Information Technology
HUD's Expenditure Plan Satisfies Statutory Conditions, and Implementation of Management Controls Is Under Way Gao ID: GAO-11-762 September 7, 2011Information technology (IT) is critical to the Department of Housing and Urban Development's (HUD) ability to carry out its home ownership and community development mission. Provisions of the Consolidated Appropriations Act, 2010, require HUD to develop and submit to Congress an expenditure plan for its efforts to modernize the department's IT environment prior to using 75 percent of the funds made available for IT modernization. The plan is to satisfy certain statutory conditions and is to be reviewed by GAO. Accordingly, GAO's objectives were to (1) determine whether HUD's revised plan satisfies statutory conditions and (2) provide observations about the plan and management of HUD's IT modernization program. To accomplish this, GAO assessed the plan against the statutory conditions, analyzed department documentation and relevant plans on key internal management controls, and reviewed HUD's efforts to address open GAO recommendations. GAO also interviewed cognizant department officials.
HUD's revised fiscal year 2010 expenditure plan satisfied the statutory conditions contained in the act. Specifically, pursuant to the statute, the plan identified the functional and performance capabilities, mission benefits, lifecycle costs, and key milestones for seven identified IT projects that support HUD's modernization efforts. For example, the plan stated that one of the mission benefits expected from the HUD Integrated Financial Management Improvement Project is to support the timeliness and responsiveness of financial transactions by ensuring that invoices are paid on time equal to or greater than 98 percent of the time. Further, the plan demonstrated that each project had support from an adequately staffed project office; conformed to the department's in-process policies and procedures on capital planning and investment control; complied with the department's in-process enterprise architecture; and had been managed in accordance with HUD's in-process lifecycle management processes. For example, the plan disclosed detailed information regarding how each project was categorized in relation to the department's conceptual architecture currently in development. GAO made two observations regarding the department's management of its IT modernization program: First, HUD has made progress toward implementing key IT management controls. For example, HUD created a conceptual enterprise architecture that is expected to be fully defined by spring 2012; however, it has not yet established institutional commitment through an approved policy to guide the development, maintenance, and use of the architecture. Further, the department has begun establishing a new investment management governance structure which is expected to support the fiscal year 2013 budget process. Lastly, HUD has committed to developing an IT human capital plan by December 2011 that is expected to include strategies to accomplish the human capital goals of the Office of the Chief Information Officer. Second, HUD has fully implemented or has plans to address prior GAO recommendations related to its expenditure plan and IT management. Specifically, of eight recommendations made in two reports issued in July 2009 and November 2010, respectively, HUD has fully implemented six of these recommendations and is taking steps to address the remaining two. For example, GAO recommended that future expenditure plans clearly describe the status of the department's efforts to establish and implement modernization management controls. HUD's revised plan addressed this recommendation by detailing what progress the department has made and what activities it is taking toward institutionalizing management controls. In addition, the department has developed a plan to address investment management weakness; however, work remains to develop criteria for evaluating the investment portfolio. HUD is also developing strategies to close skill gaps in its IT workforce. To ensure institutional commitment for current and future enterprise architecture development, maintenance, and use, GAO is recommending that HUD approve a policy to govern the architecture prior to further developing its segment architectures. In written comments on a draft of this report, HUD concurred with GAO's recommendation.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Valerie C. Melvin Team: Government Accountability Office: Information Technology Phone: (202) 512-6304GAO-11-762, Information Technology: HUD's Expenditure Plan Satisfies Statutory Conditions, and Implementation of Management Controls Is Under Way
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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
September 2011:
Information Technology:
HUD's Expenditure Plan Satisfies Statutory Conditions, and
Implementation of Management Controls Is Under Way:
GAO-11-762:
GAO Highlights:
Highlights of GAO-11-762, a report to congressional committees.
Why GAO Did This Study:
Information technology (IT) is critical to the Department of Housing
and Urban Development‘s (HUD) ability to carry out its home ownership
and community development mission. Provisions of the Consolidated
Appropriations Act, 2010, require HUD to develop and submit to
Congress an expenditure plan for its efforts to modernize the department
‘s IT environment prior to using 75 percent of the funds made
available for IT modernization. The plan is to satisfy certain
statutory conditions and is to be reviewed by GAO. Accordingly, GAO‘s
objectives were to (1) determine whether HUD‘s revised plan satisfies
statutory conditions and (2) provide observations about the plan and
management of HUD‘s IT modernization program. To accomplish this, GAO
assessed the plan against the statutory conditions, analyzed
department documentation and relevant plans on key internal management
controls, and reviewed HUD‘s efforts to address open GAO
recommendations. GAO also interviewed cognizant department officials.
What GAO Found:
HUD‘s revised fiscal year 2010 expenditure plan satisfied the
statutory conditions contained in the act. Specifically, pursuant to
the statute, the plan identified the functional and performance
capabilities, mission benefits, lifecycle costs, and key milestones
for seven identified IT projects that support HUD‘s modernization
efforts. For example, the plan stated that one of the mission benefits
expected from the HUD Integrated Financial Management Improvement
Project is to support the timeliness and responsiveness of financial
transactions by ensuring that invoices are paid on time equal to or
greater than 98 percent of the time. Further, the plan demonstrated
that each project had support from an adequately staffed project
office; conformed to the department‘s in-process policies and
procedures on capital planning and investment control; complied with
the department‘s in-process enterprise architecture; and had been
managed in accordance with HUD‘s in-process lifecycle management
processes. For example, the plan disclosed detailed information
regarding how each project was categorized in relation to the
department‘s conceptual architecture currently in development.
GAO made two observations regarding the department‘s management of its
IT modernization program:
First, HUD has made progress toward implementing key IT management
controls. For example, HUD created a conceptual enterprise
architecture that is expected to be fully defined by spring 2012;
however, it has not yet established institutional commitment through
an approved policy to guide the development, maintenance, and use of
the architecture. Further, the department has begun establishing a new
investment management governance structure which is expected to
support the fiscal year 2013 budget process. Lastly, HUD has committed
to developing an IT human capital plan by December 2011 that is
expected to include strategies to accomplish the human capital goals
of the Office of the Chief Information Officer.
Second, HUD has fully implemented or has plans to address prior GAO
recommendations related to its expenditure plan and IT management.
Specifically, of eight recommendations made in two reports issued in
July 2009 and November 2010, respectively, HUD has fully implemented
six of these recommendations and is taking steps to address the
remaining two. For example, GAO recommended that future expenditure
plans clearly describe the status of the department‘s efforts to
establish and implement modernization management controls. HUD‘s
revised plan addressed this recommendation by detailing what progress
the department has made and what activities it is taking toward
institutionalizing management controls. In addition, the department
has developed a plan to address investment management weakness;
however, work remains to develop criteria for evaluating the
investment portfolio. HUD is also developing strategies to close skill
gaps in its IT workforce.
What GAO Recommends:
To ensure institutional commitment for current and future enterprise
architecture development, maintenance, and use, GAO is recommending
that HUD approve a policy to govern the architecture prior to further
developing its segment architectures. In written comments on a draft
of this report, HUD concurred with GAO‘s recommendation.
View [hyperlink, http://www.gao.gov/products/GAO-11-762] or key
components. For more information, contact Valerie C. Melvin at (202)
512-6304 or melvinv@gao.gov.
