oversight

USDA Information Management: Action Needed To Address Long-standing Deficiencies

Published by the Government Accountability Office on 1997-03-05.

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

                          United States General Accounting Office

GAO                       Testimony
                          Before the Committee on Agriculture, Nutrition and
                          Forestry, U.S. Senate




For Release on Delivery
Expected at
9 a.m.
                          USDA INFORMATION
Wednesday,
March 5, 1997             MANAGEMENT

                          Action Needed To Address
                          Long-standing Deficiencies
                          Statement of Joel C. Willemssen
                          Director, Information Resources Management
                          Accounting and Information Management Division




GAO/T-AIMD-97-56
Mr. Chairman and Members of the Committee:

We are pleased to be here today to assist the Committee in its assessment
of progress made by the Department of Agriculture (USDA) in putting into
place a foundation for effective acquisition and management of its
information technology resources. As requested, this morning I will
discuss past difficulties USDA has experienced in planning for and
managing information technology, and will then describe the action we
believe the Department must take if it is to significantly improve its
management of information technology resources. I will also touch briefly
on the Department’s current moratorium on information technology
acquisitions.

Critical legislation enacted last year, the Clinger-Cohen Act of 1996—along
with other important management reform legislation—provides a
framework under which sound investment in information technology (IT)
can become the norm, rather than the exception. For this to happen,
however, it is important that implementation actions focus not only on the
means (the policies, practices, and processes) but also on end results that
are expected from the management reforms. Given the problems that have
plagued USDA in the past, and the Secretary’s commitment to significantly
improving the Department’s management of IT investments, this hearing
comes at an opportune time. How and how well USDA implements these
laws will essentially determine whether it can begin to efficiently and
cost-effectively manage its investment in information technology, one that
currently totals $1.2 billion annually.

The influence of USDA on millions of Americans makes it essential that its
information technology systems be carefully managed; failure to do so
could have serious consequences. USDA’s size and complexity, however,
make this far from a simple undertaking. The fourth largest federal agency,
USDA employs over 100,000 individuals in 30 separate component agencies
with multiple and sometimes disparate missions. Its responsibilities range
from forests and timber to food assistance for the needy and the safety of
meat and poultry products for human consumption. In fiscal year 1997
alone, USDA outlays will total about $57 billion.




Page 1                                                     GAO/T-AIMD-97-56
                           As we have reported over the past several years, USDA and its agencies time
History of Problems:       and again have poorly planned or managed information technology
Inadequate Planning,       projects. This has resulted in the waste of millions of dollars in IT
Management of              investments. Specific deficiencies we have encountered include
                           inadequate definition of system needs, insufficient analysis of alternatives,
Information                proceeding with system modernization before assessing business needs
Technology Resources       and developing a strategic business plan, not considering Departmental
                           restructuring in the planning and acquisition of IT resources, and
                           ineffectively managing the Department’s $100-million annual
                           telecommunications program. What many of these actions have in
                           common is that they have allowed programs to be unduly influenced by
                           technology as the driving force, rather than choosing technology to help a
                           program achieve certain strategic goals by first analyzing and revising the
                           mission-related business process.

                           The attachment to my statement today lists previous reports dealing with
                           these specific cases in detail. I would, though, like to highlight a few
                           examples.

                       •   In June 1990, we reported that the Forest Service was not ready to procure
                           a $1.2-billion geographic information system because alternatives for
                           integrating this nationwide system into its existing operations had not
                           been adequately analyzed, and system performance needs had not been
                           adequately defined.
                       •   In October 1991, we reported that the Farmers Home Administration was
                           proceeding with a $520-million project to modernize automated systems
                           for making and collecting loans, yet those plans were not based on a
                           strategic business plan that articulated how the agency would operate in
                           the future, such as the impact of changes to the loan management
                           operations. We judged the level of risk in this effort to be, therefore,
                           unacceptable.
                       •   In June 1992, we testified before this Committee that restructuring the
                           Department would affect the farm service agencies’ automation plans,
                           which included four USDA agencies planning separate information
                           technology modernizations; together, they were to spend about $2 billion
                           from 1993 through 1997. Such investments were unwise at the time, given
                           the likelihood of at least some modification to reflect a streamlined field
                           structure and new ways of doing business. The Committee agreed and at
                           its urging the Department postponed these acquisitions and later
                           established a consolidated, multiagency program, which came to be
                           known as Info Share.




