Treasury must finalize privacy policies, auditors say

The Treasury Department needs to finalize policies and procedures to safeguard the privacy of sensitive information, department auditors said.

The policies relate to the collection, use, disclosure and storage of personally identifiable information as required by the Office of Management and Budget and various statutes, said the Treasury Office of Inspector General, which contracted with KPMG to perform the audit.

A fiscal 2005 appropriations law requires agencies to appoint a chief privacy officer, establish privacy and data protection policies, prepare progress reports for the department IG and Congress, and commission a review by an independent third party, said Joel Grover, Treasury’s deputy assistant IG for financial management and information technology audits.

“Without formal directives and policies…information in an identifiable form may not be adequately protected,” KPMG said in its report released Dec. 10 through the IG’s office.

Although several privacy policies were still in draft form, most Treasury agencies, except the Internal Revenue Service, have begun to adopt them, KPMG said. For example, agencies have performed privacy impact assessments on information systems and provided training on the responsibilities of individuals authorized to access sensitive information, the auditors said.

Based on its inspections, KPMG auditors wrote that “Treasury is adequately protecting [personally identifiable information] on public Internet sites, intranet sites and general support systems.”

Treasury needs to finalize its policies and start providing reports to the IG’s office and Congress on their status, KPMG said. Treasury has not submitted reports because of competing priorities and limited resources, the auditors noted, adding that the reports provide a benchmark for progress in privacy and data protection and a foundation for establishing funding requests.

Treasury has had a chief privacy officer since 2005. It established the Office of Privacy and Treasury Records in March and made it responsible for consolidating privacy functions, said Peter McCarthy, Treasury’s assistant secretary for management, chief financial officer and the agency’s senior official for privacy matters. The Office of the Chief Information Officer previously handled those responsibilities.

With all privacy functions under a single line of authority, McCarthy said he is committed to strengthening the information privacy program and fulfilling all requirements.