[End of section]
Contents:
Letter:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendix I: Briefing for Staff Members of the Subcommittees on
Transportation, Housing and Urban Development, and Related Agencies,
Senate and House Committees on Appropriations:
Appendix II: Comments from the Department of Housing and Urban
Development:
Appendix III: GAO Contact and Staff Acknowledgments:
Abbreviations:
CIO: Chief Information Officer:
EA: enterprise architecture:
FHA: Federal Housing Administration:
HEARTH Act: Homeless Emergency Assistance and Rapid Transition to
Housing Act of 2009:
HUD: Department of Housing and Urban Development:
IT: information technology:
OCIO: Office of the Chief Information Officer:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 7, 2011:
The Honorable Patty Murray:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Tom Latham:
Chairman:
The Honorable John W. Olver:
Ranking Member:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
The Department of Housing and Urban Development's (HUD) mission is to
create strong, sustainable, inclusive communities and quality,
affordable homes for all. Information technology (IT) plays a critical
role in HUD's ability to carry out its mission. For instance, the
department reports that its business operations rely on IT to process
over 50,000 loan requests per week, over 12,000 service calls per
month, and more than 7,000 grant requests annually for each of its
major grant programs. Despite this role, HUD's current IT environment
has not effectively supported its business operations. As we have
previously reported,[Footnote 1] its information systems are
overlapping and duplicative, are not integrated, necessitate manual
workloads, and employ antiquated technologies that are costly to
maintain.
Since 2010, the department has been working to modernize its IT
infrastructure and systems through its Transformation Initiative. This
initiative represents a strategy for reforming the way the department
does business, and comprises four components: (1) research,
evaluation, and program metrics; (2) program demonstrations; (3)
technical assistance and capacity building; and (4) information
technology. Congress provided funding for HUD's IT modernization
projects with certain limitations through the Consolidated
Appropriations Act, 2010.[Footnote 2] Specifically, the act states
that the department may not obligate more than 25 percent of the funds
made available until the Secretary submits to the Senate and House
Committees on Appropriations an expenditure plan that satisfies two
sets of statutory conditions and is reviewed by GAO.[Footnote 3]
In 2010, HUD submitted two initial expenditure plans that were
intended to be part of a series of incremental plans. We reviewed the
first of these two plans and reported to the Senate and House
Committees on Appropriations on August 24, 2010, that the plan did not
satisfy all of the statutory conditions and thus was limited as a
congressional oversight and decision-making tool.[Footnote 4] We did
not report on the second plan because, after its submission, HUD
reassessed and revised the number and scope of its Transformation
Initiative IT projects. On February 14, 2011, HUD submitted to
Congress a revised expenditure plan that sought to obligate a total of
$122.5 million. According to the revised plan, this funding was to be
used to support seven modernization projects ($85.7 million), a group
of enterprisewide services ($33.8 million), and a key assessment of
HUD's IT environment ($3.0 million).
In reviewing HUD's revised expenditure plan, our specific objectives,
as agreed with your offices, were to (1) determine whether HUD's
expenditure plan satisfies statutory conditions and (2) provide
observations about the plan and management of HUD's IT modernization
program.
On June 9, 2011, we provided your offices with briefing slides that
outlined the results of our study. On June 15, 2011, we met with your
staff to discuss our findings, conclusions, and recommendation. The
purpose of this report is to provide the published briefing slides to
you and to officially transmit our recommendation to the Secretary of
the Department of Housing and Urban Development. The slides, which
discuss our scope and methodology, are included in appendix I.
We performed our work in support of this performance audit at HUD
headquarters in Washington, D.C., from November 2010 to September 2011
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
In summary, our review highlighted the following:
* HUD's revised fiscal year 2010 expenditure plan satisfied the
statutory conditions contained in the act.[Footnote 5]
- First, the plan identified the functional and performance
capabilities, mission benefits, lifecycle costs, and key milestones
for each of the seven IT modernization projects.[Footnote 6] For
example, the plan described the Federal Housing Administration
Transformation project's automated fraud analysis tools that are to
support risk management within housing insurance programs
(capabilities) and stated that these tools were expected to be
delivered by October 2011 (key milestones).
- Second, the plan demonstrated that each project had support from an
adequately staffed project office; conformed to the department's in-
process policies and procedures on capital planning and investment
control; complied with the department's in-process enterprise
architecture; and had been managed in accordance with HUD's in-process
lifecycle management processes. For example, with respect to adequate
project staffing, the plan provided a list of roles and
responsibilities for each member of the project team and provided an
assessment regarding the current status of staffing resources for each
project.
* We made two observations regarding HUD's management of its IT
modernization program:
First, HUD has made progress toward implementing key IT management
controls. For example, HUD created a conceptual enterprise
architecture that is expected to be fully defined by spring 2012;
however, it has not yet established institutional commitment through
an approved policy to guide the development, maintenance, and use of
the architecture. This is of concern because without such a policy,
segment architectures that are being developed may not reflect
departmentwide goals and priorities for modernizing the IT
environment, and as a result, may require future revision.
Additionally, the department has begun establishing a new investment
management governance structure which is expected to support the
fiscal year 2013 budget process. Lastly, HUD has committed to
developing an IT human capital plan by December 2011 that is expected
to include strategies to accomplish the human capital goals of the
Office of the Chief Information Officer.
Second, HUD has fully implemented or has plans to address the eight
prior GAO expenditure plan and IT management recommendations made in
two reports issued in July 2009 and November 2010, respectively.
[Footnote 7] Specifically, HUD has fully implemented six of these
recommendations and is taking steps to address the remaining two.
[Footnote 8] For example, we recommended that future expenditure plans
clearly describe the status of the department's efforts to establish
and implement modernization management controls. HUD's revised plan
addressed this recommendation by detailing what progress the
department has made and what activities it is taking toward
institutionalizing management controls. In addition, the department
has developed a plan to address investment management weakness;
however, work remains to develop criteria for evaluating the
investment portfolio.[Footnote 9] HUD is also developing strategies to
close skill gaps in its IT workforce, and plans to complete these
strategies by December 2011.
Conclusions:
HUD's revised expenditure plan satisfied both sets of statutory
conditions for the department's seven IT modernization projects. As a
result, the plan provides key information needed by HUD's
appropriations subcommittees to oversee these modernization projects
and hold the department accountable for project results.
In addition, HUD has made important progress to strengthen its IT
modernization management capacity; however, critical work remains to
build on these accomplishments. Specifically, the department has begun
to implement a new governance structure, as well as fully implementing
most of the recommendations we have made to improve future expenditure
plans and develop select IT management controls. HUD has also
committed to completing key actions necessary to fully address our
outstanding recommendations in the areas of investment management and
human capital. However, work to refine the new departmentwide
architecture is being performed in the absence of an approved
enterprise architecture policy to guide this effort. Until an
architecture policy is established and planned actions in response to
open recommendations are fully completed, the department will be
unable to effectively institutionalize its modernization management
program.
Recommendation for Executive Action:
To ensure institutional commitment for current and future enterprise
architecture development, maintenance, and use, we are recommending
that the Secretary of HUD direct the Chief Information Officer to
approve a policy to govern the architecture prior to further
developing its segment architectures. Because HUD has committed to
specific milestones to address prior GAO recommendations in the areas
of investment management and human capital, we did not make additional
recommendations at this time relative to these two areas.
Agency Comments:
In written comments on a draft of this report, which are reprinted in
appendix II, HUD's Chief Information Officer stated that HUD concurred
with our recommendation and that the comments included in the
transmitted briefing adequately represented the department's position.
Moreover, the Chief Information Officer stated that the department
remains committed to the approval of a policy to govern the enterprise
architecture and will dedicate resources toward implementing our
recommendation.
We are sending copies of this report to interested congressional
committees. We are also sending copies to the Secretary of the
Department of Housing and Urban Development and the Director of the
Office of Management and Budget. Copies of this report will also be
available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions on matters discussed in this
report, please contact me at (202) 512-6304 or melvinv@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff who
made significant contributions to this report are listed in appendix
III.
Signed by:
Valerie C. Melvin:
Director, Information Management and Human Capital Issues:
[End of section]
Appendix I: Briefing for Staff Members of the Subcommittees on
Transportation, Housing and Urban Development, and Related Agencies,
Senate and House Committees on Appropriations:
Information Technology: HUD's Expenditure Plan Satisfies Statutory
Conditions; Implementation of Management Controls Underway:
Briefing for Staff Members of the Subcommittees on Transportation,
Housing and Urban Development, and Related Agencies:
Senate and House Committees on Appropriations:
June 9, 2011:
Contents:
* Introduction;
* Objectives;
* Scope and Methodology;
* Results in Brief;
* Background;
* Results;
* Conclusions;
* Recommendation for Executive Action;
* Agency Comments and Our Evaluation.
