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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Highlights
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.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | 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. |
Closed – Implemented
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.
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| Department of Agriculture | 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. |
Closed – Implemented
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.
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| Department of Agriculture | 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). |
Closed – Implemented
FmHA reported, in its December 1991 FMFIA report, the lack of an effective oversight mechanism for its ADP modernization program.
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Topics
Direct loansFarm income stabilization programsFinancial managementInformation systemsLoan accounting systemsManagement information systemsPlanningSystems conversionsSystems designBusiness systems modernization