SSA ADP Budget: Suggested Reductions to Fiscal Year 1991 Budget

Published by the Government Accountability Office on 1990-08-22.

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

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                             kpor~, to the Chairman, Subcommittee
GAO                          on Labor, Heall,h and Human Services,
                             lkhcation, and Related Agencks,
                             Commit,ttlc on Appropriations,

                             Suggested Reductions
                             to Fiscal Year 1991
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                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Information Management and
                   Technology Division


                   August 22,199O

                   The Honorable Tom Harkin
                   Chairman, Subcommittee on Labor, Health
                     and Human Services, Education, and
                     Related Agencies
                   Committee on Appropriations
                   United States Senate

                   Dear Mr. Chairman:

                   On January 22, 1990, you asked us to analyze the Social Security
                   Administration’s (SSA)fiscal year 199 1 information technology systems
                   budget request of $240 million. Besides covering the systems’ operations
                   and maintenance, the budget request includes $48.1 million for system
                   enhancements such as automated data processing (ADP) and telecommu-
                   nications hardware, software, supplies, and contractor services. As
                   arranged with your office, we determined whether SSAhad justification
                   for the $48.1 million.

                   On April 16, 1990, we briefed your office on our preliminary findings.
                   This report updates that briefing with the latest information available
                   when we completed our work in June 1990.

                   We were able to identify adequate justification for $37.1 million of the
Results in Brief   $48.1 million requested for the fiscal year 1991 system enhancements.
                   However, we are concerned about two enhancement projects-systems
                   integration and office automation -with a total fiscal year 1991 esti-
                   mated cost of $11 million. SSAhas decided it is premature to fund the
                   requested systems integration project so it plans to reprogram the $6
                   million for some as yet unspecified projects. Because it is unclear how
                   these funds will be spent, the Committee may wish to reduce SSA’Sfiscal
                   year 1991 budget request by $6 million. Regarding the $6 million
                   requested for office automation, we found wide differences between the
                   amounts SSA’Sbudget requested and those found in SSA’Sinternal docu-
                   ments. Internal documents show, for example, that $51 million-not the
                   $5 million requested-is needed for office automation in fiscal year
                   1991. The Committee may wish to defer $6 million for office automation
                   until SSA provides the Committee with a detailed analysis of the agency’s
                   annual plans for acquiring additional office automation equipment and
                   services and makes it consistent with the budget request.

                   Page 1                           GAO/EWEG90-&?2   Suggested SSA ADP Budget Cuts
                         and maintenance. T,he budget also requested funds for system moderni-
                         zation efforts invol\)ing additional ADP and telephone equipment, new
                         software development, and related contractor services. SSAimplemented
                         the system modernization program in 1982 to improve software, equip-
                         ment, and data communications, and to implement an integrated data
                         base to provide better service to the public. The cumulative cost of the
                         system modernization effort as of September 1989 amounted to about
                         $600 million.

                         SSA’Sfiscal year 1991 information technology systems budget request
Analysis of SSA’s        for $240 million includes $191.9 million for ADP and telephone opera-
Information              tions and maintenance and $48.1 million for systems enhancements. The
Technology Systems       systems enhancements- the focus of our review-are divided into three
                         programmatic categories, with funding levels as specified below:
Budget Request
                     . New Hardware and Upgrades ($18.6 million) includes additional com-
                       puter terminals and disk storage capacity, expanded mainframe com-
                       puter capacity, new software systems, and contractor support for
                       equipment installation;
                     . Systems Analysis, Software Planning, and ADP Support Services ($24.5
                       million) includes contractor support for planning, designing, developing,
                       and installing software systems, and for providing advice and guidance
                       with the planning, implementation and management of SSA’S current and
                       future modernization activities; and
                     . Office Automation ($6 million) includes workstation networks and
                       software applications for automating labor-intensive processes to
                       improve employee productivity and efficiency.

                         In analyzing SSA’Sbudget request we examined supporting documenta-
                         tion as well as information obtained during interviews with project
                         officers and management officials. On this basis, we identified adequate
                         justification for $37.1 million of the $48.1 million requested. However,
                         we question the justification for SSA’Ssystems integration services pro-
                         ject, which accounts for $6 million of the $24.5 million requested for
                         systems analysis, software planning, and ADP support services. We also
                         question the justification for the $5 million requested for office

                         Page 2                           GAO/IMTEC90-82   Suggested SSA ADP Budget Cuts

                          ss~ requested $6 million in fiscal year 1991 for a new project intended to
$6 Million Fiscal Year    furnish systems integration services (including expert advice) to help
1991 Systems              SSAplan, implement, and manage its current and future modernization
Integration Services      activities. On July 5, 1990, SSAofficials informed us that SSAhad decided
                          not to implement the system integration project in fiscal year 1991
Project Delayed           because its requirements had not been finalized. Also, available %A
                          documentation shows that before SSAcan start the project a number of
                          planning and design tasks must be completed. For example, SSAstill
                          must complete detailed task requirements and cost/benefit analyses, as
                          well as the agency procurement request before contractor resources are

                          ss~ officials believe that the $6 million can be reallocated to other-yet
                          unspecified-system-enhancement projects. Consequently, we could not
                          analyze the proposed reallocation to determine whether it is justified.
                          Because it is unclear how SW would spend the funds, the Committee
                          may wish to reduce SA’S fiscal year 1991 information technology
                          system budget request by $6 million for the systems-integration project.