[End of section]
Introduction:
Information technology (IT) plays a critical role in the Department of
Housing and Urban Development's (HUD) ability to carry out its home
ownership and community development mission. For instance, the
department reports that its business operations rely on IT to process
over 50,000 loan requests per week, over 12,000 service calls per
month, and more than 7,000 grant requests annually for each of its
major grant programs.
Despite this role, HUD's current IT environment has not effectively
supported its business operations. As we have previously reported,
[Footnote 10] its information systems are overlapping and duplicative,
are not integrated, necessitate manual workloads, and employ
antiquated technologies that are costly to maintain.
Since 2010, the department has been working to modernize its IT
infrastructure and systems through its Transformation Initiative.
[Footnote 11] In order to provide oversight and inform decision-
making, Congress established limitations on funding for HUD's
Transformation Initiative IT modernization projects through the
Consolidated Appropriations Act, 2010.[Footnote 12]
Specifically, the act states that not less than $80 million and not
more than $180 million shall be available for IT modernization
projects supporting the Transformation Initiative. Further, the act
states that the department may not obligate more than 25 percent of
the funds made available until the Secretary submits to the Senate and
House Committees on Appropriations an expenditure plan that is
reviewed by GAO and satisfies two sets of statutory conditions:
First, for each project, the plan must identify:
* functional and performance capabilities to be delivered,
* expected mission benefits,
* estimated lifecycle costs, and,
* planned key milestones.
Second, the plan must demonstrate that each project:
* is supported by an adequately staffed project office,
* conforms to capital planning and investment control requirements,
* complies with the department's enterprise architecture (EA), and,
* is being managed in accordance with applicable lifecycle management
policies and guidance.
In 2010, HUD submitted two initial expenditure plans that were
intended to be part of a series of incremental plans to obligate $138
million across 29 IT modernization projects.
The two initial plans sought to obligate $42.8 million of the funds
across 15 projects. We reviewed the first of these two plans and
reported to the Senate and House Committees on Appropriations on
August 24, 2010, that the plan did not satisfy all of the statutory
conditions and thus was limited as a congressional oversight and
decision-making tool.[Footnote 13] We also made recommendations aimed
at improving future plans and the management of HUD's modernization
efforts. We did not report on the second plan because, after its
submission, HUD reassessed and revised the number and scope of its
Transformation Initiative IT projects. This action, undertaken at the
direction of the Office of Management and Budget, was consistent with
our recommendation to pursue modernization projects commensurate with
the department's capacity to manage them.[Footnote 14]
On February 14, 2011, HUD submitted a revised expenditure plan that
sought to obligate a total of $122.5 million of the funds made
available in fiscal year 2010. The revised plan included seven
modernization projects ($85.7 million), a group of enterprisewide
services ($33.8 million), and a key assessment of HUD's IT environment
($3.0 million).
As agreed with HUD's appropriations subcommittees, our review
objectives for the revised fiscal year 2010 plan were to:
* determine whether HUD's expenditure plan satisfies statutory
conditions, and,
* provide observations about the plan and management of HUD's IT
modernization program.
[End of section]
Scope and Methodology:
To accomplish our first objective, we analyzed the expenditure plan to
determine whether it contained, for all seven IT modernization
projects, information to address each set of statutory conditions, as
specified in the act.[Footnote 15] Specifically,
* For the first condition, we assessed the plan to determine whether
it contained the following four elements: functional and performance
capabilities to be delivered, expected mission benefits, estimated
lifecycle costs, and planned key milestones.
* For the second condition, we evaluated the plan to determine whether
it described four elements: support by an adequately staffed project
office, conformance with capital planning requirements, compliance
with the department's EA, and management in accordance with applicable
lifecycle policies and guidance.
For both conditions, we determined whether the expenditure plan
satisfied or did not satisfy each condition. To have satisfied a given
condition, the plan had to meet all elements for a given condition. In
making our determination, we limited our assessment to the contents of
the plan because the act required that the plan itself contain
information to address the statutory conditions.
To accomplish our second objective, we did the following:
* Developed observations about HUD's IT modernization program by
analyzing relevant department-provided documentation on key internal
management controls, including IT investment management, EA, and human
capital. We also interviewed relevant department and project
officials, including the Associate Chief Information Officer for
Customer Relationship and Performance Management and the Director of
Enterprise Architecture, and observed management review meetings to
corroborate these observations.
* Determined the extent to which HUD had implemented our prior
recommendations on IT management and future expenditure plans by
analyzing supporting documents, including investment management
charters and implementation plans, EA development plans, human capital
plans, and project risk lists. We also interviewed relevant department
officials such as the Deputy Chief Information Officers responsible
for human capital and investment management.
We determined that information provided by HUD, such as action plans,
executive status reports, cost estimates, and schedules, were
sufficiently reliable for the purposes of this briefing. To arrive at
this assessment, we conducted limited reliability testing by comparing
key information across multiple documents to identify discrepancies
and interviewing cognizant HUD officials. However, we did not test the
quality of this information, including project cost estimates and key
milestones.
We conducted this performance audit at HUD headquarters in Washington,
D.C., from November 2010 to June 2011 in accordance with generally
accepted government auditing standards. Those standards require that
we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Results in Brief:
HUD's revised fiscal year 2010 expenditure plan satisfied both sets of
statutory conditions contained in the Consolidated Appropriations Act,
2010.[Footnote 16] Specifically, for the first set of conditions, the
plan identified the functional and performance capabilities, mission
benefits, lifecycle costs, and key milestones for each of the seven
projects. For example, the plan stated that one of the mission
benefits expected from the HUD Integrated Financial Management
Improvement Project is to support the timeliness and responsiveness of
financial transactions by ensuring that invoices are paid on time
equal to or greater than 98 percent of the time. Further, for the
second set of conditions, the plan demonstrated that each project had
support from an adequately staffed project office; conformed to the
department's in-process policies and procedures on capital planning
and investment control; complied with the department's in-process EA;
and had been managed in accordance with HUD's in-process lifecycle
management processes.[Footnote 17] For example, the plan disclosed
detailed information regarding how each project was categorized in
relation to the department's conceptual EA currently in development.
We have two observations regarding HUD's management of its IT
modernization program:
* Since our most recent report in November 2010,[Footnote 18] HUD has
made progress toward implementing key IT management controls. For
example, HUD created a conceptual EA that is expected to be fully
defined by spring 2012; however, it has not yet established
institutional commitment through an approved policy to guide the
development, maintenance, and use of the EA. This is of concern
because without such a policy, segment architectures that are being
developed may not reflect departmentwide goals and priorities for
modernizing its IT environment, and as a result may require future
revision. Additionally, the department has begun establishing a new
investment management governance structure and anticipates finalizing
it by the end of this month. Lastly, HUD has committed to developing
an IT human capital plan by December 2011 that is expected to include
strategies to accomplish the human capital goals of the Office of the
Chief Information Officer (CIO).
* HUD has fully implemented or has plans to address prior GAO
expenditure plan and IT management recommendations. Specifically, of
eight recommendations made in two reports issued in July 2009 and
November 2010, respectively,[Footnote 19] HUD has fully implemented
six of these recommendations and is taking steps to address the
remaining two. For example, the department has developed a plan to
address investment management weakness; however work remains to
develop criteria for evaluating the investment portfolio. HUD is also
developing strategies to close skill gaps in its IT workforce. In
addition, we recommended that future expenditure plans
clearly describe the status of the department's efforts to establish
and implement modernization management controls. HUD's revised plan
addressed this recommendation by detailing what progress the
department has made and what activities it is taking toward
institutionalizing management controls.
