oversight

Social Security Administration: Responses to Subcommittee Questions About the On-line PEBES Service

Published by the Government Accountability Office on 1997-06-20.

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

GAO
      United States
      General Accounting  Office
      Washington, D.C. 20548

      Accounting and Information
      Management Division


      B-2773 19


      June 20, 1997

      The Honorable Jim Bunning
      Chairman, Subcommittee on Social Security
      Committee on Ways and Means
      House of Representatives

      Subject:    Social Securitv Administration: Resnonses to Subcommittee
                  Questions About the On-line PEBES Service

      Dear Mr. Chairman:

      This letter responds to your May 16, 1997, request that we provide answers to
      questions relating to our May 6, 1997, testimony.’ During that testimony, we
      discussed privacy and security concerns surrounding the Social Security
      Administration’s (SSA) use of the Internet to provide Personal Earnings and
      Benefit Estimate Statements (PEBES) to individuals. Your questions, along with
      our responses, follow.

      1. In Dr. Callahan’s testimony, he indicates that discussion should focus on
         authentication   requirements, not system security, because he says the
         PEBES system is secure, since SSA is using time-tested commercial
         encryption that banks and other on-line businesses use every day. How do
         your views compare with Dr. CaUahan’s?

      We believe that discussion should include a focus on system security for the
      following reasons.

      -   There have been recent problems in implementing currently available
          commercial encryption processes; and computer systems that use these
          processes have been successfully attacked. For example, about 18 months
          ago, a leading product available for protecting the confidentiality of data
          was found to contain a flaw that resulted in the improper implementation of
          a key process used to encrypt the data. As noted by the individuals who


      ‘Social Securitv Administration: Internet Access to Personal Earnings and
      Benefits Information (GAO/T-AIMD/HEHS-97-123, May 6, 1997).
                                   GAO/AI&ID-97-121R Social Security On-line PEBES
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     identified the flaw, “[t]he security community has painfully learned that
     small bugs in a security-critical module of a software system can have
     serious consequences, and that such errors are easy to commit.“’

     In addition, within the past 3 months, a number of security weaknesses have
     been identified in the two leading software packages that would have been
     used by individuals to access PEBES information. While we cannot know
     the exact impact of such weaknesses on the security of PEBES information,
     we believe they clearly indicate that the security solution selected may not
     be as stable as SSA believes.

     Dr. Callahan stated that SSA is using the same encryption techniques as
     banks and other on-line businesses. However, SSA’s analyses did not
     include detailed reviews or assessments of the actual techniques and
     procedures that these businesses used to implement secure transactions.
     Without full knowledge of these techniques and procedures, we do not
     believe that SSA can know with certainty that it has implemented the same
     type of system that is being used by the commercial enterprises it is trying
     to emulate.

     Because of security concerns, some commercial enterprises have not
     implemented full Internet-based electronic commerce. Others have done so,
     but have given customers a choice in whether to provide sensitive
     information via the Internet. For example, some firms allow customers to
     use the Internet to identify and order items or services that they wish to
     purchase. The customers, however, then decide whether to pay for these
     purchases by providing their credit card information over the Internet or via
     a toll-free telephone call to the firm.

     In our opinion, the risks associated with commercial systems should be
     viewed very differently from those associated with SSA’s on-line service.
     With commercial enterprises, economic risks-driven by such considerations
     as how much the company can afford to lose if its security system is
     compromised-are likely to be key factors in assessing the need for
     computer security, and in deciding what additional controls should be
     implemented to prevent significant monetary losses. With SSA, however,
     privacy considerations-rather than economic concerns-would likely be
     among the key factors that SSA considers in determining its security needs.
     In our view, one of the paramount factors in assessing the risks associated
     with SSA’s on-line service is establishing public confidence in the agency’s
      ability to adequately protect an individual’s information.



 “Randomness and the Netscane Browser, Ian Goldberg and David Wagner, Dr.
 Dobbs’ Journal, January 1996.

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2. You ,mention that SSA made on-line PEBES a part of its business plan fol
    1997-2001 and took numerOus actions to protect the confidentiality   of
    client data. In addition, they tested the system for a year and consulted
    with numerous outside experts. Yet, there was considerable public outcry
    when the system became publicly available. Based on your experience,
  . what other steps might SSA have taken to prevent this?

