the e-Gov Scorecard
as a mechanism for managing federal IT projects. Quarterly e-Gov
Scorecards are reports that use a red/yellow/green scoring system to
illustrate the results of OMB's evaluation of agencies' implementation of
e-government criteria in the President's Management Agenda. The scores are
determined in quarterly reviews, where OMB evaluates agency progress
toward agreed-upon goals along several dimensions, and provides input to
the quarterly reporting on the President's Management Agenda. Key criteria
used to score agencies e-government process include acceptable business
cases, cost and schedule performance; and security accreditation. As of
June 30, 2006, 21 of the 26 departments/major agencies were identified as
having a yellow (mixed results) or red (unsatisfactory) score.

^2High risk projects are identified as having performance shortfalls if
one or more of the following performance evaluation criteria are not met:
establishing baselines with clear cost, schedule, and performance goals;
maintaining the project's cost and schedule variances within 10 percent;
assigning a qualified project manager; and avoiding duplication by
leveraging inter-agency and governmentwide investments.

Results in Brief

OMB and federal agencies have identified approximately 227 IT
projects--totaling at least $10.4 billion in expenditures for fiscal year
2008--as being poorly planned, poorly performing, or both. Specifically,
through the Management Watch List process, OMB determined that 103
projects (totaling about $4.5 billion) are poorly planned. In addition,
agencies reported that 91 of their high risk projects (totaling about $1.8
billion) were poorly performing. Thirty-three projects (totaling about
$4.1 billion) are both poorly planned and poorly performing. For example,
the Department of Treasury's Electronic Fraud Detection System was
identified as being poorly planned, the Social Security Administration's
Disability Service Improvement project was identified as being poorly
performing, and the Department of Homeland Security's Secure Border
Initiative Net Technology Program was identified as being both poorly
planned and poorly performing.

OMB has taken steps to improve the identification and oversight of the
Management Watch List and High Risk projects by addressing some of the
recommendations that we had made previously. However, additional efforts
are needed to more effectively perform these activities. Specifically, we
previously recommended that OMB take action to improve the accuracy and
reliability of exhibit 300s, of application of the high risk projects
criteria, and perform governmentwide tracking and analysis of Management
Watch List and high risk project information. In response to our
recommendations, OMB, for example, started publicly releasing aggregate
lists of Management Watch List and high risk projects by agency in
September 2006 and has been updating them since then on a quarterly basis
by posting them on their website. However, OMB does not publish the
reasons for placing projects on the Management Watch List, nor does it
specifically identify why high risk projects are poorly performing.
Providing this information would allow OMB and others to better analyze
the reasons projects are poorly planned and performing, take corrective
actions, and track these projects on a governmentwide basis. Such
information would also help to highlight progress made by agencies or
projects, identify management issues that transcend individual agencies,
and highlight the root causes of governmentwide issues and trends. Until
OMB makes further improvements in the identification and oversight of
poorly planned and poorly performing IT projects, potentially billions in
taxpayer dollars are at risk of being wasted.

^3GAO, Information Technology: OMB Can Make More Effective Use of Its
Investment Reviews, [21]GAO-05-276 (Washington, D.C.: April 15, 2005);
Information Technology: Agencies Need to Improve the Accuracy and
Reliability of Investment Information, GAO- 06-250 (Washington, D.C.:
Jan.12, 2006); Information Technology: Agencies and OMB Should Strengthen
Processes for Identifying and Overseeing High Risk Projects,
[22]GAO-06-647 ( Washington, DC, June 15, 2006).

Background

Each year, OMB and federal agencies work together to determine how much
the government plans to spend for IT and how these funds are to be
allocated. Federal IT spending has risen to an estimated $65 billion in
fiscal year 2008.

OMB plays a key role in overseeing the implementation and management of
federal IT investments. To improve this oversight, Congress enacted the
Clinger-Cohen Act in 1996, expanding the responsibilities delegated to OMB
and agencies under the Paperwork Reduction Act.^4 Among other things,
Clinger-Cohen requires agency heads, acting through agency chief
information officers, to better link their IT planning and investment
decisions to program missions and goals and to implement and enforce IT
management policies, procedures, standards, and guidelines. The act also
requires that agencies engage in capital planning and performance and
results-based management.^5 OMB's responsibilities under the act include
establishing processes to analyze, track, and evaluate the risks and
results of major capital investments in information systems made by
executive agencies. OMB must also report to Congress on the net program
performance benefits achieved as a result of major capital investments in
information systems that are made by executive agencies.^6

^444 U.S.C. S 3504(a)(1)(B)(vi)(OMB); 44 U.S.C. S 3506(h)(5) (agencies).

^540 U.S.C. S 11312; 40 U.S.C. S 11313.

In response to the Clinger-Cohen Act and other statutes, OMB developed
policy for planning, budgeting, acquisition, and management of federal
capital assets. This policy is set forth in OMB Circular A-11 (section
300) and in OMB's Capital Programming Guide (supplement to Part 7 of
Circular A-11), which directs agencies to develop, implement, and use a
capital programming process to build their capital asset portfolios. Among
other things, OMB's Capital Programming Guide directs agencies to

           o evaluate and select capital asset investments that will support
           core mission functions that must be performed by the federal
           government and demonstrate projected returns on investment that
           are clearly equal to or better than alternative uses of available
           public resources;
           o institute performance measures and management processes that
           monitor actual performance and compare to planned results; and
           o establish oversight mechanisms that require periodic review of
           operational capital assets to determine how mission requirements
           might have changed and whether the asset continues to fulfill
           mission requirements and deliver intended benefits to the agency
           and customers.

           To further support the implementation of IT capital planning
           practices as required by statute and directed in OMB's Capital
           Programming Guide, we have developed an IT investment management
           framework^7 that agencies can use in developing a stable and
           effective capital planning process. Consistent with the statutory
           focus on selecting,^8 controlling,^9 and evaluating^10
           investments, this framework focuses on these processes in relation
           to IT investments specifically. It is a tool that can be used to
           determine both the status of an agency's current IT investment
           management capabilities and the additional steps that are needed
           to establish more effective processes. Mature and effective
           management of IT investments can vastly improve government
           performance and accountability. Without good management, such
           investments can result in wasteful spending and lost opportunities
           for improving delivery of services to the public.
			  
^6These requirements are specifically described in the Clinger-Cohen Act,
40 U.S.C. S 11302 (c).

^7GAO, Information Technology Investment Management: A Framework for
Assessing and Improving Process Maturity, [23]GAO-04-394G (Washington,
D.C.: March 2004).

^8During the selection phase, the organization (1) identifies and analyzes
each project's risks and returns before committing significant funds to
any project and (2) selects those IT projects that will best support its
mission needs.

^9During the control phase, the organization ensures that, as projects
develop and investment expenditures continue, the project is continuing to
meet mission needs at the expected levels of cost and risk. If the project
is not meeting expectations or if problems have arisen, steps are quickly
taken to address the deficiencies.

