USDA Information Management: Action Needed To Address Long-standing
Deficiencies (Testimony, 03/05/97, GAO/T-AIMD-97-56).

Pursuant to a congressional request, GAO discussed: (1) past
difficulties that the Department of Agriculture (USDA) has experienced
in planning for and managing information technology (IT); (2) actions
GAO believes USDA must take if it is to significantly improve its
management of information technology resources; and (3) USDA's current
moratorium on information technology acquisitions.

GAO noted that: (1) USDA and its agencies have poorly planned or managed
information technology projects, resulting in the waste of millions of
dollars in IT investments; (2) specific deficiencies include inadequate
definition of system needs, insufficient analysis of alternatives,
proceeding with system modernization before assessing business needs and
developing a strategic business plan, not considering departmental
restructuring in the planning and acquisition of IT resources, and
ineffectively managing USDA's telecommunications program; (3) such
deficiencies have allowed programs to be unduly influenced by technology
as the driving force, rather than choosing technology to help a program
achieve certain strategic goals by first analyzing and revising the
mission-related business process; (4) although USDA has several actions
underway to implement recommendations that GAO has made over the last 3
years related to these issues, GAO cannot at this time be sure that they
will fully address its concerns; (5) USDA will need to fully and
properly implement the mandates of the Clinger-Cohen Act of 1996 to
begin resolving its long-standing deficiencies in managing and acquiring
information technology; (6) some specific provisions of the act which
are at the core of how USDA can begin to make improvements relate to:
(a) capital planning and investment control; (b) performance and
results-based management; and (c) agency chief information officer; (7)
USDA has begun taking steps toward meeting the mandates, but has not yet
established specific time frames or milestones for full implementation;
(8) the Clinger-Cohen Act will be more powerful if it can be integrated
with the objectives of broader governmentwide management reform
legislation that USDA is also required to implement; (9) the Deputy
Secretary established a moratorium on all significant information
technology investments to give USDA time to assess its existing and
planned investments and constrain IT spending until it develops a
departmentwide information architecture and implementation process; and
(10) the acting chief information officer also suspended
telecommunications investments for the service center implementation
effort, with some exceptions, until USDA can assess the impact of the
fiscal year 1998 budget.

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

 REPORTNUM:  T-AIMD-97-56
     TITLE:  USDA Information Management: Action Needed To Address 
             Long-standing Deficiencies
      DATE:  03/05/97
   SUBJECT:  Information technology
             Strategic information systems planning
             Agricultural programs
             Information resources management
             ADP procurement
             Federal procurement
             Telecommunication
             Federal agency reorganization
             Systems design
IDENTIFIER:  USDA Info Share Program
             USDA Financial Information System Vision and Strategy 
             Initiative
             USDA Dedicated Loan Origination/Servicing System
             
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Cover
================================================================ COVER


Before the Committee on Agriculture, Nutrition and Forestry, U.S. 
Senate

For Release on Delivery
Expected at
9 a.m.
Wednesday,
March 5, 1997

USDA INFORMATION MANAGEMENT -
ACTION NEEDED TO ADDRESS
LONG-STANDING DEFICIENCIES

Statement of Joel C.  Willemssen
Director, Information Resources Management
Accounting and Information Management Division

GAO/T-AIMD-97-56

GAO/AIMD-97-56t


(511419)


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

  CIO - Chief Information Officer
  GPRA - Government Performance and Results Act
  IT - information technology
  USDA - Department of Agriculture

============================================================ Chapter 0

Mr.  Chairman and Members of the Committee: 

We are pleased to be here today to assist the Committee in its
assessment of progress made by the Department of Agriculture (USDA)
in putting into place a foundation for effective acquisition and
management of its information technology resources.  As requested,
this morning I will discuss past difficulties USDA has experienced in
planning for and managing information technology, and will then
describe the action we believe the Department must take if it is to
significantly improve its management of information technology
resources.  I will also touch briefly on the Department's current
moratorium on information technology acquisitions. 

