From the U.S. Government Accountability Office, www.gao.gov Transcript for: Federal Oversight of $54 Billion Spent on Existing IT Systems Description: Audio interview by GAO staff with Dave Powner, Director, Information Technology Related GAO Work: GAO-13-87: Information Technology: Agencies Need to Strengthen Oversight of Billions of Dollars in Operations and Maintenance Investments Released: November 2012 [Background Music] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's September 2012. Nearly 70 percent of federal agencies' IT budgets goes towards operating and maintaining existing systems. A group led by Dave Powner, a director in GAO's Information Technology team, recently reviewed the extent to which agencies analyze the performance of these legacy systems. GAO's Jeremy Cluchey sat down with Dave to talk about what they learned. [ Jeremy Cluchey: ] Can you talk a little bit about agencies information technology budgets and particularly how much goes to maintaining existing IT systems? [ Dave Powner: ] Well, currently the federal government spends about $80 billion annually on federal IT. Of that 80 billion, 70 percent of that overall IT spend goes toward operational or existing systems. So that le- that's $55 billion going towards existing systems which only leaves about 25 billion for IT acquisition and development to really modernize agency missions. So we have the 55/25 split, and again 70 percent-- that's a lot of money that goes towards operational or existing systems. [ Jeremy Cluchey: ] And in this report, your team focused primarily on that larger chunk, that $55 billion that's spent on existing systems. Agencies are directed by OMB to analyze these systems and your team looked at the extent to which several agencies are doing that. Can you talk about what you found there? [ Dave Powner: ] Yeah, OMB actually requires an operational analysis for all existing or operational systems to be done on an annual basis. Basically what it gets at, is the investment continuing to meet mission needs adding value to the agency and then second, is there a more efficient way to actually pursue this investment? We looked at five agencies that were, that had large and significant existing or operational budgets and there's really two categories of systems. First of all there were some agencies that had policies in place to do these operational analysis and they were doing some of these operational analysis. Those agencies were the Department of Homeland Security and Health and Human Services. So good news story there. Now all of their operational analysis did not necessarily address everything that was required and we noted that in our report. And then there were some investments that wasn't, that the operational analysis wasn't conducted. Now there were three agencies that did not have policies and had not conducted a single operational analysis for any of their steady state systems for fiscal year '11. That's the, was the scope of our review. Those agencies were Department of Defense, Treasury, and VA. [ Jeremy Cluchey: ] And based on these findings, what are some of the steps that GAO's recommending here? [ Dave Powner: ] Well, a couple things Jeremy. So if you first look at DHS and HHS, we want to make sure that their assessments are complete in addressing all the key criteria that OMB calls for in these assessments. And then for those investments that are getting the analysis, that they focus on those. We got good results immediately from DHS. Their CIO sent out a memo to all the component agencies highlighting the importance of these operational assessments and to ensure that they're done on an annual basis. Now if you turn towards DOD, Treasury, and VA, those organizations needed to get policies in place to conduct these and actually to start conducting these operational analysis on an annual basis for all of their existing or operational systems. [ Jeremy Cluchey: ] The report also mentions increasing public transparency around the results of these operational analysis and assessments. How could this work and why is it important? [ Dave Powner: ] Well, in addition to making the recommendations to the five agencies that we looked at Jeremy, also OMB has a role in this and what we found is that OMB did not have a mechanism to ensure that the policy, that these operational analysis are in fact conducted, nor is there any reporting mechanism. So our recommendation to OMB was to direct the agencies to report their operational analysis on the federal IT dashboard. At times, OMB has challenges policing some of their policies. This actually would provide great transparency and it would be apparent whether agencies are conducting these operational analysis as intended. [ Jeremy Cluchey: ] Finally, for taxpayers interested in how federal agencies are spending down these enormous IT budgets, what's the bottom line here? [ Dave Powner: ] Well, the bottom line is we spend a significant amount of money on existing and operational systems. We want to make sure that those existing systems are meeting mission needs continuing to add value, but also being done in the most efficient way possible. If in fact we found a way to save money and move some of the $55 billion slice over to the $25 billion slice, we would be in a position to spend more money on modern technology and to enhance mission at many of these agencies. 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