Due to the importance of the department's efforts to modernize its IT
environment, we are recommending that the Secretary of HUD direct the
CIO to approve a policy to govern the development, maintenance, and
use of EA. Because HUD has committed to plans that address prior GAO
recommendations in the areas of investment management and human
capital, we are not making recommendations relative to these two areas
at this time.
In commenting on a draft of this briefing provided via e-mail, HUD's
Deputy Associate CIO for Customer Relationship and Performance
Management neither agreed nor disagreed with our recommendation. The
department official stated that HUD's approach to developing a new EA
policy includes several steps to reduce the risk associated with not
having an approved policy, such as involving senior executives in
restructuring HUD's IT investment portfolio in light of the new
architecture design, among other things. While we support this
approach, we maintain that continued development of segment
architectures in the absence of an approved policy increases the
likelihood that the department will continue to invest in systems that
are potentially duplicative and poorly integrated.
[End of section]
Background:
HUD's mission is to create strong, sustainable, inclusive communities
and quality, affordable homes for all. To carry out this mission, HUD
is organized into business areas that perform a range of core
functions, including providing housing and economic opportunities to
low- and moderate-income people; regulating aspects of the housing
industry and maintaining and expanding home ownership, rental housing,
and health care opportunities; and guaranteeing investors' payments
and interest by federally insured or guaranteed loans through a HUD-
owned corporation.
HUD's business areas are aided by several supporting and
administrative offices. Supporting offices include the Office of Faith-
Based and Neighborhood Partnerships and the Office of Healthy Homes
and Lead Hazard Control, which provide key services for the quality
and sustainment of mission areas. Administrative offices include the
Office of the Chief Financial Officer and the Office of the Chief
Information Officer (OCIO), which provide management support to
several business areas.
A simplified view of the department's organizational structure is
provided in figure 1.
Figure 1: Simplified HUD Organizational Chart:
[Refer to PDF for image: organizational chart]
Top level:
Secretary.
Second level, reporting to Secretary:
Deputy Secretary.
Third level, reporting to Deputy Secretary:
* Public and Indian Housing;
* Fair Housing and Equal Opportunity;
* Community Planning and Development;
* Government National Mortgage Association;
* Housing;
* Chief Operating Officer:
- Chief Information Officer.
Source: GAO based on HUD data.
[End of figure]
HUD's OCIO is responsible for developing, modernizing, and enhancing
the department's IT environment. In this role, the OCIO has direct
interaction with IT project managers in order to communicate HUD's
processes and guidance for modernizing the department's IT
environment. The OCIO has also been working toward developing and
establishing key IT management controls that will provide the
department with institutionalized processes for more efficient and
effective implementation of systems and technology tools aimed at
improving the business units' ability to achieve HUD's mission.
To this end, the OCIO has established four management goals, which
align with the department's 2010-2015 Strategic Plan:[Footnote 20] (1)
enhance the quality, availability, and delivery of HUD information to
citizens, business partners, and government; (2) promote an enterprise
approach to IT that will foster innovation and collaboration; (3)
achieve excellence in IT management practice; and (4) transform the
OCIO to a culture of operational excellence that can achieve current
and future departmental goals.
HUD's Transformation Initiative represents a strategy for reforming
the way the department does business. In particular, the initiative
comprises four components: (1) research, evaluation, and program
metrics; (2) program demonstrations; (3) technical assistance and
capacity building; and (4) information technology. The Consolidated
Appropriations Act, 2010[Footnote 21] authorized not less than $80
million and not more than $180 million to be available for the
information technology component of this initiative, which includes
the department's IT modernization efforts, and stated that HUD may not
obligate more than 25 percent of these funds until the Secretary
submits to the Senate and House Committees on Appropriations an
expenditure plan that is reviewed by GAO and that satisfies the two
sets of statutory conditions.[Footnote 22]
HUD submitted the first in a series of incremental expenditure plans
on April 26, 2010, which sought to obligate about $28.1 million across
eight modernization projects. On August 24, 2010, we provided the
results of our review of the April 2010 expenditure plan to the Senate
and House Committees on Appropriations. We reported that the plan was
limited as a congressional oversight and decision-making tool because
it did not satisfy all of the statutory conditions.[Footnote 23]
Accordingly, we made multiple recommendations to improve future
expenditure plans, including disclosing risks and ensuring that
modernization projects are commensurate with the department's
institutional capacity to execute them.
On September 16, 2010, HUD submitted a second increment of the
expenditure plan and provided supplemental information to address
deficiencies in the first plan. This second plan included an
additional seven modernization projects and sought to obligate an
additional $14.7 million.
In October 2010, at the direction of the Office of Management and
Budget and to address our recommendation on balancing modernization
projects with IT management capacity, HUD reassessed its inventory of
IT modernization projects. As a result, a revised expenditure plan
that superseded the April and September 2010 plans was submitted to
the Senate and House Committees on Appropriations on February 14,
2011. This plan seeks to obligate $122.5 million for seven IT
modernization projects, a group of enterprisewide services, and a key
assessment of HUD's IT environment.
Table 1 summarizes the revised plan's modernization projects and
associated requested appropriations.
Table 1: Summary of HUD's IT Modernization Projects and Activities
Contained in the Revised Fiscal Year 2010 Expenditure Plan, Submitted
on February 14, 2011:
Project: Electronic Grants Management in support of the HEARTH Act[A];
Purpose: Reengineer processes and implement an automated system for
managing grants that will reduce application time, eliminate manual
paper processes, and increase the transparency of grant management
information;
Fiscal year 2010 appropriations[C]: $10.1 million.
Project: Enterprise Services[B];
Purpose: Support implementation of core projects by deploying
enterprisewide services and supporting activities including data
management, standardized technologies, and transition costs for
migrating to automated systems and processes;
Fiscal year 2010 appropriations[C]: $33.8 million.
Project: Federal Housing Administration (FHA) Transformation;
Purpose: Implement a commercially available industry standard
financial infrastructure for all FHA's insurance programs (Single
Family Housing, Multifamily Housing, and the Insured Health Care) that
will enable improved lifecycle case management;
Fiscal year 2010 appropriations[C]: $20.5 million.
Project: HUD Integrated Acquisition Management System;
Purpose: Integrate an acquisition management system that is compliant
with federal regulations to reduce inefficiencies, time, and
duplication in the procurement process across office locations to
expedite services rendered to the public;
Fiscal year 2010 appropriations[C]: $3.4 million.
Project: HUD Integrated Financial Management Improvement Project;
Purpose: Deploy a commercial off-the-shelf integrated financial
management system that will allow the department to be compliant with
relevant financial management laws and regulations;
Fiscal year 2010 appropriations[C]: $10.0 million.
Project: Human Resources End-to-End Solution;
Purpose: Integrate human resources systems and tools to allow for
automated recruitment and hiring documentation, reduction of manual
data entry, and accelerated candidate decision making;
Fiscal year 2010 appropriations[C]: $10.0 million.
Project: IT Assessment/Management Support[B];
Purpose: Conduct an assessment of the IT environment of modernization
projects and provide project management support to the core projects
and OCIO;
Fiscal year 2010 appropriations[C]: $3.0 million.
Project: Next Generation Voucher Management System;
Purpose: Reengineer voucher management processes to establish a
technical infrastructure that will integrate disparate systems and
provide consistent information in order to support rental housing
assistance services;
Fiscal year 2010 appropriations[C]: $29.0 million.
Project: Place-based Performance Management System;
Purpose: Provide business intelligence and geospatial tools for
documenting and assessing progress toward achieving strategic goals
that will enhance transparency, reduce workload, increase employee
productivity and improve data quality;
Fiscal year 2010 appropriations[C]: $2.7 million.
Project: Total;
Fiscal year 2010 appropriations[C]: $122.5 million.
Source: GAO analysis based on HUD data.