Critical legislation enacted last year, the Clinger-Cohen Act of
1996--along with other important management reform
legislation--provides a framework under which sound investment in
information technology (IT) can become the norm, rather than the
exception.  For this to happen, however, it is important that
implementation actions focus not only on the means (the policies,
practices, and processes) but also on end results that are expected
from the management reforms.  Given the problems that have plagued
USDA in the past, and the Secretary's commitment to significantly
improving the Department's management of IT investments, this hearing
comes at an opportune time.  How and how well USDA implements these
laws will essentially determine whether it can begin to efficiently
and cost-effectively manage its investment in information technology,
one that currently totals $1.2 billion annually. 

The influence of USDA on millions of Americans makes it essential
that its information technology systems be carefully managed; failure
to do so could have serious consequences.  USDA's size and
complexity, however, make this far from a simple undertaking.  The
fourth largest federal agency, USDA employs over 100,000 individuals
in 30 separate component agencies with multiple and sometimes
disparate missions.  Its responsibilities range from forests and
timber to food assistance for the needy and the safety of meat and
poultry products for human consumption.  In fiscal year 1997 alone,
USDA outlays will total about $57 billion. 


   HISTORY OF PROBLEMS: 
   INADEQUATE PLANNING, MANAGEMENT
   OF INFORMATION TECHNOLOGY
   RESOURCES
---------------------------------------------------------- Chapter 0:1

As we have reported over the past several years, USDA and its
agencies time and again have poorly planned or managed information
technology projects.  This has resulted in the waste of millions of
dollars in IT investments.  Specific deficiencies we have encountered
include inadequate definition of system needs, insufficient analysis
of alternatives, proceeding with system modernization before
assessing business needs and developing a strategic business plan,
not considering Departmental restructuring in the planning and
acquisition of IT resources, and ineffectively managing the
Department's $100-million annual telecommunications program.  What
many of these actions have in common is that they have allowed
programs to be unduly influenced by technology as the driving force,
rather than choosing technology to help a program achieve certain
strategic goals by first analyzing and revising the mission-related
business process. 

The attachment to my statement today lists previous reports dealing
with these specific cases in detail.  I would, though, like to
highlight a few examples. 

  -- In June 1990, we reported that the Forest Service was not ready
     to procure a $1.2-billion geographic information system because
     alternatives for integrating this nationwide system into its
     existing operations had not been adequately analyzed, and system
     performance needs had not been adequately defined. 

  -- In October 1991, we reported that the Farmers Home
     Administration was proceeding with a $520-million project to
     modernize automated systems for making and collecting loans, yet
     those plans were not based on a strategic business plan that
     articulated how the agency would operate in the future, such as
     the impact of changes to the loan management operations.  We
     judged the level of risk in this effort to be, therefore,
     unacceptable. 

  -- In June 1992, we testified before this Committee that
     restructuring the Department would affect the farm service
     agencies' automation plans, which included four USDA agencies
     planning separate information technology modernizations;
     together, they were to spend about $2 billion from 1993 through
     1997.  Such investments were unwise at the time, given the
     likelihood of at least some modification to reflect a
     streamlined field structure and new ways of doing business.  The
     Committee agreed and at its urging the Department postponed
     these acquisitions and later established a consolidated,
     multiagency program, which came to be known as Info Share. 

As you are aware, Mr.  Chairman, the way USDA managed the Info Share
program continued to be problematic.  In August 1994, we reported
that the $2.6-billion program was basically being managed as a
vehicle for acquiring new technology, rather than as an opportunity
for reengineering business processes to better serve farm service
agency customers.  The General Services Administration subsequently
canceled USDA's procurement authority for this project, and the
Office of Management and Budget placed it on its list of high-risk
programs.  As reported by USDA's Office of Inspector General, during
fiscal years 1993 and 1994 over $100 million had already been spent,
which included personnel costs.  USDA finally disbanded Info Share in
December 1995 and moved the program's key objectives to the
Department's service center implementation effort. 

