Information Security
Further Efforts Needed to Address Significant Weaknesses at the Internal Revenue Service Gao ID: GAO-07-364 March 30, 2007In fiscal year 2006, the Internal Revenue Service (IRS) collected about $2.5 trillion in tax payments and paid about $277 billion in refunds. Because IRS relies extensively on computerized systems, effective information security controls are essential to ensuring that financial and taxpayer information is adequately protected from inadvertent or deliberate misuse, fraudulent use, improper disclosure, or destruction. As part of its audit of IRS's fiscal years 2006 and 2005 financial statements, GAO assessed (1) IRS's actions to correct previously reported information security weaknesses and (2) whether controls were effective in ensuring the confidentiality, integrity, and availability of financial and sensitive taxpayer information. To do this, GAO examined IRS information security policies and procedures, guidance, security plans, reports, and other documents; tested controls over five critical applications at three IRS sites; and interviewed key security representatives and management officials.
IRS has made limited progress toward correcting or mitigating previously reported information security weaknesses at two data processing sites, but 66 percent of the weaknesses that GAO had previously identified still existed. Specifically, IRS has corrected or mitigated 25 of the 73 information security weaknesses that GAO reported as unresolved at the time of our last review. For example, IRS has improved password controls on its servers and enhanced audit and monitoring efforts for mainframe and Windows user activity, but it continues to (1) use inadequate account lockout settings for Windows servers and (2) inadequately verify employees' identities against official IRS photo identification. Significant weaknesses in access controls and other information security controls continue to threaten the confidentiality, integrity, and availability of IRS's financial and tax processing systems and information. For example, IRS has not implemented effective access controls related to user identification and authentication, authorization, cryptography, audit and monitoring, physical security, and other information security controls. These weaknesses could impair IRS's ability to perform vital functions and increase the risk of unauthorized disclosure, modification, or destruction of financial and sensitive taxpayer information. Accordingly, GAO has reported a material weakness in IRS's internal controls over its financial and tax processing systems. A primary reason for the new and old weaknesses is that IRS has not yet fully implemented its information security program. IRS has taken a number of steps to develop, document, and implement an information security program. However, the agency has not yet fully or consistently implemented critical elements of its program. Until IRS fully implements an agencywide information security program that includes risk assessments, enhanced policies and procedures, security plans, training, adequate tests and evaluations, and a continuity of operations process for all major systems, the financial and sensitive taxpayer information on its systems will remain vulnerable.
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: Team: Phone:GAO-07-364, Information Security: Further Efforts Needed to Address Significant Weaknesses at the Internal Revenue Service
This is the accessible text file for GAO report number GAO-07-364
entitled 'Information Security: Further Efforts Needed to Address
Significant Weaknesses at the Internal Revenue Service' which was
released on March 30, 2007.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to the Commissioner of Internal Revenue:
United States Government Accountability Office:
GAO:
March 2007:
Information Security:
Further Efforts Needed to Address Significant Weaknesses at the
Internal Revenue Service:
GAO-07-364:
GAO Highlights:
Highlights of GAO-07-364, a report to the Commissioner of Internal
Revenue
Why GAO Did This Study:
In fiscal year 2006, the Internal Revenue Service (IRS) collected about
$2.5 trillion in tax payments and paid about $277 billion in refunds.
Because IRS relies extensively on computerized systems, effective
information security controls are essential to ensuring that financial
and taxpayer information is adequately protected from inadvertent or
deliberate misuse, fraudulent use, improper disclosure, or destruction.
As part of its audit of IRS‘s fiscal years 2006 and 2005 financial
statements, GAO assessed (1) IRS‘s actions to correct previously
reported information security weaknesses and (2) whether controls were
effective in ensuring the confidentiality, integrity, and availability
of financial and sensitive taxpayer information. To do this, GAO
examined IRS information security policies and procedures, guidance,
security plans, reports, and other documents; tested controls over five
critical applications at three IRS sites; and interviewed key security
representatives and management officials.
What GAO Found:
IRS has made limited progress toward correcting or mitigating
previously reported information security weaknesses at two data
processing sites, but 66 percent of the weaknesses that GAO had
previously identified still existed. Specifically, IRS has corrected or
mitigated 25 of the 73 information security weaknesses that GAO
reported as unresolved at the time of our last review. For example, IRS
has improved password controls on its servers and enhanced audit and
monitoring efforts for mainframe and Windows user activity, but it
continues to (1) use inadequate account lockout settings for Windows
servers and (2) inadequately verify employees‘ identities against
official IRS photo identification.
Significant weaknesses in access controls and other information
security controls continue to threaten the confidentiality, integrity,
and availability of IRS‘s financial and tax processing systems and
information. For example, IRS has not implemented effective access
controls related to user identification and authentication,
authorization, cryptography, audit and monitoring, physical security,
and other information security controls. These weaknesses could impair
IRS‘s ability to perform vital functions and increase the risk of
unauthorized disclosure, modification, or destruction of financial and
sensitive taxpayer information. Accordingly, GAO has reported a
material weakness in IRS‘s internal controls over its financial and tax
processing systems.
A primary reason for the new and old weaknesses is that IRS has not yet
fully implemented its information security program. IRS has taken a
number of steps to develop, document, and implement an information
security program. However, the agency has not yet fully or consistently
implemented critical elements of its program. Until IRS fully
implements an agencywide information security program that includes
risk assessments, enhanced policies and procedures, security plans,
training, adequate tests and evaluations, and a continuity of
operations process for all major systems, the financial and sensitive
taxpayer information on its systems will remain vulnerable.
