oversight

Reliability of Cost and Benefit Information in the U.S. Department of Education's Information Technology Investment Exhibit 300s

Published by the Department of Education, Office of Inspector General on 2009-07-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             UNITED STATES DEPARTMENT OF EDUCATION
                                    OFFICE OF INSPECTOR GENERAL



                                                               July 30, 2009
                                                                                                    Control Number
                                                                                                    ED-OIG/A04H0018

Danny Harris
Chief Information Officer
Office of the Chief Information Officer
U.S. Department of Education
550 12th St. SW, Room 9112
Washington, DC 20202

Dear Mr. Harris:

The enclosed Final Audit Report, entitled, Reliability of Cost and Benefit Information in the U.S.
Department of Education’s Information Technology Investment Exhibit 300s presents the results of
the two audits 1 we performed on selected U.S. Department of Education (Department) Information
Technology (IT) exhibit 300s. The objectives of both audits were to determine whether the cost
information presented in the Department’s exhibit 300s, including the estimated benefits of system
development efforts, is 1) based on reasonably accurate, reliable, and complete cost and benefit
data; and 2) independently validated prior to submission to the Office of Management and Budget
(OMB). Our audits covered selected exhibit 300s submitted to OMB through September 2007 for
selected IT investments.

For a complete list of acronyms/abbreviations used in this report, see Appendix A.



                                                         BACKGROUND



The Department budgeted approximately $587.1 million2 to spend on IT investments for fiscal year
(FY) 2008. 3 The Department, along with other government agencies, is required to submit an
exhibit 300 Capital Asset Plan and Business Case (exhibit 300) to OMB each year for each major IT
investment in order to justify funding requests for the investments. Among other things, exhibit

1
  Audit Control Number (ACN) A04H0019 was a review of selected Federal Student Aid (FSA) IT Investment exhibit
300s, while ACN A04H0018 was a review of selected IT investment exhibit 300s from five other offices within the
Department. Since both audits have the same audit objectives and audit findings, and the exhibit 300s reviewed in both
audits fall under the ultimate responsibility of the Department’s Office of the Chief Information Officer, we combined
the results of both audits into this one report.
2
  Of the budgeted amount, $334.5 million was allocated to the five FSA IT investments we reviewed.
3
  The source for this figure is the Department’s FY 2009 Budget Exhibit 53.

    The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                      excellence and ensuring equal access.
Final Report
ED-OIG/A04H0018                                                                            Page 2 of 22

300s contain cost, schedule, and performance goals as it relates to the IT project. Also included in
exhibit 300s are controls that agencies have established to ensure good project management.

The primary office that develops policies and procedures for IT investment decisions and the
exhibit 300 approval process within the Department is the Office of the Chief Information Officer
(OCIO). This office advises and assists the Secretary and other senior officers in acquiring IT and
managing information resources. It also helps Department officials comply with applicable laws
and regulations, such as the Clinger-Cohen Act of 1996 (CCA). OCIO is responsible for providing
technical and support services to the Department’s Planning and Investment Review Working
Group (PIRWG) and Investment Review Board (IRB). OCIO’s Investment and Acquisition
Management Services (IAMS) team is responsible for providing IT investment information and
recommendations to the PIRWG and IRB.

The PIRWG assesses the effectiveness of the Department’s IT investment management process and
provides recommendations through the Chief Information Officer (CIO) to the IRB for refining and
improving the process. The PIRWG uses criteria such as proposals for investments, project funding
requests, and project progress and performance to analyze IT investment activities. The IRB is the
executive decision-making body for the Department’s IT investment management process. The
IRB reviews the IT investment proposals and recommendations of the CIO and finalizes all
decisions and corrective actions, ranging from initiation and modification through continuation or
termination of an IT investment. The IAMS team is responsible for providing liaison support to IT
project managers regarding business case justifications and the gathering and reporting of IT project
documentation. The IAMS team also receives, reviews, and coordinates the yearly submission of
the exhibit 300s to OMB.

Federal Student Aid (FSA) has an internal IT investment review process for its exhibit 300s prior to
submission to the Department. For a description of both the Department’s and FSA’s IT exhibit
300 approval processes, see Appendix B.

The management of IT investments is guided by the CCA, which was designed to ensure that the
Federal government’s acquisition and management of IT be operated in the same manner as an
efficient and profitable business. The CCA requires the Department and individual programs to use
performance based management principles for acquiring IT so that major IT investments are
properly planned, implemented, maintained, and evaluated; and accountability for performance is
enforced.

OMB provides guidance on management improvement initiatives and policies including capital
planning and investment control so that IT investments that directly support agency strategic
missions, employ an integrated planning, budgeting, and procurement process consistent with the
CCA. OMB Memorandum M-05-23 4 required all Federal agencies to 1) ensure that cost, schedule,
and performance goals were independently validated for all new major IT projects before beginning
development; and 2) complete independent validations by March 31, 2006 for ongoing major IT
projects with development efforts.



4
    OMB Memorandum M-05-23, Improving Information Technology Project Planning and Execution (August 4, 2005).
Final Report
ED-OIG/A04H0018                                                                                  Page 3 of 22

We reviewed 10 IT investments from 6 different offices within the Department, as shown in Table 1.
Because FSA is responsible for its administrative, accounting, and financial management functions
of all its IT contracts, we performed an audit of FSA’s exhibit 300s separately from other offices
within the Department. We selected five investments for review from FSA and one investment from
each of the other five offices.

                            Table 1 – IT Investments Selected for Review
                     Office                                       Investment Name
Office of Planning, Evaluation, and Policy
                                                Education Data Exchange Network (EDEN)5
Development (OPEPD)
                                                Education Department Utility for Communications,
OCIO                                            Applications, and Technical Environment
                                                (EDUCATE) 6
Office of the Chief Financial Officer (OCFO)    Integrated Support Services (ISS)
Office of Elementary and Secondary Education
                                                         Migrant Student Information Exchange (MSIX)
(OESE)
Institute of Education Sciences (IES)                    National Assessment of Educational Progress (NAEP)

                                                         Advance 7
                                                         Common Services for Borrowers (CSB)
FSA                                                      Enterprise Information System (EIS)
                                                         National Student Loan Data System (NSLDS) 8
                                                         Virtual Data Center (VDC)


For a description of the IT investments reviewed, see Appendix C.



                                             AUDIT RESULTS



We found that the Department did not always report reliable and complete cost data in its exhibit
300s. Specifically, four of the six offices with investments reviewed did not report cumulative
project costs 9 in exhibit 300s. In addition, four 10 of the six offices did not maintain sufficient
5
  EDEN was formerly called Performance-Based Data Management Initiative (PBDMI).