           Prior Reviews on Federal IT Investment Management Have Identified
			  Weaknesses

           Only by effectively and efficiently managing their IT resources
           through a robust investment management process can agencies gain
           opportunities to make better allocation decisions among many
           investment alternatives and further leverage their investments.
           However, the federal government faces enduring IT challenges in
           this area. For example, in January 2004 we reported on mixed
           results of federal agencies' use of IT investment management
           practices.^11 Specifically, we reported that although most of the
           agencies had IT investment boards responsible for defining and
           implementing the agencies' investment management processes,
           agencies did not always have important mechanisms in place for
           these boards to effectively control investments, including
           decision-making rules for project oversight, early warning
           mechanisms, and/or requirements that corrective actions for
           underperforming projects be agreed upon and tracked.
           Executive-level oversight of project-level management activities
           provides organizations with increased assurance that each
           investment will achieve the desired cost, benefit, and schedule
           results. Accordingly, we made several recommendations to agencies
           to improve their practices.

           In previous work using our investment management framework, we
           reported that the use of IT investment management practices by
           agencies was mixed. For example, a few agencies that have followed
           the framework in implementing capital planning processes have made
           significant improvements.^12 In contrast, however, we and others
           have continued to identify weaknesses at agencies in many areas,
           including immature management processes to support both the
           selection and oversight of major IT investments and the
           measurement of actual versus expected performance in meeting
           established performance measures.^13 For example, we recently
           reported that the Department of Homeland Security and the
           Department of Treasury did not have the processes in place to
           effectively select and oversee their major investments.^14
			  
^10During the evaluation phase, actual versus expected results are
compared once projects have been fully implemented. This is done to (1)
assess the project's impact on mission performance, (2) identify any
changes or modifications to the project that may be needed, and (3) revise
the investment management process based on lessons learned.

^11GAO, Information Technology Management: Governmentwide Strategic
Planning, Performance Measurement, and Investment Management Can Be
Further Improved, [24]GAO-04-49 (Washington, D.C.: Jan. 12, 2004).

^12These agencies include the Departments of Agriculture, Commerce, and
the Interior.

^13For example, GAO, Information Technology; Treasury Needs to Strengthen
Its Investment Board Operations and Oversight, [25]GAO-07-865 (Washington,
D.C.; Jul. 23, 2007); Information Technology: DHS Needs to Fully Define
and Implement Policies and Procedures for Effectively Managing
Investments, [26]GAO-07-424 (Washington, D.C., Apr. 27, 2007); Information
Technology: Centers for Medicare & Medicaid Services Needs to Establish
Critical Investment Management Capabilities, [27]GAO-06-12 (Washington,
D.C.: Oct. 28, 2005); Information Technology: Departmental Leadership
Crucial to Success of Investment Reforms at Interior, [28]GAO-03-1028
(Washington, D.C.: Sept. 12, 2003); and United States Postal Service:
Opportunities to Strengthen IT Investment Management Capabilities,
[29]GAO-03-3 (Washington, D.C.: Oct. 15, 2002).

^14 [30]GAO-07-424 and [31]GAO-07-865 .
             
			  OMB's Management Watch List Is Intended to Correct Project Weaknesses
			  and Business Case Deficiencies 

           To help ensure that investments of public resources are justified
           and that public resources are wisely invested, OMB began using its
           Management Watch List in the President's fiscal year 2004 budget
           request, as a means to oversee the justification for and planning
           of agencies' IT investments. This list was derived based on a
           detailed review of the investments' Capital Asset Plan and
           Business Case, also known as the exhibit 300.
			  
^15 [32]GAO-05-276 .			  

           The exhibit 300 is a reporting mechanism intended to enable an
           agency to demonstrate to its own management, as well as OMB, that
           a major project is well planned in that it has employed the
           disciplines of good project management; developed a strong
           business case for the investment; and met other Administration
           priorities in defining the cost, schedule, and performance goals
           proposed for the investment.

           We reported in 2005 that OMB analysts evaluate agency exhibit 300s
           by assigning scores to each exhibit 300 based on guidance
           presented in OMB Circular A-11.^15 As described in this circular,
           the scoring of a business case consists of individual scoring for
           10 categories, as well as a total composite score of all the
           categories. The 10 categories are

           o acquisition strategy,
           o project (investment) management,
           o enterprise architecture,
           o alternatives analysis,
           o risk management,
           o performance goals,
           o security and privacy,
           o performance-based management system (including the earned value
           management system),^16 
           o life-cycle costs formulation, and
           o support of the President's Management Agenda.

           Projects are placed on the Management Watch List if they receive
           low scores (3 or less on a scale from 1 to 5) in the areas of
           performance goals, performance-based management systems, security
           and privacy or a low composite score.

           According to OMB, agencies with weaknesses in these three areas
           are to submit remediation plans addressing the weaknesses. OMB
           officials also stated that decisions on follow-up and monitoring
           the progress are typically made by staff with responsibility for
           reviewing individual agency budget submissions, depending on the
           staff's insights into agency operations and objectives. According
           to OMB officials, those Management Watch List projects that
           receive specific follow-up attention receive feedback through the
           passback process, targeted evaluation of remediation plans
           designed to address weaknesses, the apportioning of funds so that
           the use of budgeted dollars was conditional on appropriate
           remediation plans being in place, and the quarterly e-Gov
           Scorecards. OMB removes projects from the Management Watch List as
           agencies remediate the weaknesses identified with these projects'
           business cases.
			  
^16Earned value management 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.

           OMB's High Risk Projects Process Intended to Correct and Improve
			  Project Performance

           As originally defined in OMB Circular A-11 and subsequently
           reiterated in an August 2005 memorandum, high risk projects are
           those that require special attention from oversight authorities
           and the highest levels of agency management. These projects are
           not necessarily "at risk" of failure, but may be on the list
           because of one or more of the following four reasons:

           o The agency has not consistently demonstrated the ability to
           manage complex projects.
           o The project has exceptionally high development, operating, or
           maintenance costs, either in absolute terms or as a percentage of
           the agency's total IT portfolio.
           o The project is being undertaken to correct recognized
           deficiencies in the adequate performance of an essential mission
           program or function of the agency, a component of the agency, or
           another organization.
           o Delay or failure of the project would introduce for the first
           time unacceptable or inadequate performance or failure of an
           essential mission function of the agency, a component of the
           agency, or another organization.

           Most agencies reported that to identify high risk projects, staff
           from the Office of the Chief Information Officer compare the
           criteria against their current portfolio to determine which
           projects met OMB's definition. They then submit the list to OMB
           for review. According to OMB and agency officials, after the
           submission of the initial list, examiners at OMB work with
           individual agencies to identify or remove projects as appropriate.
           According to most agencies, the final list is then approved by
           their Chief Information Officer.

           For the identified high risk projects, beginning September 15,
           2005, and quarterly thereafter, Chief Information Officers are to
           assess, confirm, and document projects' performance. Specifically,
           agencies are required to determine, for each of their high risk
           projects, whether the project was meeting one or more of four
           performance evaluation criteria:

           o establishing baselines with clear cost, schedule, and
           performance goals;
           o maintaining the project's cost and schedule variances within 10
           percent;
           o assigning a qualified project manager; and
           o avoiding duplication by leveraging inter-agency and
           governmentwide investments.