[A] The Homeless Emergency Assistance and Rapid Transition to Housing
(HEARTH) Act of 2009, Div B of Pub L. No. 111-22 (May 20, 2009), among
other things, consolidates separate homeless assistance programs.
[B] According to the plan, these efforts are not projects in the sense
of delivering a modernized system solution, and were included to
disclose and ensure transparency of all funding covered in the plan.
[C] Transformation Initiative appropriations authorized to be
transferred from other accounts are available for obligation by the
department through September 30, 2012.
[End of table]
End of section]
Results:
Objective 1: Statutory Conditions:
HUD's Transformation Initiative IT Expenditure Plan Satisfied
Statutory Conditions:
In contrast to previously submitted expenditure plans, HUD's February
2011 plan satisfied both sets of statutory conditions for the seven IT
modernization projects it covered. By doing so, the plan should
provide HUD's appropriations committees with greater insight and
visibility into key aspects of the modernization projects under way in
order to support effective oversight and inform funding decisions.
For the first set of conditions, the plan identified the functional
and performance capabilities to be delivered, expected mission
benefits, estimated lifecycle costs, and planned key milestones for
each of the seven projects. For example, the plan described the FHA
Transformation project's automated fraud analysis tools that are to
support risk management within FHA's insurance programs (capabilities)
and stated that these tools were expected to be delivered by October
2011 (key milestones).
Table 2 provides a summary of our assessment.
Table 2: Summary of GAO's Assessment of HUD's Expenditure Plan against
Statutory Condition 1:
Description of the first condition: Functional and performance
capabilities: The information regarding system capabilities should be
defined to a level that permits meaningful understanding of what the
system is to do (functions) and how well the system is to perform
these functions (performance). These capabilities should be defined to
a level that permits meaningful understanding of what capabilities are
to be delivered and measurement of progress in doing so;
GAO assessment: HUD's expenditure plan described the functional
capabilities that are to be delivered and described information on
system performance for each of the seven projects. For example, for
the FHA Transformation, the plan identified functional capabilities
expected to be delivered by October 2011, such as automated fraud
analysis tools to support risk management within FHA's insurance
programs. Further, the plan identified that the Human Resources End-to-
End Solution would provide the capability to track and report real-
time information regarding HUD's hiring and recruitment activities.
Description of the first condition: Mission benefits: The benefits to
accrue from a proposed system should be specific and measurable, and
should be linked to specific capabilities;
GAO assessment: The plan described mission benefits for each of the
seven projects that were specific, measurable, and linked to
functional capabilities. For instance, for the HUD Integrated
Financial Management Improvement Project, the plan identified that the
project will support timeliness and responsiveness by ensuring that
invoices are paid on time equal to or greater than 98 percent of the
time. The plan also stated that the Electronic Grants Management in
Support of the HEARTH Act project is expected to eliminate manual
processes, including the review of paper applications, and that this
capability would result in $800,000 in annual savings on data entry.
Description of the first condition: Lifecycle costs: A project's
lifecycle cost estimate should include all direct and indirect costs
associated with planning, designing, developing, procuring, deploying,
operating and maintaining, and disposing of the system. Estimates
should include enough detail to understand and measure funds for major
project work activities and deliverables;
GAO assessment: HUD's plan described costs associated with the
lifecycle of a project, providing details on funds needed for major
project work activities and deliverables. For example, for the Next
Generation Voucher Management System project, the plan described
direct costs associated with planned deliverables as well as indirect
costs associated with operation and maintenance activities.
Additionally, the HUD's Integrated Acquisition Management System
project estimate contained a breakdown of costs associated with
lifecycle phases, including design and deployment.
Description of the first condition: Key milestones: Project milestones
should be tied to the capabilities to be delivered and should permit
progress to be measured;
GAO assessment: The plan described key milestones for each of the
seven projects. Specifically, the plan described milestones that were
tied to capabilities, permitted progress to be measured, and
documented to what extent the milestones were being achieved. For
instance, for the Electronic Grants Management in Support of the
HEARTH Act project, the plan identified key milestones by project
phase and deliverable timeframes for the development of requirements
and software releases. The plan also outlined key milestones for the
Place-Based Performance Management System, such as implementing a
database by July 2010 to track and report department performance
goals, which the project reported as completed in October 2010.
Source: GAO analysis of HUD data.
[End of table]
For the second set of conditions, the plan described how each project
complied with the four IT management controls that comprise this
condition. HUD has not yet fully implemented three of the IT
management controls,[Footnote 24] two of which are discussed in the
following section of this briefing. In these cases, we assessed the
plan against the department's in-process controls.
The plan stated that each project was supported by an adequately
staffed project office, conformed to capital planning and investment
control requirements, complied with the department's EA, and was
managed in accordance with applicable lifecycle management policies
and guidance. For example, with respect to adequate project staffing,
the plan provided a list of roles and responsibilities for each member
of the project team and provided an assessment regarding the current
status of staffing resources for each project.
Table 3 provides a summary of our assessment.
Table 3: Summary of GAO's Assessment of HUD's Expenditure Plan against
Statutory Condition 2:
Description of the second condition: Adequately staffed project
office: Having adequate project staff is essential to a successful
systems modernization program. Understanding the gaps in staffing
resources and identifying qualifications of key staff are critical in
determining whether or not sufficient staffing resources exist to
achieve the desired project outcomes;
GAO assessment: The plan described the adequacy of project office
staff for the seven projects and identified which projects were
adequately staffed. In particular, the plan provided a clear
understanding of staffing resources by identifying qualifications of
key staff and providing a list of team members and their respective
roles. For example, for FHA Transformation, the plan stated that all
key staff positions had been filled and provided the names for the
individuals that had filled them. Further, the plan reported that only
one project-”the Next Generation Voucher Management System-”was
insufficiently staffed as of February 9, 2011.
Description of the second condition: Capital planning and investment
control: An organization's performance can be dramatically impacted by
effective management of its IT investments. Effective management
includes reviewing IT projects to ensure that they conform to the
Office of Management and Budget's requirements for selecting and
controlling investments. Additionally, organizations should establish
their own capital planning and investment control requirements;
GAO assessment: The plan stated that each project conformed to the
department's capital planning and investment control requirements. For
example, the plan states that HUD's Integrated Acquisition Management
System project was subject to review by the investment management
committee in order to continue funding. Further, the plan described
the department's new IT investment management framework and steps
being taken to institutionalize associated policies and procedures.
Description of the second condition: Enterprise Architecture: An
organization's IT investments should comply with an EA. Approved EA
artifacts and products should include information regarding an
organization's IT projects and how those projects are categorized
relative to segments within the EA;
GAO assessment: The plan described how each project complied with
HUD's EA relative to the conceptual architecture and sequencing plan
that have been developed thus far. In particular, it identifies
compliance by categorizing each project by the segment architecture
(e.g., grants management and financial management) as defined in the
conceptual EA. For example, the plan identified that the Place-Based
Performance Management System is part of the business analytical
services segment architecture. The plan also described the status of
HUD's efforts to develop its EA and provided next steps for
implementing architecture segments.
Description of the second condition: Lifecycle management: Following a
lifecycle management process in which key activities and phases of a
project are conducted in a logical and disciplined process helps
ensure that IT modernization projects achieve intended goals within
established cost and risk levels;
GAO assessment: The plan described how each project conforms to HUD's
lifecycle management processes. Specifically, the plan identified the
type of investment and lifecycle phase for all modernization projects.
It also listed key project management documentation required by the
department's lifecycle management processes. For example, for the Next
Generation Voucher Management System, the plan identified the project
as a development project in the definition phase and outlined 39 key
project management analyses and plans that were specific to the
definition phase of the lifecycle management process. The plan also
described efforts HUD has under way to establish required management
reviews before projects are able to proceed to the next lifecycle
phase.
Source: GAO analysis of HUD data.
[End of table]
[End of Objective 1]
Objective 2: Observations:
We have two observations regarding the department's management of its
IT modernization program:
* HUD has made progress in developing key components of selected IT
management controls-”investment management, EA, and human capital-”
that are needed to effectively carry out its modernization efforts.