6
  EDUCATE was formerly called EDNet; Combined Office Automation (COA); and Network Operations (NetOps).

7
  In FY 2006, ADvance-Aid Delivery, formerly named Front-End Business Integration, split off into two investments,

with one investment remaining ADvance Aid-Delivery and the other investment named ADvance Development. In FY

2007 ADvance Development was renamed ADvance Person Data Management Although two separate exhibit 300s

were submitted for ADvance Aid Delivery and ADvance Person Data Management in FY 2007, for reporting purposes,

we categorize all iterations of the ADvance investment as ADvance.

8
  Includes FSA’s NSLDS re-engineering effort, which was later terminated.

9
  Cumulative project costs are required in the column labeled “PY-1 and Earlier” in the exhibit 300. Past Year (PY)-1 

and Earlier refers to the fiscal year immediately preceding the past year and all years earlier, which we refer to as

“cumulative project costs” in this report.

10
   Three of the four offices were the same in both findings.

Final Report
ED-OIG/A04H0018                                                                                  Page 4 of 22

documentation to support the accuracy, reliability, and completeness of the summary of spending
tables included in the exhibit 300s. Of the four offices, two did not maintain sufficient support for
the benefits information. Without complete, historical cost information and supporting
documentation, we could not verify the estimated costs and benefits information included in the
exhibit 300s, nor could we assure that the exhibit 300s reviewed included estimates of all
reasonable costs and benefits related to the initiative. As such, the Department and OMB could be
making investment decisions based on unreliable cost and benefit information, and without full
consideration of the entire cost of the project.

In general, we found that all six offices 11 reviewed complied with OMB’s 2005 validation
requirements 12 for exhibit 300 costs, with the performance of either an independent validation or an
Integrated Baseline Review (IBR). An IBR 13 is a formal review conducted jointly by the
government program manager and technical staff and their contractor counterparts to verify the
technical content of the performance measurement baseline and the accuracy of the related resource
(budgets) and schedules.

In its comments to the draft audit report, OCIO concurred with the finding and recommendations.
OCIO stated that in April 2008, it provided an FY 2010 Exhibit 300 Guidance document to all
project managers. However, the guidance was not discussed during our audit, nor was it provided
when we updated our audit information in February 2009, at which time we specifically requested
any updated information related to the finding and recommendations. Subsequent to receiving
OCIO’s comments, we requested a copy of the guidance. In our review of the April 2008 guidance;
we found that it addresses reporting cumulative project costs and estimated benefits. However, the
guidance does not address the maintenance of supporting cost and benefit information, nor does it
include requirements to promote adherence to the guidance, both of which are critical to addressing
the finding and recommendations included in this report. OCIO stated that it will address
strengthening guidance in the corrective action plan (CAP). The full text of OCIO’s comments is
included as an attachment to this report.


FINDING - Inconsistent Reporting of Cumulative Project Costs and
          Insufficient Documentation in Support of Reported Costs and
          Benefits

We found that 4 of the 6 selected offices (OCFO, OESE, IES, and FSA) within the Department did
not report cumulative project costs in 14 of 55 total exhibit 300s reviewed for the 10 selected
investments. Of the 55 exhibit 300s, we judgmentally selected 27 14 to verify the accuracy and

11
   The only exception was FSA’s Enterprise Information System exhibit 300 submitted in fiscal year 2007. Since this

was the only exhibit 300 that did not undergo independent validation out of the 27 exhibit 300s reviewed for supporting

documentation, we did not consider it material and, therefore, are not reporting it as a finding. Instead, we informed 

FSA of the issue at the exit meeting.

12
   OMB Memorandum M-05-23, Improving Information Technology Project Planning and Execution (August 4, 2005). 

13
   According to OMB Memorandum M-05-23, Improving Information Technology Project Planning and Execution

(August 2005), IBRs can be done in lieu of independent validation.

14
   The 27 selected exhibit 300s include the first exhibit 300 submitted to OMB under the 10 investments’ current name;

the most recently submitted exhibit 300 under the investments’ current name; and if the investments had former names,

we selected the last exhibit 300 submitted under each of the former names.

Final Report
ED-OIG/A04H0018                                                                                    Page 5 of 22

reliability of the costs and benefit information included in the exhibit 300s. We found that 4 of 6
offices (OCIO, OCFO, IES, and FSA) did not maintain sufficient documentation supporting costs in
15 of the 27 exhibit 300s reviewed. In addition, 2 of the 6 offices (OCIO and FSA) did not
maintain adequate support for benefits reported in 7 15 of the 27 exhibit 300s reviewed.

Cumulative Project Costs not Reported in Exhibit 300s
In comparing cumulative project costs reported in an investment’s exhibit 300 with the amount
reported in the investment’s previous exhibit 300s, we found that OCFO, OESE, IES, and FSA did
not report cumulative project costs in 14 of the 44 exhibit 300s reviewed from those 4 offices.
Table 2 shows the number of exhibit 300s that do not contain cumulative project costs for each of
the four offices in question (OCFO, OESE, IES, and FSA).

                       Table 2 - Exhibit 300s with Non-cumulative Project Costs
                                                                            Number of Exhibit 300s that
                             Investment        Number of Exhibit
        Office                                                              do not Contain Cumulative
                               Name             300s Reviewed (a)
                                                                                 Project Costs (b)
          OCFO                   ISS                      9                                   7
          OESE                  MSIX                      3                                   1
           IES                  NAEP                      5                                   2
                               NSLDS                      6                                   2
                                VDC                       6                                   1
           FSA                 ADvance                    5                                   0
                                 CSB                      5                                   1
                                 EIS                      5                                   0
                   Totals                                 44                                 14
 (a) We also reviewed 5 EDUCATE exhibit 300s and 6 EDEN exhibit 300s, which are not shown in the table
     because we did not identify any cumulative cost issues in those exhibit 300s. Therefore, in total we reviewed
     55 (44+5+6) exhibit 300s, 14 of which did not contain cumulative project costs for prior years.
 (b) The 14 exhibit 300s that did not contain cumulative projects costs are listed in Appendix D.


With the exception of NAEP, the project managers 16 agreed that for 9 of the 14 exhibit 300s
identified, the amounts reported in the cumulative project cost column were not cumulative and
were inconsistently reported. FSA’s IT Liaison stated that when the exhibit 300s were first
developed, they did not include information from previous contracts or iterations of the investment;
but, for newer investments they have tried to capture all expenditures. In addition, according to the
December 2006 IRB meeting minutes, the Under Secretary stated that very few project managers
were maintaining up-to-date cost information in the Electronic Capital Planning and Investment
Controls System (eCPIC), which is a web-based application used to create and maintain exhibit
300s. The Director of the Contract Performance Analysis and Oversight Group stated that the CSB
exhibit 300 did not include up-to-date cost information in eCPIC, which resulted in inaccurate
cumulative project costs for CSB’s FY 2007 exhibit 300.

15
   Of the seven exhibit 300s with unsupported benefit information, six are also included in the number of exhibit 300s

that contain unsupported cost information.

