Report shows Agencies Continue to Mismanage Billions of Dollars
Jul 19 2010
WASHINGTON - Today Sens. Tom Carper (D-Del.) and Susan Collins (R-Me.), members of the Homeland Security and Governmental Affairs Committee, released a report from the Government Accountability Office (GAO), which they requested, highlighting government agencies' continued mismanagement of billions of dollars on information technology (IT) investments because of poor management oversight. The Committee, which oversees the $80 billion agencies spend annually on IT products and services, has held several hearings examining why agencies continue to waste billions of dollars on investments that are delivered late, over budget and not performing as planned.
In 2008, the Office of Management and Budget (OMB), after multiple requests from Congress, released a report detailing why nearly one-third of every investment was poorly planned or over budget. In a move to make government information more accessible and transparent, the Administration delivered a website that provided an "IT Dashboard" which could quickly and easily illustrate investments that were on-track, having trouble, or needing to be canceled.
However, as today's report highlights, agencies have so far failed to upload accurate information about the current status of projects, leaving OMB and the American people in the dark. Some of the investments listed on the IT Dashboard are already hundreds of millions of dollars over budget and years behind schedule. For example, the Department of Homeland Security's (DHS) investment, Automated Commercial Environment, is expected to allow Border Patrol agents to more efficiently scan cargo entering the country and flag cargo that may be hazardous. The project's current status on the IT Dashboard shows that the project is on track and under budget. However, a previous examination by the GAO reveals the very same project is expected to cost approximately $740 million more than originally planned. Sens. Carper and Collins have written to the agencies urging them to provide more timely and accurate data.
"No one would feel comfortable jumping into a car and driving off with their family for a road trip without a working dashboard to tell them how the car is handling," said Sen. Carper. "Information on how fast the car is going, how much fuel is left, and whether the car is running hot are three simple ways to tell whether your trip will be success or whether you will end up stuck on the side of the road. In fact, a car that doesn't provide this information should never be sold in the first place. Yet it seems to be common practice for agencies to provide OMB and Congress with inaccurate and out of date information on whether their investments are on budget, on schedule, and performing as expected. This is simply unacceptable and needs to change."
"This GAO report notes that accountability and public transparency hinge upon accurate, up-to-date data being entered into that oversight system," said Sen. Collins. "The accuracy and timeliness of that data are key to the success of the "IT Dashboard." Much is at stake here. Aggressive oversight of the nearly $80 billion in taxpayer money that the federal government spends on IT investments annually is critical to helping ensure the prevention of waste, fraud and abuse. We have already seen hundreds of millions of dollars wasted by the federal government due to poorly planned and poorly managed IT projects."
"But the key to the oversight tool's success is to make certain that agencies provide accurate and updated information," added Sen. Collins. "That is why I, along with Senator Carper, have written to agencies urging them to provide correct, complete, and timely data on their IT investments. I expect GAO's recommendations to be implemented and agencies to be more proactive in providing factual and timely information about the performance of IT investments."
Sens. Carper and Collins's bill, The Information Technology Investment Oversight Enhancement and Waste Prevention Act of 2009 (S. 920), which would require agencies to rigorously plan investments and report on cost overruns and schedule delays, was passed by the Senate in May and is awaiting a vote in House of Representatives.
A copy of the text of the letter follows:
We wanted to bring your attention to an important issue that we have been focusing on for some time that could save your agency and Americans significant tax dollars. As you know, information technology (IT) has changed the way agencies operate. Over the past decade or so IT has transformed the way agencies accomplish their missions, allowing them to be more efficient and effective. Federal agencies' track records, however, of keeping costs down and delivery dates firm when it comes to IT investments is lacking. In fact, many of these challenges are long-standing and deep-rooted issues that require your attention.
In fiscal year 2009, the federal government spent nearly $79 billion on IT projects to accomplish their missions, including keeping our troops safe overseas, our borders secure at home, and our government transparent and accountable to taxpayers. In fact, the Government Accountability Office (GAO) estimates that federal agencies will likely invest about the same amount, if not more, on new and ongoing IT investments in the next few years in order to continually improve the way agencies operate.
Unfortunately, not all of that $79 billion is spent as wisely as we would hope or expect. Poor agency oversight has led to hundreds of millions of dollars being wasted on IT programs that were planned poorly from the start and managed even worse. For example, the Census Bureau's mismanagement led to a costly malfunction of handheld data collection devices used by Census workers to conduct the recent 2010 Census. The data collection devices did not perform as promised, causing the Census Bureau to spend an additional $1 billion to revert the 2010 Census non-response follow-up operations to a paper-based system. Furthermore, the Internal Revenue Service struggled for more than 20 years and spent over $4 billion to modernize its IT systems to more efficiently process annual tax returns before they finally decided in June 2009 to abandon the program entirely. Even worse, over the past few years the Department of Homeland Security invested $52 million toward a financial system that failed and they are now starting from scratch with a new project that is estimated to potentially cost between $450 million and $1 billion. These are only a few examples of IT investments that experienced poor planning and faulty project oversight.
To address these challenges, we authored the Information Technology Investment Oversight Enhancement and Waste Prevention Act of 2009, which was approved by the U.S. Senate on May 20, 2010. Our bill would address many of the problems highlighted above by requiring agencies to properly plan projects from the outset and to conduct an independent cost estimate for projects prone to mismanagement. Further, our bill gives the Office of Management and Budget (OMB) a unique weapon that would help root out problems and put IT projects back on the right track before they spiral out of control. The bill also would require agencies to alert Congress when an IT investment significantly exceeds the expected cost estimate and mandates that the agency conduct a rigorous analysis to get it back on track. Lastly, the bill calls for OMB to create a website that provides an accurate analysis of all major IT investments.
We were pleased, then, when OMB took our advice to create a website and launched the "IT Dashboard" on June 30, 2009. The IT Dashboard is a one-stop clearinghouse of information about IT investments, which enables Congress and the taxpayers to hold agencies accountable for results. The IT Dashboard has been critical in stressing the importance of properly planning and managing the significant investments the federal government makes in technology projects. In fact, just last week OMB updated and improved its IT Dashboard to help better track complex investments and make it easier to highlight those that may need high-level attention.
Today, the Government Accountability Office (GAO) released its first report on the effectiveness of the IT Dashboard and found that the website has increased the level of transparency and oversight of IT investments. GAO also concluded that not all agencies were providing accurate and timely information on the status of their IT projects. Specifically, the GAO reported that some agencies fail to regularly provide updated data, provide conflicting or inaccurate cost and schedule information, and make it difficult to understand whether an investment was on target or needed some serious help. This needs to change because it deprives OMB, Congress and taxpayers the opportunity to hold agencies accountable for spending their money wisely. Accurate and timely data on IT projects are key to effective oversight and prevention of cost and schedule overruns.
To this end, we urge you to ensure your agency provides the necessary focus and attention on this important issue. We ask that you work with your staff to prioritize the planning and management of major IT investments and ensure your agency's data on IT investments is accurately portrayed on the IT Dashboard. We have asked GAO to continue to closely monitor the IT Dashboard to determine whether agencies are improving the accuracy and reliability of this cost and schedule information. We would like you to provide, by August 9 in writing, information about what your agency is doing to more regularly update accurate data on the IT Dashboard.
We appreciate your attention to this important matter and look forward to continuing to work with you on this and many other issues. If you have any questions on this request, feel free to reach out to us directly or our staff contacts, Teresa Neven at (202) 224-4751 or Erik Hopkins at (202) 224-7195.
Chairman, Federal Financial Management, Government Information, Federal Services, and International Security