Information Technology Reform:

Billions of Dollars in Savings Have Been Realized, but Agencies Need to Complete Reinvestment Plans

GAO-15-617: Published: Sep 15, 2015. Publicly Released: Sep 15, 2015.

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What GAO Found

Twenty-four of the 26 federal agencies participating in the Office of Management and Budget's (OMB) information technology (IT) reform initiatives reported achieving an estimated total of $3.6 billion dollars in cost savings and avoidances between fiscal years 2011 and 2014. Slightly more than half (or about $2.0 billion) of the savings and avoidances were from data center consolidation and optimization efforts. Notably, of the $3.6 billion total, the Departments of Defense, Homeland Security, Treasury, and the Social Security Administration accounted for about $2.5 billion (or 69 percent).

Agency-reported IT Reform Cost Savings and Avoidances

Agency-reported IT Reform Cost Savings and Avoidances

Most agencies did not fully meet OMB's requirements to submit reinvestment plan information. Of the 27 agencies required to submit reinvestment plans (including one-time and ongoing plans), 5 agencies had fully implemented OMB's guidance, while the remaining 22 had only partially implemented it. For example, most agencies had not fully implemented OMB's guidance for submitting one-time fiscal year 2014 IT reduction and reinvestment plans as part of OMB's “cut and reinvest” effort. As a result, agencies' plans were substantially short of OMB's overall fiscal year 2014 targets: $3.0 billion in proposed reductions and $2.1 billion in proposed reinvestments, compared to OMB's targets of $7.6 billion in reductions and as much as $7.6 billion in reinvestments. Agencies provided varied reasons for not meeting OMB's requirements, such as that their components had not fully tracked and reported how their savings were to be reinvested. Until agencies complete their ongoing reinvestment plans, they will be challenged to ensure that their considerable savings are being used in the most efficient and effective manner possible.

Four selected agencies—the Departments of Education, Interior, Labor, and the Social Security Administration—had documented key governance processes to guide the development of their fiscal year 2014 budget submission, which included proposed IT reinvestments of $350 million. However, none of the four agencies had tracked the reinvestment performance results. They provided varied reasons for not doing so, and two agencies noted the lack of visibility into their components' reinvestments. The lack of performance tracking is also due to OMB not requiring agencies to document actual results. In addition, OMB has not defined targets for reinvestments beyond fiscal year 2014. Until OMB requires agencies to track actual reinvestment performance and defines targets, it will be limited in its ability to ensure that agencies are actually reinvesting funds as planned and may not be able to hold them accountable. Finally, without improved tracking, selected agencies may lack assurance that their components are reinvesting in areas consistent with agency-wide goals.

Why GAO Did This Study

Beginning in 2010, OMB initiated a series of IT reform efforts to consolidate the growing number of data centers and eliminate duplicative spending. In May 2012, the agency began a “cut and reinvest” effort that required agencies to propose fiscal year 2014 IT reductions and reinvestments.

GAO was asked to review agencies' savings from OMB's IT reform efforts and determine how those savings are being reinvested. The objectives were to (1) assess agencies' progress in achieving savings from their IT reform efforts, (2) evaluate agencies' plans to reinvest their savings, and (3) evaluate how selected agencies have reinvested their savings and governance processes to oversee the reinvestments. GAO assessed 26 agencies' cost savings and avoidance documentation, evaluated 27 agencies' (including the Smithsonian Institution) reinvestment plans against OMB's guidance, and compared 4 of the agencies' governance processes against best practices. The 4 agencies were selected, in part, because they had the highest dollar amounts of proposed IT reinvestments.

What GAO Recommends

GAO recommends that agencies complete their IT savings reinvestment plans and improve tracking, and that OMB define targets for agency reinvestment and require that agencies complete their plans and track actual reinvestment performance. OMB and 12 agencies agreed with GAO's recommendations, 1 did not state whether it agreed or disagreed, 3 had no comments, and 1 partially agreed.

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

Recommendations for Executive Action

  1. Status: Open

    Comments: The Office of Management and Budget generally agreed with our recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To better ensure that agencies' IT savings are being reinvested in the most efficient and effective manner possible, the Director of OMB should direct the Federal CIO to ensure that agencies complete their reinvestment plans, in accordance with established requirements, and maintain those plans on an ongoing basis.