What GAO Recommends:
GAO is recommending that the IRS Commissioner take several actions to
fully implement an agencywide information security program. In
commenting on a draft of this report, IRS agreed to address all
recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-364].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Greg Wilshusen at (202)
512-6244 or WilshusenG@gao.gov or Keith A. Rhodes at (202) 512-6412 or
Rhodesk@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Objectives, Scope, and Methodology:
IRS Made Limited Progress in Correcting Previously Reported Weaknesses:
Significant Weaknesses Continue to Place Financial and Taxpayer
Information at Risk:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Comments from the Commissioner of Internal Revenue:
Appendix II: GAO Contacts and Staff Acknowledgments:
Abbreviations:
CIO: Chief Information Officer:
FISMA: Federal Information Security Management Act:
IRS: Internal Revenue Service:
MA&SS: Mission Assurance and Security Services:
NIST: National Institute of Standards and Technology:
OMB: Office of Management and Budget:
TIGTA: Treasury Inspector General for Tax Administration:
United States Government Accountability Office:
Washington, DC 20548:
March 30, 2007:
The Honorable Mark W. Everson:
Commissioner of Internal Revenue:
Dear Commissioner Everson:
The Internal Revenue Service (IRS) has a demanding responsibility in
collecting taxes, processing tax returns, and enforcing the nation's
tax laws. It relies extensively on computerized systems to support its
financial and mission-related operations. Effective information system
controls are essential to ensuring that financial and taxpayer
information are adequately protected from inadvertent or deliberate
misuse, fraudulent use, improper disclosure, or destruction. These
controls also affect the confidentiality, integrity, and availability
of financial and sensitive taxpayer information.
As part of our audit of IRS's fiscal years 2006 and 2005 financial
statements, we assessed the effectiveness of the service's information
security controls[Footnote 1] over key financial systems, information,
and interconnected networks at three locations. These systems support
the processing, storage, and transmission of financial and sensitive
taxpayer information. In our report on IRS's fiscal years 2006 and 2005
financial statements,[Footnote 2] we reported that the new information
security deficiencies we identified in fiscal year 2006 and the
unresolved deficiencies from prior audits represent a material
weakness[Footnote 3] in internal controls over financial and tax
processing systems.
We assessed (1) the status of IRS's actions to correct or mitigate
previously reported information security weaknesses at two data
processing sites and (2) whether controls over key financial and tax
processing systems are effective in ensuring the confidentiality,
integrity, and availability of financial and sensitive taxpayer
information.
This report provides a general summary of the vulnerabilities
identified and our recommendations to help strengthen and improve IRS's
information security program. We are also issuing a separate report for
limited distribution that contains sensitive information. It describes
in more detail the information security weaknesses that we identified
and our specific recommendations for correcting them.
We performed our review in accordance with generally accepted
government auditing standards, from June 2006 through November 2006.
Results in Brief:
IRS has made limited progress toward correcting previously reported
information security weaknesses at two data processing sites. It has
corrected or mitigated 25 of the 73 information security weaknesses
that we reported as unresolved at the time of our last review at those
sites. Actions have been taken to address weaknesses related to access
controls and configuration management, among other things. For example,
IRS has implemented controls used to authorize access to Windows
systems, network devices,[Footnote 4] databases, and mainframe systems;
improved password controls on its servers; enhanced audit and
monitoring efforts for mainframe and Windows user activity; conducted a
facility risk assessment at a critical data processing site; and
improved change controls over one of its mainframe systems.
Nevertheless, 66 percent, or 48 of the 73 previously identified
information security weaknesses remain unresolved.
Significant weaknesses in access controls and other information
security controls continue to threaten the confidentiality, integrity,
and availability of IRS's financial and tax processing systems and
information. IRS has not consistently implemented effective access
controls to prevent, limit, or detect unauthorized access to computing
resources from within its internal network. These access controls
include those related to user identification and authentication,
authorization, cryptography, audit and monitoring, and physical
security. In addition, IRS faces risks to its financial and sensitive
taxpayer information due to weaknesses in configuration management,
segregation of duties, media destruction and disposal, and personnel
security controls. A key reason for the information security weaknesses
in IRS's financial and tax processing systems is that it has not yet
fully implemented its agencywide information security program to ensure
that controls are effectively established and maintained. As a result,
weaknesses in information security controls over its key financial and
tax processing systems could impair IRS's ability to perform vital
functions and could increase the risk of unauthorized disclosure,
modification, or destruction of financial and sensitive taxpayer
information.
We are making recommendations to the Commissioner of Internal Revenue
to take several actions to fully implement a comprehensive agencywide
information security program. We also are making recommendations to the
commissioner in a separate report with limited distribution. These
recommendations consist of actions to be taken to correct the specific
information security weaknesses related to user identification and
authentication, authorization, cryptography, audit and monitoring,
physical security, configuration management, segregation of duties,
media destruction and disposal, and personnel security.
In providing written comments on a draft of this report, the
Commissioner of Internal Revenue recognized that continued diligence of
IRS's security and privacy responsibilities is required. He further
stated that IRS would continue to remedy all recommendations to
completion to ensure that operations of its applications and systems
adhere to security requirements.
Background:
Information security is a critical consideration for any organization
that depends on information systems and computer networks to carry out
its mission or business. It is especially important for government
agencies, where the public's trust is essential. The dramatic expansion
in computer interconnectivity and the rapid increase in the use of the
Internet are changing the way our government, the nation, and much of
the world communicate and conduct business. Without proper safeguards,
systems are unprotected from individuals and groups with malicious
intent who can intrude and use their access to obtain sensitive
information, commit fraud, disrupt operations, or launch attacks
against other computer systems and networks. These concerns are well
founded for a number of reasons, including the dramatic increase in
reports of security incidents, the ease of obtaining and using hacking
tools, and steady advances in the sophistication and effectiveness of
attack technology.
Our previous reports, and those by the Treasury Inspector General for
Tax Administration (TIGTA), describe persistent information security
weaknesses that place federal agencies, including IRS, at risk of
disruption, fraud, or inappropriate disclosure of sensitive
information. Recognizing the importance of securing federal agencies'
information systems, Congress enacted the Federal Information Security
Management Act (FISMA) in December 2002[Footnote 5] to strengthen the
security of information and systems within federal agencies. FISMA
requires each agency to develop, document, and implement an agencywide
information security program to provide information security for the
information and systems that support the operations and assets of the
agency, using a risk-based approach to information security management.