           If a high risk project meets any of these four performance
           evaluation criteria, agencies are instructed to document this
           using a standard template provided by OMB and provide this
           template to oversight authorities (e.g., OMB, agency inspectors
           general, agency management, and GAO) on request. Upon submission,
           according to OMB staff, individual analysts review the quarterly
           performance reports of projects with shortfalls to determine how
           well the projects are progressing and whether the actions
           described in the planned improvement efforts are adequate using
           other performance data already received on IT projects such as the
           e-Gov Scorecards, earned value management data, and the exhibit
           300.
			  
			  Poorly Planned and Performing Projects Total at Least $10 Billion
			  in Estimated Expenditures for Fiscal Year 2008

           OMB and federal agencies have identified approximately 227 IT
           projects--totaling at least $10.4 billion in expenditures for
           fiscal year 2008--as being poorly planned, poorly performing, or
           both. Figure 1 shows the distribution of these projects and their
           associated dollar values.

           Figure 1: Poorly Planned and Poorly Performing IT Projects (as of
           June 2007)
			  
			  Hundreds of Projects Totaling Billions of Dollars Are Placed on the
			  Management Watch List Annually

           Each year, OMB places hundreds of projects totaling billions of
           dollars on the Management Watch List. Table 1 provides a
           historical perspective of the number of these projects and their
           associated budget since OMB started reporting on the Management
           Watch List in the President's budget request for 2004. The table
           shows that while the number of projects and their associated
           budget have generally decreased since then, they increased by 83
           projects this year, and represent a significant percentage of the
           total budget.

           Table 1: Management Watch List Budget for Fiscal Years 2004-2008
           (in billions)
			  
                                                     Percentage of federal IT 
             Total federal IT    Management Watch      projects on Management 
Fiscal            projects       List projects   Watch List (percentage of 
years  (associated budget) (associated budget)                     budget) 
2004          1400 ($59.0)         771 ($20.9)                   55% (35%) 
2005          1200 ($60.0)         621 ($22.0)                   52% (37%) 
2006          1087 ($65.0)         342 ($15.0)                   31% (23%) 
2007           857 ($64.0)          263 ($9.9)                   31% (15%) 
2008           840 ($65.0)         346 ($14.0)                   41% (22%) 
			  

           Source: GAO analysis of OMB data.

           As of July 2007,^17 136 projects, representing $8.6 billion, still
           remained on the Management Watch List (see appendix 1 for complete
           list). We determined that 29 of these projects were on the
           Management Watch List as of September 2006.
			  
			  ^17 This is the date of OMB's most recent Management Watch List update.
			  
			  Poorly Performing Projects Total About $6 Billion in Estimated
			  Expenditures for Fiscal Year 2008

           As of June 2007, when agencies last reported on their high risk
           projects to OMB, the 24 major agencies identified 438 IT projects
           as high risk, of which 124 had performance shortfalls collectively
           totaling about $6.0 billion in funding requested for fiscal year
           2008. Table 2 shows that the number of projects, as well as the
           number of projects with shortfalls increased this year. OMB
           attributes this rise to increased management oversight by
           agencies.

           Table 2: High Risk Projects with Performance Shortfalls for Fiscal
           Years 2007 and 2008 (associated budget in billions)
			  
                                       High risk                              
                         High risk projects with                              
                Total     projects    shortfalls      Percentage of high risk 
Fiscal  federal IT  (associated   (associated          projects shortfalls 
years     projects      budget)       budget)       (percentage of budget) 
2007   857 ($64.0)  226 ($6.4)a    79 ($2.2)a 9% (3.4% of total IT budget) 
2008   840 ($65.0) 438 ($14.0)b   124 ($6.0)b  15% (9% of total IT budget) 			  

           Source: GAO analysis of OMB data.

           ^aThese number and dollar figures are from September 2006.

           ^bThese number and dollar figures are from June 2007.

           The majority of projects were not reported to have had performance
           shortfalls. In addition, five agencies--the departments of Energy,
           Housing and Urban Development, Labor, and State, and the National
           Science Foundation--reported that none of their high risk projects
           experienced any performance shortfalls. Figure 2 illustrates the
           number of high risk projects by agency as of June 2007, with and
           without shortfalls.

Figure 2: Number of Agencies High Risk Projects with and without
Performance Shortfalls (as of June 2007)

Notes: One project can have multiple shortfalls.

Department of Homeland Security (DHS); Department of Veterans Affairs
(VA); Department of Transportation (DOT); U.S. Agency for International
Development (USAID); Social Security Administration (SSA); General
Services Administration (GSA); Department of Agriculture (USDA); Small
Business Administration (SBA); Department of Defense (DOD); Environmental
Protection Agency (EPA); Nuclear Regulatory Commission (NRC); Office of
Personnel Management (OPM); Department of Health and Human Services (HHS);
Department of Justice (DOJ); National Aeronautics and Space Administration
(NASA); National Science Foundation (NSF); Department of Housing and Urban
Development (HUD); Department of Energy (DOE); Department of Labor (DOL);
Department of Interior (DOI).

^aThe Department of Interior did not provide
their June 2007 high risk report to GAO.

Agencies reported cost and schedule variances that exceeded 10 percent as
the greatest shortfall. This is consistent with what they reported about a
year ago, and the distribution of shortfalls types is similar to last
year. Figure 3 illustrates the reported number and type of performance
shortfalls associated with high risk projects.

Figure 3: Reported Performance Shortfalls of 126 Projects (as of June
2007)

Appendix II identifies the shortfalls associated with each of the poorly
performing projects.

Twenty-two high risk projects have experienced performance shortfalls for
the past four quarters (see figure 4).

Figure 4: High Risk Projects with Shortfalls in the Last 4 Quarters Sorted
by Funding

Note: Department of Homeland Security (DHS); Department of Agriculture
(USDA); Department of Veterans Affairs (VA); Department of Justice (DOJ);
U.S. Agency for International Development (USAID); Small Business
Administration (SBA)

Of these projects, the following six have had shortfalls since the High
Risk List was established in September 2005.

           o Department of Homeland Security's (DHS) Secure Border Initiative
           Net Technology Program, which is expected to provide on-scene
           agents near real-time information on attempted border crossings by
           illegal aliens, terrorists, or smugglers;
           o Department of Agriculture's (USDA) Modernize and Innovate the
           Delivery of Agricultural Systems, which is intended to modernize
           the delivery of farm program benefits by deploying an
           internet-based self-service capabilities for customers, and
           eliminating the department's reliance on aging technology and
           service centers as the sole means of delivering program benefits;
           o Department of Veterans Affairs' (VA) VistA Imaging, which should
           provide complete online patient data to health care providers,
           increase clinician productivity, facilitate medical
           decision-making, and improve quality of care;
           o DHS's Transportation Worker Identification Credentialing, which
           is to establish a system-wide common secure biometric credential,
           used by all transportation modes, for personnel requiring
           unescorted physical and/or logical access to secure areas of the
           transportation system;
           o Department of Justice's (DOJ) Regional Data Exchange, which is
           expected to combine and share regional investigative information
           and provide powerful tools for analyzing the integrated data sets;
           and
           o VA's Patient Financial Services System, which is expected create
           a comprehensive business solution for revenue improvement
           utilizing improved business practices, commercial software, and
           enhanced VA clinical applications.
			  
