oversight

Army ADP: Prevalence of Fourth Quarter Obligations

Published by the Government Accountability Office on 1990-12-20.

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

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GAO
                   United States
                   General Accounting Office
                   Washington, D.C. 20648

                   Information Management and
                   Technology Division

                   R-241751
                   December20,199O

                   The Honorable John P. Murtha
                   Chairman, Subcommitteeon Defense
                   Committee on Appropriations
                   Houseof Representatives
                   Dear Mr. Chairman:

                   In February 1989, the DefenseInspector General reported that the
                   Army buys most of its automated data processing(ADP) equipment in
                   the last quarter of the fiscal year. On February 8, 1990, you conse-
                   quently asked us to review its managementof ADP funds. Specifically,
                   you asked us to identify the prevalence of ADP year-end obligations, and
                   determine whether they complied with Army policies and were cost-
                   effective. As agreedwith your office, we only reviewed,the U.S. Army
                   Training and Doctrine Command(TRAIXX).
                   To determine the prevalence of year-end obligations of appropriated
                   operation and maintenance funds, we identified fiscal years 1988 and
                   1989 Army annual ADP obligations and what portion of these occurred
                   between July 1 and September30, the fourth quarter of each fiscal year.
                   To determine compliance, we selecteda sample of fourth quarter ADP
                   obligations at TRADOC. For cost-effectiveness,we relied upon our prior
                   report on the Army’s managementof new ADP initiatives.1 Details of our
                   objectives, scope,and methodology are in appendix I.


                   In fiscal years 1988 and 1989, Army records showed that 65 to 75 per-
Results in Brief   cent of the operation and maintenance funds obligated for acquiring ADP
                   hardware and software were made in the last quarter of the fiscal year.
                   At TRADOC, year-end ADP obligations we sampled complied with Com-
                   mand guidance.We previously reported that the Army has not com-
                   pleted an Army-wide architecture, nor implemented its information
                   managementplan for monitoring and controlling information initiatives
                   at major commandsand installations. Consequently,it cannot guarantee
                   the cost-effectivenessof individual acquisitions.




                   1Information Resources:Army ShouldLimit New Initiatives Until ManagementProgramIs Imple-
                   mented(GAO/;



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             During fiscal years 1988 and 1989, the Army’s total ADP obligations
Background   from its operation and maintenance account2were about $1.7 billion and
             $1.8 billion, respectively. They were for hardware, software, leasesand
             maintenance, and to pay personnel. Hardware acquisitions included
             buying computers and peripherals. Software acquisitions included com-
             mercially available software to support the hardware acquired.
             In 1984,the Army established its Information ResourcesManagement
             Program to set up a commonmanagementand planning structure. It
             would ensure that (1) all Army information requirements are identified,
             validated, and ranked; (2) unnecessarily redundant information systems
             are eliminated; and (3) an orderly transition from the present to the
             future computer environment is planned. The program requires each
             organization to (1) develop an information architecture to serve as the
             frame of reference for all information managementdecisionsand
             (2) prepare an Information ManagementPlan of ranked initiatives. It
             plans to develop an overall Army information architecture from these
             smaller architectures.

             The Army is organized into major commandsthat carry out specific
             functions. For example, TRADOCsets equipment requirements, designs
             organizational structures, and trains troops for combat. In April 1985,
             TRADOC set up an ADP division within its contracting activity at Fort
             Eustis, Virginia, to award automation-related acquisitions over $2,000.
             Subsequently TRADOC    issued an ADP Approval and Acquisition Guide to
             help personnel buy ADP resources.This guide requires procurement
             packagesto be submitted to the contracting activity, which reviews
             them and issuesobligation documents(e.g., purchase orders, contracts,
             requisitions). Before issuing an obligation document, the contracting
             activity must be sure each packageincludes (1) the director of informa-
             tion management(LIOIM) certification of review, (2) a purchase request
             and commitment document, and (3) command review and approval.

             DOIM certification documentsthat the packagehas been approved in
             accordancewith TRANCand Army regulations. A purchase request and
             commitment document ensuresfunds are available before an obligation
             is made. Command review and approval is given by the Office of the
             Deputy Chief of Staff for Information Management(DCXM).



             2TheArmy alsocan acquireADP resourcesfrom at leasttwo other funding sources-other procure-
             ment appropriationsand research,development,test, and evaluation appropriations.



