USDA Information Management: Extensive Improvements Needed in Managing
Information Technology Investments (Testimony, 05/14/97,
GAO/T-AIMD-97-90).
GAO discussed the need for the Department of Agriculture (USDA) to
address its long-standing difficulties in managing its substantial
information technology (IT) investments.
GAO noted that: (1) a USDA that works better and costs less in the 21st
century must have efficient and effective information systems; (2) yet
USDA has a long history of poorly planning and managing IT investments
with the resulting loss of taxpayer dollars; (3) given USDA's track
record, it would be both appropriate and necessary for the Department to
demonstrate to the Congress that measurable progress has been made to
effectively implement the Clinger-Cohen Act and other legislative
mandates, and strengthen Departmentwide leadership, accountability, and
oversight of the acquisition and use of IT investments before millions
more are spent on additional investments; (4) until and unless USDA can
do so, the Congress may wish to consider reducing or limiting USDA's IT
funding to only meeting critical information technology needs required
to support ongoing operations; and (5) otherwise, USDA risks continuing
its legacy of wasting taxpayer dollars on IT investments that are poorly
planned and managed, and being unable to operate effectively and
efficiently in the next century.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-AIMD-97-90
TITLE: USDA Information Management: Extensive Improvements Needed
in Managing Information Technology Investments
DATE: 05/14/97
SUBJECT: Strategic information systems planning
Information resources management
Systems conversions
Internal controls
Chief information officers
Cost control
Accountability
Telecommunication equipment
IDENTIFIER: USDA Info Share Program
USDA Financial Information System Vision and Strategy
Initiative
USDA Dedicated Loan Origination/Servicing System
**************************************************************************
* This file contains an ASCII representation of the text of a GAO *
* report. Delineations within the text indicating chapter titles, *
* headings, and bullets are preserved. Major divisions and subdivisions *
* of the text, such as Chapters, Sections, and Appendixes, are *
* identified by double and single lines. The numbers on the right end *
* of these lines indicate the position of each of the subsections in the *
* document outline. These numbers do NOT correspond with the page *
* numbers of the printed product. *
* *
* No attempt has been made to display graphic images, although figure *
* captions are reproduced. Tables are included, but may not resemble *
* those in the printed version. *
* *
* A printed copy of this report may be obtained from the GAO Document *
* Distribution Facility by calling (202) 512-6000, by faxing your *
* request to (301) 258-4066, or by writing to P.O. Box 6015, *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time. *
**************************************************************************
Cover
================================================================ COVER
Before the Subcommittee on Department Operations, Nutrition, and
Foreign Agriculture, Committee on Agriculture, House of
Representatives
For Release on Delivery
Expected at
9:30 a.m.
Wednesday,
May 14, 1997
USDA INFORMATION MANAGEMENT -
EXTENSIVE IMPROVEMENTS NEEDED IN
MANAGING INFORMATION TECHNOLOGY
INVESTMENTS
Statement of Joel C. Willemssen
Director, Information Resources Management
Accounting and Information Management Division
GAO/T-AIMD-97-90
GAO/AIMD-97-90T
(511426)
Abbreviations
=============================================================== ABBREV
ADP - automated data processing
CIO - chief information officer
FCIC - Federal Crop Insurance Corporation
FmHA - Farmers Home Administration
GPRA - Government Performance and Results Act
GSA - General Services Administration
IRM - information resources management
IT - information technology
OIG - Office of Inspector General
OMB - Office of Management and Budget
PRA - Paperwork Reduction Act of 1995
USDA - Department of Agriculture
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to assist the Subcommittee in its
oversight of the Department of Agriculture's (USDA) planning and
management of its information technology (IT) resources; spending for
IT resources currently totals over $1 billion annually. As
requested, this morning I will discuss the need for USDA to address
its long-standing difficulties in managing its substantial
investments in information technology, and provide specific examples
taken from our reports of USDA's inadequate management of information
technology investments that resulted in millions of taxpayer dollars
being wasted. In doing so, I will also provide a perspective on what
we believe to be a major cause of these problems and discuss
recommendations we have made to address these problems. I will then
briefly discuss recent legislation that provides a framework for
making sound IT investments in the future, which was based, in part,
on practices we identified that were being followed by leading
organizations that have successfully used technology to dramatically
improve performance and meet strategic goals.\1 I will also touch
briefly on the Department's current moratorium on information
technology acquisitions.
--------------------
\1 Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).