Such a program includes developing and implementing security plans,
policies, and procedures; testing and evaluating the effectiveness of
controls; assessing risk; providing specialized training; planning,
implementing, evaluating, and documenting remedial action to address
information security deficiencies; and ensuring continuity of
operations. We have designated information security as a governmentwide
high-risk area since 1997[Footnote 6]--a designation that remains in
force today.[Footnote 7]
IRS has demanding responsibilities in collecting taxes, processing tax
returns, and enforcing the nation's tax laws. It relies extensively on
computerized systems to support its financial and mission-related
operations. In fiscal year 2006, IRS collected about $2.5 trillion in
tax payments, processed hundreds of millions of tax and information
returns, and paid about $277 billion in refunds to taxpayers. IRS is a
large and complex organization, adding unique mission operational
challenges for management. It employs tens of thousands of people in 10
service center campuses, 3 computing centers, and numerous other field
offices throughout the United States.
IRS also collects and maintains a significant amount of personal and
financial information on each American taxpayer. The confidentiality of
this sensitive information must be protected; otherwise, taxpayers
could be exposed to loss of privacy and to financial loss and damages
resulting from identity theft or other financial crimes.
The Commissioner of Internal Revenue has overall responsibility for
ensuring the confidentiality, availability, and integrity of the
information and information systems that support the agency and its
operations. FISMA states that the Chief Information Officer (CIO) is
responsible for developing and maintaining an information security
program. Within IRS, this responsibility is delegated to the Chief of
Mission Assurance and Security Services (MA&SS). The Chief of MA&SS is
responsible for developing policies and procedures regarding
information technology security; establishing a security awareness and
training program; conducting security audits; coordinating the
implementation of logical access controls into IRS systems and
applications; providing physical and personnel security; and, among
other things, monitoring IRS security activities. To help accomplish
these goals, MA&SS has developed and published information security
policies, guidelines, standards, and procedures in the Internal Revenue
Manual, the Law Enforcement Manual, and other documents. The
Modernization and Information Technology Services organization, led by
the CIO, is responsible for developing security controls for systems
and applications; conducting annual tests of systems; implementing,
testing, and validating the effectiveness of remedial actions; ensuring
that continuity of operations requirements are addressed for all
applications and systems it owns; and mitigating technical
vulnerabilities and validating the mitigation strategy.
Objectives, Scope, and Methodology:
The objectives of our review were to determine (1) the status of IRS's
actions to correct or mitigate previously reported weaknesses at two
data processing sites and (2) whether controls over key financial and
tax processing systems located at three sites were effective in
ensuring the confidentiality, integrity, and availability of financial
and sensitive taxpayer information. This review was completed to
support the annual financial statement audit, by assessing the
effectiveness of information system controls for the purposes of
supporting our opinion on internal controls over the preparation of the
financial statements.
We concentrated our evaluation primarily on threats emanating from
sources internal to IRS's computer networks. Our evaluation was based
on (1) our Federal Information System Controls Audit Manual, which
contains guidance for reviewing information system controls that affect
the confidentiality, integrity, and availability of computerized
information; (2) FISMA, which establishes key elements that are
required for an effective agencywide information security program; and
(3) previous reports from TIGTA and GAO. Specifically, we evaluated
information security controls that are intended to:
* prevent, limit, and detect electronic access to computer resources
(information, programs, and systems), thereby protecting these
resources against unauthorized disclosure, modification, and use;
* provide physical protection of computer facilities and resources from
espionage, sabotage, damage, and theft;
* prevent the exploitation of security vulnerabilities;
* prevent the introduction of unauthorized changes to application or
system software;
* ensure that work responsibilities for computer functions are
segregated so that one individual does not perform or control all key
aspects of computer-related operations and, thereby, have the ability
to conduct unauthorized actions or gain unauthorized access to assets
or records without detection;
* provide confidentiality of used media; and:
* limit the disruption to a system due to the intentional or
unintentional actions of individuals.
In addition, we evaluated IRS's agencywide information security
program. We identified and reviewed pertinent IRS information security
policies and procedures, guidance, security plans, relevant reports,
and other documents. We also tested the effectiveness of information
security controls at three IRS sites. We focused on five critical
applications that directly or indirectly support the processing of
material transactions that are reflected in the agency's financial
statement. These applications are used for procurement, asset
management, and tax administration, which are located at the sites. We
also discussed with key security representatives and management
officials whether information security controls were in place,
adequately designed, and operating effectively.
IRS Made Limited Progress in Correcting Previously Reported Weaknesses:
IRS has made limited progress toward correcting previously reported
information security weaknesses at two data processing sites.
Specifically, it has corrected or mitigated 25 of the 73 weaknesses
that we reported as unresolved at the time of our last review. IRS
corrected weaknesses related to access controls and configuration
management, among others. For example, it has:
* made progress in implementing controls used to authorize access to
Windows systems, network devices, databases, and mainframe systems by,
among other things, removing administrative privileges from Windows
users who did not need them to perform job duties; securely configuring
the protocol used for managing network performance; improving control
over data sharing among mainframe users; and restricting a certain
access privilege to mainframe users who did not need it to perform
their job duties;
* improved password controls on its servers by installing a password
filter on Windows systems requiring users to create passwords in
accordance with IRS policy, discontinuing the use of stored passwords
in clear text for automatic logon files and structured query language
scripts, and requiring password complexity and stronger password
expiration policies on Windows systems;
* enhanced audit and monitoring efforts for mainframe and Windows user
activity;
* conducted a facility risk assessment at a critical data processing
site; and:
* improved change controls over one of IRS's mainframe systems.
In addition, IRS has made progress in enhancing its information
security program. For example, IRS has trained its staff to restore
operations in the event of an emergency at an off-site location,
assessed risks for the systems we reviewed, certified and accredited
the systems we reviewed, enhanced information security awareness and
training by providing training to employees and contractors, and
established an ongoing process of testing and evaluating its systems to
ensure compliance with policies and procedures.
