ADP Modernization:

Half-Billion Dollar FmHA Effort Lacks Adequate Planning and Oversight

IMTEC-92-9: Published: Oct 29, 1991. Publicly Released: Oct 29, 1991.

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Pursuant to a congressional request, GAO reviewed the Farmers Home Administration's (FmHA) approach to managing its $520-million effort to modernize the automated systems it uses to make and collect loans, focusing on planning and oversight.

GAO found that: (1) federal standards state that information system modernization efforts should be based on an agency's long-term business plan, addressing strategy as well as long-term objectives; (2) the FmHA modernization plan does not establish a clear vision of how FmHA plans to operate in the future or reflect current changes in the FmHA organizational structure and loan management operations; (3) FmHA is modernizing its automated systems without an information system plan, and it has not defined its short- and long-term information needs or how those needs can be met; and (4) FmHA has an Executive Review Board responsible for reviewing and approving major information resource management (IRM) projects, but the board has been inactive for over 3 years and the agency is not using the mechanism it established to oversee modernization.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FmHA reduced its fiscal year 1992 and 1993 automatic data processing budgets by $158 million because it lacked a business plan and supporting information systems plan. FmHA has now completed these plans, and has modified its modernization effort as appropriate. Further, it provided an action plan to the Secretary of Agriculture which notes FmHA estimated timeframes for implementing these plans.

    Recommendation: In order to minimize the risks inherent in the FmHA modernization effort, the Secretary of Agriculture should direct the Administrator, FmHA, to refrain from starting any new modernization projects until FmHA: (1) develops a forward-looking business plan and supporting information systems plan; (2) assesses whether its current modernization efforts are consistent with these plans; (3) modifies its modernization efforts, as necessary, to ensure congruence with these plans; and (4) reports to the Secretary the results of its assessment of and modifications to the modernization effort.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: FmHA established a high level management group, the Automation Review Council, and assigned it responsibility for overseeing the modernization effort. This group met for the first time in February 1992. The group's charter states that the group can be supplemented by technical experts as needed.

    Recommendation: In order to minimize the risks inherent in the FmHA modernization effort, the Secretary of Agriculture should direct the Administrator, FmHA, to activate the Executive Review Board, or designate another body to oversee the modernization program and hold it accountable for overseeing the modernization effort. This body should be augmented with experts from banking and credit management, as well as experts in IRM.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: FmHA reported, in its December 1991 FMFIA report, the lack of an effective oversight mechanism for its ADP modernization program.

    Recommendation: In order to minimize the risks in the FmHA modernization effort, the Secretary of Agriculture should direct the Administrator, FmHA, to report the lack of effective oversight mechanisms as a material internal control weakness under the Federal Managers' Financial Integrity Act (FMFIA).

    Agency Affected: Department of Agriculture

 

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