BACKGROUND
---------------------------------------------------------- Chapter 0:1
The influence of USDA on millions of Americans makes it essential
that the Department plan and manage its information technology
wisely. USDA's size and complexity, however, make this far from
simple. The fourth largest federal agency, USDA employs over 100,000
individuals in 30 separate component agencies having 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. Over the past 10
years, USDA has reported spending about $8 billion on IT resources.
During this time, as depicted below, USDA has seen its annual IT
expenditures nearly double, from about $560 million to over $1
billion.
Figure 1: USDA IT Expenditures
for the Past 10 Years (Fiscal
Years 1987 Through 1996)
(See figure in printed
edition.)
Source: The Department of Agriculture. This information has not
been independently verified by GAO.
To put this figure in perspective, this $1 billion expenditure
equates to spending over $2.7 million every day of the year. Besides
purchases of computer hardware, software, and supplies, USDA spends a
significant amount annually for services, especially those to support
its information technology purchases. These include such items as
contractor maintenance on systems or development of computer
applications. Another major portion of USDA's IT expenditures goes
toward personnel; this outlay makes up about 30 percent of the total
information technology budget. In fiscal year 1996, USDA reported
having about 6,200 full-time equivalent employees in the IT resource
area.
Another large portion of USDA's information technology expenditures
covers intra-governmental payments, which mostly comprises payments
to states for computer systems to administer the food stamp program.
USDA's reported fiscal year 1996 spending for major categories is
shown below in figure 2.
Figure 2: USDA's Fiscal Year
1996 IT Expenditures, by Major
Category
(See figure in printed
edition.)
Source: The Department of Agriculture. This information has not
been independently verified by GAO.
For fiscal year 1997, USDA plans to increase its IT expenditures to
about $1.1 billion, and has requested about $1.2 billion for fiscal
year 1998.
USDA DOES NOT EFFECTIVELY PLAN
OR MANAGE ITS SUBSTANTIAL
INVESTMENTS IN INFORMATION
TECHNOLOGY
---------------------------------------------------------- Chapter 0:2
Although USDA has reported spending nearly $8 billion on information
technology resources over the past 10 years, it has not effectively
planned or managed these IT investments and, as a result, has wasted
millions of dollars. Mr. Chairman, I would now like to highlight a
number of specific examples taken from our reports issued during this
period, in which we found that USDA had not effectively planned major
computer-modernization activities or managed IT resources.
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.\2 We
concluded an unnecessary risk existed that the proposed system
would not be effective and cost-beneficial in meeting the
agency's mission needs. The Forest Service took actions to
address our concerns and agreed to undertake a pilot program to
reduce risk, which it completed last fall. The Forest Service
is now preparing to move forward on this procurement.
Later, in September 1990, we reported that ineffective project
management and oversight contributed to cost growth, schedule
delays, and user needs' not being met for USDA's grain and
processed commodity inventory systems.\3 Cost estimates grew to
almost 9 times the original estimates, from $7 million to $62
million; one system was installed 2 years later than planned,
while the other was installed more than 6 years behind schedule.
Then, in October 1991 we reported that the Farmers Home
Administration faced unacceptable risks by proceeding with a
$520 million project to modernize automated systems for making
and collecting loans because project plans were not based on a
strategic business plan that articulated how the agency would
operate in the future, such as handling the impact of expected
changes to loan management operations.\4
USDA canceled this procurement after issuance of our report.
Similarly, we testified in June 1992 that restructuring the
Department would affect the farm service agencies' automation
plans, which included four USDA agencies planning separate
information technology modernization projects; together, they
planned to spend about $2 billion between 1993 and 1997 on
separate IT acquisitions.\5 At that time, we testified that such
investments were unwise given the likelihood of some changes to
the USDA field structure and new ways of doing business. The
Senate Committee on Agriculture, Nutrition and Forestry agreed,
and, at its urging, the Department postponed these acquisitions
and later established a consolidated, multiagency program. USDA
allowed the Federal Crop Insurance Corporation's (FCIC) $62
million IT modernization effort to continue on the basis that it
was needed to ensure continued delivery of crop insurance to
farmers.
We reported in March 1993, however, that FCIC could not demonstrate
that its nationwide project was required to meet immediate
needs, and that it had not even identified what those needs
were.\6 Uncertainties about FCIC's future, including the
restructuring of USDA and reforms in the crop insurance program,
created formidable risks for FCIC's planned nationwide computer
acquisition project. We therefore recommended that FCIC cancel
its nationwide acquisition, which it did, and pursue instead
lower risk options to meeting immediate needs once identified.