16
   Project Managers for the ISS and MSIX investments only.

Final Report
ED-OIG/A04H0018                                                                                  Page 6 of 22


The project manager for NAEP agreed that the amounts reported in the cumulative project cost
column included in the Budget Year (BY) 2007 NAEP exhibit 300 were not cumulative but did not
agree that the reported project costs in the BY 2009 NAEP exhibit 300 were not cumulative.
However, because the NAEP project manager did not provide a sufficient explanation for no
increase in cumulative project costs reported in the BY 2009 exhibit 300 from that reported in the
BY 2008 exhibit 300, 17 we classified the BY 2009 exhibit 300 as not including total cumulative
project costs.

OMB requires agencies to complete the exhibit 300 summary of spending table. The table includes
both estimated project costs and expended costs. The cumulative project cost column of the
spending table should include costs incurred since the inception of the project. When non­
cumulative projects costs or no costs are entered into that column, OMB and other interested parties
do not have accurate historical cost information to use in investment funding decisions; and,
therefore, may be making decisions based on incomplete project cost data.

Supporting Cost and Benefit Documentation not Maintained for Exhibit 300s
In reviewing supporting cost and benefit documentation, or both, for a total of 27 selected exhibit
300s, from 6 Department offices, we found that 4 offices (OCIO, OCFO, IES, and FSA) did not
maintain sufficient documentation to adequately support the costs in the summary of spending
tables presented in 15 of the exhibit 300s. Of the 15 exhibit 300s with unsupported summary of
spending tables, 9 were completely unsupported, 3 were 41 to 68 percent unsupported, and 3 were
12 to 16 percent unsupported. We considered summary of spending tables and benefits information
to be adequately supported if at least 90 percent of the costs and benefits were supported with
sufficient 18 documentation (i.e., a 10 percent threshold).

Of the 27 exhibit 300s reviewed, estimated benefits was required to be reported for 20 of the exhibit
300s. However, only 16 of the 20 exhibit 300s contained estimated benefits, as required; and 1
exhibit 300 (BY 2009 EDUCATE) that did not require estimated benefits, actually included
estimated benefits. Of the 17 exhibit 300s that contained estimated benefits, 14 contained estimated
quantitative benefits, while the other 3 contained qualitative benefits. In reviewing supporting
documentation for the 14 exhibit 300s that contained estimated quantitative benefits, we found that
2 offices (OCIO and FSA) did not maintain sufficient documentation to support any of the
estimated quantitative benefits presented in 7 of the 14 exhibit 300s. Table 3 on the following page
summarizes the number of exhibit 300s, by investment, for which sufficient supporting cost and
benefit documentation, or both, was not maintained.




17
  Funds used in BY 2008 should have increased the cumulative project cost for the project in the BY 2009 exhibit 300.
18
  Examples of sufficient supporting cost and benefit documentation provided to the audit team include task orders,
contracts, bids, proposals, Independent Government Cost Estimates, invoices, receiving reports, purchase requisitions,
Cost Benefit Analyses, Alternative Analysis Life Cycle Cost Summary, and Net Present Value Tables.
Final Report
ED-OIG/A04H0018                                                                                  Page 7 of 22

Table 3 - Summary of Exhibit 300s with Unsupported Cost/Spending Tables and Benefits
                                                                             Number of
                                                     Number of                                     Number of
                                   Number                                   Exhibit 300s
                                                  Exhibit 300s with                             Exhibit 300s with
                                  of Exhibit                                    with
     Office    Investment                           Unsupported                                   Unsupported
                                     300s                                    Estimated
                                                    Summary of                                     Estimated
                                  Reviewed                                  Quantitative
                                                   Spending Table                                   Benefits
                                                                              Benefits
  OCIO           EDUCATE                4                    4                      1                     1(a)
                                          b
 OCFO                ISS               1( )                  1                     0                      0
   IES              NAEP                2                    1                      1                     0
 OPEPD              EDEN                3                    0                      3                     0
 OESE               MSIX                2                    0                      1                     0
  FSA             ADvance               4                    1                      0                     0
  FSA                VDC               2                     1                     1                      1
  FSA                CSB               3                     1                     2                      0
  FSA                EIS                3                    3                      3                     3
  FSA              NSLDS               3                     3                     2                      2
              Totals                   27                   15                     14                     7
(a) Although not required, OCIO reported estimated benefits for the BY 2009 EDUCATE exhibit 300. OCIO should
    have maintained documentation to support the estimated benefits. OMB Circular A-11, Part 7, Section 300 –
    Planning, Budgeting, Acquisition, and Management of Capital Assets (2007,) states that “If additional supporting
    information is necessary, OMB will request from agencies the supporting evidence used to produce the exhibit
    300. All information necessary to complete an exhibit 300 should already exist as part of the agency's overall
    Information Resources Management activities and within project specific documentation. The materials used to
    produce the exhibit 300 should be readily available to OMB upon request.”
(b) We had originally tested 2 ISS exhibit 300s, including the initial and the most recent ones. However, the
    Department has a 7-year record retention policy. We are not reporting the initial ISS exhibit 300 even though no
    supporting documentation was provided, because it is more than 7 years old and therefore not subject to the record
    retention policy.

For detailed information on the amount and percentage of unsupported costs and benefits for each
of the exhibit 300s in question and explanations on why the costs and benefits were not sufficiently
supported, see Appendix E.

The 4 exhibit 300s that did not include the required estimated benefits were MSIX BY 2007,
EDUCATE BY 2007, 19 and ADvance BY 2008 and BY 2009. OMB Circular A-11, Part 7, Section
300 - Planning, Budgeting, Acquisition, and Management of Capital Assets (2005), with respect to
the completion of BY 2007 exhibit 300s, states –
           IT investments, both ongoing and pre-existing investments reporting through the
           budget process, must complete Parts I and II.

Part I.E of exhibit 300s submitted in FY 2005 for BY 2007 states –




19
     Called Combined Office Automation for BY 2007.
Final Report
ED-OIG/A04H0018                                                                      Page 8 of 22

       In order to successfully address this area of the business case, you must include
       three viable alternatives that were compared consistently, identify the alternative
       chosen, and provide benefits and reasons for your choice.”

In addition, OMB Circular A-11, Part 7, Section 300 - Planning, Budgeting, Acquisition, and
Management of Capital Assets (2006 and 2007), with respect to the completion of BY 2008 and BY
2009 exhibit 300s, states –
       Part II should be completed only for investments identified as “Planning” or “Full
       Acquisition,” or “Mixed Life-Cycle” investments… In selecting the best capital
       asset, you should identify and consider at least three viable alternatives. . . Use
       the results of your alternatives analysis to complete the following table.

The alternative analysis table includes the reporting of a risk adjusted lifecycle benefits estimate.

OESE and OCIO were required to complete Part I of the BY 2007 exhibit 300s submitted for the
MSIX and EDUCATE investments, respectively. However in completing Part I, OESE and OCIO
did not provide benefits for the selected alternatives as required by instructions provided in Part I.E
of the exhibit 300. In addition, FSA was required to complete Part II of the BY 2008 and BY 2009
exhibit 300s submitted for the ADvance investment. However, FSA did not conduct alternative
analyses to include estimated benefits in Part II of the exhibit 300s, as instructed by OMB Circular
A-11.