                           Page 2                                                      GAO/T-AIMD-97-56
As you are aware, Mr. Chairman, the way USDA managed the Info Share
program continued to be problematic. In August 1994, we reported that the
$2.6-billion program was basically being managed as a vehicle for
acquiring new technology, rather than as an opportunity for reengineering
business processes to better serve farm service agency customers. The
General Services Administration subsequently canceled USDA’s
procurement authority for this project, and the Office of Management and
Budget placed it on its list of high-risk programs. As reported by USDA’s
Office of Inspector General, during fiscal years 1993 and 1994 over
$100 million had already been spent, which included personnel costs. USDA
finally disbanded Info Share in December 1995 and moved the program’s
key objectives to the Department’s service center implementation effort.

The issue of streamlining and consolidating systems also applies to
management of the Department’s financial information. We noted in
September 1995 that many of USDA’s financial management systems
problems would not be resolved until and unless the Department’s systems
were brought into compliance with USDA’s financial standards. Further,
absent from the Department’s “Financial Information Systems Vision and
Strategy” was any mention of eliminating or consolidating over 100
separate financial management systems at USDA that perform overlapping
functions, or of reengineering its financial management processes.

Another area involved wasted funds for USDA’s telecommunications. As we
reported in April 1995, USDA had not acted on all identified opportunities to
consolidate and optimize telecommunications services and thus save
millions of dollars annually. Further, we reported in September 1995 that
due to lax oversight, various USDA agencies were using—and paying
for—redundant services in the same locations, leasing equipment they
were not using, and paying for services never provided. Moreover, we
reported in April 1996 that USDA had not taken sufficient action to address
telephone fraud and abuse.

Recommendations that we have made over the last 3 years to address
these issues have not yet been fully implemented. The Department has
several actions underway; we cannot at this time, however, be sure that
they will fully address our concerns.




Page 3                                                       GAO/T-AIMD-97-56
                            USDA’s problems in planning and managing IT are not unique; similar
USDA at a                   problems have been encountered throughout government. After a decade
Crossroads: Following       of agencies’ poor planning and program management that resulted in
Legislative                 American taxpayers’ not getting their money’s worth from expenditures of
                            $200 billion on information systems, the Congress enacted the
Prescriptions Can           Clinger-Cohen Act to strengthen executive leadership in information
Help USDA Control           management and institute sound capital investment decision-making to
                            maximize the potential return on information system investments. By
Information                 providing specific requirements for federal agencies and holding them
Technology                  responsible for results, this law is far-reaching. To be effective, however,
                            its must be supported and implemented.

                            A USDA that works better and costs less in the 21st century must have
                            efficient and effective information systems. If properly implemented, the
                            requirements of the Clinger-Cohen Act should lead to a significantly
                            improved approach to acquiring and managing agencies’ IT investments.
                            Simply put, USDA will need to fully and properly implement the
                            Clinger-Cohen mandates to begin resolving its long-standing deficiencies
                            in managing and acquiring IT. The following sections of the act outline IT
                            requirements related to planning and managing investments; they are at
                            the core of how USDA can began to make improvements:

                        •   capital planning and investment control,
                        •   performance and results-based management, and
                        •   agency chief information officer.

                            To its credit, USDA has begun taking steps toward meeting the
                            Clinger-Cohen mandates. However, much remains to be done to fully
                            implement the act’s various provisions. The Department has not yet
                            established specific time frames or milestones for full implementation; this
                            will be an important step, as the actions that remain will be neither easy
                            nor quick. They will require a significant amount of time and commitment
                            by the most senior managers in the Department.

                            It is important to note, however, that just as technology is most effective
                            when it supports defined business needs and objectives, Clinger-Cohen
                            will be more powerful if it can be integrated with the objectives of broader
                            governmentwide management reform legislation that USDA is also required
                            to implement. One such reform includes the Paperwork Reduction Act,
                            which emphasizes the need for an overall information resources
                            management strategic planning framework, with IT decisions linked
                            directly to mission needs and practices. Another reform is the Chief



                            Page 4                                                      GAO/T-AIMD-97-56
                       Financial Officers Act, which requires that sound financial management
                       practices and systems essential for tracking program costs and
                       expenditures be in place. Still another reform is the Government
                       Performance and Results Act (GPRA), which focuses on defining mission
                       goals and objectives, measuring and evaluating performance, and
                       reporting results. Together, Clinger-Cohen and these other reforms
                       provide a powerful framework under which USDA has the best opportunity
                       to improve the management and acquisition of information technology
                       that we all want to see.

