GAO-12-342SP: Information technology: 19. Information Technology Investment Management

Information technology > 19. Information Technology Investment Management

The Office of Management and Budget, and the Departments of Defense and Energy need to address potentially duplicative information technology investments to avoid investing in unnecessary systems.

Why This Area Is Important

The Office of Management and Budget (OMB) has reported that the federal government spends billions of dollars on information technology (IT) investments each year. In fiscal year 2011, there were approximately 7,200 investments totaling at least $79 billion. The Department of Defense (DOD) reported the largest number of information technology (IT) investments (2,383 investments at $37 billion), followed by the Department of Energy (Energy) (876 investments and $2 billion).

According to OMB’s annual budget guidance (beginning with fiscal year 2004), agencies are required to map each IT investment to a functional category and sub-category within the Federal Enterprise Architecture.[1] These categorizations, known as a primary function and subfunction are intended to enable OMB and others to analyze investments with similar functions, as well as identify and analyze potentially duplicative investments across agencies.



[1]The Federal Enterprise Architecture is intended to provide federal agencies and other decision makers with a common frame of reference or taxonomy for informing agencies’ individual enterprise architecture efforts and their planned and ongoing investment activities, and to do so in a way that identifies opportunities for avoiding duplication of effort and launching initiatives to establish and implement common, reusable, and interoperable solutions across agency boundaries.

What GAO Found

As GAO reported in September 2011, in their fiscal year 2011 budget submissions to OMB on IT spending, agencies reported the greatest number of IT investments in the information and technology management category (1,536 investments), followed by supply chain management (777 investments), and human resources management (622 investments).[1] Similarly, planned expenditures on investments were greatest in the information and technology management category, at about $35.5 billion. The figure below depicts the total number of investments governmentwide per function.

Number of IT Investments Governmentwide by Primary Function, as of July 2011 (fiscal year 2011 planned expenditures, in billions)

Number of IT Investments Governmentwide by Primary Function, as of July 2011 (fiscal year 2011 planned expenditures, in billions)

GAO reported that OMB provides guidance to agencies on how to report on their IT investments, but this guidance does not ensure complete reporting or facilitate the identification of duplicative investments. Specifically, agencies differ on what investments they include as an IT investment; for example, 5 of the 10 agencies GAO reviewed consistently consider investments in research and development systems as IT, and 5 do not. As a result, federal agencies’ annual IT investments are likely greater than the $79 billion reported in fiscal year 2011. In addition, OMB’s guidance to federal agencies requires each investment to be mapped to a single functional category. This limits OMB’s ability to identify duplicative investments both within and across agencies because similar investments may be organized into different categories. For example, GAO reported on a DOD financial management system that was identified in a different functional category—supply chain management.[2]

GAO also reported that OMB and federal agencies have undertaken several initiatives to address potentially duplicative IT investments. For example, OMB has efforts under way to consolidate similar functions through its Federal Enterprise Architecture initiative, which was developed in 1999. This initiative was intended to provide federal agencies with a common construct for their architectures and thereby facilitate the coordination of common business processes, and system investments among federal agencies. In 2004, we reported that the Federal Enterprise Architecture was a work in progress and was still evolving.[3] To this point, OMB’s Chief Architect reported that comprehensive changes to the Federal Enterprise Architecture are underway and planned for fiscal year 2012. In addition, most of the agencies GAO reviewed established guidance for ensuring new investments are not duplicative with existing systems. However, agencies do not routinely assess operational systems to determine if they are duplicative. Therefore, GAO reported that until agencies routinely assess their IT investment portfolios to identify and reduce duplicative systems, the government’s current situation of having hundreds of similar IT investments will continue to exist.