Although IRS has made progress in correcting many of the previously
identified security weaknesses, 48 weaknesses (66 percent) remain
unresolved. For example, IRS continued to, among other things,
* use inadequate account lockout settings for Windows servers,
* improperly restrict file permissions on UNIX systems,
* routinely permit unencrypted protocols for remote logon capability to
servers,
* insufficiently monitor system activities and configure certain
servers to ensure adequate audit trails,
* inadequately verify employees' identities against official IRS photo
identification,
* use an ineffective patch management program, and:
* use disaster recovery plans that did not include disaster recovery
procedures for certain mission-critical systems.
Significant Weaknesses Continue to Place Financial and Taxpayer
Information at Risk:
Significant weaknesses in access controls and other information
security controls continue to threaten the confidentiality, integrity,
and availability of IRS's financial and tax processing systems and
information. A primary reason for these weaknesses is that IRS has not
yet fully implemented its information security program. As a result,
IRS's ability to perform vital functions could be impaired and the risk
of unauthorized disclosure, modification, or destruction of financial
and sensitive taxpayer information is increased.
Access Controls Were Inadequate:
A basic management objective for any organization is to protect the
resources that support its critical operations from unauthorized
access. Organizations accomplish this objective by designing and
implementing controls that are intended to prevent, limit, and detect
unauthorized access to computing resources, programs, information, and
facilities. Inadequate access controls diminish the reliability of
computerized information and increase the risk of unauthorized
disclosure, modification, and destruction of sensitive information and
disruption of service. Access controls include those related to user
identification and authentication, authorization, cryptography, audit
and monitoring, and physical security. IRS did not ensure that it
consistently implemented effective access controls in each of these
areas, as the following sections in this report demonstrate.
User Identification and Authentication:
A computer system must be able to identify and authenticate different
users so that activities on the system can be linked to specific
individuals. When an organization assigns unique user accounts to
specific users, the system is able to distinguish one user from
another--a process called identification. The system also must
establish the validity of a user's claimed identity by requesting some
kind of information, such as a password, that is known only by the
user--a process known as authentication. According to IRS policy, user
accounts will be associated with only one individual or process and
should automatically lockout after three consecutive failed logon
attempts. If user accounts are not associated with an individual (e.g.,
group user accounts), they must be controlled, audited, and managed. In
addition, IRS policy requires strong enforcement of passwords for
authentication to IRS systems. For example, passwords are to expire and
are not to be shared by users.
IRS did not adequately control the identification and authentication of
users to ensure that only authorized individuals were granted access to
its systems. For example, administrators at one site shared logon
accounts and passwords when accessing a database production server for
the procurement system.[Footnote 8] By allowing users to share accounts
and passwords, individual accountability for authorized system activity
as well as unauthorized system activity could be lost. In addition, at
the same site, IRS did not enforce strong password management on the
same database production server. Accounts did not lock out users after
failed logon attempts and passwords did not expire. As a result, the
database was susceptible to a brute force password attack that could
result in unauthorized access. Furthermore, at another site, IRS stored
user IDs and passwords in mainframe files that could be read by every
mainframe user. As a result, increased risk exists that an intruder or
unauthorized user could read and use these IDs and passwords to log on
to the computer systems and masquerade as an authorized user.
Authorization:
Authorization is the process of granting or denying access rights and
permissions to a protected resource, such as a network, a system, an
application, a function, or a file. A key component of granting or
denying access rights is the concept of "least privilege." Least
privilege is a basic principle for securing computer resources and
information. This principle means that users are granted only those
access rights and permissions that they need to perform their official
duties. To restrict legitimate users' access to only those programs and
files that they need to do their work, organizations establish access
rights and permissions. "User rights" are allowable actions that can be
assigned to users or to groups of users. File and directory permissions
are rules that regulate which users can access a particular file or
directory and the extent of that access. To avoid unintentionally
authorizing users access to sensitive files and directories, an
organization must give careful consideration to its assignment of
rights and permissions. IRS policy requires that all production systems
be securely configured to specifically limit access privileges to only
those individuals who need them to perform their official duties.
IRS permitted excessive access to key financial systems by granting
rights and permissions that gave users more access than they needed to
perform their official duties. For example, at one site, excessive read
access was allowed to production system libraries that contained
mainframe configuration information. In addition, this site did not
maintain documentation of approved access privileges allowed to each
system resource by each user group. Without such documentation, IRS
limits its ability to monitor and verify user access privileges.
Furthermore, IRS did not appropriately restrict the use of anonymous e-
mails on the two mainframe systems we reviewed. These servers allowed
anonymous e-mails from one of our analysts masquerading as a legitimate
sender and could expose IRS employees to malicious activity, including
phishing.[Footnote 9] At another site, IRS granted all users excessive
privileges to sensitive files on its production database server for the
procurement system. Additionally, the procurement system was vulnerable
to a well-known exploit whereby database commands could be inserted
into the application through a user input screen that was available to
everyone on the agency's network. Administrative privileges also were
granted to the procurement system's database application user ID at
this location. This user ID allowed extensive administrative privileges
that were inappropriate for this type of account. Excessive or
unauthorized access privileges provide opportunities for individuals to
circumvent security controls.
Cryptography:
Cryptography[Footnote 10] underlies many of the mechanisms used to
enforce the confidentiality and integrity of critical and sensitive
information. A basic element of cryptography is encryption. Encryption
can be used to provide basic data confidentiality and integrity, by
transforming plain text into cipher text using a special value known as
a key and a mathematical process known as an algorithm. IRS policy
requires the use of encryption for transferring sensitive but
unclassified information between IRS facilities. The National Security
Agency also recommends disabling protocols that do not encrypt
information transmitted across the network, such as user ID and
password combinations.
IRS did not consistently apply encryption to protect sensitive data
traversing its network. For example, at one site, IRS was using an
unencrypted protocol to manage network devices on a local server. In
addition, the procurement application and the UNIX servers we reviewed
at another site were using unencrypted protocols. Therefore, all
information, including user ID and password information, was being sent
across the network in clear text. These weaknesses could allow an
attacker to view information and use that knowledge to gain access to
financial and system data being transmitted over the network.