                       I would now like to highlight some of the specific provisions of the
                       Clinger-Cohen Act and the steps USDA has taken to start meeting provisions
                       of the act; I will then provide our observations on the implementation
                       challenges facing the Department.


Capital Planning and   Under this section of the Clinger-Cohen Act, USDA is required to design
Investment Control     and implement a process for maximizing the value and assessing and
                       managing the risks of information technology acquisitions. This process
                       is supposed to be integrated with the processes for making budgetary,
                       financial, and program management decisions, and include criteria to
                       be applied in considering whether to undertake a particular investment
                       in information systems. Moreover, the process is to provide for
                       (1) identifying information systems investments that would result in
                       shared benefits or reduced costs for other government agencies,
                       (2) identifying quantifiable measurements of benefits and risks of
                       proposed investments, and (3) the means for senior management to
                       obtain information on the progress of information systems investments.

                       USDA has begun to act in this area and is currently designing the specific
                       elements and criteria for its capital planning and investment control
                       process. In light of this, and because no specific time frames or milestones
                       yet exist, it is unclear at this time how the Department’s process will
                       operate or when the Department will be ready to fully implement the
                       process.

                       Part of USDA’s overall capital planning and investment control process will
                       include its Executive Information Technology Investment Review Board,
                       which the Secretary authorized last July. It was given responsibility for
                       selecting, monitoring, and evaluating Departmentwide technology
                       investments; members include the Department’s most senior program




                       Page 5                                                      GAO/T-AIMD-97-56
                  officials. The board first met this past January, but has not yet adopted
                  operating procedures.

                  Full and effective implementation of this section of Clinger-Cohen
                  provides, among other elements, potential benefits from sharing with
                  government entities beyond USDA. For example, USDA’s initial version of its
                  information architecture includes an illustration of candidate locations for
                  telecommunications equipment and services based on where major
                  concentrations of USDA personnel work. At many of these locations,
                  however, other federal agencies, such as the Department of the Interior,
                  may already have equipment and services in place that could possibly be
                  shared. If such opportunities to share resources exist and are ignored, the
                  chance to achieve savings will be missed.


Performance and   Under this section of Clinger-Cohen, to implement performance and
Results-Based     results-based management for information technology, USDA is required
Management        to establish goals for improving the efficiency and effectiveness of
                  agency operations through the effective use of information technology,
                  and to report to the Congress on its progress in achieving these goals.
                  USDA is also required to revise mission-related and administrative
                  processes before making significant investments in information
                  technology, and to ensure that performance measures are prescribed for
                  gauging how well the technology supports USDA programs.

                  USDA is in the early stages of addressing these requirements, and it is
                  unclear at this time how the Department will fully implement all the
                  requirements under this section. From our perspective, these requirements
                  may be the most difficult and time-consuming to implement, and will
                  demand full commitment and involvement from senior managers for
                  USDA’s mission areas.


                  In establishing the mission-based goals and performance measures for IT
                  investments, USDA will need to make sure that these are aligned with the
                  long-term strategic goals and performance measures it is currently
                  developing under GPRA. In a report we sent you last week, we discussed
                  the progress USDA has made in meeting the GPRA requirements, and noted
                  that USDA plans to consult with the Congress some time this spring after its
                  draft Departmentwide strategic plan has been reviewed by the Office of
                  Management and Budget and the Secretary.




                  Page 6                                                       GAO/T-AIMD-97-56
                           Moreover, USDA historically has not demonstrated success in obtaining the
                           necessary commitment and involvement from senior managers in revising
                           mission-related processes. For example, as previously discussed, we noted
                           in our August 1994 Info Share report that, despite the importance of senior
                           management involvement to fundamentally improve the way these
                           agencies do business, Departmental managers were not directly and
                           personally involved and responsible. Two-and-a-half years after our report,
                           USDA is just starting to move forward with its first projects to revise farm
                           service agency processes.