The issue of streamlining and consolidating systems also applies to
management of the Department's financial information.  We noted in
September 1995 that many of USDA's financial management systems
problems would not be resolved until and unless the Department's
systems were brought into compliance with USDA's financial standards. 
Further, absent from the Department's "Financial Information Systems
Vision and Strategy" was any mention of eliminating or consolidating
over 100 separate financial management systems at USDA that perform
overlapping functions, or of reengineering its financial management
processes. 

Another area involved wasted funds for USDA's telecommunications.  As
we reported in April 1995, USDA had not acted on all identified
opportunities to consolidate and optimize telecommunications services
and thus save millions of dollars annually.  Further, we reported in
September 1995 that due to lax oversight, various USDA agencies were
using--and paying for--redundant services in the same locations,
leasing equipment they were not using, and paying for services never
provided.  Moreover, we reported in April 1996 that USDA had not
taken sufficient action to address telephone fraud and abuse. 

Recommendations that we have made over the last 3 years to address
these issues have not yet been fully implemented.  The Department has
several actions underway; we cannot at this time, however, be sure
that they will fully address our concerns. 


   USDA AT A CROSSROADS: 
   FOLLOWING LEGISLATIVE
   PRESCRIPTIONS CAN HELP USDA
   CONTROL INFORMATION TECHNOLOGY
---------------------------------------------------------- Chapter 0:2

USDA's problems in planning and managing IT are not unique; similar
problems have been encountered throughout government.  After a decade
of agencies' poor planning and program management that resulted in
American taxpayers' not getting their money's worth from expenditures
of $200 billion on information systems, the Congress enacted the
Clinger-Cohen Act to strengthen executive leadership in information
management and institute sound capital investment decision-making to
maximize the potential return on information system investments.  By
providing specific requirements for federal agencies and holding them
responsible for results, this law is far-reaching.  To be effective,
however, its must be supported and implemented. 

A USDA that works better and costs less in the 21st century must have
efficient and effective information systems.  If properly
implemented, the requirements of the Clinger-Cohen Act should lead to
a significantly improved approach to acquiring and managing agencies'
IT investments.  Simply put, USDA will need to fully and properly
implement the Clinger-Cohen mandates to begin resolving its
long-standing deficiencies in managing and acquiring IT.  The
following sections of the act outline IT requirements related to
planning and managing investments; they are at the core of how USDA
can began to make improvements: 

  -- capital planning and investment control,

  -- performance and results-based management, and

  -- agency chief information officer. 

To its credit, USDA has begun taking steps toward meeting the
Clinger-Cohen mandates.  However, much remains to be done to fully
implement the act's various provisions.  The Department has not yet
established specific time frames or milestones for full
implementation; this will be an important step, as the actions that
remain will be neither easy nor quick.  They will require a
significant amount of time and commitment by the most senior managers
in the Department. 

It is important to note, however, that just as technology is most
effective when it supports defined business needs and objectives,
Clinger-Cohen will be more powerful if it can be integrated with the
objectives of broader governmentwide management reform legislation
that USDA is also required to implement.  One such reform includes
the Paperwork Reduction Act, which emphasizes the need for an overall
information resources management strategic planning framework, with
IT decisions linked directly to mission needs and practices.  Another
reform is the Chief Financial Officers Act, which requires that sound
financial management practices and systems essential for tracking
program costs and expenditures be in place.  Still another reform is
the Government Performance and Results Act (GPRA), which focuses on
defining mission goals and objectives, measuring and evaluating
performance, and reporting results.  Together, Clinger-Cohen and
these other reforms provide a powerful framework under which USDA has
the best opportunity to improve the management and acquisition of
information technology that we all want to see. 

I would now like to highlight some of the specific provisions of the
Clinger-Cohen Act and the steps USDA has taken to start meeting
provisions of the act; I will then provide our observations on the
implementation challenges facing the Department. 