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

  2. Status: Open

    Comments: The Office of Management and Budget generally agreed with our recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To better ensure that agencies' IT savings are being reinvested in the most efficient and effective manner possible, the Director of OMB should direct the Federal CIO to require agencies to track actual reinvestment performance and define performance targets for agencies' reinvestments, as done previously.

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

  3. Status: Open

    Comments: The Department of Agriculture agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Agriculture should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Agriculture

  4. Status: Open

    Comments: The Department of Commerce agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, as part of any future update to the department's information resource management strategic plan or equivalent document, the Secretary of Commerce should direct the CIO to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Department of Commerce

  5. Status: Open

    Comments: The Department of Commerce agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Commerce should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Commerce

  6. Status: Open

    Comments: The Department of Defense partially agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Defense should direct the Defense CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Defense

  7. Status: Open

    Comments: The Department of Defense agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: In addition, to improve the U.S. Army Corps of Engineers' IT savings reinvestment plans, the Secretary of Defense should direct the Secretary of the Army, as part of any future update to the U.S. Army Corps of Engineers' IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Department of Defense

  8. Status: Open

    Comments: The Department of Energy agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Energy should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Energy

  9. Status: Open

    Comments: The Department of Health and Human Services agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Health and Human Services should direct the CIO, as part of any future update to the department's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Department of Health and Human Services

  10. Status: Open

    Comments: The Department of Homeland Security agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Homeland Security should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Homeland Security

  11. Status: Open

    Comments: The Department of Housing and Urban Development agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Housing and Urban Development should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Housing and Urban Development

  12. Status: Open

    Comments: The Department of Interior generally agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans and tracking of reinvestments, the Secretary of the Interior should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of the Interior

  13. Status: Open

    Comments: The Department of Interior generally agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans and tracking of reinvestments, the Secretary of the Interior should direct the CIO to use existing governance mechanisms and any improvements resulting from the implementation of Federal Information Technology Acquisition Reform (FITARA) to improve tracking of how savings have been reinvested.

    Agency Affected: Department of the Interior

  14. Status: Open

    Comments: When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's tracking of reinvestments, the Secretary of Labor should direct the CIO to use existing governance mechanisms and any improvements resulting from the implementation of FITARA to improve tracking of how savings have been reinvested.

    Agency Affected: Department of Labor

  15. Status: Open

    Comments: When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of State should direct the CIO, as part of any future update to the department's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Department of State

  16. Status: Open

    Comments: When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of the Treasury should direct the CIO, as part of any future update to the department's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Department of the Treasury

  17. Status: Open

    Comments: When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of the Treasury should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to use any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of the Treasury

  18. Status: Open

    Comments: The Department of Veterans Affairs generally agreed with our recommendation. When we confirm what actions the department has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Veterans Affairs should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Department of Veterans Affairs

  19. Status: Open

    Comments: The Environmental Protection Agency agreed with our recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the agency's IT savings reinvestment plans, the Administrator of the Environmental Protection Agency should direct the CIO to ensure that the agency's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Environmental Protection Agency

  20. Status: Open

    Comments: The Nuclear Regulatory Commission agreed with our recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the agency's IT savings reinvestment plans, the Chairman of the U.S. Nuclear Regulatory Commission should direct the CIO, as part of any future update to the agency's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Nuclear Regulatory Commission

  21. Status: Open

    Comments: The Nuclear Regulatory Commission agreed with our recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the agency's IT savings reinvestment plans, the Chairman of the U.S. Nuclear Regulatory Commission should direct the CIO to ensure that the agency's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: Nuclear Regulatory Commission

  22. Status: Open

    Comments: The Office of Personnel Management agreed with our recommendation. When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the agency's IT savings reinvestment plans, the Director of the Office of Personnel Management should direct the CIO, as part of any future update to the agency's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: Office of Personnel Management

  23. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the agency's IT savings reinvestment plans, the Administrator of the U.S. Agency for International Development should direct the CIO, as part of any future update to the agency's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

    Agency Affected: United States Agency for International Development

  24. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve the agency's IT savings reinvestment plans, the Administrator of the U.S. Agency for International Development should direct the CIO ensure that the agency's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

    Agency Affected: United States Agency for International Development

 

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