			  Several Projects are Both Poorly Planned and Poorly Performing

           Thirty-three projects are on both the Management Watch List and
           list of high risk projects with shortfalls, meaning that they are
           both poorly planned and poorly performing. They total about $4.1
           billion in estimated expenditures for fiscal year 2008. These
           projects are listed in table 3 below.

Table 3: Projects on both the Management Watch List and the High Risk List
with Shortfalls.

                                                             Fiscal year 2008 
                                                                  request (in 
Agency    Investment name                                        millions) 
DHS       CBP Secure Border Initiative net Technology                      
             Program                                                    1,000 
DHS       DHS Financial Management Transformation; E-Gov:                  
             E-Travel Migr.; FM LoB Migr.; FM LoB Legacy                      
             Sys.                                                           6 
DHS       DHS HR IT; E-Gov: HR LoB Migr.; E-Training                       
             Migr.; EHRI Migr.; E-Training Legacy Sys.; HR                    
             LoB Legacy Sys.                                               17 
DHS       DHS Infrastructure                                         1,071 
DHS       FEMA eNEMIS                                                   17 
DHS       Consolidated Enforcement Environment                          11 
DHS       Rescue 21                                                      0 
Education Budget Formulation and Execution LoB                           0 
Education Common Origination and Disbursement                            8 
Education Common Services for Borrowers                                 15 
Education Data Warehouse                                                 1 
Education Education Resources Information Center                         9 
NASA      Integrated Enterprise Management - Core                          
             Financial                                                     22 
NRC       Electronic Information                                           
             Exchange/E-Authentication Migration                            1 
OPM       E-Training                                                     0 
Treasury  Chief Counsel                                                  1 
Treasury  Enterprise IT Infrastructure Optimization                        
             Initiative                                                 1,638 
Treasury  Financial Analysis & Reporting System                            
             Applications                                                   3 
Treasury  Fiscal Management                                              0 
Treasury  Integrated Collection System                                   9 
Treasury  Integrated Financial System/CORE Financial                       
             System                                                        17 
Treasury  Enterprise Systems                                             1 
Treasury  Examinations                                                   4 
Treasury  Treasury-Wide Enterprise Content Management                      
             Services                                                       6 
USDA      Food and Agriculture Bio-Surveillance                            
             Integration System                                             0 
USDA      -ConnectHR                                                    10 
USDA      Modernize and Innovate the Delivery of                           
             Agricultural Systems                                         144 
VA        Financial & Logistics Integrated Technology                      
             Enterprise                                                    48 
VA        Medical and Prosthetic Research Operations                    24 
VA        My HealtheVet                                                 17 
VA        Patient Financial Services System                              0 
VA        Learning Management System                                     6 
VA        VistA Imaging                                                 41 

Source: GAO Analysis of OMB data.

Note: Department of Homeland Security (DHS); National Aeronautics and
Space Administration (NASA); Nuclear Regulatory Commission (NRC); Office
of Personnel Management (OPM); Department of Agriculture (USDA);
Department of Veterans Affairs (VA)

OMB Has Taken Steps to Improve the Identification and Oversight of Management
Watch List and High Risk Projects, but Additional Efforts Are Needed

OMB has taken steps to improve the identification and oversight of the
Management Watch List and high risk projects by addressing some of the
recommendations we previously made, but additional efforts are needed to
more effectively perform these activities and ultimately ensure that
potentially billions of taxpayer dollars are not wasted. Specifically, we
previously recommended that OMB take action to improve the accuracy and
reliability of exhibit 300s and application of the high risk projects
criteria, and perform governmentwide tracking and analysis of Management
Watch List and high risk project information. While OMB took steps to
address our concerns, more can be done.

Exhibit 300s Are Now Reported Publicly but Their Accuracy and Reliability Issues
Remain

In January 2006, we noted that the underlying support for information
provided in the exhibit 300s was often inadequate and that, as a result,
the Management Watch List may be undermined by inaccurate and unreliable
data.^18 Specifically, we noted that

           o documentation either did not exist or did not fully agree with
           specific areas of all exhibit 300s;
           o agencies did not always demonstrate that they complied with
           federal or departmental requirements or policies with regard to
           management and reporting processes; for example, no exhibit 300
           had cost analyses that fully complied with OMB requirements for
           cost-benefit and cost-effectiveness analyses; and
           o data for actual costs were unreliable because they were not
           derived from cost-accounting systems with adequate controls; in
           the absence of such systems, agencies generally derived cost
           information from ad hoc processes.

^18GAO-06-250.

           We recommended, among other things, that OMB direct agencies to
           improve the accuracy and reliability of exhibit 300 information.

           To address our recommendation, in June 2006, OMB directed agencies
           to post their exhibit 300s on their website within two weeks of
           the release of the President's budget request for fiscal year
           2008. While this is a step in the right direction, the accuracy
           and reliability of exhibit 300 information is still a significant
           weakness among the 24 major agencies,^19 as evidenced by a March
           2007 President's Council on Integrity and Efficiency and Executive
           Council on Integrity and Efficiency study commissioned by OMB to
           ascertain the validity of exhibit 300s.^20 Specifically, according
           to individual agency reports contained within the study,
           Inspectors General found that the documents supporting agencies'
           exhibit 300s continue to have accuracy and reliability issues. For
           example, according to these reports, the Agency for International
           Development did not maintain the documentation supporting exhibit
           300s cost figures. In addition, at the Internal Revenue Service,
           the exhibit 300s were unreliable because, among other things,
           project costs were being reported inaccurately and progress on
           projects in development was measured inaccurately.
			  
			  High Risk Criteria Are Being Applied More Consistently, but Questions
			  Remain as to Whether All Projects Are Identified, Including Projects
			  with Shortfalls

           In June 2006, we noted that OMB did not always consistently apply
           the criteria for identifying high risk projects. For example, we
           identified projects that appeared to meet the criteria but that
           were not designated as high risk.^21 Accordingly, we recommended
           that OMB apply their high risk criteria consistently. OMB has
           since designated as high risk the projects that we identified.
           Further, OMB officials stated that they have worked with agencies
           to ensure a more consistent application of the high risk criteria.
           These are positive steps, as they result in more projects
           receiving the management attention they deserve.

           However, questions remain as to whether all high risk projects
           with shortfalls are being reported by agencies. For example, we
           have reported in our high risk series^22 that the Department of
           Defense's efforts to modernize its business systems have been
           hampered because of weaknesses in practices for (1) developing and
           using an enterprise architecture, (2) instituting effective
           investment management processes, and (3) establishing and
           implementing effective systems acquisition processes. We concluded
           that the department remains far from where it needs to be to
           effectively and efficiently manage an undertaking of such size,
           complexity, and significance. Despite these problems, Department
           of Defense (DOD), which accounts for $31 billion of the
           government's $65 billion in IT expenditures, only reported three
           projects as being high risk with shortfalls representing a total
           of about $1 million. The dollar value of DOD's three projects
           represents less than one tenth of one percent of high risk
           projects with shortfalls. In light of the problems we and others
           have identified with many of DOD's projects, this appears to be an
           underestimation. Given the critical nature of high risk projects,
           it is particularly important to identify early on those that are
           performing poorly, before their shortfalls become overly costly to
           address.
			  