      CAPITAL PLANNING AND
      INVESTMENT CONTROL
-------------------------------------------------------- Chapter 0:2.1

Under this section of the Clinger-Cohen Act, USDA is required to
design and implement a process for maximizing the value and assessing
and managing the risks of information technology acquisitions.  This
process is supposed to be integrated with the processes for making
budgetary, financial, and program management decisions, and include
criteria to be applied in considering whether to undertake a
particular investment in information systems.  Moreover, the process
is to provide for (1) identifying information systems investments
that would result in shared benefits or reduced costs for other
government agencies, (2) identifying quantifiable measurements of
benefits and risks of proposed investments, and (3) the means for
senior management to obtain information on the progress of
information systems investments. 

USDA has begun to act in this area and is currently designing the
specific elements and criteria for its capital planning and
investment control process.  In light of this, and because no
specific time frames or milestones yet exist, it is unclear at this
time how the Department's process will operate or when the Department
will be ready to fully implement the process. 

Part of USDA's overall capital planning and investment control
process will include its Executive Information Technology Investment
Review Board, which the Secretary authorized last July.  It was given
responsibility for selecting, monitoring, and evaluating
Departmentwide technology investments; members include the
Department's most senior program officials.  The board first met this
past January, but has not yet adopted operating procedures. 

Full and effective implementation of this section of Clinger-Cohen
provides, among other elements, potential benefits from sharing with
government entities beyond USDA.  For example, USDA's initial version
of its information architecture includes an illustration of candidate
locations for telecommunications equipment and services based on
where major concentrations of USDA personnel work.  At many of these
locations, however, other federal agencies, such as the Department of
the Interior, may already have equipment and services in place that
could possibly be shared.  If such opportunities to share resources
exist and are ignored, the chance to achieve savings will be missed. 


      PERFORMANCE AND
      RESULTS-BASED MANAGEMENT
-------------------------------------------------------- Chapter 0:2.2

Under this section of Clinger-Cohen, to implement performance and
results-based management for information technology, USDA is required
to establish goals for improving the efficiency and effectiveness of
agency operations through the effective use of information
technology, and to report to the Congress on its progress in
achieving these goals.  USDA is also required to revise
mission-related and administrative processes before making
significant investments in information technology, and to ensure that
performance measures are prescribed for gauging how well the
technology supports USDA programs. 

USDA is in the early stages of addressing these requirements, and it
is unclear at this time how the Department will fully implement all
the requirements under this section.  From our perspective, these
requirements may be the most difficult and time-consuming to
implement, and will demand full commitment and involvement from
senior managers for USDA's mission areas. 

In establishing the mission-based goals and performance measures for
IT investments, USDA will need to make sure that these are aligned
with the long-term strategic goals and performance measures it is
currently developing under GPRA.  In a report we sent you last week,
we discussed the progress USDA has made in meeting the GPRA
requirements, and noted that USDA plans to consult with the Congress
some time this spring after its draft Departmentwide strategic plan
has been reviewed by the Office of Management and Budget and the
Secretary. 

Moreover, USDA historically has not demonstrated success in obtaining
the necessary commitment and involvement from senior managers in
revising mission-related processes.  For example, as previously
discussed, we noted in our August 1994 Info Share report that,
despite the importance of senior management involvement to
fundamentally improve the way these agencies do business,
Departmental managers were not directly and personally involved and
responsible.  Two-and-a-half years after our report, USDA is just
starting to move forward with its first projects to revise farm
service agency processes. 


