Information Technology:

Additional OMB and Agency Actions Needed to Ensure Portfolio Savings Are Realized and Effectively Tracked

GAO-15-296: Published: Apr 16, 2015. Publicly Released: Apr 16, 2015.

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David Powner
(202) 512-9286
pownerd@gao.gov

 

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What GAO Found

Agencies decreased their planned PortfolioStat savings by at least 68 percent from what they reported to GAO in 2013. Specifically, while agencies initially had planned to save at least $5.8 billion between fiscal years 2013 and 2015, these estimates were decreased to approximately $2 billion. The Departments of Defense and Homeland Security accounted for most of the difference (see fig. below). Further, although the Office of Management and Budget (OMB) made its data center consolidation initiative part of PortfolioStat in 2013, agencies have not consistently included planned savings from this initiative in their PortfolioStat reporting. As a result, the total amount that agencies expect to save through fiscal year 2015 is understated.

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As of January 2015, agencies reported having achieved approximately $1.1 billion in PortfolioStat-related savings during fiscal years 2013 and 2014. However, only 9 of 26 agencies met or exceeded their revised planned savings goals. Further, inconsistencies in OMB and agencies' reporting make it difficult to reliably measure progress in achieving PortfolioStat savings: (1) OMB included fiscal year 2012 savings in reporting against the fiscal years 2013 to 2015 goal, and (2) agencies had additional cost-savings initiatives they reported to GAO but not to OMB, and vice versa.

Three selected agencies explained how they reinvested their PortfolioStat savings, but did not always provide supporting documentation. For example, the Department of Homeland Security reported reinvesting the $176 million from its data center consolidation and enterprise licensing agreements initiatives in multiple efforts, but did not provide supporting documentation.

Agencies completed 26 of 112 action items resulting from the 2013 PortfolioStat process, such as improve project delivery. However, almost 80 percent of the 86 incomplete items did not have associated time frames for completion. During our review, OMB stated they did not believe time frames were needed to monitor the status of the action items. However, establishing such time frames would increase agencies' accountability for completing the activities.

Why GAO Did This Study

In March 2012, OMB launched an initiative, referred to as PortfolioStat, which requires agencies to conduct annual reviews of their IT investments and make decisions on eliminating duplication, among other things. In March 2013, OMB launched the second iteration of this initiative, with the goal of eliminating duplication and achieving savings through specific actions and time frames.

GAO was asked to review the implementation of the second iteration of PortfolioStat. GAO's specific objectives were to (1) assess agencies' plans for achieving PortfolioStat savings, (2) determine agencies' progress in achieving planned savings, (3) describe the extent to which selected agencies have reinvested PortfolioStat savings, and (4) describe action items resulting from the PortfolioStat process and determine the extent to which agencies have addressed them. To do so, GAO determined planned savings amounts for fiscal years 2013 through 2015, evaluated whether initiatives have yielded anticipated savings, analyzed data from three agencies based on expected savings for fiscal year 2013, and identified the status and time frames of action items.

What GAO Recommends

GAO is making recommendations to OMB and Defense aimed at improving the reporting of achieved savings, documenting how savings are reinvested, and establishing time frames for PortfolioStat action items. OMB agreed and Defense partially agreed. GAO modified the recommendation to Defense based on its response.

For more information, contact David Powner at (202) 512-9286 or pownerd@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In July 2016, we followed up with OMB on its efforts to address this recommendation. As of September 1, 2016, we were still waiting for the agency's response.

    Recommendation: To better ensure that the PortfolioStat initiative improves governmental efficiency and achieves cost savings, the Director of OMB should direct the Federal CIO to ensure that its reports to Congress about the results of IT reform efforts accurately reflect savings generated from all PortfolioStat initiatives, including those associated with FDCCI.

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

  2. Status: Open

    Comments: In July 2016, we followed up with OMB on its efforts to address this recommendation. As of September 1, 2016, we were still waiting for the agency's response.

    Recommendation: To better ensure that the PortfolioStat initiative improves governmental efficiency and achieves cost savings, the Director of OMB should direct the Federal CIO to track agencies' planned savings and use them as a baseline for measuring reported actual savings.

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

  3. Status: Open

    Comments: In July 2016, we followed up with OMB on its efforts to address this recommendation. As of September 1, 2016, we were still waiting for the agency's response.

    Recommendation: To better ensure that the PortfolioStat initiative improves governmental efficiency and achieves cost savings, the Director of OMB should direct the Federal CIO to require agencies to document specifically how the cost savings achieved from PortfolioStat have been reinvested.

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

  4. Status: Open

    Comments: In July 2016, we followed up with OMB on its efforts to address this recommendation. As of September 1, 2016, we were still waiting for the agency's response.

    Recommendation: To better ensure that the PortfolioStat initiative improves governmental efficiency and achieves cost savings, the Director of OMB should direct the Federal CIO to establish time frames for completing assigned PortfolioStat action items and hold agencies accountable for meeting those time frames.

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

  5. Status: Open

    Comments: In March 2016, during our review of federal agencies' efforts to rationalize their portfolio of software applications, the department reported that it does not collect data specifically on savings and cost avoidance associated with the business and enterprise IT applications that comprise most of the 25 cost initiatives reported in GAO-14-65. We will continue to follow up with the department on this recommendation.

    Recommendation: The Secretary of Defense should direct the Chief Information Officer to revisit the 25 cost initiatives GAO reported in GAO-14-65 to identify those that have achieved savings and cost avoidances and report those savings and avoidances to OMB.

    Agency Affected: Department of Defense

 

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