The project managers and other responsible officials for the investments reviewed presented several
reasons for not providing sufficient documentation to support estimated costs and benefits presented
in exhibit 300s. The reasons provided included –
-   former project managers who were responsible for the unsupported exhibit 300s no longer work
    for the Department, and the supporting documentation could not be located; and
-   supporting documentation was lost because of a computer hard disk crash.

For 4 of the 5 FSA investments reviewed, staff, other than the project manager, prepared and
maintained the exhibit 300s, but did not maintain sufficient documentation supporting the
information included in the exhibit 300s. In discussing training with three of the four non-project
managers who prepared the exhibit 300s, all three confirmed that the training they received did not
address the maintenance of documentation needed to support the cost information reported in
exhibit 300s.

The CCA requires agencies to use performance based management principles for acquiring IT so
that major IT investments are properly planned, implemented, maintained, and evaluated –
enforcing performance accountability. In response to the CCA and other statutes, OMB developed
a policy for planning, budgeting, acquiring, and managing Federal capital assets. This policy, set
forth in OMB Circular A-11, Part 7, Section 300 – Planning, Budgeting, Acquisition, and
Management of Capital Assets (2007) states that –

       OMB uses the exhibit 300 to make both quantitative decisions about budgetary
       resources consistent with the Administration’s program priorities, and qualitative
Final Report
ED-OIG/A04H0018                                                                                  Page 9 of 22

        assessments about whether the agency’s programming processes are consistent with
        OMB policy and guidance. OMB will be evaluating all elements of the business
        cases and will communicate the results of these evaluations in the course of the
        budget process. If additional supporting information is necessary, OMB will request
        from agencies the supporting evidence used to produce the exhibit 300. All
        information necessary to complete an exhibit 300 should already exist as part of the
        agency's overall Information Resources Management activities and within project
        specific documentation. The materials used to produce the exhibit 300 should be
        readily available to OMB upon request.

The guidance further states that –

        Following budget season, agencies should update their agency’s exhibit 300s
        submitted during budget submission to reflect final Presidential decisions…agencies
        should continuously maintain updated information about the projects contained in
        the exhibit 300. OMB may request this information at any time.

According to the Departmental Directive OCIO: 3-108 – IT Investment Management Policy
(September 15, 2006), there are three 20 groups within the Department with the responsibility for
managing, coordinating, and choosing IT investments – IAMS, the IRB, and the PIRWG.
However, none of the groups review IT exhibit 300s for accuracy and consistency, nor do they
review the documentation used to support the cost information presented in the exhibit 300s. In
addition, OCIO does not have written policies for maintaining supporting documentation, nor does
it have guidance on what type of documentation is sufficient to support estimated costs presented in
exhibit 300s. As a result, OCIO has no controls in place to ensure that sufficient documentation is
maintained to support the estimated costs and benefits and cumulative project costs in exhibit 300s.

Inaccurate historical cost information and insufficient supporting documentation for the exhibit
300s reviewed raises questions as to the justification provided for the investment and the resulting
management decisions based on this information. The lack of documentation provided in support of
cost and benefit information reported in the Department’s exhibit 300s indicates an underlying
weakness in the management of IT investments with respect to management’s processes and
controls. As a result, the Department and OMB could be making investment decisions based on
inaccurate and unreliable cost and benefit information, or both; and may not be considering the
entire cost of a project in evaluating competing projects in other categories of investment. Without
cumulative project cost information, OMB is not receiving complete and accurate information on
investment expenditures to make quantitative decisions about budgetary resources consistent with
the Administration’s program priorities and qualitative assessments about whether the Department’s
programming processes are consistent with OMB policy and guidance.

In March 2009, the Government Accountability Office (GAO) released a new guide entitled Cost
Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program
Costs (GAO-09-3SP). The guide formalizes an approach to cost estimating based on best practices,
which is intended to help agencies produce well-documented, comprehensive, accurate, and

20
  A description of the responsibilities for each of the three groups – IAMS, IRB, and PIRWG – is included in the
Background section of this letter.
Final Report
ED-OIG/A04H0018                                                                                  Page 10 of 22

credible estimates for capital program costs. The guide lays out a multi-step process for developing
high-quality trustworthy cost estimates and explains how to manage program costs once a contract
has been awarded. The guide is intended to assess the accuracy of agencies’ cost estimates and
determine whether programs are on schedule.

Recent legislation, including the Ensuring Continued Access to Student Loans Act of 2008, 21 have
created a need for new IT investments and increased demand on existing IT investments, or both.
As such, it is critical that the Department establish policies and procedures for developing,
managing, and documenting investment costs so that both the Department and OMB have accurate
and reliable information to use in making investment decisions and in evaluating competing
projects. In addition, all Department offices need to obtain and maintain adequate supporting cost
documentation to help avoid the issues identified in our audit.

In February 2009, we asked both OCIO and FSA to provide us with documentation regarding any
updated information, including policies and procedures, to address the findings and
recommendations presented during the exit conferences. OCIO provided documentation for a new
process they were implementing called Program Assessment. The purpose of Program Assessment
is to measure project management effectiveness and efficiency through the combined analysis of
assessment criteria, such as planning, scheduling, and budgeting; business case support and
achievement; project management process and tools; and corrective actions and data maintenance.
Currently, OCIO is collecting supporting documentation for the Program Assessment of 14 major
investment business cases, and plans to analyze those business cases to determine whether active
core management functions are in place and whether corrective actions are needed. However, the
Program Assessment does not address the documentation issues identified in the report – non­
cumulative project costs and insufficient documentation of supporting costs and benefits reported in
exhibit 300s reviewed. With the potential for new IT investments to address recent legislation, it is
critical that OCIO immediately begin maintaining documentation in support of the cost and benefit
information included in exhibit 300s to ensure that investment decisions are based on reasonably
accurate, reliable, and complete cost and benefit data.

According to FSA's CIO, FSA is revising parts of its IT investment process. FSA provided a
February 2009 draft of its Capital Planning and Investment Review Team Charter. However, this
charter did not address maintaining sufficient documentation to support the estimated costs and
benefits presented in exhibit 300s.

RECOMMENDATIONS

We recommend that OCIO –

1.1	    Develop and implement policies and procedures to ensure that IT project managers and
        other staff involved in the exhibit 300 process are consistent in reporting cumulative project
        costs years in exhibit 300s.



21
 Legislation authorizing the Department to purchase Federal student loans from lenders to ensure ongoing liquidity and
availability of funds to student loans.
Final Report
ED-OIG/A04H0018                                                                     Page 11 of 22

1.2	   Develop and implement policies and procedures to ensure that IT project managers and
       other staff involved in the exhibit 300 process maintain accurate, reliable, and complete cost
       and benefit data to support estimated costs and benefits presented in exhibit 300s, using
       GAO’s new Cost Estimating and Assessment Guide as a reference.