We also recommended that FCIC evaluate the possibility of
incorporating its IT modernization into USDA's consolidated
program, which was just getting underway and came to be known as
Info Share.
However, as you know Mr. Chairman, USDA experienced more than its
share of problems with the Info Share program it began in April 1993.
This program was the biggest, most costly, and most challenging
modernization attempt in USDA's history; it promised to improve
operations and delivery of services to customers of farm service and
rural development agencies by reengineering business processes and
developing integrated information systems. At the time, the
Secretary of Agriculture announced that customer services would be
improved through "one-stop" shopping for farm services.
As we reported in August 1994, the $2.6 billion Info Share program
was basically being managed as a vehicle for acquiring new
technology, rather than as a true opportunity for reengineering
business processes to better serve farm service customers.\7 The
concept of one-stop shopping had not been clearly defined and USDA
managers were not performing the key steps necessary to fundamentally
improve the way these agencies do business. Therefore, we concluded
that unless USDA concentrates on reengineering business processes,
the Department risked spending hundreds of millions of dollars to
further automate its current way of doing business and not meeting
future needs.
Following our report on Info Share, the General Services
Administration (GSA) canceled USDA's procurement authority for this
project, and the Office of Management and Budget (OMB) placed Info
Share on its list of high-risk programs that it kept at the time.
However, by that time, as reported by USDA's Office of Inspector
General, over $100 million had been spent on the project during
fiscal years 1993 and 1994.\8 Although USDA took measures to restart
the program by hiring a new program manager and setting up a program
office in January 1995, the Inspector General reported 4 months later
that a need for strengthened leadership and direction of Info Share
at the most senior levels of the Department was clear. After
millions more dollars were spent, USDA finally disbanded Info Share
in December 1995 and moved the program's key objectives to the
Department's service center implementation effort.
For the substantial investment made in Info Share, USDA had little to
show in the way of reengineered processes or integrated information
systems. Moreover, despite agreeing with our recommendations to
refocus Info Share to ensure that business processes were
reengineered, USDA continued to request additional funds to acquire
new computer systems without determining how to best deliver services
to its customers.
USDA has continued the objectives of Info Share under its service
center implementation program; its goal is to restructure operations
at 3,700 locations to create a network of about 2,500 "one-stop"
centers. Unfortunately, even though USDA hopes to have all of these
service centers fully operational by the end of this year, the
Department has yet to articulate a clear vision of how services are
to be delivered in these centers and exactly what "one-stop" service
entails. While the names of the projects have changed, two facts
have remained constant: (1) USDA still has not reengineered business
processes or established integrated information systems and (2) it
continues to spend additional millions of dollars on IT.
The need to streamline and consolidate systems also applies to the
Department's financial information. As we reported in September
1995, many of USDA's financial management systems problems would
remain unresolved until the Department's systems were brought into
compliance with USDA's financial standards.\9 Further, absent from
the Department's Financial Information Systems Vision and Strategy
was any mention of eliminating or consolidating over 100 separate
USDA financial management systems that perform overlapping functions
or of reengineering its financial management processes. Most of
these systems are managed by USDA's agencies and its National Finance
Center; in fiscal year 1994, USDA spent about $187 million to operate
and maintain these over-100 separate systems. To our knowledge, USDA
still has not implemented our recommendations that it eliminate or
consolidate redundant financial management systems across agencies.
Ineffective management of the Department's $100 million annual
telecommunications investment has also resulted in wasting millions
of taxpayer dollars. As we reported in April 1995, USDA has hundreds
of field office sites where multiple USDA agencies, located within
the same building, obtain and use separate, and often redundant,
telecommunications services.\10 While USDA had identified
opportunities to consolidate and optimize telecommunications
resources for substantial savings, the Department had not acted on
these opportunities and, as a result, at the time of our review, was
wasting as much as $5 million to $10 million annually. We noted that
USDA's Office of Information Resources Management, which has
responsibility for managing the Department's telecommunications, had
not effectively carried out its responsibility.