      AGENCY CHIEF INFORMATION
      OFFICER
-------------------------------------------------------- Chapter 0:2.3

Under this section, to help USDA carry out the new responsibilities
discussed in the previous two sections, the Secretary of Agriculture
is required to designate a chief information officer.  The CIO is to
be much more than a senior technology manager.  As a top-level
executive reporting directly to the agency head, the CIO is supposed
to be responsible for achieving mission results through technology by
working with senior managers on effective management to achieve the
agency's strategic performance goals.  Moreover, the CIO is to
promote improvements in work processes and develop and implement an
integrated, agencywide technology architecture.  The CIO is also
required to monitor and evaluate the performance of information
technology programs, and advise the head of the agency whether to
continue, modify, or terminate a program or project.  Further, the
CIO is responsible for strengthening the agency's knowledge, skills,
and capabilities to effectively manage information resources. 

USDA has taken steps to begin implementing requirements in this area. 
In August 1996 the Secretary established a CIO position and
designated an acting CIO, who reports to the Secretary.  At USDA, the
CIO has been given responsibility for supervising and coordinating
the design, acquisition, maintenance, use, and disposal of
information technology by USDA agencies, and for monitoring the
performance of USDA's information technology programs and activities. 
However, USDA has not yet established specific time frames or
milestones for developing policies and procedures describing how the
CIO's office will carry out these responsibilities. 

The CIO's office has developed an initial version of an information
technology architecture.  The acting CIO presented this initial
version of the architecture to the review board last month, and the
board is now considering it.  USDA has likewise not yet established a
specific time frame or milestones for completing its architecture. 

In our view, in order to complete a sound and integrated
architecture, substantial progress must first be seen in the
performance and results-based management area.  Without first
revising mission-related processes, at least conceptually, USDA risks
developing an information systems technology architecture that
supports the Department's outdated processes rather than one
consistent with any future approach.  Revising mission-related
processes may alter the architecture components and severely affect
information technology investment decisions. 

A case in point is the revision of a mission-related loan servicing
process at USDA.  After our October 1991 report, USDA canceled its
$520-million Farmers Home Administration effort to modernize
automated systems for its highly decentralized process for making and
collecting single-family housing loans.  Since then, with pressure
from the Congress, USDA has developed and is implementing a new
process for servicing these loans centrally known as the Dedicated
Loan Origination and Servicing system.  By moving from a highly
decentralized to a centralized system, USDA expects to reduce the
number of offices necessary for carrying out this process by about
two-thirds--from about 2,200 in 1991 to about 800.  Revising the
loan-servicing process significantly affected the Department's
information technology investment decisions since fewer and different
computers and telecommunications equipment were needed for
centralized servicing. 

Once USDA is ready to implement its architecture, another critical
component of implementation will be establishing a systematic process
for making necessary adjustments to the architecture to reflect
internal and external changes.  Changes may include elements such as
the impact that the fiscal year 1998 budget will have on information
technology investment decisions.  This is especially true at USDA's
Farm Service Agency, since the Department's fiscal year 1998 budget
request points out that by the end of 1999 a maximum of 2,000 field
office service centers will exist, compared with more than 2,500
today.  Other changes will include those opportunities identified
through USDA's examination this year of operational efficiencies and
cost savings from further coordinating Farm Service Agency and
Natural Resources Conservation Service activities; these include
alternative means of program delivery, such as centralizing servicing
for Agriculture Transition Marketing Act payments.  Completing the
architecture and keeping it current is especially critical if it is
to represent a sound and integrated tool for guiding USDA's
investment decisions. 


   CONSTRAINING INFORMATION
   TECHNOLOGY SPENDING WHILE
   IMPLEMENTING CLINGER-COHEN
---------------------------------------------------------- Chapter 0:3

Finally, Mr.  Chairman, a word about the Department's moratorium on
significant information technology investments.  With the passage of
Clinger-Cohen and concerns expressed in Senate and House
appropriations and authorization language, the Deputy Secretary last
November established a moratorium on all significant information
technology investments.  This was done to give the Department time to
assess its existing and planned IT investments and constrain IT
spending until it develops a Departmentwide information architecture
and implementation process.  We applaud this action and view it as
the first step in getting a handle on information technology spending
at USDA. 