More recently, GAO conducted a review to examine the three largest categories of IT investments within DOD, Energy, and the Department of Homeland Security (DHS). Specifically, as GAO reported in February 2012, although DOD, Energy, and DHS use various investment review processes to identify duplicative investments, GAO found that 37 of GAO’s sample of 810 investments were potentially duplicative at DOD and Energy (see table below).[4] These investments account for about $1.2 billion in IT spending for fiscal years 2007 through 2012, for these two agencies. To identify these potentially duplicative investments, GAO reviewed the description of each investment’s purpose within specific functional categories and subcategories to identify similarities among related investments within each agency. This formed the basis of establishing groupings of similar investments. GAO discussed the groupings with each of the selected agencies, and GAO obtained further information from agency officials and reviewed and assessed agencies’ rationales for having multiple systems that perform similar functions. For example, GAO identified four DOD Navy personnel assignment investments—one system for officers, one for enlisted personnel, one for reservists, and a general assignment system—each of which is responsible for managing similar functions. The Department of the Navy is implementing an executive oversight board and a centralized review process of IT investments that officials reported will examine these investments to determine if actual duplication exists. The table below summarizes 12 groups of potentially duplicative investments by purpose and agency, which GAO identified.

Potentially Duplicative Investments for DOD and Energy, as of January 2012

Dollars in millions

Department

Branch/bureau

Purpose

Number of investments

Planned or actual spending fiscal years 2007-2012

DOD

Air Force

Contract Management

5

$41

 

Army

Personnel Assignment Management

2

12

 

Navy

Acquisition Management

4

407

 

 

Aviation Maintenance and Logistics

2

85

 

 

Contract Management

5

17

 

 

Housing Management

2

5

 

 

Personnel Assignment Management

4

28

 

 

Promotion Rating

2

3

 

 

Workforce Management

3

109

 

DOD-enterprisewide

Civilian Personnel Management

2

504

Energy

Energy Programs

Back-end Infrastructure

3

1

 

Energy Programs & Environmental and Other Defense Activities

Electronic Records and Document Management

3

7

Total

 

 

37

$1,219

Source: GAO analysis of agency data.

While GAO did not identify any potentially duplicative investments at DHS within GAO’s sample, DHS officials have independently identified several duplicative investments and systems. Specifically, DHS officials have identified and, more importantly, reduced duplicative functionality in four investments, including a personnel security investment, time and attendance investment, human resources investment, and an information network investment. DHS also has plans to further consolidate systems within these investments by 2014, which is expected to produce approximately $41 million in cost savings. DHS officials have also identified 38 additional systems that they have determined to be duplicative. For example, officials identified multiple personnel action processing systems that could be consolidated.

Officials from the three agencies offered a variety of reasons for the potential duplication, such as decentralized governance within the department and a lack of control over certain facilities. Further complicating agencies’ ability to identify and eliminate duplicative investments is that investments are, in certain cases, misclassified by function. For example, DHS’s Federal Emergency Management Agency—Minor Personnel/Training Systems investment was initially categorized within the Employee Performance Management subfunction, but DHS agreed that this investment should be assigned to the Human Resources Development subfunction. Proper categorization is necessary in order to analyze and identify duplicative investments, both within and across agencies. GAO reported that until DOD, Energy, and DHS, correctly categorize their investments, they are limiting their ability to identify opportunities to consolidate or eliminate duplicative investments.

GAO also reported that DHS had taken action to improve its processes for identifying and eliminating duplicative investments. For example, through reviewing portfolios of IT investments, DHS had identified much, and eliminated some, duplicative functionality in certain investments—as previously discussed. Additionally, DOD and Energy had recently initiated specific plans to address potential duplication in many of the investments GAO identified—such as plans to consolidate or eliminate systems. While these efforts could eventually yield results, DOD’s and Energy’s initiatives had not yet led to the consolidation or elimination of duplicative investments or functionality. For example, while DOD and Energy had documented milestones for improving their IT investment review processes, officials did not provide examples of duplicative investments that they had consolidated or eliminated. Therefore, GAO reported that until DOD and Energy demonstrate, through existing transparency mechanisms, that they are making progress in identifying and eliminating duplicative investments, it will remain unclear whether they are avoiding investment in unnecessary systems.


[1]GAO, Information Technology: OMB Needs to Improve Its Guidance on IT Investments, GAO-11-826 (Washington, D.C.: Sept. 29, 2011).

[2]GAO, Financial Management Systems: OMB's Financial Management Line of Business Initiative Continues but Future Success Remains Uncertain, GAO-09-328 (Washington, D.C.: May 7, 2009).

[3]GAO, Information Technology: The Federal Enterprise Architecture and Agencies’ Enterprise Architectures Are Still Maturing, GAO-04-798T(Washington, D.C.: May 19, 2004).