             Page 2            GAO/IMTEGfU-12 Prevalence of Fourth Quarter Obligations for Army ADP
                                         Army’s annual obligations from its operation and maintenance appropri-
Obligations for                          ation for ADP hardware and software for fiscal years 1988 and 1989
Hardware and                             were about $115 million and $147 million, respectively. As table 1
                                         shows, 76 and 65 percent of these obligations occurred in the fourth
‘Oftware         Preva1ent         in    quarter of these fiscal years.
the Fourth Quarter
Table 1: Percent of Fourth Quarter ADP
Obligations                                                                                       Percent obligated in fourth
                                                                                                           quarter
                                         ADP Acquisitions                                             FY 1988           FY 1989
                                         Hardware                                                           77                62
                                         Software                                                           65                79
                                         Total                                                              75                65


                                         Unlike hardware and software purchases,operation and maintenance
                                         obligations for salaries and travel were spread out fairly evenly
                                         throughout the year. Obligations for leasesand maintenance fluctuated.
                                         Operation and maintenance funds obligated for salaries and travel were
                                         about 25 percent each quarter during both years; obligations for leases
                                         and maintenance did not exceed33 percent in the fourth quarter of
                                         either year.
                                         Army officials said that they planned to obligate funds for ADP hard-
                                         ware and software at year end to be sure they can cover other essential
                                         items such as salaries. In May 1989 HouseAppropriations Subcommittee
                                         hearings, the Army’s Director of Information Systemsfor Command,
                                         Control, Communications, and Computers stated that commandersmust
                                         ensure that salaries are paid and that soldiers are trained, fed, and
                                         clothed. Sometimes,he said, it is late in the fiscal year before com-
                                         manders know whether they will have enough money to do other things
                                         such as to pave streets, restock supplies, or buy personal computers,

                                         Basedon our sample, TRADOC'S fiscal year 1988 and 1989 fourth quarter
Obligations at                           ADP obligations comply with the Command’sADP Guide. Also, each sam-
TRADOCInstallations                      pled obligation was supported by the appropriate obligation document
Comply With TRADOC                       as required by the Army’s Accounting and Fund Control regulation. In
                                         fiscal years 1988 and 1989, TRADOC'S contracting activity processed
Guidance                                 1,633 fourth quarter ADP obligations. Having selectedand reviewed 53
                  I                      of these, which represented at least one of the largest procurements for
                                         each TRAIIOC installation and activity, we found that every procurement
                                         packageincluded the required documents.Each package (1) received


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                        B-241751




                        DOIM certification, (2) contained a purchase request and commitment
                        document, and (3) received architectural approval from TRADOC head-
                        quarters.3Also, each obligation was supported by a purchase order.
                                                          *

                        Although TRADOC has met the paperwork requirements for obligating
Army Lacks the          funds for the sample we reviewed, the Army lacks the tools to ensure
Necessary Tools to      that TRADOC'S acquisitions are cost-effective. As we reported in June
Ensure Cost-Effective   1990, neither Army headquarters nor TRADOC has completed its informa-
                        tion architecture. Also, the Army has not established an effective pro-
Acquisitions            cessfor monitoring and controlling information initiatives service-wide.

                        Without an information architecture, the Army has not established an
                        adequate framework that defines the relationships of all elements
                        involved in information resourcesmanagement.An information archi-
                        tecture should establish objectives, develop guidance, evaluate initia-
                        tives, and identify and rank requirements. Architecture development
                        has been hindered at all levels by (1) the lack of a complete headquar-
                        ters architecture to guide major commandsand installations, (2) a lack
                        of specific implementation guidance and milestones,(3) local com-
                        manders’ lack of commitment to the program, and (4) an emphasison
                        new systems initiatives over architecture development. Recognizingthe
                        need for a headquarters architecture, they plan to complete it by March
                        1991.

                        We also reported in June 1990 that the Army has not established an
                        effective processfor monitoring and controlling information initiatives.
                        As a result, it cannot consistently ensure that its automation initiatives
                        are basedon valid requirements, conform to an Army information archi-
                        tecture, and minimize duplication. Without an effective processand
                        information architecture, the Army lacks the necessarytools which
                        would assist in ensuring cost-effectiveness.

                        Our previous report contains recommendationsto correct weaknessesin
                        the Army’s ADP management.Accordingly, we are not making any fur-
                        ther recommendationsat this time.


                        3TRADOChas not establishedan information architecturein accordancewith Army guidance,how-
                        ever, a proprietary operatingenvironment(hardware,operatingsystems,and communicationsnet-
                        work protocols)has beenmandatedfor all of its installations.Accordingto a DCSIMofficial, they
                        review the procurementpackageto ensurecompliancewith this mandatedenvironment.



                        Page 4             GAO/IMTEIG91-12 Prevalence of Fourth Quarter Obligations for Army ADP
EL241761




We did not obtain written agency commentson a draft of this report. We
did, however, discussits contents with Army officials and have included
their commentswhere appropriate.
We are providing copiesof this report to the Chairmen, SenateCom-
mittee on Appropriations, House and SenateCommitteeson Armed Ser-
vices, HouseCommittee on Government Operations, and Senate
Committee on Governmental Affairs. Should you have any questions
about this report or require additional information, please contact me at
(202) 275-4649.Major contributors to this report are listed in appendix
II.