However, the department has not yet established an EA policy that
reflects an institutional commitment for this management control.
* HUD has fully implemented or has plans to address prior GAO
recommendations for improving future expenditure plans and IT
management controls.
Collectively, these observations indicate that HUD is making progress
toward effective management of its IT modernization efforts, although
work remains to ensure that management controls are fully
institutionalized.
Observation 1: HUD Has Made Progress in Establishing and Implementing IT
Management Controls, but Further Work to Develop an EA Policy Remains:
An organization's ability to effectively modernize its IT environment
greatly depends on the extent to which it has established and
implemented IT management controls. These controls include IT
investment management, the development and use of an EA, and IT human
capital management.
Over the past 5 years, we have reported on HUD's efforts to establish
and implement these IT management controls.[Footnote 25] In November
2010, we reported that HUD was in the process of introducing new
approaches to its management of IT, which the department described as
significant in nature and requiring time to accomplish.
Since that time, HUD has made progress in establishing and
implementing key elements of these IT management controls, but further
work to develop a policy for EA remains, as detailed in the following
discussion.
IT Investment Management:
Investment management includes the selection and control of
investments to ensure that they produce business value in the
investment decision-making process.[Footnote 26] If managed
effectively through an appropriate governance structure, IT
investments can have a dramatic impact on an organization's
performance and accountability. Through a portfolio-based approach,
the organization can consider new investment proposals, along with
previously funded investments, and identify the appropriate mix of
these investments to best meet mission needs.
In July 2009, we reported[Footnote 27] weaknesses in HUD's management
of its IT investment portfolio and recommended that the department
develop and implement a plan to address these weaknesses. We discuss
the status of this recommendation in our second observation.
Specifically, the department has a draft plan to address identified
weaknesses and expects this plan to be completed by the end of June
2011.
In November 2010, we reported[Footnote 28] that HUD was establishing a
new IT governance structure intended to increase the transparency of
and facilitate decision-making for its IT investment portfolio, and
that the department was in the process of restructuring its projects
into a single portfolio.
Since then, HUD began implementing the new governance structure and
completed the restructuring of its Transformation Initiative portfolio
in December 2010. Specifically, the department has held monthly
governance meetings that include the review of IT modernization
investments and have resulted in the approval of a future conceptual
EA.
As a result, the department consolidated and re-prioritized its
Transformation Initiative IT portfolio to align with the new EA
strategic direction. In addition, HUD has begun to analyze its
comprehensive list of IT systems to justify ongoing investments, which
will inform the new single portfolio.
To support this new structure, HUD developed a governance plan,
committee charters, and investment management policies and procedures.
These guiding documents were developed consistent with federal
requirements[Footnote 29] and are intended to institutionalize the
governance structure. For example, the investment management policy
provides criteria for reviewing IT investments, such as demonstrating
security controls that are consistent with the Federal Information
Security Management Act of 2002.[Footnote 30]
The plan and its associated policies and procedures were drafted and
originally expected to be completed by October 2010; however, the
department has experienced several delays. According to HUD's Deputy
Associate CIO for Customer Relationship and Performance Management,
the department has made progress toward completing the internal
review, which has taken longer than anticipated. Finalization of the
new governance structure with its associated documentation is expected
by the end of this month.
HUD has applied this new structure to its portfolio of Transformation
Initiative investments and plans to implement the governance structure
across all IT investments. According to the Deputy Associate CIO, this
is expected to occur by September 2011 in support of the fiscal year
2013 budget approval process.
Once this new governance structure is finalized and applied to all IT
investments, HUD should be able to effectively identify the
appropriate mix of departmentwide investments that best meets its
mission needs.
Enterprise Architecture:
An EA is a corporate blueprint for organizational transformation and
IT modernization.[Footnote 31] Generally speaking, it describes an
enterprise's current, or "as-is," operational and technological
environment and its target, or "to-be," environment, and contains a
sequencing plan for transitioning from the current to the target
environment. An approved corporate policy is fundamental to
establishing institutional commitment and direction for defining an
EA. Such a policy institutionalizes the architecture's importance,
role, and relationship to other corporate management areas. The policy
should define the EA, identify major roles and responsibilities, and
acknowledge interdependencies and relationships among the EA program
and other related management controls such as investment management,
privacy, and records management. Further, this policy serves as an
executive-level commitment to EA as a corporate asset and should
govern EA development, maintenance, and use. The absence of a well
defined EA, based on an approved policy, can result in sub-optimal
technology infrastructures and systems that are duplicative and poorly
integrated.
In August 2006 and July 2009, we reported[Footnote 32] that HUD had
largely established an EA program but needed to address weaknesses
associated with the lack of a security architecture and independent
verification and validation.
Additionally, in July 2009, we reported[Footnote 33] that HUD's
approach to developing segment architectures to modernize individual
components of the overall organization did not reflect key aspects of
relevant federal guidance. For example, while the department had
identified and prioritized segments to be modernized, it had not
adhered to these priorities, and most segments were out of date.
Accordingly, we made recommendations aimed at improving the
department's segment architecture approach.
In November 2010, we reported that HUD's CIO had decided to reexamine
and redefine the department's EA segments based on business functions
that transcend business units (e.g., business intelligence, grants
management, and workflow management).[Footnote 34] Because of this new
direction, the department initiated work to analyze its existing
portfolio of modernization projects in order to identify potential
duplication and inform the next version of its EA.
By January 2011, HUD had developed a conceptual as-is and to-be
architecture with a corresponding sequencing plan for transitioning to
the new environment. For example, the department's conceptual
architecture calls for 21 segment architectures that are categorized
into core mission areas, business services, and enterprise services.
This conceptual architecture is expected to be the basis for
developing HUD's segment architectures. In lieu of an approved EA, the
OCIO has worked with project teams to categorize investments according
to their relevant architecture segments.
However, the department has not updated its EA policy to reflect this
new direction, but plans to do so by spring 2012. According to the
Deputy Associate CIO for Customer Relationship and Performance
Management, updating the EA policy has not been a priority given the
department's focus on developing segment architectures. This is of
concern because developing segment architectures in the absence of an
approved policy could result in rework later on. For example, without
appropriate stakeholder input, the developed segment architectures may
not reflect departmentwide goals and priorities for modernizing its IT
environment.
Until HUD has an approved policy that establishes institutional
commitment for its new EA direction, ongoing activities may not align
with the new direction, which increases the likelihood that the
department will continue to invest in systems that are duplicative and
poorly integrated.
IT Human Capital Management:
By employing strategic human capital management, organizations can
better position themselves to have people with the right knowledge,
skills, and abilities to support mission operations both today and in
the future.[Footnote 35] Since 2001, we have designated the strategic
management of human capital as a governmentwide high-risk area.
[Footnote 36] Principles for strategic workforce planning include,
among other things, analyzing the gaps between current skills and
future needs and developing strategies for filling gaps. If performed
effectively, these activities can collectively create a strategic and
proactive approach to human capital management.
In July 2009, we reported[Footnote 37] that HUD had developed a
strategy for closing IT human capital gaps; however, the strategy was
based on an unreliable gap analysis and it had yet to be implemented.
Accordingly, we recommended that the department establish and execute
IT human capital gap closure strategies that are based on a complete
and current inventory of its existing IT workforce skills. While we
indicate the status of this recommendation in our second observation,
the next slide discusses progress made.
In November 2010, we reported[Footnote 38] that HUD began work toward
developing an IT human capital management plan and had mapped skills
of current staff to determine whether resource gaps exist. We also
reported that the department had begun to develop IT human capital gap
strategies but had yet to establish a timeframe for completion.
Since then, HUD has continued its efforts toward developing the IT
human capital plan and made progress in implementing our
recommendation to establish skill gap closure strategies.