Audit and Monitoring:
To establish individual accountability, monitor compliance with
security policies, and investigate security violations, it is crucial
to determine what, when, and by whom specific actions have been taken
on a system. Organizations accomplish this by implementing system or
security software that provides an audit trail, or logs of system
activity, that they can use to determine the source of a transaction or
attempted transaction and to monitor users' activities. The way in
which organizations configure system or security software determines
the nature and extent of information that can be provided by the audit
trail. To be effective, organizations should configure their software
to collect and maintain audit trails that are sufficient to track
security-relevant events. The Internal Revenue Manual requires that
auditable events be captured and audit logs be used to review what
occurred after an event, for periodic reviews, and for real-time
analysis. In addition, the manual requires that audit logs be
maintained and archived in a way that allows for efficient and
effective retrieval, viewing, and analysis, and that the logs be
protected from corruption, alteration, or deletion.
IRS did not consistently audit and monitor security-relevant system
activity on its applications. According to IRS officials, IRS did not
capture auditable events for its procurement application as a result of
system performance issues. Therefore, no audit reports were being
reviewed by managers for this application. In addition, IRS was unable
to effectively monitor activity for its administrative financial system
because the volume of the information in the log made it difficult for
IRS officials to systematically analyze targeted activities and
security-relevant events or archive logs. As a result, unauthorized
access could go undetected, and the agency's ability to trace or
recreate events in the event of a system modification or disruption
could be diminished.
Physical Security:
Physical access controls are used to mitigate the risks to systems,
buildings, and supporting infrastructure related to their physical
environment and to control the entry and exit of personnel in buildings
as well as data centers containing agency resources. Examples of
physical security controls include perimeter fencing, surveillance
cameras, security guards, and locks. Without these protections, IRS
computing facilities and resources could be exposed to espionage,
sabotage, damage, and theft. IRS policy states that only authorized
personnel should have access to IRS buildings and structures.
Although IRS has implemented physical security controls over its
information technology resources, certain weaknesses reduce the
effectiveness of these controls. For example:
* IRS did not physically protect a server containing source code for
its procurement application. The server was not located in a secured
computer room; instead, it was located in a cubicle.
* IRS did not consistently manage the use of proximity cards, which are
used to gain access to secured IRS facilities. For example, one of the
sites we visited could not account for active proximity cards for at
least 11 separated employees. At that same site, at least 12 employees
and contractors were given proximity cards that allowed them access to
a computer room, although these individuals did not need this access to
perform their official duties.
* IRS did not always effectively secure certain restricted areas. For
example, it implemented motion detectors at one site to release the
locks on doors that lead from areas that are accessible by the general
public directly into IRS-controlled areas. The motion detector's field
of view was set wider than necessary, so that an unauthorized
individual would simply have to wait for an authorized individual to
pass by the motion detector on the IRS-controlled side of the door to
gain unauthorized access to the IRS facility.
As a result, IRS is at increased risk of unauthorized access to
financial information and inadvertent or deliberate disruption of
procurement services.
Other Information System Controls Were Not Sufficient:
In addition to access controls, other important controls should be in
place to ensure the confidentiality, integrity, and availability of an
organization's information. These controls include policies,
procedures, and techniques for securely configuring information
systems, segregating incompatible duties, sufficiently disposing of
media, and implementing personnel security. Weaknesses in these areas
increase the risk of unauthorized use, disclosure, modification, or
loss of IRS's information and information systems.
Configuration Management:
The purpose of configuration management is to establish and maintain
the integrity of an organization's work products. By implementing
configuration management, organizations can better ensure that only
authorized applications and programs are placed into operation through
establishing and maintaining baseline configurations and monitoring
changes to these configurations. According to IRS policy, changes to
baseline configurations should be monitored and controlled. Patch
management, a component of configuration management, is an important
factor in mitigating software vulnerability risks. Proactively managing
vulnerabilities of systems will reduce or eliminate the potential for
exploitation and involves considerably less time and effort than
responding after an exploit has occurred. Up-to-date patch installation
can help diminish vulnerabilities associated with flaws in software
code. Attackers often exploit these flaws to read, modify, or delete
sensitive information; disrupt operations; or launch attacks against
other organizations' systems. According to the National Institute of
Standards and Technology (NIST), tracking patches allows organizations
to identify which patches are installed on a system and provides
confirmation that the appropriate patches have been applied. IRS's
patch management policy also requires that patches be implemented in a
timely manner, and that critical patches are applied within 72 hours to
minimize vulnerabilities.
IRS did not properly implement configuration management procedures. For
example, IRS did not record successful changes to baseline
configurations on one of its mainframe systems, which supports its
general ledger for tax administration activities. Without adequately
logging system configuration changes, IRS cannot adequately ensure they
are properly monitored and controlled. In addition, IRS did not
effectively track or install patches in a timely manner. For example,
one IRS location did not have a tracking process in place to ensure
that up-to-date patches have been applied on UNIX servers. Furthermore,
installation of critical patches through the configuration management
process for Windows systems was not timely. For example, critical
Windows patches released in July 2006 had not yet been applied at the
time of our review in August 2006. As a result, increased risk exists
that the integrity of IRS systems could be compromised.
Segregation of Duties:
Segregation of duties refers to the policies, procedures, and
organizational structures that help ensure that no single individual
can independently control all key aspects of a process or computer-
related operation and thereby gain unauthorized access to assets or
records. Often, organizations achieve segregation of duties by dividing
responsibilities among two or more individuals or organizational
groups. This diminishes the likelihood that errors and wrongful acts
will go undetected, because the activities of one individual or group
will serve as a check on the activities of the other. Inadequate
segregation of duties increases the risk that erroneous or fraudulent
transactions could be processed, improper program changes implemented,
and computer resources damaged or destroyed. The Internal Revenue
Manual requires that IRS divide and separate duties and
responsibilities of incompatible functions among different individuals,
so that no individual shall have all of the necessary authority and
system access to disrupt or corrupt a critical security process.