1.3	   Develop and implement policies and procedures that include requirements for compliance
       that link to performance standards in order to promote adherence to its April 2008 FY 2010
       Exhibit 300 Guidance document and all future exhibit 300 guidance documents.

1.4	   Ensure that estimated benefits are reported in exhibit 300s when required.

1.5	   Require IAMS to request and consider the documentation used to support all exhibit 300s
       received from the principal offices during its review process.

Auditee Comments
In its comments to the draft audit report, OCIO concurred with the finding and recommendations.
In response to the recommendations, OCIO stated that, in April 2008, it provided an FY 2010
Exhibit 300 Guidance document to all project managers that addressed the reporting of cumulative
project cost, and the performance and reporting of alternatives analyses, including the requirement
for benefits associated with each alternative reported. OCIO stated that it will address strengthening
guidance and adherence to the guidance in the CAP. In addition, OCIO stated that it will address the
creation and management of a document repository for supporting documentation in the CAP.

OIG Response
OCIO plans to strengthen the FY2010 Exhibit 300 Guidance document to address the deficiencies
identified during our audit period. In strengthening the guidance, OCIO needs to address the
maintenance of accurate, reliable, and complete cost and benefit data to support estimated costs and
benefits presented in exhibit 300s; and include requirements to promote adherence to the guidance.
Unless project managers are held accountable for adhering to the guidance, the deficiencies in
exhibit 300s may very well continue. Therefore, we added a new recommendation that OCIO’s
current guidance and any future exhibit 300 guidance include requirements for compliance that link
to performance standards in order to promote adherence (Recommendation 1.3). In addition, we
reiterate the importance of referring to GAO’s Cost Estimating and Assessment Guide when
developing the CAP to strengthen OCIO’s guidance; and encourage OCIO to include the
information in its exhibit 300 guidance document in written policies and procedures for project
managers.
Final Report
ED-OIG/A04H0018                                                                                 Page 12 of 22


                                           OTHER MATTERS



FSA’s Exhibit 300s Were Inconsistent with the Budget Submission

OMB held a meeting in October 2007 with both OCIO and FSA officials to discuss discrepancies
OMB identified with FSA’s exhibit 300s submitted for FY 2007 / BY 2009. According to OMB
Circular A-11, Part 7, Section 300 – Planning, Budgeting, Acquisition, and Management of Capital
Assets (2007) the exhibit 300 must be submitted with an agency’s budget submission and should be
fully integrated with an agency’s overall budget submission. In addition, the Department’s IT
Investment Management Process Guide (September 2005), states that the OCIO is responsible for
working with Budget Services to coordinate the preparation of the IT exhibit 300s to ensure that
they reflect funding decisions that were made during the Select Phase 22 and that they are developed
and submitted in accordance with the budget submission process. Although OMB and Department
guidance discusses linking the exhibit 300s with the budget process, neither state that the costs
reported in the exhibit 300s must match the corresponding budget submission. However, FSA’s
Director of Budget Group stated that based on the discussion with OMB, exhibit 300 cost data and
the budget numbers should match at certain times during the year.

According to FSA’s IT Liaison, the exhibit 300 numbers should match with the budget in
September, when exhibit 300s are submitted, in December, and during the summer when upfront
estimates are needed for investments. FSA’s IT Liaison stated that in previous years, the project
managers and other staff worked with FSA’s budget group to ensure that the numbers contained in
both the exhibit 300s and the budget matched; however, for FY 2007 FSA received information
from the Department’s budget office that the budget and exhibit 300 numbers did not necessarily
need to match. According to the IAMS Director, the numbers FSA reported in its FY 2007 exhibit
300s continued to change up until the Department submitted the final versions to OMB. Both the
IAMS Director and FSA’s IT Liaison stated that, based on the discussions with OMB, FSA agreed
to update and resubmit all of its FY 2007 exhibit 300s to ensure that the budget numbers match the
exhibit 300s submitted.

Given the issues that OMB had with FSA’s FY 2007 / BY 2009 exhibit 300s, the Department
should clarify its guidance regarding the relationship between the exhibit 300 and budget numbers
reported to OMB.



                      OBJECTIVES, SCOPE, AND METHODOLOGY



The objectives of our audits were to determine whether the cost information presented in the
Department’s submission for exhibit 300s, including the estimated benefits of system development
22
  The process the Department and Principal Offices use to determine priorities and make decisions about which
initiatives (new and ongoing) they will fund and include in the IT portfolio.
Final Report
ED-OIG/A04H0018                                                                                Page 13 of 22

efforts, is 1) based on reasonably accurate, reliable, and complete cost and benefit data; and 2)
independently validated prior to submission to OMB. Our audit covered exhibit 300s submitted to
OMB through September 2007 for selected IT investments.

To determine the policies, procedures, and controls over the Department’s IT exhibit 300 process,
we obtained and reviewed laws, regulations, policies, procedures, and guides. We also interviewed
the Chairman of the IRB, the Chairman of the PIRWG, and the Director of IAMS to determine their
policies and procedures for approving/managing exhibit 300s and providing guidance to the project
managers. In addition, we interviewed the project managers and other staff responsible for the IT
investments and creation of the exhibit 300s included in our review. Within FSA, we interviewed
FSA’s CIO, Deputy CIO, and IT Liaison. We also discussed selected aspects of the exhibit 300s
process with the OMB’s Assistant General Counsel and a Policy Analyst within OMB’s Office of
Information and Regulatory Affairs.

To determine the accuracy, reliability, and completeness of the costs and benefits reported in exhibit
300s, we selected a judgmental sample of 6 of the 7 offices within the Department that were
responsible for the preparation of the 29 exhibit 300s submitted to OMB in September 2007 for BY
2009. The selected offices include OPEPD, OCIO, OCFO, OESE, IES, and FSA. The only office
that was not chosen for review was the Office of Management (OM) because its exhibit 300 IT
investments represented less than $1 million dollars. We then judgmentally selected 10 of the 29
investments for which an exhibit 300 was submitted to OMB in September 2007. From five of the
selected offices (OPEPD, OCIO, OCFO, OESE, and IES), we judgmentally selected one IT
investment from each office. The investments selected were those that had the highest FY 2009
budget from each office. The selected investments were EDEN, EDUCATE, ISS, MSIX, and
NAEP. From the sixth selected office (FSA) we selected five investments for review, by selecting
the investments with the highest FY 2009 budget. The five selected investments from FSA include
ADvance (which includes ADvance-Aid Delivery and ADvance Person Data Management), CSB,
EIS, NSLDS, and VDC.