Unfortunately, Mr. Chairman, lax Departmentwide leadership and
oversight of USDA's telecommunications investments have resulted in
even further waste. In September 1995, we reported that USDA was
wasting millions of dollars each year paying for unnecessary or
unused telecommunications equipment and services because the
Department had not cost-effectively managed its telecommunications
resources.\11 For example, because of breakdowns in management
controls, for several years prior to our audit, USDA was paying tens
of thousands of dollars annually for leased telecommunications
equipment, such as rotary telephones and outdated computer modems,
that it no longer even had. In but one of the many cases we
identified, a USDA agency had paid a total of about $84,000 over 8
years to lease 16 modems that agency staff told us were long outdated
and likely disposed of years earlier. Another USDA agency continued
to pay about $500 a month for telecommunications services for an
office that had been closed for more than a year, and had paid as
much as $6,200 for these services at the time we reported this.
Mr. Chairman, we are convinced that without our reports on these
problems, USDA would have continued paying tens of thousands of
dollars annually for telephone equipment and services that it no
longer needed or could not even locate. Given these serious
management weaknesses, we recommended that the Secretary report the
Department's management of telecommunications as a material internal
control weakness under the Federal Managers' Financial Integrity Act
and take other corrective actions, including stopping payments for
the unnecessary services and leased equipment.
Unfortunately, USDA problems managing telecommunications do not end
there. In April 1996, after we uncovered hundreds of cases of
telephone abuse and fraud at the Department, we also reported that
USDA lacked adequate controls over the millions of dollars it spends
each year on commercial telephone services.\12 Many of these cases
involved inappropriate collect calls made from individuals in 18
correctional institutions, accepted and paid for by USDA, and then
possibly transferred to other USDA long-distance lines.
We have made numerous recommendations in our reports to address and
help USDA correct the problems it has encountered. However, the
Department has not yet fully implemented several of our
recommendations, especially those we made over the last 3 years on
Info Share, telecommunications, and financial systems. While some
actions are underway, we cannot at this time be sure they will fully
address all our concerns. In the case of Info Share, for instance,
USDA last fall initiated four reengineering efforts for the farm
service agencies, but in doing so did not implement our 1994
recommendations to require top-level managers to be directly and
personally involved and responsible for directing the activity, or
that the Department designate a senior manager to be responsible for
managing these efforts.
--------------------
\2 Geographic Information System: Forest Service Not Ready To
Acquire Nationwide System (GAO/IMTEC-90-31, June 21, 1990).
\3 Information Resources: Management Improvements Essential for Key
Agriculture Automated Systems (GAO/IMTEC-90-85, Sept. 12, 1990).
\4 ADP Modernization: Half-Billion Dollar FmHA Effort Lacks Adequate
Planning and Oversight (GAO/IMTEC-92-9, Oct. 29, 1991)
\5 Department of Agriculture: Restructuring Will Impact Farm Service
Agencies' Automation Plans and Programs (GAO/T-IMTEC-92-21, June 3,
1992).
\6 Crop Insurance Program: Nationwide Computer Acquisition Is
Inappropriate at This Time (GAO/IMTEC-93-20, Mar. 8, 1993).
\7 USDA Restructuring: Refocus Info Share Program on Business
Processes Rather Than Technology (GAO/AIMD-94-156, Aug. 5, 1994).
\8 Monitoring of the Info Share Program (USDA/OIG Report 50530-1HQ,
May 4, 1995).
\9 USDA Financial Systems: Additional Actions Needed To Resolve
Major Problems (GAO/AIMD-95-222, Sept. 29, 1995).
\10 USDA Telecommunications: Missed Opportunities To Save Millions
(GAO/AIMD-95-97, Apr. 24, 1995).
\11 USDA Telecommunications: Better Management and Network Planning
Could Save Millions (GAO/AIMD-95-203, Sept. 22, 1995) and USDA
Telecommunications (GAO/AIMD-95-219R, Sept. 5, 1995).
\12 USDA Telecommunications: More Effort Needed to Address Telephone
Abuse and Fraud (GAO/AIMD-96-59, Apr. 16, 1996).
PERSPECTIVE ON A MAJOR CAUSE OF
USDA'S INFORMATION TECHNOLOGY
PROBLEMS
---------------------------------------------------------- Chapter 0:3
In light of these numerous examples, you can see Mr. Chairman, that
USDA has had a history of IT problems dating back to the 1980s.
While many factors have contributed to this, a major cause that often
surfaced is a lack of strong information resources management (IRM)
leadership, accountability, and oversight of the acquisition and use
of Departmental IT investments. Let me quote from one of our
reports:
"USDA needs to better manage its computer and information
resources if it is to meet the demands of its users.
Restructuring its ADP [automated data processing] organization
under a senior official with strengthened authority is a must if
USDA is to deal with the many information resources problems it
faces. . . . The existing ADP organization does not provide
adequate planning, control, direction, and accountability. . .