[4]GAO, Information Technology: Departments of Defense and Energy Need to Address Potentially Duplicative Investments, GAO-12-241. Washington, D.C.: February 17, 2012.

Actions Needed

To better ensure the agencies avoid investing in duplicative investments, GAO recommended in September 2011 that the Director of OMB

  • clarify guidance to federal agencies in reporting on their IT investments by specifying whether certain types of systems should be included;
  • require federal agencies to report the steps they take to ensure that their IT investments are not duplicative as part of their annual budget and IT investment submissions; and
  • revise guidance to federal agencies on categorizing IT investments to ensure that the categorizations are clear and allow agencies to choose secondary categories.

Additionally, GAO recommended in February 2012 that the Secretaries of DOD and Energy should direct their Chief Information Officers to

  • utilize existing transparency mechanisms to report on the results of their efforts to identify and eliminate, where appropriate, each potentially duplicative investment GAO identified, as well as any other duplicative investments.

GAO also recommended in February 2012 that the Secretaries of DOD, Energy, and DHS should direct their Chief Information Officers to

  • correct the miscategorizations for the investments GAO identified and ensure that investments are correctly categorized in agency submissions.

How GAO Conducted Its Work

The information contained in this analysis is based on findings from the products listed in the related GAO products section. GAO analyzed IT investment data and OMB’s guidance to federal agencies on IT investments, interviewed officials at the 10 federal agencies with the largest IT spending in fiscal year 2010[1] to understand how they implement OMB guidance, and analyzed reports and interviewed officials on efforts to address duplicative investments. GAO also selected three of the largest agencies with respect to number of investments—DOD, Energy, and DHS to identify potentially duplicative investments. GAO analyzed a subset of investment data from OMB’s IT budget data to identify investments with similar functionality. Specifically, GAO reviewed 810, or 11 percent, of the approximately 7,200 IT investments federal agencies report to OMB. GAO’s review represents approximately 24 percent of DOD’s IT portfolio in terms of the number of investments that they report to OMB, 19 percent of Energy’s, and 16 percent of DHS’s. GAO then reviewed the name and narrative description of each investment’s purpose to identify similarities among related investments within each agency (GAO did not review investments across agencies). This formed the basis of establishing groupings of similar investments. GAO discussed the groupings with each of the selected agencies, and GAO obtained further information from agency officials and reviewed and assessed agencies’ rationales for having multiple systems that perform similar functions. See pages 345-346 of the PDF version of this report (appendix III) for a list of the programs GAO identified that may have similar or overlapping objectives, provide similar services or be fragmented across government missions. Overlap and fragmentation may not necessarily lead to actual duplication, and some degree of overlap and duplication may be justified.



[1]The 10 federal agencies are the Departments of Agriculture, Commerce, Defense, Health and Human Services, Homeland Security, Justice, Transportation, the Treasury, and Veterans Affairs, and the National Aeronautics and Space Administration.

Agency Comments & GAO Contact

GAO provided a draft of its September 2011 report to OMB for review and comment. OMB disagreed with the first recommendation and agreed with the second and third recommendations. Specifically, OMB officials do not plan to implement the first recommendation, because they believe guidance already exists on categorizing and identifying IT investments. However, GAO believes that the recommendation is appropriate because the existing guidance does not address key categories of IT investments where GAO found inconsistencies among agencies. OMB officials stated that the agency plans to address the second and third recommendations through updated guidance and the annual budget process.

GAO provided a draft of its February 2012 report to OMB, DOD, Energy, and DHS for review and comment. OMB provided technical comments that GAO incorporated, where appropriate. DOD and DHS generally agreed with the recommendations, while Energy agreed with the first recommendation, but not the second. Specifically, Energy disagreed that two of the four investments GAO identified were miscategorized, explaining that their categorizations reflect funding considerations. However, OMB guidance indicates that investments should be classified according to their intended purpose. Consequently, GAO believes the recommendation is warranted.

GAO provided a draft of this report section to OMB for review and comment. OMB provided technical comments, which were incorporated as appropriate.

For additional information about this area, contact David A. Powner at (202) 512-9286 or pownerd@gao.gov.

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