Farmers Home Administration

GAO discussed its review of the Farmers Home Administration's (FmHA) $520-million information systems modernization, focusing on FmHA effectiveness in planning and oversight. GAO noted that: (1) inadequate planning, combined with ineffective management and oversight, led to the failure of the previous two modernization efforts; (2) FmHA has yet to resolve its long-standing planning and oversight problems; (3) FmHA is assuming that it can develop technology-based solutions to respond to fundamentally new and different ways of doing business, but if existing systems cannot be retrofitted to meet FmHA mission or borrowers' needs, it may cost millions to replace or redesign them; (4) FmHA is spending hundreds of millions of dollars to modernize systems that support its loan programs before it has clearly articulated a business vision and supporting information needs; (5) FmHA must develop an overall plan to ensure that the modernization does not degenerate into a loose collection of independent systems; and (6) the deficient methods used by FmHA to manage its modernization effort increase the risk that it will fail, leaving FmHA without the information technology it needs to help reduce its loan losses.