Specifically, the department appointed an OCIO Chief Learning Officer
to address identified IT skills gaps through targeted training for
staff. In addition, HUD has created a statement of work related to
establishing a human capital plan that includes tasks such as
identifying challenges and developing performance metrics and
strategies to accomplish OCIO human capital goals. According to the
CIO, the department plans to complete the IT human capital plan and
associated strategies to address IT skill gaps by December 2011.
Once HUD completes its IT human capital management plan as well as
planned actions to address our recommendation, the department will be
better positioned to acquire the skill sets needed to effectively
support the delivery of its IT modernization projects.
Observation 2: HUD Has Fully Implemented or Has Plans to Address Prior
GAO IT Management and Expenditure Plan Recommendations:
As discussed previously in this briefing, HUD has several activities
under way to address recommendations we made for improving its future
expenditure plans and IT management capacity. In total, we made eight
recommendations aimed at improving these areas. HUD has fully
implemented six of the eight prior recommendations and has plans to
address the remaining two. Table 4 summarizes our prior
recommendations, the status of their implementation, and actions taken
or remaining to fully address weaknesses identified.
Table 4: Status of HUD's Progress in Implementing Prior GAO
Recommendations:
GAO recommendation: Report actions planned to address our prior EA
recommendations and develop a plan for reexamining segment priorities
and updating and developing segment architectures in accordance with
these priorities and relevant guidance. (GAO-09-675);
Status: Implemented;
HUD actions: HUD developed a conceptual EA that reflects its
modernization projects. As a result, GAO recommendations made
regarding HUD's outdated EA are superseded by the department's new EA.
In addition, the department developed a plan for reexamining and
updating its segment architectures in accordance with priorities and
relevant guidance.
GAO recommendation: Ensure that future expenditure plans satisfy each
element of each statutory condition for each project in the plan, or
disclose why any element is not satisfied, along with any associated
project risks and plans for addressing those risks. (GAO-11-72);
Status: Implemented;
HUD actions: HUD's revised expenditure plan satisfied the elements of
each statutory condition for all projects identified in the plan. In
addition, the plan includes the associated project risks and plans for
addressing those risks.
GAO recommendation: Ensure that future expenditure plans clearly
describe the status of HUD's efforts to establish and implement
modernization management controls, along with the project-specific
risks and mitigation plans associated with this status. (GAO-11-72);
Status: Implemented;
HUD actions: The plan clearly describes the status of the department's
efforts to establish and implement modernization management controls.
In addition, the plan includes project-specific risks and mitigation
plans associated with the status of implementing management controls.
GAO recommendation: Ensure that the number and scope of HUD's
modernization projects are commensurate with the department's
institutional capacity to execute them. (GAO-11-72);
Status: Implemented;
HUD actions: At the direction of the Office of Management and Budget,
HUD reduced its portfolio of modernization projects from 29 to 7,
which was consistent with our recommendation.
GAO recommendation: Establish an enterprisewide program office with
the responsibility and authority for managing the department's
modernization efforts. (GAO-09-675);
Status: Implemented;
HUD actions: HUD recently established an enterprisewide project
management office, headed by the Office of the Chief Human Capital
Officer, which is responsible for formalizing processes for
identifying projects. This office has authority for assisting to
prioritize projects across the department's program management
offices, and building project management competencies with dedicated
resources.
GAO recommendation: Develop a plan for developing and implementing the
departments new performance management framework, including an
implementation schedule of key activities and related resource needs,
and ensure that this plan provides for complying with the statutory
requirement for annual reporting of progress in achieving IT strategic
goals. (GAO-09-675);
Status: Implemented;
HUD actions: HUD developed and implemented a plan for establishing the
department's new performance management framework. In May 2010 HUD
issued a new strategic plan with associated goals, such as
transforming the way the department does business. Accordingly, the
OCIO developed new specific IT strategic goals to align to the new
Strategic Plan. In addition, the OCIO developed a plan that outlines
specific measures for achieving those goals, such as transforming the
OCIO to a culture that can achieve current and future departmental
goals. As a result, the department is positioned to comply with the
statutory requirement for annual reporting of progress in achieving IT
strategic goals.
GAO recommendation: Develop and implement a plan to address the IT
portfolio investment management weaknesses. (GAO-09-675);
Status: In progress;
HUD actions: HUD is making progress in implementing IT portfolio
investment management controls. In particular, it developed a plan to
address identified weaknesses in its investment management approach.
This plan calls for activities that are consistent with federal
requirements, as discussed in the previous section of this briefing.
Specifically, the plan calls for establishing key policies and
procedures for reviewing, evaluating, and improving the departments
portfolio, as well as establishing resources for reviewing the
portfolio and ensuring board members are familiar with the process.
However, the plan does not include activities for developing criteria
for assessing portfolio performance and defining and collecting data
consistent with the criteria. According to HUD officials, the plan
will be updated to include activities for establishing criteria, and
they expect the plan to be completed by July 2011.
GAO recommendation: Establish and execute IT human capital gap closure
strategies that are based on a complete and current inventory of its
existing IT workforce skills. (GAO-09-675);
Status: In progress;
HUD actions: HUD is making progress toward establishing and executing
strategies to address IT workforce gaps. Specifically, the department
completed an assessment of existing workforce skills, including a
review of how IT resources support the goals in HUD's 2011-2015
strategic plan. The department is still working to develop and execute
skill gap closure strategies, and these strategies are expected to be
included in HUD's IT human capital plan, as discussed earlier in this
briefing.
Source: GAO analysis based on HUD data.
[End of table]
[End of section]
Conclusions:
HUD's revised expenditure plan satisfied both sets of statutory
conditions for the department's seven IT modernization projects. As a
result, the plan provides key information needed by HUD's
appropriations subcommittees to oversee these modernization projects
and hold the department accountable for project results.
In addition, HUD has made important progress to strengthen its IT
modernization management capacity; however, critical work remains to
build on these accomplishments. Specifically, the department has begun
to implement a new governance structure, as well as fully implementing
most of the recommendations we have made to improve future expenditure
plans and develop select IT management controls. HUD has also
committed to completing key actions necessary to fully address our
outstanding recommendations in the areas of investment management and
human capital. However, work to refine the new departmentwide
architecture is being performed in the absence of an approved EA
policy to guide this effort. Until an EA policy is established and
planned actions in response to open recommendations are fully
completed, the department will be unable to effectively
institutionalize its modernization management program.
[End of section]
Recommendation for Executive Action:
To ensure institutional commitment for current and future EA
development, maintenance, and use, we are recommending that the
Secretary of HUD direct the CIO to approve a policy to govern the EA
prior to further developing its segment architectures. Because
HUD has committed to specific milestones to address prior GAO
recommendations in the areas of investment management and human
capital, we are not making additional recommendations at this time
relative to these two areas.
[End of section]
Agency Comments and Our Evaluation:
HUD's Deputy Associate CIO for Customer Relationship and Performance
Management provided comments on a draft of this briefing via e-mail.
In those comments, the official did not explicitly agree or disagree
with our recommendation, but acknowledged the value of an approved
policy to guide HUD's EA and reported that the department has a
working draft of such a policy. The official also stated that HUD's
approach for developing an approved policy includes several activities
aimed at reducing risks associated with the absence of a new policy.
Specifically, the official said that HUD's senior executives, who have
taken sponsorship of segments of the EA, are leading discussions to
review inefficiencies in the mix of investments and systems in order
to identify EA development priorities, among other things.
Additionally, the official stated that the department is undertaking
activities to evaluate the performance of ongoing investments and
assess external factors that might require changes to its portfolio.
Further, the official commented that collectively these activities are
expected to inform the structure, policy, procedures, standards, and
guidelines being developed for the department's EA.
We support HUD's approach toward developing a new policy.
Nevertheless, we maintain our position that an approved policy is
fundamental to establishing institutional commitment and direction for
the EA. Continued development of segment architectures without such a
policy increases the likelihood that the department will continue to
invest in systems that are duplicative and poorly integrated.