^19President's Council on Integrity and Efficiency and Executive Council
on Integrity and Efficiency, Fiscal Years 2006 and 2007 Assessments Of
Federal Agencies' Exhibit 300s , (Washington, D.C.: March 2007).

^20President's Council on Integrity and Efficiency and Executive Council
on Integrity and Efficiency, Fiscal Years 2006 and 2007 Assessments Of
Federal Agencies' Exhibit 300s , (Washington, D.C.: March 2007).

^21 [35]GAO-06-647 .

^22GAO, High-Risk Series: An Update, [36]GAO-05-207 (Washington, D.C.:
January 2005): High-Risk Series: An Update, [37]GAO-07-310 (Washington,
D.C.: January 2007).

           Management Watch List and High Risk Projects Made Public, but
			  Governmentwide Analyses Still Not Performed

           Finally, to improve the oversight of the Management Watch List
           projects, we recommended in our April 2005 report^23 that the
           Director of OMB report to Congress on projects' deficiencies,
           agencies' progress in addressing risks of major IT investments,
           and management areas needing attention. In addition, to fully
           realize the potential benefits of using the Management Watch List,
           we recommended that OMB use the list as the basis for selecting
           projects for follow-up, tracking follow-up activities and analyze
           the prioritized list to develop governmentwide and agency
           assessments of the progress and risks of IT investments,
           identifying opportunities for continued improvement. We also made
           similar recommendations to the Director of OMB regarding high risk
           projects. Specifically, we recommended that OMB develop a single
           aggregate list of high risk projects and their deficiencies and
           use that list to report to Congress progress made in correcting
           high risk problems, actions under way, and further actions that
           may be needed.
			  
^23GAO, Information Technology: Improvements Needed to More Accurately
Identify and Better Oversee Risky Projects Totaling Billions of Dollars,
[38]GAO-06-1099T (Washington, D.C.: Sept. 7, 2006).

           To its credit, OMB started publicly releasing aggregate lists of
           the Management Watch List and high risk projects in September
           2006, and has been releasing updated versions on a quarterly basis
           by posting them on their website. While this is a positive step,
           OMB does not publish the specific reasons that each project is
           placed on the Management Watch List, nor does it specifically
           identify why high risk projects are poorly performing, as we have
           done in appendix II. Providing this information would allow OMB
           and others to better analyze the reasons projects are poorly
           planned and performing and take corrective actions and track these
           projects on a governmentwide basis. Such information would also
           help to highlight progress made by agencies or projects, identify
           management issues that transcend individual agencies, and
           highlight the root causes of governmentwide issues and trends.
           Such analysis would be valuable to agencies in planning future IT
           projects, and could enable OMB to prioritize follow-up actions and
           ensure that high-priority deficiencies are addressed.

           In summary, the Management Watch List and high risk projects
           processes play important roles in improving the management of
           federal IT investments by helping to identify poorly planned and
           poorly performing projects that require management attention. As
           of June 2007, the 24 major agencies had 227 such projects totaling
           at least $10 billion. OMB has taken steps to improve the
           identification of these projects, including implementing
           recommendations related to improving the accuracy of exhibit 300s
           and the application of the high risk projects criteria. However,
           the number of projects may be understated because issues
           concerning the accuracy and reliability of the budgetary documents
           the Management Watch List is derived from still remain and high
           risk projects with shortfalls may not be consistently identified.

           While OMB can act to further improve the identification and
           oversight of poorly planned and poorly performing projects, we
           recognize that agencies must also take action to fulfill their
           responsibilities in these areas. We have addressed this in
           previous reports and made related recommendations. Until further
           improvements in the identification and oversight of poorly planned
           and poorly performing IT projects, potentially billions in
           taxpayer dollars are at risk of being wasted.
			  
			  GAO Contact and Acknowledgments

           If you should have any questions about this testimony, please
           contact me at (202) 512-9286 or by e-mail at [33][email protected] .
           Individuals who made key contributions to this testimony are
           Sabine Paul, Assistant Director; Neil Doherty; Amos Tevelow; Kevin
           Walsh and Eric Winter.
			  
			  Appendix I: Management Watch List Projects

           The following provides additional detail on the investments
           comprising OMB's Management Watch List as of July 2007. Under the
           Clinger-Cohen Act of 1996, agencies are required to submit
           business plans for IT investments to OMB. If the agency's
           investment plan contains one or more planning weaknesses, it is
           placed on OMB's Management Watch List and targeted for follow-up
           action to correct potential problems prior to execution.

           We estimated the fiscal year 2008 request based on the data in the
           Report on IT Spending for Fiscal Years 2006, 2007, and 2008
           (generally referred to as exhibit 53), and data provided by
           agencies.