In deciding to establish the PEBES service, SSA hoped that providing U.S.
workers with better information about Social Security would help rebuild public
confidence in its programs and offer a useful financial planning tool. Moreover,
by making PEBES information accessible via the Internet, SSA believed it could
better reach its intended audience and, ultimately, provide “world class” service
to the more than 100 million people projected to receive PEBES information
annually by the year 2000.

In making information readily available via the Internet, however, many
opportunities for serious misuse of sensitive information exist; these must be
carefully considered, and must be communicated to those individuals whose
information might be placed at risk. In our opinion, many people are not fully
aware of most of the risks relating to the use of computer systems-risks that
tend to be amplified in the on-line world. Consequently, when the potential for
security weaknesses becomes apparent, public concern and outcry are not
unexpected. Moreover, the need to identify and promote awareness of security
risks may be vital to a project’s success.

We support SSA’s recent use of public forums to solicit views on how the
agency can provide electronic services via the Internet while protecting
individual privacy. In our view, engaging in public dialogue about the system
prior to full implementation and deployment is essential not only to assess
public acceptance of this service but also to educate people about the inevitable
risks inherent in the Internet. In this way, the public can make an informed
decision regarding its use.

Because of the sensitive information contained in the PEBES system, the
potential threats to this system are great. While public forums can provide
invaluable insights regarding the agency’s use of electronic services via the
Internet, these views, alone, would not be sufficient to ensure that the most
appropriate technical safeguards are identified and implemented to protect
against security threats. Effective risk management is necessary to
accomplishment this.

Risk management would include assessing the vulnerabilities involved in using
the Internet to provide this service, and then implementing appropriate security
controls to reduce risk to an acceptable level. A risk assessment can focus on
many different areas, including hardware and software systems,


3                            GAO/AIMD-97-121R Social Security On-line PEBES
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telecommunications, and technical and operational controls that can be
designed into a new application. The results of such an assessment can then be
used to determine acceptable levels of risk and to select cost-effective
safeguards, considering factors such as organizational policy and legislation;
safety, reliability, and quality requirements; cost; and cultural constraints. It is
important to note, however, that merely selecting appropriate safeguards does
not reduce risk; those safeguards must also be effectively implemented.
Moreover, agencies must periodically reassess risks and, where necessary,
improve system security safeguards.

3. You state that agencies need to determine the a.cceptable level of risk when
   developing effective systems security. Do you believe that agencies need
   more specific guidance, perhaps govemznzent-wide, on how to assess risks
   and develop the appropriate balance between privacy and other agency
   objectives?

In light of the increasing importance of information security and the pattern of
widespread problems that has emerged, it is essential that federal agencies
implement information security programs that proactively and systematically
assess risk, monitor the effectiveness of security controls, and respond to
identified problems. Such programs are necessary to ensure that management
and technical controls, including actions to correct identified weaknesses, are
effective on a continuing basis.

The need to protect sensitive federal data maintained on automated inforn-tation
systems has been recognized for years in various laws and federal guidance.
The Privacy Act of 1974, as amended, the Computer Security Act of 1987, and
the Paperwork Reduction Act of 1995, as amended, all contain provisions
requiring agencies to protect the confidentiality and integrity of the sensitive
information that they maintain. In accordance with the Paperwork Reduction
Act, the Office of Management and Budget (OMB) is responsible for developing
information security policies and overseeing agency practices. OMB’s Circular
A-130, appendix III, “Security of Federal Automated Information Resources,”
(updated February 1996) establishes minimum controls to be included in
agency information system security programs, including the need to assess risks
and take actions to manage them. In addition, guidance on effective risk
management has been developed by the National Institute of Standards and
Technology.3 This guidance identifies basic activities and processes that
agencies should use in assessing and taking steps to reduce and maintain
 acceptable levels of risk.




 “An Introduction to Commuter Securilx The NIST Handbook, National Institute
 of Standards and Technology, Special Publication 800-12.
                               GAO/AIMD-97-121R Social Security On-line PEBES
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Despite such guidance, we have recently reported that information system
security weaknesses remain pervasive among many major federal agencies,.’and
we have designated information security a high-risk area.” Our reviews found
inadequate management and implementation of information security programs,
rather than the absence of specific guidance, to be the primary cause of many
of these weaknesses. Specifically, one of the fundamental causes is that
agencies have not implemented security programs that provide a systematic
means of assessing risk, implementing effective policies and control techniques,
and monitoring the effectiveness of these measures. Ensuring adequate security
requires ongoing attention to risk-monitoring and the effectiveness of mitigating
controls. Yet, many federal managers are either not Mly aware of their
responsibility to identify and control these risks, or have not given information
security the level of attention needed to ensure its effectiveness.

