_... .--- --- .-_._ - -__---. 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 Budget l._“_. ..,.. .--_.--...-- ...--- ~--- --- United States GAO General Accounting Office Washington, D.C. 20548 Information Management and Technology Division B-240364 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 automation. Page 2 GAO/IMTEC90-82 Suggested SSA ADP Budget Cuts ‘I . B-240334 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 engaged. 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 B-240334 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 c 41 Bad0354 . 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 Page 5 GAO/IMTEG90432 Suggested SSA ADP Budget Cuts Appendix I Major Contributorsto This Report I Information Thomas E. Melloy, Assistant Director Managementand Michael A. Alexander, Evaluator-in-Charge Kim F. White, Staff Evaluator Technology Division, Washington, DC. (510488) Page 6 GAO/IMTEG90-82 Suggested SSA ADP Budget Cuts 11*-1** ._l”ll”l. I ,_l”.. “1” . . I” “. .“” . I. I . ..^. 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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)