Agency Chief Information   Under this section, to help USDA carry out the new responsibilities
Officer                    discussed in the previous two sections, the Secretary of Agriculture is
                           required to designate a chief information officer. The CIO is to be much
                           more than a senior technology manager. As a top-level executive
                           reporting directly to the agency head, the CIO is supposed to be
                           responsible for achieving mission results through technology by working
                           with senior managers on effective management to achieve the agency’s
                           strategic performance goals. Moreover, the CIO is to promote
                           improvements in work processes and develop and implement an
                           integrated, agencywide technology architecture. The CIO is also required
                           to monitor and evaluate the performance of information technology
                           programs, and advise the head of the agency whether to continue,
                           modify, or terminate a program or project. Further, the CIO is
                           responsible for strengthening the agency’s knowledge, skills, and
                           capabilities to effectively manage information resources.

                           USDA has taken steps to begin implementing requirements in this area. In
                           August 1996 the Secretary established a CIO position and designated an
                           acting CIO, who reports to the Secretary. At USDA, the CIO has been given
                           responsibility for supervising and coordinating the design, acquisition,
                           maintenance, use, and disposal of information technology by USDA
                           agencies, and for monitoring the performance of USDA’s information
                           technology programs and activities. However, USDA has not yet established
                           specific time frames or milestones for developing policies and procedures
                           describing how the CIO’s office will carry out these responsibilities.

                           The CIO’s office has developed an initial version of an information
                           technology architecture. The acting CIO presented this initial version of the
                           architecture to the review board last month, and the board is now
                           considering it. USDA has likewise not yet established a specific time frame
                           or milestones for completing its architecture.



                           Page 7                                                       GAO/T-AIMD-97-56
In our view, in order to complete a sound and integrated architecture,
substantial progress must first be seen in the performance and
results-based management area. Without first revising mission-related
processes, at least conceptually, USDA risks developing an information
systems technology architecture that supports the Department’s outdated
processes rather than one consistent with any future approach. Revising
mission-related processes may alter the architecture components and
severely affect information technology investment decisions.

A case in point is the revision of a mission-related loan servicing process
at USDA. After our October 1991 report, USDA canceled its $520-million
Farmers Home Administration effort to modernize automated systems for
its highly decentralized process for making and collecting single-family
housing loans. Since then, with pressure from the Congress, USDA has
developed and is implementing a new process for servicing these loans
centrally known as the Dedicated Loan Origination and Servicing system.
By moving from a highly decentralized to a centralized system, USDA
expects to reduce the number of offices necessary for carrying out this
process by about two-thirds—from about 2,200 in 1991 to about 800.
Revising the loan-servicing process significantly affected the Department’s
information technology investment decisions since fewer and different
computers and telecommunications equipment were needed for
centralized servicing.

Once USDA is ready to implement its architecture, another critical
component of implementation will be establishing a systematic process for
making necessary adjustments to the architecture to reflect internal and
external changes. Changes may include elements such as the impact that
the fiscal year 1998 budget will have on information technology
investment decisions. This is especially true at USDA’s Farm Service
Agency, since the Department’s fiscal year 1998 budget request points out
that by the end of 1999 a maximum of 2,000 field office service centers will
exist, compared with more than 2,500 today. Other changes will include
those opportunities identified through USDA’s examination this year of
operational efficiencies and cost savings from further coordinating Farm
Service Agency and Natural Resources Conservation Service activities;
these include alternative means of program delivery, such as centralizing
servicing for Agriculture Transition Marketing Act payments. Completing
the architecture and keeping it current is especially critical if it is to
represent a sound and integrated tool for guiding USDA’s investment
decisions.




Page 8                                                      GAO/T-AIMD-97-56
                      Finally, Mr. Chairman, a word about the Department’s moratorium on
Constraining          significant information technology investments. With the passage of
Information           Clinger-Cohen and concerns expressed in Senate and House
Technology Spending   appropriations and authorization language, the Deputy Secretary last
                      November established a moratorium on all significant information
While Implementing    technology investments. This was done to give the Department time to
Clinger-Cohen         assess its existing and planned IT investments and constrain IT spending
                      until it develops a Departmentwide information architecture and
                      implementation process. We applaud this action and view it as the first
                      step in getting a handle on information technology spending at USDA.