The challenge for federal managers is to view the management of information
security as an integral element of program management. This means (1)
considering the security implications whenever computer and
telecommunications technology is being designed and put in use to support
program operations, (2) weighing the potential costs and benefits, (3)
determining what level of risk is acceptable in light of expected benefits, and
(4) providing adequate resources to monitor controls and keep risks at an
acceptable level.

4. Have you done any assessments of the existing privacy offices at HHS and
   the I. and how effective they are for addressing issues such as SSA faces?

We have not performed any assessments of existing privacy offices at HHS and
IRS and therefore cannot comment on their effectiveness. However, the Privacy
Act requires certain actions on the part of federal agencies and departments to
ensure the privacy and confidentiality of personal information. These
requirements include establishing appropriate administrative, technical, and
physical safeguards to ensure the security and confidentiality of records. They
also include protecting against anticipated threats or hazards to the security or
integrity of these records, that could result in substantial harm, embarrassment,
inconvenience, or unfairness to individuals.

5. Wttat do you see as the role of SSA’s chief information Bfficer in the
   decision to make PEBES available on-line and the privacy and security
   issues involved therein?


%iformation Securitv: Opportunities for Imnroved OMB Oversight of Agency
Practices (GAO/AND-96-110, Sept. 24, 1996).
“High-Risk Series: Information Management and Technolom (GAO/HR-97-9,
Feb. 1997).

5                             GAO/AIMD-97-121R Social Security On-line PEBES
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As the senior official designated to oversee information resources management
(IRM), SSA’s chief information officer (CIO) should have primary responsibility
for ensuring that the on-line PEBES initiative represents a sound information
technology investment based on factors such as the project’s cost, risk, return
on investment, and support of mission-related outcomes. The CIO should also
be responsible for ensuring that the information systems supporting this
initiative are adequately protected from unauthorized access that could result in
the potential disclosure of sensitive data and/or serious disruptions to the
agency’s operations.

The Paperwork Reduction Act of 1995 (as amended) and Clinger-Cohen Act of
1996 require a number of IRM practices to improve the productivity, efficiency,
and effectiveness of government operations. To fulfill the requirements of these
acts, one of the CIO’s primary responsibilities is ensuring the effective
acquisition and management of information resources to support agency
programs and missions. This includes (1) promoting effective agency
operations by implementing budget-linked capital planning for, and
performance-based management of, information technology (IT) systems; (2)
actively participating with other agency managers in IT planning, budgeting, and
investment decision-making; and (3) monitoring the performance of agency IT
programs, evaluating them on the basis of appiicable performance measures,
and advising the agency head regarding whether to continue, modify, or
terminate individual programs or projects. Only through a sound IT investment
process that encompasses these practices can the CIO be effectively positioned
to establish clear accountability for agency IRM activities, promote coordination
among and visibility of the agency’s information activities, and guarantee the
effective acquisition and use of information technology.

To be effective in implementing the requirements of these acts, IRM must be the
CIO’s primary duty. However, it is important to note that while the CIO is to
play an active role in managing and overseeing IT investments, it is the agency
head’s responsibility under these acts to establish an agencywide process and
framework within which such IT management and oversight is conducted. In
our view, this involves the creation of a high-level forum or board composed of
the CIO, the chief financial officer, and senior line managers with responsibility
for selecting, controlling, and evaluating information technology investments
against established criteria.

An essential element in managing information resources is protecting sensitive
and critical federal data from unauthorized access and inappropriate disclosure.
Thus, another key responsibility of the CIO’s is ensuring the privacy and
security of information contained in the agency’s information systems. Agencies
increasingly rely on interconnected systems to control critical functions such as
communications, financial services, transportation, and utilities. Although
greater use of interconnected systems promises significant benefits in improved


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business and government operations, such systems are much more vulnerable to
anonymous intruders, who may manipulate data to commit fraud, obtain
sensitive information, or severely disrupt operations. The Paperwork Reduction
Act, consistent with the Computer Security Act, requires each federal agency to
“identify and afford security protections commensurate with the risk and
magnitude of the harm resulting from the loss, misuse, or unauthorized access
to or modification of information collected or maintained by or on behalf of an
agency.” The Clinger-Cohen Act further requires the agency’s CIO to ensure
that information security policies, procedures, and practices fulfill this
requirement.