[and] it has no authority over agency in-house development
efforts. . . . For several years problems have been
identified in USDA's management and use of information
resources. Yet, little has been done to solve these problems."
This was taken from our June 1981 report on USDA's management
leadership over information resources.\13 Unfortunately, many of
these statements still apply. While the senior officials at USDA
responsible for the Department's IT resources have changed over the
past 16 years, recurring problems in planning and managing
information technology have not, and these problems continue to
plague the Department.
Our management review of USDA in 1989 also highlighted the need for
strong leadership from top management to overcome serious,
long-standing organizational weaknesses.\14
Specifically, while USDA's Office of Information Resources Management
had responsibility for Departmentwide planning and management of
information technology, it lacked the authority necessary to overcome
the problems caused by USDA's traditional approach to managing
information resources: Its agencies are independent and their
interests parochial in terms of managing these resources. In this
1989 report, we also noted that the budget remained a creature of the
individual agencies' priorities and missions, where hundreds of
appropriations accounts exist, limiting considerably the Secretary's
flexibility.
In July 1991, continuing our series of management reviews at USDA, we
noted once again that the agencies within USDA have always defined
their own requirements and then planned and implemented systems, with
little Departmental oversight or accountability.\15
Because of this, we highlighted numerous examples of faulty
information systems being developed that did not allow data sharing
or provide managers with the information they needed to effectively
manage their programs. To overcome these problems, we again
recommended that USDA exercise stronger central leadership and
oversight to ensure effective systems planning and provide for better
accountability over agency expenditures for information technology.
Other oversight agencies have also reported on these problems. For
example, the GSA's fiscal year 1994 Information Resources Procurement
and Management Review of USDA highlighted the need for the Department
to overcome many of the same barriers we have pointed out over the
years.\16 Specifically, GSA discussed the need for strong, sustained
executive leadership in IT planning to overcome the Department's
stovepipe approach and for managers at all levels to be accountable
for prudent IT investing. Likewise, reports issued by USDA's Office
of Inspector General, including one in March 1993, also discuss
serious problems in planning major IT acquisitions because of
ineffective and weak central oversight of these activities by the
Department.\17
Because of the lack of strong IRM leadership, accountability, and
oversight, USDA agencies have continued to plan, acquire, and develop
separate systems, independently, without considering opportunities to
integrate systems and share data. Consequently, over time, the
Department has invested hundreds of millions of dollars in hundreds
of stovepipe systems--many poorly planned. These are systems that
are not interoperable with other agency systems, and actually inhibit
the use and sharing of information. In fact, data are often
inaccessible and underutilized outside of, and even within, USDA's
agencies for identifying problems, analyzing trends, or assessing
crosscutting programmatic and policy issues. Even after the Congress
passed the 1990 Farm Bill that specifically required USDA to
integrate various databases that relate to agriculture program data,
USDA did not do so, and its agencies continue to have separate
databases that are not integrated and do not share information.
As a result of this stovepipe approach to planning and managing IT,
we see the Department as data-rich but information-poor. For
example, in the fall of 1991, when the Ranking Minority Member of the
Senate Agriculture Committee asked three questions on where staff
reside under the current structure, how much of the taxpayer dollars
are they spending, and what work they perform, the Department could
not give accurate information in a timely fashion. Similarly, in
1993 when we requested basic information on major systems under
development at USDA, the Department did not have the data readily
available, and it took 2 months before USDA supplied the information,
after making a special request to the agencies.\18
This situation still exists, as we found when preparing for this
testimony. Specifically, when we asked the Department for the total
number of contracting officers at USDA, the headquarters office
responsible for ensuring that these officers are certified did not
know either the number of officers or who they were, noting that they
delegated these responsibilities to USDA component agencies.\19
--------------------
\13 Department of Agriculture Needs Leadership in Managing Its
Information Resources (GAO/CED-81-116, June 19, 1981).
\14 U.S. Department of Agriculture: Interim Report on Ways To
Enhance Management (GAO/RCED-90-19, Oct. 26, 1989).
\15 U.S. Department of Agriculture: Strengthening Management
Systems To Support Secretarial Goals (GAO/RCED-91-49, July 31, 1991).
\16 Information Resources Procurement and Management Review:
Department of Agriculture (GSA, FY94).
\17 Office of Information Resources Management Departmental Controls
Over Major IRM Acquisitions (USDA/OIG Report 58001-1-FM, Mar. 31,
1993).
