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GAO: Planned IT Savings From Consolidation Never Tracked

Congressional auditors feel the Department of Homeland Security can do a better job in determining the value of its IT investments in a timely manner.
About six months before the Department of Homeland Security began operating in February 2003, the Bush administration issued an order halting major new IT projects among the 22 agencies that would make up the new department. To get funding, any major project would have needed to win the blessing of an investment review group made up of top White House Offices of Management and Budget and Homeland Security officials.

A major thrust behind the OMB order was to save taxpayers money by avoiding the creation of redundant systems. At the time, OMB estimated that consolidating and integrating the 22 agencies' investments could save between $100 million and $200 million in IT infrastructure and $65 million and $85 million in business-systems expenditures over two years.

But OMB never developed a method to determine if those savings materialized, according to a report issued Thursday by the General Accounting Office, the investigative arm of Congress. An OMB IT official told the accounting office that the estimates were rough approximations and that no documentation exists to support how they were derived.

The investment-review group relied on an informal, undocumented process to fulfill its responsibilities. Nevertheless, according to OMB and Homeland Security IT officials, the review group reviewed five agency investments that were submitted and addressed long-term IT strategic issues related to the transition to the new department.

For instance, the Coast Guard submitted an emergency request to proceed with a licensing agreement with Microsoft. The investment review group OK'd the agreement--provided it be expanded to include other homeland security entities. According to Coast Guard IT officials, the licensing agreement wasn't expanded to include other Homeland Security agencies, the GAO report says, but they couldn't explain why the review group's condition wasn't met.

The Customs Service tendered a non-emergency request to procure a new E-mail system. The review group agreed with the procurement, but recommended a different technical solution. The solution hadn't been implemented by early this year, GAO says.

Because of the memo, the Federal Emergency Management Agency terminated a planned correspondence-tracking system and a personnel-resources information system. In addition, it integrated five infrastructure projects into continuing homeland security initiatives, the GAO report says. It also scaled back an enterprise resource planning project and upgrades to its financial-management system.

Although budgetary savings haven't yet been identified, GAO says Homeland Security IT officials, including CIO Steve Cooper, cited other benefits to the July 2002 memorandums. In particular, they estimated that several million dollars in costs have been avoided as a result of the review group's decision to require the Secret Service to go ahead with the procurement of a search engine provided it would be made available to other Homeland Security agencies.

The investment review group evolved into the department's CIO Council, which is responsible for developing, implementing, and managing a vision and direction for information resources and telecommunications management. Homeland Security chief technology officer Lee Holcomb told GAO that the review group provided the new department with a head start on day one by, for example, deciding to use the Immigration and Naturalization Service's network backbone for the department. Department IT officials credit the memos as facilitating its long-term IT planning efforts, including the development of an enterprise architecture.

Though the department is progressing in its review of agency IT projects, GAO says difficulties exist in bringing them before new review boards in a timely manner. And, GAO recommends, Homeland Security needs to develop a process to do so. Cooper and his staff have identified at least 100 IT programs that need to be reviewed. Without these processes--including a master milestone calendar--the department won't be able to properly prioritize IT investments or terminate poorly managed or strategically unnecessary investments, says David Powner, the GAO's director of IT-management issues.

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