To determine whether cumulative project costs were reported, as opposed to non-cumulative project
costs, we reviewed all exhibit 300s pertaining to the 10 investments selected for review, which
totaled 55 exhibit 300s. We compared the cumulative project costs reported in an investment’s
exhibit 300 with the cumulative project costs reported in the previous exhibit 300 and questioned
any discrepancies. For example, if an investment’s exhibit 300 submitted in 2002 reports
$5,000,000 of cumulative project costs and the investment’s exhibit 300 submitted in 2003 reports
only $1,000,000 for cumulative project costs, we asked the project manager to explain the
difference – whether the figure is an error or whether there is a legitimate reason for the decrease in
cumulative project costs.

To determine whether supporting documentation was maintained for the costs and benefits reported
in the selected investments’ exhibit 300s, we obtained and reviewed 27 of the exhibit 300s
belonging to the 10 selected investments. We selected the first exhibit 300 submitted to OMB
under the investments’ current name (provided the exhibit 300 is not more than 7 years old); 23 the


23
  According to General Record Schedule 27 - Records of the Chief Information Officer, Item 3, IT Capital Investment
Records: “…routine and periodic reports on IT capital investments, capital asset plans, business cases for major
Final Report
ED-OIG/A04H0018                                                                                      Page 14 of 22

most recently submitted exhibit 300 under the investment’s current name; and if the investment had
former names, selected the last exhibit 300 submitted under each of the former names. In addition,
for the selected exhibit 300s that were subject to OMB’s 2005 validation requirements, we obtained
and reviewed documentation supporting independent validation of the exhibit 300s or
documentation supporting an IBR (which can be done in lieu of independent validation).

Of the $587.1 million that the Department budgeted for IT investments in FY 2008, $501.9 million
represented exhibit 300 IT investments and the remaining $85.2 million represented minor
investments, for which an exhibit 300 is not required. The investments we selected for review
accounted for $386.9 million of the $501.9 million budgeted for exhibit 300 IT investments in
FY 2008.

We did not conduct testing of data reliability of computer processed data because we did not rely on
any computer processed data to satisfy our audit objectives.

Our audit work was completed in Washington, D.C., and Atlanta, Georgia. We assessed the exhibit
300 investments based on OMB guidance in performance-based project management, as applied to
system development projects. We conducted our fieldwork at the applicable Department offices
from September 2007 through May 2008. An exit conference was held with selected officials from
OPEPD, OCIO, OCFO, OESE, and IES on May 9, 2008. An exit conference was held with selected
FSA officials on May 20, 2008. In February 2009, we updated the information in our review and
requested that both OCIO and FSA provide us with documentation related to the findings and
recommendations presented during the exit conferences, including any updated policies and
procedures.

We conducted these performance audits in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform audits to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.



                                    ADMINISTRATIVE MATTERS



Corrective actions proposed (resolution phase) and implemented (closure phase) by your office will
be monitored and tracked through the Department’s Audit Accountability and Resolution Tracking
System (AARTS). The Department’s policy requires that you develop a final CAP for our review
in the automated system within 30 days of the issuance of this report. The CAP should set forth the
specific action items, and targeted completion dates, necessary to implement final corrective actions
on the findings and recommendations contained in this final audit report. An electronic copy of this
report has been provided to your Audit Liaison Officer(s).


investments, systems, acquisitions, or operational assets identified in the agency's capital investment portfolio; and
clearance and review records…can be destroyed/deleted when 7 years old or when no longer needed.”
Final Report
ED-OIG/A04H0018                                                                   Page 15 of 22

In accordance with the Inspector General Act of 1978, as amended, the Office of Inspector General
is required to report to Congress twice a year on the audits that remain unresolved after six months
from the date of issuance.

Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report, represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken will be made by the appropriate Department of
Education officials.

In accordance with the Freedom of Information Act (5 U.S.C. §552), reports issued by the Office of
Inspector General are available to members of the press and general public to the extent information
contained therein is not subject to exemptions in the Act.

If you have any questions, please call Denise M. Wempe at 404-562-6477.

                                             Sincerely,
                                             /s/
                                             Keith West
                                             Assistant Inspector General for Audit
Attachment
Final Report
ED-OIG/A04H0018                                                              Page 16 of 22

Appendix A – Acronyms/Abbreviations Used in this Report

ACN           Audit Control Number
BY            Budget Year
CCA           Clinger-Cohen Act of 1996
CIO           Chief Information Officer
COA           Combined Office Automation
CSB           Common Services for Borrowers
CSC           Computer Sciences Corporation
CAP           Corrective Action Plan
eCPIC         Electronic Capital Planning and Investment Controls
Department    U.S. Department of Education
EDEN          Education Data Exchange Network
EDUCATE       Education Department Utility for Communications, Applications, and Technical Environment
EIS           Enterprise Information System
ELT           FSA’s Executive Leadership Team
Exhibit 300   Exhibit 300 Capital Asset Plan and Business Case
FSA           Federal Student Aid
FY            Fiscal Year
GAO           Government Accountability Office
GCE           Government Cost Estimate
IAMS          Investment and Acquisition Management Services
IBR           Integrated Baseline Review
IES           Institute of Education Sciences
IGCE          Independent Government Cost Estimate
IMC           FSA’s Investment Management Council
IRB           Investment Review Board
ISS           Integrated Support Services
IT            Information Technology
MSIX          Migrant Student Information Exchange
NAEP          National Assessment of Educational Progress
NetOps        Network Operations
NSLDS         National Student Loan Data System
OCFO          Office of the Chief Financial Officer
OCIO          Office of the Chief Information Officer
OESE          Office of Elementary and Secondary Education
OM            Office of Management
OMB           Office of Management and Budget
OPEPD         Office of Planning, Evaluation, and Policy Development
PBDMI         Performance-Based Data Management Initiative
PIRWG         Planning and Investment Review Working Group
PY            Past Year
VDC           Virtual Data Center
Final Report
ED-OIG/A04H0018                                                                                  Page 17 of 22

Appendix B – Information Technology (IT) Investment Exhibit 300 Approval
Process
Description of the U.S. Department of Education (Department’s) Exhibit 300 Approval
Process


•	 The Investment and Acquisition Management Services (IAMS) is the group within the Office of
   the Chief Information Officer (OCIO) that receives the IT exhibit 300s from offices within the
   Department. IAMS reviews the exhibit 300s to ensure that all questions are answered with a
   valid/appropriate response. The team then takes the exhibit 300s through two rounds 24 of
   scoring, which is based on strengths and weaknesses identified. IAMS suggests remedies for
   weaknesses identified; however, the project managers for the affected investments are not
   required to implement the suggestions.

•	 After IAMS’s review, the exhibit 300s are passed on to another group within OCIO, called the
   Planning and Investment Review Working Group (PIRWG). The PIRWG reviews the exhibit
   300s for weaknesses and involves several offices of expertise such as the information assurance
   office, budget service office, and private sector, in order to verify that the information included
   in the exhibit 300s are valid/appropriate.