                          In September 1988, the SSA Commissioner approved an agency-wide
    Office Automation     office automation strategy designed to reduce excessive reliance on
    Needs Greater Than    paper, duplication of information, incompatible word’processing sys-
    Projected in Budget   terns, and inability to share ADP resources. The strategy outlines a pro-
                          gram for introducing an integrated system of communications networks,
    Documents             compatible workstations, and other equipment and software designed to
                          provide state-of-the-art office automation technology to employees
                          throughout SSA.

                          SSAis requesting $6 million for the office automation project in fiscal
                          year 1991. SSAofficials stated that they requested the $5 million to
                          acquire more office automation equipment and services. However, in
                          reviewing SSA’Sbudget request, we were not able to associate the
                          amount requested to any specific acquisition plans.

                          Having analyzed the request and supporting documentation, we also
                          found that SSA’Srequest understates the overall funding needs for fiscal
                          year 1991 by about $46 million. SA officials agreed that the funding
                          level included in the fiscal year 1991 request is not consistent with the
                          project’s overall funding needs as reflected in SSA’Sinternal office auto-
                          mation budget and planning documentation. @A did not request full
                          funding for the office automation program largely due to the program’s

                          Page 3                            GAO/IMTJZG80-82   Suggested SSA ADP Budget Cuta

                       scope, high cost, and SSA’S limited budget for information technology
                       systems enhancement projects, according to SSAofficials.

                       Additionally, we found that SSA’Sbudget request shows that office auto-
                       mation is projected to cost $26 million during fiscal years 1991 through
                       1996. However, documentation provided by SSA’Sbudget office shows
                       that the fiscal year 1991 request understates office automation needs
                       through fiscal year 1996 by as much as $122 million. SSAofficials agreed
                       that the 6-year funding projection included in the fiscal year 1991
                       request is not consistent with the project’s overall funding needs or
                       implementation date as shown in SSA’Sinternal budget documents and
                       the office automation tactical plan.

                       Until SSAbrings its internal plans and annual funding needs in line with
                       its budget requests, the Committee may wish to defer the $6 million
                       requested by SSAfor office automation. This deferral should remain in
                       effect until SSAprovides the Committee with a detailed analysis that dis-
                       cusses the agency’s annual plans for acquiring additional office automa-
                       tion equipment and services, as well as the related cost estimates.

                       The objective of our review was to determine whether SSAhad justified
Objective, Scope,and   the enhancements portion of its fiscal year 1991 information technology
Methodology            systems budget request. We focused our review on the 24 enhancement
                       projects that have an estimated cost of $48.1 million because they
                       represent new commitments to SSA’Sinformation technology systems. As
                       arranged with your office, we did not evaluate the $191.9 million opera-
                       tions and maintenance portion of SSA’Srequest. We conducted our review
                       at the SSAheadquarters in Baltimore, Maryland, In conducting our work,
                       we examined documentation supporting the individual projects that
                       comprise the enhancements portion of SSA’Sbudget request. We
                       reviewed supporting documentation for project cost and schedule data
                       to verify that they were prepared in accordance with requirements
                       stated in Office and Management Budget Circular A-l 1 (schedules 43A
                       and 43B). We also verified that each project was on the SSAcommis-
                       sioner’s list of priority projects, ranked and recommended by SSA’S
                       internal Systems Review Board. In addition, we met with senior program
                        and management officials as well as project officers to confirm our
                       understanding of the underlying need for individual enhancements and
                       to obtain additional documentation supporting those needs.

                       We met with responsible program officials and senior management to
                       confirm our understanding of the justification for and funding status of

                       Page 4                            GAO/IM~G30-32   Suggested SSA ADP Budget Cuts


     individual information system projects included in our evaluation. Our
     evaluation was conducted from January through June 1990. As
     requested by your office, we did not obtain written agency comments on
     a draft of this report. We did, however, brief SSAofficials on the results
     of our work, and have incorporated their comments where appropriate.
     Our work was performed in accordance with generally accepted govern-
     ment auditing standards.

     We are sending copies of this report to the Chairman of the House Com-
     mittee on Appropriations; the Director, Office of Management and
     Budget; the Administrator of General Services; the Secretary of Health
     and Human Services; and the Commissioner of Social Security. Copies
     will also be made available to others upon request,

     This report was prepared under the direction of Frank Reilly, Director,
     Human Resources Information Systems, who can be reached at (202)
     276-4669. Other major contributors are listed in the appendix.

     Sincerely yours,

     Ralph V. Carlone
     Assistant Comptroller General

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Appendix I

Major Contributorsto This Report

Information            Thomas E. Melloy, Assistant Director
Managementand          Michael A. Alexander, Evaluator-in-Charge
                       Kim F. White, Staff Evaluator
Technology Division,
Washington, DC.

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