Table 4: Management Watch List Projects by Agency

                                                             Fiscal year 2008 
                                                                  request (in 
Agency    Investment name                                        millions) 
The Corps Project Management Information System II                      15 
The Corps Resident Management System                                     3 
DHS       Non Intrusive Inspection System Program (Large                0* 
             Scale)                                                           
DHS       Non Intrusive Inspection System Program (Small                0* 
             Scale)                                                           
DHS       Secure Border Initiative net Technology Program            1,000 
DHS       Unmanned Aircraft Systems                                     0* 
DHS       Financial Management Transformation                            6 
DHS       HR IT                                                         17 
DHS       Infrastructure                                             1,071 
DHS       Technical Operations Support                                   0 
DHS       National Emergency Management Information                     17 
             System                                                           
DHS       Flood Map Modernization                                        6 
DHS       Risk Assessment Systems                                        6 
DHS       Integrated Financial Management Information                    2 
             System                                                           
DHS       Consolidated Enforcement Environment                          11 
DHS       Computer Network Service Defense Provider                      0 
DHS       Computer Forensics Laboratory                                  0 
DHS       Integrated Deepwater System                                    7 
DHS       Rescue 21                                                      0 
DHS       Central Index System                                           3 
DHS       Immigration - CLAIMS 3.0                                      10 
DHS       Naturalization - CLAIMS 4.0                                   16 
DOD       Defense Information System for Security                       64 
DOL       Labor Executive Accountability Program                        12 
DOT       IT Combined Infrastructure                                   233 
Education Budget Formulation and Execution Line of                       0 
             Business                                                         
Education Common Origination and Disbursement                            8 
Education Common Services for Borrowers                                 15 
Education Data Warehouse                                                 1 
Education Education Resources Information Center                         9 
Education Integrated Technical Architecture/ Enterprise                  8 
             Application Integration                                          
Education Migrant Student Information Exchange                           4 
Education National Student Loan Data System                             10 
Education Student Aid Internet Gateway                                   1 
HHS       IT Infrastructure                                            126 
HHS       Consolidated Infrastructure                                  102 
HHS       Commissioned Corps Force Management System                     2 
HHS       Prototype Nationwide Health Information Network               56 
             Architectures                                                    
NASA      Shared Capability Asset Program                               41 
NASA      Payload Operations and Integration Center                     20 
NASA      Integrated Collaborative Environment                          21 
NASA      Earth Observing Sys Data Info Sys                            131 
NASA      Center for Computational Sciences                             15 
NASA      Space and Ground Network IT Support                            5 
NASA      Flight Operations                                             79 
NASA      Integrated Planning System                                    14 
NASA      Mission Control Center                                        50 
NASA      Software Development/Integration Laboratory                  132 
NASA      Space Shuttle Program Flight Software                         86 
NASA      Space Shuttle Program Integration                             13 
NASA      Space Station Production Facility                              7 
NASA      Shuttle Ground Camera                                          2 
NASA      Shuttle Ground Operations                                     51 
NASA      Shuttle Integrated Logistics                                  11 
NASA      Shuttle Launch Control System                                 51 
NASA      Shuttle Processing Support                                    13 
NASA      Integrated Enterprise Management - Aircraft                    5 
             Management Module                                                
NASA      Integrated Enterprise Management - Core                       22 
             Financial                                                        
NASA      Integrated Enterprise Management - Integrated                  4 
             Asset Management - Plant Property & Equipment                    
             Module                                                           
NASA      Office Automation, IT Infrastructure, and                    547 
             Telecommunications                                               
NASA      Deep Space Network                                            33 
NASA      Integrated Services Network                                   88 
NRC       Agency-wide Documents Access and Management                   12 
             System                                                           
NRC       Budget Formulation Application                                 0 
NRC       Cost Accounting System                                         1 
NRC       Digital Data Management System                                 0 
NRC       Human Resources Management System                              1 
NRC       Incident Response System                                       4 
NRC       Infrastructure Services and Support                           52 
NRC       License Fee Billing System                                     1 
NRC       License Fee Billing System Replacement                         1 
NRC       Licensing Support Network                                      2 
NRC       Licensing Tracking System/Web Based Licensing                  0 
NRC       National Source Tracking System                                4 
NRC       Reactor Program System                                         1 
NRC       Secure LAN and Electronic Safe                                 5 
OPM       E-Training                                                     0 
SBA       Business Development Management Information                    0 
             System                                                           
Treasury  Business Master File                                          13 
Treasury  Chief Counsel                                                  1 
Treasury  Cross Border Funds Transmittal                                 3 
Treasury  Electronic Fraud Detection System                             12 
Treasury  Financial Analysis & Reporting System                          3 
             Applications                                                     
Treasury  Fiscal Management                                              0 
Treasury  Individual Master File                                        13 
Treasury  Integrated Collection System                                   9 
Treasury  Integrated Financial System/CORE Financial                    17 
             System                                                           
Treasury  Enterprise Systems                                             1 
Treasury  Examinations                                                   4 
Treasury  Oracle e-Business Suite                                        5 
Treasury  Tax Return Database                                            5 
Treasury  TreasuryDirect                                                 5 
Treasury  Treasury-Wide Enterprise Content Management                    6 
             Solution                                                         
Treasury  Treasury-wide Integrated IT Infrastructure                 1,638 
USDA      ConnectHR                                                      8 
USDA      Consolidated Infrastructure, Office Automation               843 
             and Telecommunications                                           
USDA      Farm Program Modernization                                   151 
USDA      Food & Agriculture Bio-Surveillance Integration                0 
             System                                                           
USDA      Human Resources Line of Business: Service                     25 
             Center                                                           
VA        Allocation Resource Center                                     2 
VA        Automated Monument Application System                          1 
VA        Benefits Delivery Network Maintenance and                     22 
             Operations                                                       
VA        BIRLS/VADS                                                     3 
VA        Burial Operations Support System                               1 
VA        C&P Maintenance and Operations                                43 
VA        Capital Asset Management System                                2 
VA        Data Centric Transition for VR&E and Education                 0 
VA        Decision Support System                                       20 
VA        Document and Correspondence Management System                  1 
VA        Education Maintenance and Ops                                  3 
VA        Enrollment Operations and Maintenance                          5 
VA        e-Payroll                                                      9 
VA        Federal Health Information Exchange                            4 
VA        Financial & Logistics Integrated Technology                   48 
             Enterprise                                                       
VA        Financial Management System                                   16 
VA        Health Admin Center IT Operations                             11 
VA        Health Data Repository                                        27 
VA        Insurance System Maintenance and Operations                    7 
VA        IT Infrastructure                                            645 
VA        Loan Guaranty Maintenance and Operations                       2 
VA        Medical and Prosthetic Research Operations                    24 
VA        My HealtheVet                                                 17 
VA        Patient Financial Services System                              0 
VA        Payroll/HR Systems                                            27 
VA        Pharmacy Re-Engineering and IT Support                        13 
VA        Program Integrity/Data Management                             13 
VA        Rules-Based Claims Processing                                  0 
VA        Scheduling Replacement Project                                15 
VA        The Education Expert System                                    5 
VA        VA-Learning Management System                                  6 
VA        VA-Wide e-Travel Solution                                      1 
VA        VBA Application Migration Project                              5 
VA        VistA Imaging                                                 41 
VA        VistA-Application Development                                130 
VA        VistA-Legacy                                                 352 
VA        VR&E Maintenance and Operations                                4 

Source: GAO Analysis of OMB data.

Note: Department of Homeland Security (DHS); Department of Defense (DOD);
Department of Energy (DOE); Department of Interior (DOI); Department of
Justice (DOJ); Department of Labor (DOL); Department of Transportation
(DOT); Environmental Protection Agency (EPA); General Services
Administration (GSA); Department of Health and Human Services (HHS);
Department of Housing and Urban Development (HUD); National Aeronautics
and Space Administration (NASA); Nuclear Regulatory Commission (NRC);
National Science Foundation (NSF); Office of Management and Budget (OMB);
Office of Personnel Management (OPM); Small Business Administration (SBA);
Social Security Administration (SSA), U.S. Agency for International
Development (USAID); Department of Agriculture (USDA); Department of
Veterans Affairs (VA)

Our research could not identify dollar amounts for these projects.

Appendix II: High Risk Projects with Shortfalls

The following provides additional detail on the high risk projects that
have performance shortfalls as of June 2007.

We estimated the fiscal year 2008 request based on the data in the Report
on IT Spending for Fiscal Years 2006, 2007, and 2008 (generally referred
to as exhibit 53), and data provided by agencies.