In addition, just 5 weeks ago, on January 27, the acting CIO also
suspended telecommunications investments for the service center
implementation effort, with exceptions for those sites implementing
centralized rural housing loan servicing or with emergencies, until
the Department can assess the impact of the fiscal year 1998 budget. 
We also support this action since it is designed to prevent USDA from
acquiring telecommunications equipment for sites that may close. 


-------------------------------------------------------- Chapter 0:3.1

Mr.  Chairman, this concludes my statement.  I would be happy to
respond to any questions you or other members of the Committee may
have at this time. 


============================================================ Chapter 1


RELATED PRODUCTS
============================================================ Chapter 2

USDA Management:  Progress in Meeting GPRA's Requirements
(GAO/RCED-97-65R, Feb.  26, 1997). 

USDA Telecommunications:  More Effort Needed To Address Telephone
Abuse and Fraud (GAO/AIMD-96-59, April 16, 1996). 

USDA Financial Systems:  Additional Actions Needed To Resolve Major
Problems (GAO/AIMD-95-222, Sept.  29, 1995). 

USDA Telecommunications:  Better Management and Network Planning
Could Save Millions (GAO/AIMD-95-203, Sept.  22, 1995). 

USDA Telecommunications (GAO/AIMD-95-219R, Sept.  5, 1995). 

Monitoring of the Info Share Program (USDA/OIG Report 50530-1HQ, May
4, 1995). 

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

Review of Info Share Program Expenditures for Fiscal Years 1993 and
1994 (USDA/OIG Report 50530-2-HQ, Jan.  17, 1995). 

USDA Restructuring:  Refocus Info Share Program on Business Processes
Rather Than Technology (GAO/AIMD-94-156, Aug.  5, 1994). 

Information Resources Management in a Reconfigured U.S.  Department
of Agriculture (House Report 103-610), Committee on Government
Operations, House of Representatives, July 19, 1994. 

Information Resources:  USDA Lacks Data on Major Computer Systems
(GAO/AIMD-94-31, Oct.  21, 1993). 

Revitalizing USDA:  A Challenge for the 21st Century
(GAO/T-RCED-93-32, April 22, 1993). 

Crop Insurance Program:  Nationwide Computer Acquisition Is
Inappropriate at This Time (GAO/IMTEC-93-20, March 8, 1993). 

Department of Agriculture:  Restructuring Will Impact Farm Service
Agencies' Automation Plans and Programs (GAO/T-IMTEC-92-21, June 3,
1992). 

Geographic Information System:  Forest Service Has Resolved GAO
Concerns About Its Proposed Nationwide System (GAO/T-IMTEC-92-14,
April 28, 1992). 

ADP Modernization:  Half-Billion Dollar FmHA Effort Lacks Adequate
Planning and Oversight (GAO/IMTEC-92-9, Oct.  29, 1991). 

Farmers Home Administration:  Half-Billion Dollar ADP Modernization
Lacks Adequate Planning and Oversight (GAO/T-IMTEC-92-2, Oct.  29,
1991). 

Forest Service Is Making Progress in Developing a Nationwide
Geographic Information System (GAO/T-IMTEC-91-11, April 24, 1991). 

Management Improvements Essential for Key Automated Systems at the
Agriculture Stabilization and Conservation Service
(GAO/T-IMTEC-90-13,
Sept.  18, 1990). 

Information Resources:  Management Improvements Essential for Key
Agriculture Automated Systems (GAO/IMTEC-90-85, Sept.  12, 1990). 

Geographic Information System:  Forest Service Not Ready To Acquire
Nationwide System (GAO/IMTEC-90-31, June 21, 1990). 

Forest Service Not Ready to Acquire a Nationwide Geographic
Information System (GAO/T-IMTEC-90-10, May 2, 1990). 

Information Management:  Issues Important to Farmers Home
Administration Systems Modernization (GAO/IMTEC-89-64, Aug.  21,
1989). 

*** End of document. ***