IRS did not always properly segregate incompatible duties. For example,
IRS established test accounts on a production server for its
procurement system. Test accounts are used by system developers and are
not typically found on production servers. Allowing test accounts on
production servers creates the potential for individuals to perform
incompatible functions, such as system development and production
support. Granting this type of access to individuals who do not require
it to perform their official duties increases the risk that sensitive
information or programs could be improperly modified, disclosed, or
deleted.
Media Destruction and Disposal:
Media destruction and disposal is a key to ensuring confidentiality of
information. Media can include magnetic tapes, optical disks (such as
compact disks), and hard drives. Organizations safeguard used media to
ensure that the information it contains is appropriately controlled.
Improperly disposed media can lead to the inappropriate or inadvertent
disclosure of an agency's sensitive information or the personally
identifiable information of its employees and customers. This potential
vulnerability can be mitigated by properly sanitizing the media.
According to IRS policy, all media should be sanitized prior to
disposal in such a manner that sensitive information on that media
cannot be recovered by ordinary means. The policy further requires that
IRS maintain records certifying that sanitation was performed.
IRS did not have an appropriate process for disposing of information
stored on optical disk. According to agency officials at one of the
sites we visited, discarded optical disks were left unattended in a
hallway bin awaiting destruction by the cleaning staff. These disks had
not been sanitized, and IRS staff were unaware if the unattended disks
contained sensitive information. Furthermore, the cleaning staff did
not maintain records certifying that the media were destroyed. As a
result, IRS could not ensure the confidentiality of potentially
sensitive information stored on optical disks marked for destruction.
Personnel Security:
The greatest harm or disruption to a system comes from the actions,
both intentional and unintentional, of individuals. These intentional
and unintentional actions can be reduced through the implementation of
personnel security controls. According to NIST, personnel security
controls help organizations ensure that individuals occupying positions
of responsibility (including third-party service providers) are
trustworthy and meet established security criteria for those positions.
Organizations should also ensure that information and information
systems are protected during and after personnel actions, such as
terminations and transfers. Organizations can decrease the risk of harm
or disruption of systems by implementing personnel security controls
associated with personnel screening and termination. Personnel
screening controls should be implemented when an individual requires
access to facilities, information, and information systems before
access is authorized. Organizations should also implement controls for
when employment is terminated, including ceasing information system
access and ensuring the return of organizational information system-
related property (e.g., ID cards or building passes).
According to the Internal Revenue Manual, contractor employees must
complete a background investigation to be granted on-site, staff-like
access to IRS facilities. However, if a background investigation has
not been completed, individuals may not have access to IRS sensitive
areas unless they are escorted by an IRS employee. The manual further
states that managers are responsible for identifying separated
employees in order to recover IRS assets, such as ID media. Separated
employees' accounts are to be deactivated within 1 week of an
individual's departure on friendly terms and immediately upon an
individual's departure on unfriendly terms.
IRS did not always ensure the effective implementation of its personnel
security controls. For example, at two sites, IRS granted
contractors[Footnote 11] who did not have a completed background
investigation unescorted physical access to sensitive areas. In
addition, at all three sites we reviewed, IRS did not appropriately
remove application access for separated personnel. For example, 19
individuals who had separated from IRS for periods ranging from 3 weeks
to 14 months still maintained access to applications during our review
this year. These practices increase the risk that individuals might
gain unauthorized access to IRS resources.
Agencywide Information Security Program Was Not Yet Fully Implemented:
A key reason for the information security weaknesses in IRS's financial
and tax processing systems is that it has not yet fully implemented its
agencywide information security program to ensure that controls are
effectively established and maintained. FISMA requires each agency to
develop, document, and implement an information security program that,
among other things, includes:
* periodic assessments of the risk and the magnitude of harm that could
result from the unauthorized access, use, disclosure, disruption,
modification, or destruction of information and information systems;
* policies and procedures that (1) are based on risk assessments, (2)
cost-effectively reduce risks, (3) ensure that information security is
addressed throughout the life cycle of each system, and (4) ensure
compliance with applicable requirements;
* plans for providing adequate information security for networks,
facilities, and systems;
* security awareness training to inform personnel of information
security risks and of their responsibilities in complying with agency
policies and procedures, as well as training personnel with significant
security responsibilities for information security;
* at least annual testing and evaluation of the effectiveness of
information security policies, procedures, and practices relating to
management, operational, and technical controls of every major
information system that is identified in the agency's inventories;
* a process for planning, implementing, evaluating, and documenting
remedial action to address any deficiencies in its information security
policies, procedures, or practices; and:
* plans and procedures to ensure continuity of operations for
information systems that support the operations and assets of the
agency.
Although IRS continued to make important progress in developing and
documenting a framework for its information security program, key
components of the program had not been fully or consistently
implemented.
Risk Assessments:
Identifying and assessing information security risks are essential to
determining what controls are required. Moreover, by increasing
awareness of risks, these assessments can generate support for the
policies and controls that are adopted in order to help ensure that
these policies and controls operate as intended. The Office of
Management and Budget (OMB) Circular A-130, appendix III, prescribes
that risk be reassessed when significant changes are made to
computerized systems--or at least every 3 years. Consistent with NIST
guidance, IRS requires its risk assessment process to detail the
residual risk assessed and potential threats, and to recommend
corrective actions for reducing or eliminating the vulnerabilities
identified.
Although IRS had implemented a risk assessment process, it did not
always effectively evaluate potential risks for the systems we
reviewed. IRS has reassessed the risk level for each of its 264 systems
and categorized them on the basis of risk. Furthermore, the five risk
assessments that we reviewed were current, documented residual risk
assessed and potential threats, and recommended corrective actions for
reducing or eliminating the vulnerabilities they identified. However,
IRS did not identify many of the vulnerabilities in this report and did
not assess the risks associated with them. As a result, potential risks
to these systems may be unknown.
Policies and Procedures:
Another key element of an effective information security program is to
develop, document, and implement risk-based policies, procedures, and
technical standards that govern security over an agency's computing
environment. If properly implemented, policies and procedures should
help reduce the risk that could come from unauthorized access or
disruption of services. Technical security standards provide consistent
implementation guidance for each computing environment. Developing,
documenting, and implementing security policies is important because
they are the primary mechanisms by which management communicates its
views and requirements; these policies also serve as the basis for
adopting specific procedures and technical controls. In addition,
agencies need to take the actions necessary to effectively implement or
execute these procedures and controls. Otherwise, agency systems and
information will not receive the protection that the security policies
and controls should provide.
