Lawmakers: Waste not on your IT projects, and we can help

Government Accountability Office report

The Office of Management and Budget needs to do a better job of overseeing the federal government’s multibillion-dollar investment in information technology, the chairman of a Senate subcommittee said.

GAO and the subcommittee said OMB should improve the way it identifies and oversees projects. There is no central list of projects and their problems, leaving few ways to track progress.

In fiscal 2007, federal agencies have proposed spending about $4.5 billion on IT projects that are on OMB’s Management Watch List of projects at high risk of failure.

In fiscal 2007, the federal government will spend about $64 billion on IT projects ranging from e-payroll and human resources to weather satellites and defense systems. As of March, more than 300 IT projects, worth about $12 billion, were on the watch list or considered high-risk projects, according to a Government Accountability Office report released Sept. 7.

Also in March, OMB posted 263 major IT projects in the Bush administration’s fiscal 2007 budget — worth about $10 billion — on its Management Watch List. The list is a means of identifying poorly planned projects based on OMB’s evaluations of agencies’ funding, justification for the projects or Exhibit 300s.

Karen Evans, administrator for e-government and IT at OMB, said earlier this month that that number had been reduced to 86 from 263.

OMB also reports on high-risk projects, which require special attention from the highest level of agency management and oversight authorities, such as GAO. A project can become high-risk because of exceptionally high costs, even if it is performing well. GAO found that as of March only 79 of the 226 projects listed as high-risk earned the designation with performance shortfalls. They total about $2.2 billion.

David Powner, director of IT Management Issues at GAO, said the number of projects is probably higher than GAO found because of inaccurate information from agencies.

The Senate Homeland Security and Governmental Affairs Committee’s Subcommittee on Federal Financial Management, Government Information and International Security held a hearing Sept. 7 to ask OMB why such potentially wasteful projects are being funded and how it is ensuring the success of the projects.

Statutes require OMB to track and analyze the risks and outcomes of major capital investments in agency information systems. Agencies then must report to Congress on the net benefits of the investments.

“The idea that we have contracts that aren’t performing or are over-cost tells us that some of our problems are in our contracting to begin with,” said Sen. Tom Coburn (R-Okla.), subcommittee chairman.

“Without such lists, OMB is not fully exploiting the opportunity to analyze and track these projects on a governmentwide basis and not involving Congress in the oversight of these projects with risks,” the report states.

GAO also said OMB does not consistently apply to all projects the criteria for spotting risky projects. Powner said GAO found projects that appeared to meet the criteria but were not identified as high risk.

Nevertheless, OMB is pushing for more transparency on agencies’ part. They must begin publishing their business cases on their Web sites within two weeks of the president’s budget release.

Among other recommendations, Powner suggested that OMB keep agency chief information officers on their toes by having inspectors general check random business cases for inaccuracies.

“I think it’s a wonderful idea,” Evans said.

Powner also said it might help if there were consequences for poorly planned projects and inaccurate business cases. “Folks would take it a bit more seriously.”