\18 Information Resources: USDA Lacks Data on Major Computer Systems
(GAO/AIMD-94-31, Oct. 21, 1993).
\19 However, in our February 1997 report on USDA's contracting
activities we obtained information on contracting personnel at a
number of the component agencies. See USDA Procurement: Information
on Activities During Fiscal Year 1996 (GAO/RCED-97-61R, Feb. 18,
1997).
RECENT LEGISLATION AIMS TO
STRENGTHEN LEADERSHIP AND
IMPROVE INVESTMENT
DECISION-MAKING
---------------------------------------------------------- Chapter 0:4
After a decade of poor information technology planning and program
management by federal agencies, as just described for USDA, the
Congress enacted the Clinger-Cohen Act of 1996, which, in part, seeks
to strengthen executive leadership in information management and
institute sound capital investment decision-making to maximize the
return on information systems investments. It is important to note
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 is the Paperwork Reduction Act of 1995 (PRA), 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 of 1990, which requires that sound financial management
practices and systems essential for tracking program costs and
expenditures be in place. Still another reform is the 1993
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 laws provide a powerful framework under which federal
agencies, such as USDA, have the best opportunity to improve the
management and acquisition of information technology.
A USDA that works better and costs less in the 21st century must have
efficient and effective information systems. We believe that if
properly and fully implemented, the requirements of Clinger-Cohen and
PRA should help the Department make real change and improve the way
it acquires IT and manages these investments. These acts emphasize
involving senior executives in information management decisions,
establishing senior-level chief information officers (CIO),
tightening controls over technology spending,
redesigning inefficient work processes, and
using performance measures to assess technology's contributions to
achieving mission-related results.
As we have long recognized in many of our past reports on USDA,
executive leadership is critical for improving the management of
technology, and both PRA and Clinger-Cohen make agency heads directly
responsible for
establishing goals for using information technology to improve the
effectiveness of agency operations and services to the public,
measuring the actual performance and contribution of technology in
supporting agency programs, and
including with their agencies' budget submissions to OMB a report
on their progress in meeting operational improvement goals
through technology.
USDA has begun taking steps toward meeting the Clinger-Cohen
mandates. As I will discuss, however, much remains to be done by
USDA to fully implement the act's various provisions. The Department
still has not developed a project plan outlining critical tasks,
resource needs, and specific time frames and milestones for full
implementation; this will be an important step in guiding the
Department's effort to implement the Clinger-Cohen provisions, as the
actions that remain will be neither easy nor quick. They will
require a significant amount of time and commitment by many at the
Department, particularly USDA's most senior managers.
I would now like to briefly discuss the specific provisions of the
Clinger-Cohen Act and the steps that USDA has taken to start meeting
the provisions of the act; I will then provide our observations on
the implementation challenges facing the Department.
CAPITAL PLANNING AND
INVESTMENT CONTROL
-------------------------------------------------------- Chapter 0:4.1
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.
While USDA has begun to act in this area, it is still 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 precisely how the Department's process will operate, or when the
Department will be ready to fully implement it.
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 and has met several times since then, but has not yet
adopted specific operating procedures, including how and to what
extent it will be involved in evaluating and approving ongoing and
planned IT programs.
This past February, we issued a comprehensive guide for agencies such
as USDA to use in assessing how well they are selecting and managing
their information technology resources.\20 This guide, based on best
practices used by public and private organizations, can be
instrumental in helping USDA identify specific areas for improving
its investment process to maximize the returns on technology spending
while better controlling systems development risks. Officials in
USDA's office of the CIO told us that they are using GAO's guide
along with other guidance in developing their capital planning and
investment control process.
--------------------
\20 Assessing Risks and Returns: A Guide for Evaluating Federal
Agencies' IT Investment Decision-making (GAO/AIMD-10.1.13, February
1997).
PERFORMANCE-BASED AND
RESULTS-BASED MANAGEMENT
-------------------------------------------------------- Chapter 0:4.2
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 also in the early stages of addressing these requirements,
and it is still unclear at this time how the Department will fully
implement all of them. 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 February 1997 report to the
House Agriculture Committee, we discussed the status of USDA's
actions to meet the GPRA requirements and noted that it planned to
consult with the Congress some time this spring after its draft
Departmentwide strategic plan has been reviewed by OMB and the
Secretary.\21
Revising mission-related processes can achieve dramatic changes in
overall performance and customer satisfaction when the processes are
fundamentally redesigned to achieve more effective and efficient
program results. It is a formidable undertaking and entails
difficult, strenuous work because it requires an organization's
managers and employees to change how they think and work.