Although IRS has developed and documented information security
policies, standards, and guidelines that generally provide appropriate
guidance to personnel responsible for securing information and
information systems, it did not always provide needed guidance on how
to guard against significant mainframe security weaknesses. For
example, IRS policy lacked guidance on how to correctly configure
certain mainframe IDs used by the operating system and certain powerful
mainframe programs used to control processing. As a result, IRS has
reduced assurance that its systems and the information they contain are
sufficiently protected.
Security Plans:
An objective of system security planning is to improve the protection
of information technology resources. A system security plan provides an
overview of the system's security requirements and describes the
controls that are in place--or planned--to meet those requirements. OMB
Circular A-130 requires that agencies develop system security plans for
major applications and general support systems, and that these plans
address policies and procedures for providing management, operational,
and technical controls.
IRS had developed system security plans for four of the five systems we
reviewed. The plans addressed policies and procedures for providing
management, operational, and technical controls. However, IRS had not
developed a system security plan for the system that supports its
general ledger for tax administration activities. As a result, IRS
cannot ensure that appropriate controls are in place to protect this
key financial system and critical information.
Specialized Training:
People are one of the weakest links in attempts to secure systems and
networks. Therefore, an important component of an information security
program is providing required training so that users understand system
security risks and their own role in implementing related policies and
controls to mitigate those risks. IRS policy mandates that personnel
with significant security responsibilities be provided with specialized
training.[Footnote 12] In addition, IRS policy requires that personnel
performing information technology security duties meet minimum
continuing professional education levels in accordance with their
roles. Specifically, personnel performing technical security roles are
required to have 24 hours of specialized training per year, personnel
performing nontechnical roles are required to have 16 hours of
specialized training per year, and personnel performing executive
security roles should have 6 hours of specialized training per year.
IRS policy also requires that effective tracking and reporting
mechanisms be in place to monitor specialized training.
Although IRS has made significant progress in providing security
personnel with job-related training and established a methodology for
identifying employees with significant security responsibilities, in
fiscal year 2006, at least 95 individuals with significant security
responsibilities did not have the minimum number of hours of
specialized training required by IRS policy. Of those 95 individuals,
18 had not completed any training for the last reporting year. In
addition, IRS was not able to determine whether all of its employees
had met minimum continuing professional education requirements. For
example, IRS monitored employee training through its Enterprise
Learning Management System, but the system could not differentiate
between employees who are required to have only 6 hours of training and
employees who are required to have more. Furthermore, IRS did not track
all security-related training courses taken by its employees. These
conditions increase the risk that employees and contractors may not be
aware of their security responsibilities.
Tests and Evaluations of Control Effectiveness:
Another key element of an information security program is to test and
evaluate policies, procedures, and controls to determine weather they
are effective and operating as intended. This type of oversight is a
fundamental element because it demonstrates management's commitment to
the security program, reminds employees of their roles and
responsibilities, and identifies and mitigates areas of noncompliance
and ineffectiveness. Although control tests and evaluations may
encourage compliance with security policies, the full benefits are not
achieved unless the results improve the security program. FISMA
requires that the frequency of tests and evaluations be based on risks
and occur no less than annually. IRS policy also requires periodic
testing and evaluation of the effectiveness of information security
policies and procedures.
IRS tested and evaluated information security controls for each of the
systems we reviewed. However, these evaluations did not address many of
the vulnerabilities we have identified in this report. For example,
IRS's test and evaluation plan for its procurement system did not
include tests for password expiration, insecure protocols, or the
removal of employees' system access after separation from the agency.
As a result, IRS has limited assurance that it has appropriately
implemented controls, and it will be less able to identify needed
controls.
Remedial Actions:
A remedial action plan is a key component described in FISMA. Such a
plan assists agencies in identifying, assessing, prioritizing, and
monitoring progress in correcting security weaknesses that are found in
information systems. According to IRS policy, the agency should
document weaknesses found during security assessments as well as
document any planned, implemented, and evaluated remedial actions to
correct any deficiencies. The policy further requires that IRS track
the status of resolution of all weaknesses and verify that each
weakness is corrected.
IRS has developed and implemented a remedial action process to address
deficiencies in its information security policies, procedures, and
practices, however, this remedial action process was not working as
intended. For example, the verification process used to determine
whether remedial actions were implemented was not always effective. Of
the 73 previously reported weaknesses, IRS had indicated that it had
corrected or mitigated 57 of them. However, of those 57 weaknesses, 33
still existed at the time of our review. In addition, IRS had
identified weaknesses but did not document them in a remedial action
plan. For example, we reviewed system self-assessments for five systems
and identified at least 8 weaknesses not documented in a remedial
action plan. These weaknesses pertained to system audit trails,
approval and distribution of continuity of operations plans, and
documenting emergency procedures. TIGTA also reported that IRS was not
tracking all weaknesses found during security assessments in 2006. As a
result, increased risk exists that known vulnerabilities will not be
mitigated.
IRS did not proactively ensure that weaknesses found at one of its
facilities or on one of its systems were considered and, if necessary,
corrected at other facilities or on similar systems. Many of the issues
identified in this report were previously reported at other locations
and on similar systems. Yet, IRS had not applied those recommendations
to the facilities and systems we reviewed this year. For example, we
have been identifying weaknesses with encryption at IRS since
1998.[Footnote 13] However, IRS was not using encryption to protect
information traversing its network. In addition, in 2002 we recommended
that IRS promptly remove system access for separated employees and
verify that system access has been removed. Nevertheless, IRS did not
promptly remove system access for separated employees.