Sincerely yours,




Samuel W. Bowlin
Director, Defenseand Security
  Information Systems




Page 6        GAO/IMTEG91-12 Prevalence of Fourth Quarter Obligations for Army ADP
Contents


Letter                                                                                                     1

Appendix I                                                                                                 8
Objectives, Scope,and
Methodology
Appendix II
Major Contributors to
This Report
Table                   Table 1: Percent of Fourth Quarter ADP Obligations                                 3




                        Abbreviations

                        ADP       automated data processing
                        IXSIM     Deputy Chief of Staff for Information Management
                        DOIM      Director of Information Management
                        GAO       General Accounting Office
                        IMTEC     Information Managementand Technology Division
                        mm        Training and Doctrine Command


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Page 7   GAO/IMTEG91-12 Prevalence of Fourth Quarter Obligations for Army ADP
Appendix I

Objectives;Scope,and Methodology


              On February 8,1990, the Chairman, Subcommitteeon Defense,House
              Committee on Appropriations, asked that we review the Army’s man-
              agementof ADP funds at its major commandsand installations. On the
              basis of further discussionswith a member of the Subcommitteestaff,
              we were asked to (1) identify the prevalence of year-end ADP obligations
              and (2) determine whether these obligations complied with Army poli-
              cies and resulted in cost-effective acquisitions.
              To accomplish these objectives, we reviewed Army ADP obligation proce-
              dures and data related to the sustaining baseenvironment for fiscal
              years 1988 and 1989. The term sustaining baserefers to information
              used to manageArmy resourcesand installations and deploy and sus-
              tain fighting forces. We did not review obligations for strategic or tac-
              tical automation. We performed our work at the Department of Army
              headquarters in the Washington, DC., area; TRADOC, Fort Monroe, Vir-
              ginia; TRADOC'S installations at Fort Leavenworth, Kansas,and Fort Leo-
              nard Wood, Missouri; and the TRADOC Contracting Activity, Fort Eustis,
              Virginia.

              We interviewed appropriate agencyofficials and reviewed reports by
              the Department of DefenseInspector General, Department of the Army
              Inspector General,Army Audit Agency, and the Congress.We reviewed
              laws, policies, and documentsto identify criteria for year-end
              obligations.

              To determine the prevalence of fiscal years 1988 and 1989 year-end ADP
              obligations, we interviewed Army officials and reviewed annual and
              fourth-quarter obligations data from Army headquarters. This informa-
              tion listed how much money major commandsobligated for ADP hard-
              ware, software, salaries, leases,and maintenance.We did not
              independently assessthe accuracy of this data.
              To determine whether obligations complied with Army regulations, we
              limited our review to TRADOC, which is one of the Army’s 11 major com-
              mands. We interviewed officials and reviewed a judgmental sample of
              TRALIOC fourth quarter ADP obligations for fiscal years 1988 and 1989. To
              select our sample, we obtained computer-generatedreports of all fourth-
              quarter obligations for ADP acquisitions made by the TRADOC contracting
              activity. The reports showed 663 and 970 acquisitions for fiscal years
              1988 and 1989, respectively. We identified at least one of the largest
              dollar obligations for acquisition for each installation during the fourth
              quarter of each fiscal year, and reviewed a total of 53 acquisitions to see



              Page 9         GAO/IMTEGgl-12   Prevalence of Fourth Quarter Obligations for Army ADP
Appendix I
Objectives, Scope, and Methodology




if they followed Army regulations. But we did not independently assess
the accuracy of TRADOC’S data.

Our criteria for determining compliance was TRADOC’S ADP Approval and
Acquisition Guide and chapter 12-3 of Army Regulation 37-l. We
checkedthat each procurement packagereceived DOIM certification and
command review and approval, contained a purchase request and com-
mitment form, and was supported by an obligation document.
To addressthe cost-effectivenessquestion, we used information gath-
ered from our prior work and the subsequentreport, Information
Resources:Army Should Limit New Initiatives Until ManagementPro-
gram Is Implemented (GAOmTEC-90-58, June 29, 1990).

We conducted our review between April 1990 and September 1990, in
accordancewith generally acceptedgovernment auditing standards,
with the exception noted above about independently assessingdata
accuracy. We did not obtain written comments from the Department of
the Army on a draft of this report. However, we discussedthe contents
of this report with Army officials, and have included their comments
where appropriate.




Page 9            GAO/IMTEC-91-12 Prevalence of Fourth Quarter Obligations for Army ADP
Appendix II

Major Contributors to This Report


                       JosephT. McDermott, Assistant Director
Information            Thomas J. Howard, Assistant Director
Management and         Sondra F. McCauley,Senior Evaluator
Technology Division,
Washington, D.C.
                       JosephJ. Watkins, Evaluator-in-Charge
Norfolk Regional       Connie W. Sawyer, Jr., Senior Evaluator
Office




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