Historically, however, USDA has not been successful in obtaining the
necessary commitment and involvement from senior managers in revising
mission-related processes. For example, as previously mentioned,
despite the importance of senior management involvement to
fundamentally improve the way the agencies do business, Departmental
managers were not directly and personally involved and responsible
under Info Share. Now, 2 and a half years after our report, USDA is
starting to move forward with its first projects to revise farm
service agency processes; if done right, the Department can make
dramatic changes and achieve significant cost savings in how it will
operate in the 21st century as it establishes one-stop service
centers.
--------------------
\21 USDA Management: Progress in Meeting GPRA's Requirements
(GAO/RCED-97-65R, Feb. 26, 1997).
AGENCY CHIEF INFORMATION
OFFICER
-------------------------------------------------------- Chapter 0:4.3
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. 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, the
Department still has not established specific time frames or
milestones for developing policies and procedures describing how the
CIO's office will carry out these responsibilities, or specified what
the CIO's authorities are for carrying out the mandates of
Clinger-Cohen and PRA.
It is to soon to tell whether USDA's CIO will be able to effectively
implement the Clinger-Cohen and PRA requirements and direct how
various USDA component agencies, which control their own IT budgets,
will make IT investments and carry out their IT programs, as well as
reengineer business processes before acquiring new technology. The
leadership demonstrated by the CIO and the support this official
receives from the Secretary will be critical for success. It will be
equally important for the Secretary to hold the CIO accountable for
the many improvements the Clinger-Cohen Act aims to deliver.
So far, the CIO's office has developed an initial draft version of a
high-level information technology architecture. The acting CIO
presented this initial version to the review board in February 1997,
and the board is still considering it. USDA has still 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 system 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 will be establishing a systematic process for making
necessary adjustments to the architecture to reflect internal and
external changes. These 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 an independent external examination of operational
efficiencies and cost savings from further coordinating Farm Service
Agency and Natural Resources Conservation Service activities that
USDA expects to undertake later this fiscal year. 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.
Full and effective implementation of this section of Clinger-Cohen
also 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 the locations where major concentrations of USDA personnel
work. At many of these locations, however, other federal agencies,
such as the Department of the Interior, 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 potentially significant savings will be missed.
CONSTRAINING INFORMATION
TECHNOLOGY SPENDING WHILE
IMPLEMENTING CLINGER-COHEN
---------------------------------------------------------- Chapter 0:5
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 a
responsible beginning toward reigning in what too frequently has been
ill-advised information technology spending at USDA.
The acting CIO implemented the moratorium to include IT acquisitions
over $250,000 and any acquisition of telecommunications equipment
regardless of cost, with certain exemptions. These exemptions
included renewals of contracts for maintenance and support-services
contracts for mission-critical hardware, software, and applications,
including those for year-2000 compliance.\22 (USDA plans to spend
about $190 million on support services in fiscal year 1997.) We were
also told that the moratorium did not include funds that were
obligated just prior to its enactment. This is significant, because
among others, USDA obligated about $140 million in Commodity Credit
Corporation funds at the end of fiscal year 1996, which included
about $70 million for telecommunications for service centers.
Then there is the question of waivers. While operating under the
moratorium, as of April 23, 1997, agencies had submitted 46 requests
for waivers totaling about $82 million. The CIO's office had either
fully, partially, or conditionally approved 34 of these waivers,
totaling about $33 million, and allowed 2 others, worth nearly $44
million for maintenance and support services, to move ahead because
they were considered to be exempt. For the remaining 10 requests,
only 3--requests totaling $4,400 for telecommunications
equipment--were denied; 6 of the others were still in process, and
another was returned because it was incomplete.
At this time, USDA's moratorium officially remains in effect.
Initially, USDA planned to lift the moratorium this past February on
the basis that it would have completed an information architecture.
Since then, however, the Deputy Secretary has continued the
moratorium on a month-to-month basis while the Department continues
to work on refining the architecture and developing a new
Departmental capital planning and investment control process for IT
investments. While it is unclear when USDA expects to have this
process fully established, the Department has been developing an
interim, post-moratorium decision-making process for the agencies to
follow if the moratorium is lifted before the more detailed and
extensive Departmental capital planning and investment control
process is established.