Table 5: High Risk Projects with Shortfalls by Agency

                                                      Performance shortfalls
                                                       Cost and                       
                                       Fiscal          schedule                       
                                    year 2008          variance   Project             
                                      request               not   manager     Project 
                                          (in  Unclear   within       not duplicative 
Agency    Investment name           millions) baseline      10% qualified  of another 
DHS       A&O Homeland Security                                                       
          Information Network              21        X        X                       
DHS       CBP Secure Border                                                           
          Initiative net Technology                                                   
          Program                       1,000        X        X                       
DHS       Financial Management                                                        
          Transformation; E-Gov:                                                      
          E-Travel Migr.; FM LoB                                                      
          Migr.; FM LoB Legacy Sys.         6        X        X         X             
DHS       HR IT; E-Gov: HR LoB                                                        
          Migr.; E-Training Migr.;                                                    
          EHRI Migr.; E-Training                                                      
          Legacy Sys.; HR LoB                                                         
          Legacy Sys.                      17        X                  X           X 
DHS       Infrastructure                1,071        X        X                       
DHS       E-Gov E-Authentication;                                                     
          E-Auth. Migr.; E-Auth.                                                      
          Shared Serv. Prov.                0        X        X         X           X 
DHS       E-Gov E-Rulemaking Migr.;                                                   
          E-Rulemaking Legacy Sys.          1        X        X         X           X 
DHS       E-Gov FAS Migr.; FAS                                                        
          Sales Ctr.; FAS Legacy                                                      
          Sys.                              0        X        X         X           X 
DHS       E-Gov IAE Migr.                   2        X        X         X           X 
DHS       National Emergency                                                          
          Management Information                                                      
          System                           17        X                  X             
DHS       Consolidated Enforcement                                                    
          Environment                      11        X        X                       
DHS       NPPD Information Systems                                                    
          Security Line of Business         2        X        X         X             
DHS       NPPD NS/EP Priority                                                         
          Telecommuni-cations                                                         
          Service                         130        X                                
DHS       Disaster Management E-Gov        13        X        X                       
DHS       SAFECOM                           0        X        X         X             
DHS       US-VISIT                        462                 X                       
DHS       Alien Flight Student                                                        
          Program                           2        X                                
DHS       Crew Vetting                     15        X        X         X             
DHS       Hazmat Threat Assessment                                                    
          Program                          28        X        X         X             
DHS       Registered Traveler               0        X        X                       
DHS       Secure Flight                    53                 X                       
DHS       Transportation Worker                                                       
          Identification                                                              
          Credentialing                    38                 X                       
DHS       Nationwide Automatic                                                        
          Identification System            22                 X                       
DHS       Rescue 21                         0                 X         X             
DHS       Customer Service Portal          13        X        X         X           X 
DOC       FM LoB Migration                  0        X        X         X           X 
DOD       Integrated Acquisition                                                      
          Environment Legacy System                                                   
          (FedTeDS)                         1                           X             
DOD       Integrated Acquisition                                                      
          Environment Shared                                                          
          Service Provider (ORCA)           0                           X             
DOD       Integrated Acquisition                                                      
          Environment Shared                                                          
          Service Provider (PPIRS)          0                 X                       
DOJ       Regional Data Exchange           10                 X                       
DOT       EHRI                              2                           X             
DOT       E-Rulemaking Migration            1        X                                
DOT       FAA Telecommunications                                                      
          Infrastructure                  222                 X                       
DOT       Terminal Automation Mod.                                                    
          & Rep.                           13                 X                       
DOT       SWIM                             23        X                                
DOT       Traffic flow Management         121                 X                       
DOT       Regulation and                                                              
          Certification                                                               
          Infrastructure for System                                                   
          Safety                           55        X                                
Education ADvance (Aid Delivery)           65                 X                       
Education Advance Development              28                 X                       
Education Budget Formulation and                                                      
          Execution LoB                     0                           X             
Education Common Origination and                                                      
          Disbursement                      8                 X                       
Education Common Services for                                                         
          Borrowers                        15                 X                       
Education Data Strategy                    14                 X                       
Education Data Warehouse                    1                 X                       
Education E-Authentication                                                            
          Migration                         3        X        X         X           X 
Education Education Resources                                                         
          Information Center                9                 X                       
Education E-GOV: E-Rulemaking                                                         
          Migration                         0        X                                
Education EHRI                              0        X                                
Education ID Access Control System          1                 X                       
Education Information Assurance             9                 X                       
Education Integrated Partner                                                          
          Management                        8                 X                       
EPA       eRulemaking                       1                 X                       
EPA       E-Travel Migration                0                 X                       
EPA       FM LoB - Migration               26                 X                       
GSA       CHRIS-EHRI                        7                 X                     X 
GSA       EHRI Migration                    2        X                                
GSA       FAS Sales Center SSP (PP)         2                 X                       
GSA       IAE SSP (EPLS)                    1                 X                       
GSA       IAE SSP (FPDS-NG)                 6                 X                       
HHS       Federal Health                                                              
          Architecture                      4                 X                       
HHS       Consolidated Acquisiton                                                     
          Solution                          8        X        X                       
NASA      NASA Integrated                                                             
          Enterprise Management -                                                     
          Core Financial                   22                 X                       
NRC       Electronic Information                                                      
          Exchange/E-Authentication                                                   
          Migration                         1                 X                       
NRC       E-Training (Learning                                                        
          Management System)                0                 X                       
NRC       E-Travel Conversion               1                 X                       
OPM       E-Training                        0                           X             
OPM       GoLearn                           0                           X             
SBA       Business Gateway                                                            
          (Managing Partner)                6                           X             
SBA       Disaster Credit                                                             
          Management System                13                 X                       
SBA       GCBD: Business                                                              
          Development Management                                                      
          Information System                0                 X                       
SBA       OCA: Loan Management and                                                    
          Accounting System                 9                 X                       
SSA       Disability Service                                                          
          Improvement                      54                 X                       
SSA       E-Travel Migration                0                 X                       
SSA       GovBenefits Migration             0                 X                       
SSA       IT Operations Assurance          30                 X                       
SSA       Telephone Systems                                                           
          Replacement Project              26                 X                       
Treasury  Chief Counsel                     1                 X                       
Treasury  Correspondence                                                              
          Examination Automated                                                       
          System                            8                 X                       
Treasury  Debt Management                                                             
          Accounting System                 6                 X                       
Treasury  Enterprise IT                                                               
          Infrastructure                                                              
          Optimization Initiative       1,638                 X                       
Treasury  Examination Desktop                                                         
          Support System                    5                 X                       
Treasury  Excise Files Information                                                    
          Retrieval System                  7                 X                       
Treasury  Excise Tax e-File &                                                         
          Compliance                        2                 X                       
Treasury  Filing and Payment                                                          
          Compliance                        2                 X                       
Treasury  Financial Analysis &                                                        
          Reporting System                  3                 X                       
Treasury  Financial Information and                                                   
          Reporting Standardization         7                 X                       
Treasury  Fiscal Management                 0                           X             
Treasury  Integrated Collection                                                       
          System                            9                 X                       
Treasury  Integrated Customer                                                         
          Communications                                                              
          Environment                      18                 X                       
Treasury  Integrated Financial                                                        
          System/CORE Financial                                                       
          System                           17                                       X 
Treasury  Integrated Submission and                                                   
          Remittance Processing                                                       
          System                           17                 X                       
Treasury  OCC ENTERPRISE SYSTEMS            1                 X                       
Treasury  OCC EXAMINATIONS                  4                 X                       
Treasury  Payment Application                                                         
          Modernization                    18                 X                       
Treasury  SaBRe                             5                 X                       
Treasury  Service Center                                                              
          Recognition Image                                                           
          Processing System                17                 X                       
Treasury  Travel Reimbursement and                                                    
          Accounting System                 1                                       X 
Treasury  Automated Auction                                                           
          Processing System                32                 X                       
Treasury  Foreign Intelligence                                                        
          Network                           3                 X                       
Treasury  Secure Data Network               4                 X                       
Treasury  Treasury-Wide Enterprise                                                    
          Content Management                                                          
          Services                          6                 X         X             
USAID     E-Authentication                  2        X        X                       
USAID     E-Records                         1                 X                       
USAID     E-Travel                          1                 X                       
USAID     GLAS                              0                 X                       
USAID     HR LoB - Legacy System:                                                     
          Time & Attendance                                                           
          (replace AETA)                    0        X        X                       
USAID     Homeland Security                                                           
          Presidential Directive-12        10        X        X                       
USAID     Joint Assistance                                                            
          Management System                 0                 X                       
USDA      Corporate Property                                                          
          Automated Information                                                       
          System                            1                 X                       
USDA      Food and Agriculture                                                        
          Bio-Surveillance                                                            
          Integration System                0                 X                       
USDA      ConnectHR                        10                                       X 
USDA      Modernize and Innovate                                                      
          the Delivery of                                                             
          Agricultural Systems            144        X        X         X             
USDA      RMA-17, Common                                                              
          Information Management                                                      
          System                            2        X        X                       
VA        E-Gov: E-Authentication           0        X        X         X             
VA        E-Gov: Financial                                                            
          Management LOB                    0        X        X         X             
VA        E-Gov: Human Resources                                                      
          Management LoB                    0        X        X         X             
VA        Enterprise Human                                                            
          Resources Integration             2        X        X         X             
VA        Financial & Logistics                                                       
          Integrated Technology                                                       
          Enterprise                       48                 X                       
VA        Medical and Prosthetic                                                      
          Research Operations              24        X        X         X             
VA        My HealtheVet                    17                           X             
VA        Patient Financial                                                           
          Services System                   0        X        X                       
VA        Learning Management                                                         
          System                            6                 X                       
VA        VistA Imaging                    41        X        X         X             
VA        VistA-Foundations                                                           
          Modernization                    92                 X                       