•	 After the PIRWG’s review and approval of all IT exhibit 300s, a portfolio of the exhibit 300s is
   sent to OCIO’s Investment Review Board (IRB). The portfolio does not contain the actual
   exhibit 300s because the IRB does not review each individual exhibit 300. Rather, the portfolio
   contains items such as Business Case Scorecard Summaries and summary sheets 25 for each
   investment included in the portfolio. The IRB reviews the portfolio, minutes from previous IRB
   meetings, and proposed recommendations from the PIRWG to make the decision on whether to
   approve or disapprove the entire portfolio. Once the IRB approves the portfolio, OCIO submits
   the individual exhibit 300s to the Office of Management and Budget.

Description of Federal Student Aid’s (FSA’s) Exhibit 300 Approval Process Prior to
Submission to the Department

FSA’s business cases are reviewed internally by both FSA’s Investment Management Council
(IMC) and Executive Leadership Team (ELT). Based on FSA’s IT Liaison’s description of the
ELT and IMC’s review process, this procedure does not include a review of the documentation
supporting the business case. After FSA’s IMC and EMT approve its business case portfolio, it is
forwarded to the Department’s PIRWG, which reviews and makes recommendations regarding the
investment before forwarding to the Department’s IRB for its review and approval. According to
the Director for IAMS, neither OCIO nor the IRB review supporting documentation for costs
reported in the business cases. Further, according to the Chairman of the Department’s PIRWG, the
working group reviews only the business case and not the supporting documentation.

24
   FSA’s Investment Management Council and Executive Leadership Team review and approve all of FSA’s exhibit

300s prior to being forwarded to the Department for scoring.

25
   Summary sheets generally include estimated and historical costs, scoring, and action items addressing weaknesses

identified.

Final Report
ED-OIG/A04H0018                                                                    Page 18 of 22

Appendix C – Description of the Information Technology Investments Reviewed

•	 Education Data Exchange Network investment under the Office of Planning, Evaluation, and
   Policy Development is internet based, and collects elementary and secondary education data
   from state education agencies, for use in planning, policy, and management at the Federal, State,
   and local levels.

•	 Education Department Utility for Communications, Applications, and Technical Environment
   investment under the Office of the Chief Information Officer is responsible for providing
   operational services for the Department, such as security and privacy, desktop, helpdesk
   support, system/data center operations, email, and disaster recovery.
•	 Integrated Support Services investment under the Office of the Chief Financial Officer is a
   project responsible for providing support services to the Department’s integrated financial
   management solution called the Education Central Applications Processing System.
•	 Migrant Student Information Exchange investment under the Office of Elementary and
   Secondary Education is a system for providing electronic transfer of student records and
   determining the number of migratory children in each State.

•	 National Assessment of Educational Progress investment under the Institute of Education
   Sciences is a project that involves the creation and coordination of test items and questionnaires
   used in a variety of assessments for students. It has a web-based component that provides
   assessment data to parents, teachers, policymakers, and educators involved in establishing
   curriculum and achievement.

•	 ADvance investment under Federal Student Aid (FSA) was designed to integrate aid
   application, origination, disbursement, and funds management in order to support Title IV
   programs.

•	 Common Services for Borrowers investment under FSA was designed to re-engineer four
   separate, business processes into a single integrated system: Direct Loan Servicing System,
   Debt Management and Collection System, Direct Loan Consolidation System and Conditional
   Disability Discharge Tracking System / Total and Permanent Disability.

•	 Enterprise Information System investment under FSA was designed to help improve program
   integrity, operational efficiency and customer service through improvements in data quality,
   data access, and data sharing. EIS was to also serve as a systems development initiative that
   would implement key components within the FSA Target State, with Information Services as
   the first key component to be implemented.

•	 National Student Loan Data System investment under FSA was designed to collect, store, and
   make available data about Title IV aid disbursed and the aid recipients.

•	 Virtual Data Center investment under FSA provides operations and technical support for FSA’s
   federally mandated systems and the Title IV delivery systems.
Final Report
ED-OIG/A04H0018                                                              Page 19 of 22

Appendix D - Exhibit 300s with Non-cumulative Project Costs 

             Exhibit 300s with Non-cumulative Project Costs

                                                                  Exhibit 300s that do not
                      Investment       Exhibit 300s Reviewed       Contain Cumulative
   Office
                        Name              (Budget Year=BY)            Project Costs

                                              BY 2001                      (7 of 9)
                                              BY 2002
                                              BY 2003                     BY 2003
                                              BY 2004                     BY 2004
 Office of Chief       Integrated
                                              BY 2005                     BY 2005
Financial Officer   Support Services
                                              BY 2006                     BY 2006
                                              BY 2007                     BY 2007
                                              BY 2008                     BY 2008
                                              BY 2009                     BY 2009
   Office of
                    Migrant Student           BY 2007                      (1 of 3)
Elementary and
                     Information              BY 2008
  Secondary
                      Exchange                BY 2009                     BY 2009
   Education
                                            BY 2005                        (2 of 5)
                       National
   Institute of                             BY 2006
                     Assessment of
   Education                                BY 2007                       BY 2007
                      Educational
 Sciences (IES)                             BY 2008                       BY 2009
                       Progress
                                            BY 2009
                                            BY 2004                        (2 of 6)
                                            BY 2006
                    National Student
Federal Student                        BY 2006 (re-engineering)         BY 2004
                      Loan Data
  Aid (FSA)                                 BY 2007                BY 2006 (re-engineering)
                        System
                                            BY 2008
                                            BY 2009
                                            BY 2004                        (1 of 6)
                                            BY 2005
                      Virtual Data          BY 2006                       BY 2004
      FSA
                        Center              BY 2007
                                            BY 2008
                                             BY 2009
                                            BY 2005
                                                                           (1of 5)
                       Common               BY 2006
      FSA             Services for          BY 2007
                                                                          BY 2007
                       Borrowers            BY 2008
                                            BY 2009
Final Report
ED-OIG/A04H0018                                                                               Page 20 of 22

Appendix E - Exhibit 300s with Unsupported Cost/Spending Tables and Benefits

 EDUCATE 26 Exhibit 300s with Unsupported Summary of Spending Tables and Benefits (M=Million)
                                                                                                     (BY = Budget Year)