6. In reference to the intelligence community having its own Internet system,
   Mr. Rhodes was asked by Rep. Christensen how much a private Internet
   system would cost if Social Security would choose this option. Please
   provide a cost estimate for the record.

We do not have sufficient information at this time to provide an estimate of the
cost that SSA would have to incur to develop a secured Internet, such as that
used by the intelligence community. Cost data for the intelligence community’s
network, which would serve as the basis for establishing a comparative cost
estimate, is classified and, therefore, not available for public analysis. However,
on the basis of our reviews of satellite systems owned by the Department of
Defense-some of which are used by the intelligence community to support its
Internet-we believe that developing a comparable network for SSA would be
very costly.

7. Mr. Rhodes noted that 50% of the 250,000 inquiries to the Department of
   Defense’s private Internet were attacks, and that approximately 5% of those
   attacks were actually prosecuted. What steps would you recommend for
   improving the rate of prosecution?

Just as in physical crime, the rate ‘of prosecution for digital crime is a function
of the ability to collect, analyze, and ultimately, prove the evidence of a crime.
However, detecting and reacting to computer attacks-and, in turn, establishing
the types of evidence that would be required for successful prosecution-is
difficult, since some attackers have access to a number of tools and techniques
that can enable them to avoid detection.

Improving the potential for detecting and acting against security breaches will
depend, in large part, on the extent to which federal agencies and departments
implement effective information security. A good computer security program
begins with top management understanding of the risks associated with its
computers, and emphasizes the implementation of (1) cost-effective procedures
to protect the agency’s electronic assets, (2) vigorous and effective programs to



7                             GAO/AIMD-97-121R Social Security On4ine PEBES
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detect unauthorized attacks on these assets, and (3) the ability to react to any
intrusions that do occur.

For the Department of Defense, attacks on computer systems are a serious and
growing threat. Accordingly, we have made a number of recommendations for
improving the Department’s information security program.6 These
recommendations include developing departmentwide policies for preventing,
detecting, and responding to attacks on Defense information systems, including
mandating that (1) all security incidents be reported within the Department, (2)
risk assessments be performed routinely to determine vulnerabilities to attacks
and intrusions, (3) vulnerabilities and deficiencies be expeditiously corrected as
they are identified, and (4) damage from intrusions be expeditiously assessed to
ensure the integrity of data and systems compromised.

The Department of Defense developed this approach to protect against, detect,
and react to threats as part of its activity to implement a formal defensive
information warfare program. Defense’s plan calls for monitoring and detecting
intrusions or hostile actions as they occur, reacting quickly to isolate the
systems under attack, correcting the security breaches, restoring service to
authorized users, and improving security. If agencies improve their protection,
detection, and reaction capabilities, the ability to prosecute could be improved.
                                      -----


In responding to these questions, we reviewed and analyzed agency documents
describing the security of SSA’s on-line PEBES service and the strategies that
SSA is using to manage its information technology investments. We also
reviewed and analyzed the documented positions of experts in the field of
Internet and computer security, as well as federal legislation and guidance on
compute? security, privacy, and information technology management. We
discussed a draft of this correspondence with SSA’s Acting Director overseeing
the on-line PEBES initiative, and his comments have been incorporated as
appropriate. We conducted our work from June 2 through June 20, 1997, in
accordance with generally accepted government auditing standards.

We are sending copies of this correspondence to the Acting Commissioner of
Social Security and other interested parties. Copies will also be made available
to others upon request. If you have any questions regarding this letter, please




‘Information Securitv: Commuter Attacks at DeDartment of Defense Pose
Increasing; Risks (GAO/AIMD-96-84, May 22, 1996).

 8                            GAO/AIMD-97-121R Social Security On-line PEBES
B-277319
contact me at (202) 512-6253 or Valerie Melvin, Assistant Director, at (202) 512-
6304. We can also be reached by e-mail at wiZlemssenj.aimd@gao.gov and
melvinv.aimd@gao.gov,   respectively.

Sincerely yours,




Director, Information Resoufces Management




(511222)


9                             GAO/AIMD-97-121R Social Security On-line PEBES
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