Further, on January 27 of this year, the acting CIO suspended
telecommunications investments for the service center implementation
program, with the exception of those sites implementing centralized
rural housing loan servicing or having emergencies, until the
Department can assess the impact of the fiscal year 1998 budget on
the number of field offices USDA will have. We support this action,
which also remains in effect, since it is designed to prevent USDA
from acquiring telecommunications equipment for sites that may close.
At this time, USDA is still continuing to experience problems
planning and managing IT investments. For example, in planning the
purchase and installation of telecommunications equipment in the new
service centers, USDA did not take appropriate steps to ensure that
it met two of its major objectives--reducing telecommunications costs
by consolidating lines and improving customer service by being able
to transfer calls among agency staff at the service centers.
Consequently, these major goals were not met when new telephone
systems were initially installed. This past February, USDA began to
take remedial action to address these problems by issuing procedures
for centers to follow to reduce the number of unnecessary lines.
USDA is still working out procedures for how staff will answer and
transfer calls.
--------------------
\22 The year-2000 problem is rooted in the way dates are recorded and
computed in many computer systems. For the past several decades,
systems have typically used two digits to represent the year, such as
"97" representing 1997, in order to conserve on electronic data
storage and reduce operating costs. With this two-digit format,
however, the year 2000 is indistinguishable from 1900, 2001 from
1901, and so on. As a result of this ambiguity, system or
application programs that use dates to perform calculations,
comparisons, or sorting may generate incorrect results when working
with the years after 1999. Correcting the problem and achieving
year-2000 compliance--defined as the ability of information systems
to accurately process date data from, into, and between the 20th and
the 21st centuries, including leap year calculations--will not be
easy.
SUMMARY
---------------------------------------------------------- Chapter 0:6
In summary, Mr. Chairman, a USDA that works better and costs less in
the 21st century must have efficient and effective information
systems. Yet USDA has a long history of poorly planning and managing
IT investments with the resulting loss of taxpayer dollars. Given
USDA's track record, it would be both appropriate and necessary for
the Department to demonstrate to the Congress that measurable
progress has been made to effectively implement Clinger-Cohen and
other legislative mandates, and strengthen Departmentwide leadership,
accountability, and oversight of the acquisition and use of IT
investments before millions more are spent on additional investments.
Until and unless USDA can do so, the Congress may wish to consider
reducing or limiting USDA's IT funding to only meeting critical
information technology needs required to support ongoing operations.
Otherwise, USDA risks continuing its legacy of wasting taxpayer
dollars on IT investments that are poorly planned and managed, and
being unable to operate effectively and effectively in the next
century.
-------------------------------------------------------- Chapter 0:6.1
Mr. Chairman, this concludes my statement. I would be happy to
respond to any questions you or other members of the Subcommittee may
have at this time.
RELATED PRODUCTS
=========================================================== Appendix 1
USDA Information Management: Action Needed To Address Long-Standing
Deficiencies (GAO/T-AIMD-97-56, Mar. 5, 1997).
Assessing Risks and Returns: A Guide for Evaluating Federal
Agencies' IT Investment Decision-making (GAO/AIMD-10.1.13, February
1997).
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, Apr. 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, Apr. 24, 1995).
Review of Info Share Program Expenditures for Fiscal Years 1993 and
1994 (USDA/OIG Report 50530-2-HQ, Jan. 17, 1995).
Information Resources Procurement and Management Review: Department
of Agriculture (GSA, FY94)
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.
Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 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, Apr. 22, 1993).
Office of Information Resources Management Departmental Controls Over
Major IRM Acquisitions (USDA/OIG Report 58001-1-FM, Mar. 31, 1993).
Crop Insurance Program: Nationwide Computer Acquisition Is
Inappropriate at This Time (GAO/IMTEC-93-20, Mar. 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,
Apr. 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).
U.S. Department of Agriculture: Strengthening Management Systems To
Support Secretarial Goals (GAO/RCED-91-49, July 31, 1991).
Forest Service Is Making Progress in Developing a Nationwide
Geographic Information System (GAO/T-IMTEC-91-11, Apr. 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).
U.S. Department of Agriculture: Interim Report on Ways To Enhance
Management (GAO/RCED-90-19, Oct. 26, 1989).
Information Management: Issues Important to Farmers Home
Administration Systems Modernization (GAO/IMTEC-89-64, Aug. 21,
1989).
Department of Agriculture Needs Leadership in Managing Its
Information Resources (GAO/CED-81-116, June 19, 1981).
*** End of document. ***