Network Operations BY 2005 – Spending Table 100% unsupported ($141.9 M)
The Office of the Chief Information Officer (OCIO) provided two documents entitled "Responses to
PIRWG 27 Questions on Fiscal Year 04/05 IT Business Cases." However, neither of the documents
included source documents indicating how the estimated costs presented in the exhibit 300 were derived.
The two documents contained answers to questions raised by the PIRWG during a May 2003 PIRWG
meeting.
Combined Office Automations (COA) BY 2007 – Spending Table 68% unsupported ($219.6 M of $323.9 M)
OCIO provided a Computer Sciences Corporation (CSC) bid for the COA project, which contained
yearly total project cost amounts; however, the amounts in the bid were lower than the amounts
presented in the exhibit 300. OCIO also provided a document, entitled “OMB 28 Approved Baseline and
Actuals Table”; however, there were no explanations or other source documents to indicate how the
numbers in the table were derived.
EDNet BY 2008 – Spending Table 100% unsupported ($340.1 M)
OCIO provided a document entitled “OMB Approved Baseline and Actuals Table”; however, there were
no explanations or other source documents to indicate how the numbers in the table were derived. The
CSC contract was also provided for support; however, the amounts in the contract did not correspond to
the costs in the exhibit 300.
EDUCATE BY 2009 – Spending Table 12% Unsupported ($75.1 M of $608.6 M)
                  Benefits 100% Unsupported ($117 M)
OCIO provided the BY 2008 EDNet exhibit 300, and a Baseline Change Request in support of the
Operation and Maintenance Costs for 2007 and past years, and planning costs for 2007. However, the
documents did not include source documents, such as invoices or information from a cost accounting
system that would indicate how the costs were derived. In addition, OCIO provided a document entitled
“Alternatives Analysis Worksheet Select Phase FY 08/09” in support of the estimated benefits presented
in the exhibit 300. However, the worksheet is $3 million less than the amount shown on the exhibit 300.
In addition, OCIO did not provide any source documents to show how they arrived at the amount
inputted into the worksheet as savings (same as benefits).
     Integrated Support Services (ISS) Exhibit 300 with Unsupported Summary of Spending Table

ISS BY 2009 – Spending Table 59% Unsupported ($68.6 M of $117.1 M)
The Office of the Chief Financial Officer (OCFO) provided hardware and software calculation sheets in
support of $56.0 million of operation and maintenance costs incurred prior to 2007. However, the
documentation only supported $23.8 million. There was no documentation provided to support the
remaining $32.2 million. In support of the combined total of $36.6 million in estimated operation and
maintenance costs for years 2010 through 2013, OCFO provided the Government Cost Estimate (GCE)
for the new contract; and an excerpt from Project Management Terms: A Working Glossary. However,
there were no source documents to indicate how the estimated costs in the GCE were derived.
26
   Education Department Utility for Communications, Applications, and Technical Environment
27
   Planning and Investment Review Working Group
28
   Office of Management and Budget
Final Report
ED-OIG/A04H0018                                                                    Page 21 of 22

                     NAEP 29 Exhibit 300 with Unsupported Summary of Spending Table

NAEP BY 2005 – Spending Table 100% Unsupported ($61.5 M)
The Institute of Education Sciences did not provide support for any of the estimated costs in this exhibit
300. According to the former project manager for NAEP, the documentation for the cost figures in the
exhibit 300 was lost when his hard disk crashed in January 2004.

                    ADvance Exhibit 300 with Unsupported Summary of Spending Table

ADvance Person Data Management BY 2009 – Spending Table 100% Unsupported ($36.1 M)
Federal Student Aid (FSA) did not provide any documentation to support the estimated costs in this
exhibit 300.
      Virtual Data Center (VDC) Exhibit 300s with Unsupported Summary of Spending Table and
                                              Benefits
VDC BY 2009 – Spending Table 13% Unsupported ($90.3 M of $687.9 M)
FSA provided an Independent Government Cost Estimate (IGCE) to support the exhibit 300 costs;
however, it did not adequately support $90.3 million in estimated costs for future years because the IGCE
estimate for future year costs was based on assumptions pertaining to the consolidation of investments
that never actually happened.
VDC BY 2004 – Benefits 100% Unsupported ($53 M)
FSA provided an IGCE to support the estimated benefits and cost savings; however, the IGCE did not
include source documents that would indicate how the costs were derived.
      Common Services for Borrowers (CSB) Exhibit 300 with Unsupported Summary of Spending
                                             Table

CSB BY 2005 – Spending Table 100% Unsupported ($139.9 M)
Neither the IGCE, Contractors technical and price proposal, nor CSB Contract Deliverable by Borrower
Status provided by FSA supported any of the cost estimates reported in this exhibit 300 because the
amounts in the documents provided did not correspond to the costs in the exhibit 300.

EIS 30 Exhibit 300s with Unsupported Summary of Spending Tables and Benefits

EIS BY 2005 – Spending Table 100% Unsupported ($29 M)
              Benefits 100% Unsupported (20 percent improvement in customer service)
FSA provided a Software Proposal for Information Server, Data Integration Vendor Recommendations,
and Alternative Analysis Worksheet to support $29 M in planning, acquisition and maintenance costs
reported in this exhibit 300; however, none of the documents corresponded to any portion of the $29 M.
In addition, none of the documents supported a 20 percent improvement in customer service, which was
the reported benefit in the exhibit 300.


29
     National Assessment of Educational Progress
30
     Enterprise Information System
Final Report
ED-OIG/A04H0018                                                                   Page 22 of 22

EIS BY 2006 – Spending Table 100% Unsupported ($19.2 M)
              Benefits 100% Unsupported (20 percent improvement in customer service)
FSA provided a Software Proposal for Information Server, Data Integration Vendor Recommendations,
and Alternative Analysis Worksheet to support $19.2 M in operations and maintenance costs reported in
this exhibit 300; however, none of the documents corresponded to any portion of the $19.2 M. In
addition, none of the documents supported a 20 percent improvement in customer service, which was the
reported benefit in the exhibit 300.
EIS BY 2009 – Spending Table 100% Unsupported ($4.5 M)
              Benefits 100% Unsupported ($35.5 M in Life Cycle Benefits)
FSA provided a Software Proposal for Information Server, Data Integration Vendor Recommendations,
and Alternative Analysis Worksheet to support $4.5 M in planning and acquisition costs reported in this
exhibit 300; however, none of the documents corresponded to any portion of the $4.5 M. In addition,
none of the documents supported the $35.5 M Life Cycle Benefits Estimate, which was the reported
benefit in the exhibit 300.


           NSLDS 31 Exhibit 300s with Unsupported Summary of Spending Tables and Benefits

NSLDS BY 2004 – Spending Table 16% Unsupported ($5.9 M of $37.2 M)
                Benefits 100% Unsupported ($6 M)
FSA provided a business justification, contract invoices and modifications in support of $31.2 M in
estimated operations and maintenance costs; however, these documents did not support the remaining
$5.9 M. In addition, FSA did not provide any documentation supporting the $6 M estimated benefits
reported in this exhibit 300.
NSLDS BY 2006 – Spending Table 100% Unsupported ($43.3 M)
                 Benefits 100% Unuspported ($30.1 M)
FSA did not provide any documentation to support the estimated costs or benefits reported in this exhibit
300.
NSLDS BY 2009 – Spending Table 41% Unsupported ($40.2 M of $98.9 M)
FSA provided a business justification, contract invoices and modifications in support of $58.7 M in
planning, operations and maintenance costs; however, these documents did not support the remaining
$40.2 M. costs.




31
     National Student Loan Data System.