Source: GAO Analysis of OMB data.

Note: Department of Homeland Security (DHS); Department of Defense (DOD);
Department of Energy (DOE); Department of Interior (DOI); Department of
Justice (DOJ); Department of Labor (DOL); Department of Transportation
(DOT); Environmental Protection Agency (EPA); General Services
Administration (GSA); Department of Health and Human Services (HHS);
Department of Housing and Urban Development (HUD); National Aeronautics
and Space Administration (NASA); Nuclear Regulatory Commission (NRC);
National Science Foundation (NSF); Office of Management and Budget (OMB);
Office of Personnel Management (OPM); Small Business Administration (SBA);
Social Security Administration (SSA), U.S. Agency for International
Development (USAID); Department of Agriculture (USDA); Department of
Veterans Affairs (VA)

(310849)

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Highlights of [46]GAO-07-1211T , a testimony before the Subcommittee on
Federal Financial Management, Government Information, Federal Services,
and International Security, Committee on Homeland Security and
Governmental Affairs, U.S. Senate

September 20, 2007

INFORMATION TECHNOLOGY

Further Improvements Needed to Identify and Oversee Poorly Planned and
Performing Projects

The Office of Management and Budget (OMB) plays a key role in overseeing
federal information technology (IT) investments. The Clinger-Cohen Act,
among other things, requires OMB to establish processes to analyze, track,
and evaluate the risks and results of major capital investments in
information systems made by agencies and to report to Congress on the net
program performance benefits achieved as a result of these investments.
OMB has developed several processes to help carry out its role. For
example, OMB began using a Management Watch List several years ago as a
means of identifying poorly planned projects based on its evaluation of
agencies' funding justifications for major projects, known as exhibit
300s. In addition, in August 2005, OMB established a process for agencies
to identify high risk projects and to report on those that are performing
poorly.

GAO testified last year on the Management Watch List and high risk
projects, and on GAO`s recommendations to improve these processes. GAO was
asked to (1) provide an update on the Management Watch List and high risk
projects and (2) identify OMB's efforts to improve the identification and
oversight of these projects. In preparing this testimony, GAO summarized
its previous reports on initiatives for improving the management of
federal IT investments. GAO also analyzed current Management Watch List
and high risk project information.

OMB and federal agencies have identified approximately 227 IT
projects--totaling at least $10.4 billion in expenditures for fiscal year
2008--as being poorly planned (on the Management Watch List), poorly
performing (on the High Risk List with performance shortfalls), or both.
The figure below shows the distribution of these projects as well as their
associated dollar values.

Poorly Planned and Poorly Performing IT Projects (as of June 2007)

OMB has taken steps to improve the identification and oversight of the
Management Watch List and High Risk projects by addressing recommendations
previously made by GAO, however, additional efforts are needed to more
effectively perform these activities. Specifically, GAO previously
recommended that OMB take action to improve the accuracy and reliability
of exhibit 300s and consistent application of the high risk projects
criteria, and perform governmentwide tracking and analysis of Management
Watch List and high risk project information. In response to these
recommendations, OMB, for example, started publicly releasing aggregate
lists of Management Watch List and high risk projects by agency in
September 2006 and has been updating them since then on a quarterly basis.
However, OMB does not publish the reasons for placing projects on the
Management Watch List, nor does it specifically identify why high risk
projects are poorly performing. Providing this information would allow OMB
and others to better analyze the reasons projects are poorly planned and
performing, take corrective actions, and track these projects on a
governmentwide basis. Such information would also help to highlight
progress made by agencies or projects, identify management issues that
transcend individual agencies, and highlight the root causes of
governmentwide issues and trends. Until OMB makes further improvements in
the identification and oversight of poorly planned and poorly performing
IT projects, potentially billions in taxpayer dollars are at risk of being
wasted.

References

Visible links
  21. http://www.gao.gov/cgi-bin/getrpt?GAO-05-276
  22. http://www.gao.gov/cgi-bin/getrpt?GAO-06-647
  23. http://www.gao.gov/cgi-bin/getrpt?GAO-04-394G
  24. http://www.gao.gov/cgi-bin/getrpt?GAO-04-49
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-07-865
  26. http://www.gao.gov/cgi-bin/getrpt?GAO-07-424
  27. http://www.gao.gov/cgi-bin/getrpt?GAO-06-12
  28. http://www.gao.gov/cgi-bin/getrpt?GAO-03-1028
  29. http://www.gao.gov/cgi-bin/getrpt?GAO-03-3
  30. http://www.gao.gov/cgi-bin/getrpt?GAO-07-424
  31. http://www.gao.gov/cgi-bin/getrpt?GAO-07-865
  32. http://www.gao.gov/cgi-bin/getrpt?GAO-05-276
  33. mailto:[email protected]
  34. http://www.gao.gov/cgi-bin/getrpt?GAO-06-250
  35. http://www.gao.gov/cgi-bin/getrpt?GAO-06-647
  36. http://www.gao.gov/cgi-bin/getrpt?GAO-05-207
  37. http://www.gao.gov/cgi-bin/getrpt?GAO-07-310
  38. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1099T
  39. http://www.gao.gov/
  40. http://www.gao.gov/
  41. http://www.gao.gov/fraudnet/fraudnet.htm
  42. mailto:[email protected]
  43. mailto:[email protected]
  44. mailto:[email protected]
  45. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1211T
  46. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1211T
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