[End of section]
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[End of briefing slides section]
Appendix II: Comments from the Department of Housing and Urban
Development:
U.S. Department of Housing and Urban Development:
Chief Information Officer:
Washington, Dc 20410-1000:
August 12, 2011:
Ms. Valerie C. Melvin:
Director, Information Management and Human Capital Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Melvin:
Thank you for the opportunity to comment on the Government
Accountability Office (GAO) draft report entitled, Information
Technology: HUD's Expenditure Plan Satisfies Statutory Conditions, and
Implementation of Management Controls is Underway (GAO-11-762).
The Department of Housing and Urban Development (HUD) reviewed the
draft report and concurs with the recommendation for executive action.
Agency comments on a draft of this briefing document adequately
represent HUD's position.
The Department remains committed to the approval of a policy to govern
the enterprise architecture. To this end, we will dedicate resources
toward achieving the Executive Action recommended by GAO.
If you have any questions or require additional information, please
contact Jerry E. Williams, Chief Information Officer, at 202-708-0306.
Sincerely,
Signed by:
Jerry E. Williams:
Chief Information Officer:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Valerie C. Melvin at (202) 512-6304 or melvinv@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Carol Cha (Assistant
Director), Lee McCracken, Teresa M. Neven, Matthew Strain, and Daniel
Swartz made key contributions to this report.
[End of section]
Footnotes:
[1] GAO, Information Technology: HUD Needs to Strengthen Its Capacity
to Manage and Modernize Its Environment, [hyperlink,
http://www.gao.gov/products/GAO-09-675] (Washington, D.C.: July 31,
2009); Information Technology: HUD Needs to Better Define Commitments
and Disclose Risk for Modernization Projects in Future Expenditure
Plans, [hyperlink, http://www.gao.gov/products/GAO-11-72] (Washington,
D.C.: November 23, 2010).
[2] The act, Pub. L. No. 111-117, title II, Department of Housing and
Urban Development Appropriations Act, 2010, 123 Stat. 3074, 3093-3094
(Dec. 16, 2009), states that not less than $80 million and not more
than $180 million shall be available for IT modernization projects
supporting the Transformation Initiative.
[3] Under the act, the expenditure plan must satisfy two sets of
statutory conditions and be reviewed by GAO prior to HUD spending 75
percent of the funds made available for IT modernization. First, for
each project, the plan must identify functional and performance
capabilities to be delivered, expected mission benefits, estimated
lifecycle costs, and planned key milestones. Second, the plan must
demonstrate that each project is supported by an adequately staffed
project office, conforms to capital planning and investment control
requirements, complies with the department's enterprise architecture,
and is being managed in accordance with applicable lifecycle
management policies and guidance.
[4] [hyperlink, http://www.gao.gov/products/GAO-11-72].
[5] Pub. L. No. 111-117, 123 Stat. 3093-3094.
[6] The seven projects are Electronic Grants Management, Federal
Housing Administration Transformation, HUD Integrated Acquisition
Management System, HUD Integrated Financial Management Improvement
Project, Human Resources End-to-End Solution, Next Generation Voucher
Management System, and Place-based Performance Management System.
[7] [hyperlink, http://www.gao.gov/products/GAO-09-675] and
[hyperlink, http://www.gao.gov/products/GAO-11-72].
[8] The two remaining recommendations are in the areas of investment
management and human capital.
[9] As reflected in appendix I, HUD officials stated that the plan
would be updated by July 2011 to include activities for establishing
criteria; however, as of September 1, 2011, the plan had not been
updated.
[10] GAO, Information Technology: HUD Needs to Strengthen Its Capacity
to Manage and Modernize Its Environment, [hyperlink,
http://www.gao.gov/products/GAO-09-675] (Washington, D.C.: July 31,
2009).
[11] HUD's Transformation Initiative consists of four components: (1)
research, evaluation, and program metrics; (2) program demonstrations;
(3) technical assistance and capacity building; and (4) information
technology.
[12] Pub. L. No. 111-117, title II, Department of Housing and Urban
Development Appropriations Act, 2010, 123 Stat. 3074, 3093-3094
(Dec. 16, 2009).
[13] GAO, Information Technology: HUD Needs to Better Define
Commitments and Disclose Risks for Modernization Projects in Future
Expenditure Plans, [hyperlink, http://www.gao.gov/products/GAO-11-72]
(Washington, D.C.: Nov. 23, 2010).
[14] [hyperlink, http://www.gao.gov/products/GA0-11-72].
[15] Pub. L. No. 111-117, 123 Stat. 3093-3094.
[16] Pub. L. No. 111-117, 123 Stat. 3093-3094.
[17] The plan was assessed against in-process controls for three of
the four IT management controls that comprise the second set of
conditions: capital planning and investment management, EA, and
lifecycle management. Two of these controls are discussed in our
second objective. HUD has not fully implemented these controls but has
fully implemented the remaining control, IT project staffing.
[18] [hyperlink, http://www.gao.gov/products/GA0-11-72].
[19] [hyperlink, http://www.gao.gov/products/GA0-09-675] and
[hyperlink, http://www.gao.gov/products/GAO-11-72].
[20] HUD Strategic Plan Fiscal Year 2010-2015 (May 2010).
[21] Pub. L. No. 11-117, 123 Stat. 3093-3094.
[22] For the first condition, for each project the plan must identify
functional and performance capabilities to be delivered, expected
mission benefits, estimated lifecycle costs, and planned key
milestones. For the second condition, the plan must demonstrate that
each project is supported by an adequately staffed project office,
conforms to capital planning and investment control requirements,
complies with the department's EA, and is being managed in accordance
with applicable lifecycle management policies and guidance.
[23] [hyperlink, http://www.gao.gov/products/GAO-11-72].
[24] The IT controls not yet fully implemented are capital planning
and investment control, EA, and lifecycle management.
[25] GAO, Enterprise Architecture: Leadership Remains Key to
Establishing and Leveraging Architectures for Organizational
Transformation, [hyperlink, http://www.gao.gov/products/GAO-06-831]
(Washington, D.C.: Aug.14, 2006); [hyperlink,
http://www.gao.gov/products/GAO-09-675]; [hyperlink,
http://www.gao.gov/products/GAO-11-72].
[26] GAO, Information Technology Investment Management: A Framework
for Assessing and Improving Process Maturity, [hyperlink,
http://www.gao.gov/products/GAO-04-394G] (Washington, D.C.: March
2004).
[27] [hyperlink, http://www.gao.gov/products/GA0-09-675].
[28] [hyperlink, http://www.gao.gov/products/GA0-11-72].
[29] The Office of Management and Budget Circular No. A-11,
Preparation, Submission, and Execution of the Budget (July 2010).
[30] The Federal Information Security Management Act of 2002 was
enacted as title III, E-Government Act of 2002, Pub L. No. 107-347,
Dec. 17, 2002.
[31] [hyperlink, http://www.gao.gov/products/GA0-10-846G].
[32] [hyperlink, http://www.gao.gov/products/GA0-06-831], [hyperlink,
http://www.gao.gov/products/GAO-09-675].
[33] Segment architectures can be used to provide a bridge between the
corporate frame of reference captured in the EA and each individual
program and system investment. The Office of Management and Budget
issued the Federal Segment Architecture Methodology (December 2008),
which provides guidance for agencies to group their segment
architectures into three categories: core mission areas, business
services, and enterprise services.
[34] [hyperlink, http://www.gao.gov/products/GA0-11-72].
[35] GAO, Human Capital: Key Principles for Effective Strategic
Workforce Planning, [hyperlink, http://www.gao.gov/products/GAO-04-39]
(Washington, D.C.: Dec. 11, 2003).
[36] GA0, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GA0-11-278] (Washington, D.C.: February
2011).
[37] [hyperlink, http://www.gao.gov/products/GA0-09-675].
[38] [hyperlink, http://www.gao.gov/products/GA0-11-72].
[End of section]
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