                      In addition, just 5 weeks ago, on January 27, the acting CIO also suspended
                      telecommunications investments for the service center implementation
                      effort, with exceptions for those sites implementing centralized rural
                      housing loan servicing or with emergencies, until the Department can
                      assess the impact of the fiscal year 1998 budget. We also support this
                      action since it is designed to prevent USDA from acquiring
                      telecommunications equipment for sites that may close.


                      Mr. Chairman, this concludes my statement. I would be happy to respond
                      to any questions you or other members of the Committee may have at this
                      time.




                      Page 9                                                      GAO/T-AIMD-97-56
Page 10   GAO/T-AIMD-97-56
Related Products


              USDA Management: Progress in Meeting GPRA’s Requirements
              (GAO/RCED-97-65R, Feb. 26, 1997).

              USDATelecommunications: More Effort Needed To Address Telephone
              Abuse and Fraud (GAO/AIMD-96-59, April 16, 1996).

              USDAFinancial Systems: Additional Actions Needed To Resolve Major
              Problems (GAO/AIMD-95-222, Sept. 29, 1995).

              USDATelecommunications: Better Management and Network Planning
              Could Save Millions (GAO/AIMD-95-203, Sept. 22, 1995).

              USDA   Telecommunications (GAO/AIMD-95-219R, Sept. 5, 1995).

              Monitoring of the Info Share Program (USDA/OIG Report 50530-1HQ, May 4,
              1995).

              USDA Telecommunications: Missed Opportunities To Save Millions
              (GAO/AIMD-95-97, April 24, 1995).

              Review of Info Share Program Expenditures for Fiscal Years 1993 and
              1994 (USDA/OIG Report 50530-2-HQ, Jan. 17, 1995).

              USDARestructuring: Refocus Info Share Program on Business Processes
              Rather Than Technology (GAO/AIMD-94-156, Aug. 5, 1994).

              Information Resources Management in a Reconfigured U.S. Department of
              Agriculture (House Report 103-610), Committee on Government
              Operations, House of Representatives, July 19, 1994.

              Information Resources: USDA Lacks Data on Major Computer Systems
              (GAO/AIMD-94-31, Oct. 21, 1993).

              Revitalizing USDA: A Challenge for the 21st Century (GAO/T-RCED-93-32,
              April 22, 1993).

              Crop Insurance Program: Nationwide Computer Acquisition Is
              Inappropriate at This Time (GAO/IMTEC-93-20, March 8, 1993).

              Department of Agriculture: Restructuring Will Impact Farm Service
              Agencies’ Automation Plans and Programs (GAO/T-IMTEC-92-21, June 3, 1992).




              Page 11                                                        GAO/T-AIMD-97-56
           Related Products




           Geographic Information System: Forest Service Has Resolved GAO
           Concerns About Its Proposed Nationwide System (GAO/T-IMTEC-92-14,
           April 28, 1992).

           ADP Modernization: Half-Billion Dollar FmHA Effort Lacks Adequate
           Planning and Oversight (GAO/IMTEC-92-9, Oct. 29, 1991).

           Farmers Home Administration: Half-Billion Dollar ADP Modernization
           Lacks Adequate Planning and Oversight (GAO/T-IMTEC-92-2, Oct. 29, 1991).

           Forest Service Is Making Progress in Developing a Nationwide Geographic
           Information System (GAO/T-IMTEC-91-11, April 24, 1991).

           Management Improvements Essential for Key Automated Systems at the
           Agriculture Stabilization and Conservation Service (GAO/T-IMTEC-90-13,
           Sept. 18, 1990).

           Information Resources: Management Improvements Essential for Key
           Agriculture Automated Systems (GAO/IMTEC-90-85, Sept. 12, 1990).

           Geographic Information System: Forest Service Not Ready To Acquire
           Nationwide System (GAO/IMTEC-90-31, June 21, 1990).

           Forest Service Not Ready to Acquire a Nationwide Geographic
           Information System (GAO/T-IMTEC-90-10, May 2, 1990).

           Information Management: Issues Important to Farmers Home
           Administration Systems Modernization (GAO/IMTEC-89-64, Aug. 21, 1989).




(511419)   Page 12                                                     GAO/T-AIMD-97-56
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