Information Technology:

OMB Needs to Improve Its Guidance on IT Investments

GAO-11-826: Published: Sep 29, 2011. Publicly Released: Oct 26, 2011.

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The federal government invests heavily in information technology (IT). In recent years, the Office of Management and Budget (OMB) has made efforts to improve the transparency, oversight, and management of the federal government's IT investments. More recently, in June 2009, OMB deployed the IT Dashboard, a Web-based system that provides detailed performance information on federal IT investments. GAO was asked to (1) describe the current number and types of IT investments reported by federal agencies on the IT Dashboard, (2) evaluate the adequacy of OMB's guidance to federal agencies in reporting on IT investments, and (3) evaluate efforts to identify and address potentially duplicative investments. To address these objectives, GAO analyzed data from the IT Dashboard, analyzed 10 federal agencies' investment guidance and reports, and interviewed agency officials.

According to data reported on OMB's IT Dashboard in July 2011, 26 federal agencies plan to spend almost $79 billion on 7,248 IT investments in fiscal year 2011. OMB often uses the $79 billion figure in referring to annual federal investments in IT; however, it is important to note that this figure does not reflect the spending of the entire federal government. It does not include IT investments by 58 independent executive branch agencies, including the Central Intelligence Agency, or by the legislative or judicial branches. A closer look at the $79 billion in investments for the 26 agencies reveals that (1) the expenditures are split almost evenly between major and nonmajor (in terms of cost, risk, and other factors) investments; (2) about two-thirds of the expenditures are for systems in an operational state, while about one-third of the expenditures provide for the development of new systems; and (3) there are hundreds of investments providing similar functions across the federal government. For example, agencies reported 1,536 information and technology management investments, 781 supply chain management investments, and 661 human resource management investments. OMB provides guidance to agencies on how to report on their IT investments, but this guidance does not ensure complete reporting or facilitate the identification of duplicative investments. Specifically, agencies differ on what investments they include as an IT investment; for example, 5 of the 10 agencies GAO reviewed consistently consider investments in research and development systems as IT, and 5 do not. As a result, the 26 federal agencies' annual IT investments are likely greater that the $79 billion reported in fiscal year 2011. In addition, OMB's guidance to federal agencies requires each investment to be mapped to a single functional category. This limits OMB's ability to identify duplicative investments both within and across agencies because similar investments may be organized into different categories. OMB and federal agencies have undertaken several initiatives to address potentially duplicative IT investments. For example, OMB has efforts under way to consolidate similar functions through its "line of business" initiatives and has reduced the scope of three duplicative systems identified during executive reviews of high-priority projects. In addition, most of the agencies GAO reviewed established guidance for ensuring new investments are not duplicative with existing systems. However, most of OMB's recent initiatives have not yet demonstrated results. Further, agencies do not routinely assess operational systems to determine if they are duplicative. Until agencies routinely assess their IT investment portfolios to identify and reduce duplicative systems, the government's current situation of having hundreds of similar IT investments will continue to exist. GAO is recommending that OMB clarify its reporting on IT investments and improve its guidance to agencies on identifying and categorizing IT investments. OMB did not agree that further efforts were needed to clarify reporting. Given the importance of continued improvement in OMB's reporting and guidance, GAO maintains its recommendations are warranted.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In the fiscal year (FY) 2014 President's budget request, the Office of Management and Budget (OMB) specified which executive branch agencies are included when discussing the annual federal budget for information technology (IT) investments. Specifically, the Analytical Perspectives supplement to the budget lists the 27 federal agencies that are included in the expected federal IT budget for FY2014. Previous budgets did not include this list of federal agencies.

    Recommendation: To ensure that IT investments are adequately identified and categorized, the Director of OMB should specify which executive branch agencies are included when discussing the annual federal IT investment portfolio.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: In its guidance to agencies on developing their fiscal year (FY) 2016 information technology (IT) budgets, the Office of Management and Budget (OMB) updated its definition of IT to be more specific about the types of systems that are covered. For example, OMB's definition now includes supercomputers, software for mission systems, telecommunications, and satellite signal processing as specific categories that are considered IT for the purpose of developing IT budgets. Previous guidance did not include this specific information.

    Recommendation: To ensure that IT investments are adequately identified and categorized, the Director of OMB should clarify guidance to federal agencies in reporting on their IT investments by specifying whether certain types of systems, such as those in research and development and space systems, should be included.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: In the fiscal year (FY) 2014 guidance to federal agencies on preparing the annual exhibit 53s, dated August 3, 2012, the Office of Management and Budget (OMB) updated its policy regarding the use of Federal Enterprise Architecture categories. Specifically, for FY2014 submissions, agencies are able to select one primary category and up to four secondary categories for each information technology investment.

    Recommendation: To ensure that IT investments are adequately identified and categorized, the Director of OMB should revise guidance to federal agencies on categorizing IT investments to ensure that the categorizations are clear and allow agencies to choose secondary categories, where applicable, which will aid in identifying potentially duplicative investments.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Implemented

    Comments: At the end of March, 2012, the Office of Management and Budget issued a memorandum to federal agencies regarding implementing PortfolioStat reviews. These reviews are meant to assist in ending the investment in duplicative information technology (IT) investments. According to the guidance, each agency was to hold their first PortfolioStat meeting by August 2012 and is to submit a plan to consolidate commodity IT investments by September 2012. OMB is requiring agencies to document its plan to consolidate their IT portfolios and submit that plan to OMB by September 2012. In addition, OMB is requiring agencies to document their cost savings and cost avoidance due to consolidation beginning in the FY2014 budget process.

    Recommendation: To ensure that IT investments are adequately identified and categorized, the Director of OMB should require federal agencies to report the steps they take to ensure that their IT investments are not duplicative as part of their annual budget and IT investment submissions.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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