Recognizing the need for a servicewide solution, IRS developed a plan
in October 2006 to address many of the recurring weaknesses. This plan
includes remedial actions to address various weaknesses such as access
authorization, audit and monitoring, configuration management, and
testing of technical controls. According to IRS, the plan should be
fully implemented by fiscal year 2012. However, until IRS fully
implements its plan to address recurring weaknesses, it may not be able
to adequately protect its information and information systems from
inadvertent or deliberate misuse, fraudulent use, improper disclosure,
or destruction.
Continuity of Operations:
Continuity of operations planning is a critical component of
information protection. To ensure that mission-critical operations
continue, it is necessary to be able to detect, mitigate, and recover
from service disruptions while preserving access to vital information.
The elements of robust continuity of operations planning include, among
others, identifying preventative controls (e.g., environmental
controls); developing recovery strategies, including alternative
processing locations; and performing disaster recovery exercises to
test the effectiveness of continuity of operations plans. According to
NIST, systems need to have a reasonably well-controlled operating
environment, and failures in environmental controls such as air-
conditioning systems may cause a service interruption and may damage
hardware. IRS policy mandates that an alternate processing site be
identified, and that agreements be in place when the primary processing
capabilities are unavailable. The policy further requires that each
application's recovery plan be tested on a yearly basis.
IRS did not have adequate environmental controls at one of the sites we
visited. For example, the air-conditioning system for the computer room
that houses the procurement system could not adequately cool down the
systems in the room and was supplemented by a portable fan. In
addition, the fire extinguishers for the same room had not had an up-
to-date inspection. Without providing adequate environmental controls,
IRS is at increased risk that critical system hardware may be damaged.
Also, IRS had established alternate processing sites for four of the
five applications we reviewed. However, it did not have an alternate
processing site for its procurement system, and it had not tested the
application's recovery plan. As a result, unforeseen events could
significantly impair IRS's ability to fulfill its mission.
Conclusions:
IRS has made important progress in correcting or mitigating previously
reported weaknesses, implementing controls over key financial and tax
processing systems, and developing and documenting a solid framework
for its agencywide information security program. However, information
security weaknesses--both old and new--continue to impair the agency's
ability to ensure the confidentiality, integrity, and availability of
financial and sensitive taxpayer information. These deficiencies
represent a material weakness in IRS's internal controls over its
financial and tax processing systems. A key reason for these weaknesses
is that the agency has not yet fully implemented critical elements of
its agencywide information security program. Until IRS (1) fully
implements a comprehensive agencywide information security program that
includes risk assessments, enhanced policies and procedures, security
plans, training, adequate tests and evaluations, and a continuity of
operations process for all major systems and (2) begins to address
weaknesses across the service, its facilities, computing resources, and
the financial and sensitive taxpayer information on its systems will
remain vulnerable.
Recommendations for Executive Action:
To help establish effective information security over key financial and
tax processing systems, financial and sensitive taxpayer information,
and interconnected networks, we recommend that you take the following
10 actions to implement an agencywide information security program:
* update the risk assessments for the five systems reviewed to include
the vulnerabilities identified in this report;
* update policies and procedures to include guidance on configuring
mainframe ID's used by the operating system and certain powerful
mainframe programs used to control processing;
* develop a system security plan for the system that supports the
general ledger for tax administration activities;
* enhance the Enterprise Learning Management System to include all
security-related training courses taken by IRS employees and
contractors and to differentiate required training hours for all
employees;
* update test and evaluation procedures to include tests for
vulnerabilities identified in this report, such as password expiration,
insecure protocols, and removal of system access after separation from
the agency;
* implement a revised remedial action verification process that ensures
actions are fully implemented;
* document weaknesses identified during security assessments in a
remedial action plan;
* provide adequate environmental controls for the computer room that
houses the procurement system, such as a sufficient air-conditioning
system and up-to-date fire extinguishers;
* establish an alternate processing site for the procurement
application; and:
* test the procurement system recovery plan.
We are also making 50 detailed recommendations in a separate report
with limited distribution. These recommendations consist of actions to
be taken to correct the specific information security weaknesses
related to user identification and authentication, authorization,
cryptography, audit and monitoring, physical security, configuration
management, segregation of duties, media destruction and disposal, and
personnel security.
Agency Comments:
In providing written comments (reprinted in app. I) on a draft of this
report, the Commissioner of Internal Revenue stated that IRS
understands that information security controls are essential for
ensuring information is adequately protected from inadvertent or
deliberate misuse, disruption, or destruction. He also noted that IRS
has taken several steps to create a strong agencywide information
security program as required by FISMA. The commissioner recognized that
continued diligence of IRS's security and privacy responsibilities is
required, and he further stated that IRS will continue to remedy all
recommendations to completion to ensure that operations of its
applications and systems adhere to security requirements.
This report contains recommendations to you. As you know, 31 U.S.C. 720
requires the head of a federal agency to submit a written statement of
the actions taken on our recommendations to the Senate Committee on
Homeland Security and Governmental Affairs and to the House Committee
on Oversight and Government Reform not later than 60 days from the date
of the report and to the House and Senate Committees on Appropriations
with the agency's first request for appropriations made more than 60
days after the date of this report. Because agency personnel serve as
the primary source of information on the status of recommendations, GAO
requests that the agency also provide it with a copy of your agency's
statement of action to serve as preliminary information on the status
of open recommendations.
We are sending copies of this report to interested congressional
committees and the Secretary of the Treasury. We will also make copies
available to others upon request. In addition, this report will be
available at no charge on the GAO Web site at http://www.gao.gov.
If you have any questions regarding this report, please contact Gregory
Wilshusen at (202) 512-6244 or Keith Rhodes at (202) 512-6412. We can
also be reached by e-mail at wilshuseng@gao.gov and rhodesk@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report are listed in appendix II.
Sincerely yours,
Signed by:
Gregory C. Wilshusen:
Director, Information Security Issues:
Signed by:
Keith A. Rhodes, Chief Technologist:
[End of section]
Appendix I: Comments from the Commissioner of Internal Revenue:
Commissioner:
Department Of The Treasury:
Internal Revenue Service:
Washington, D.C. 20224:
March 16, 2007:
Mr. Gregory C. Wilshusen:
Director, Information Security Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Wilshusen:
I am writing to provide the Internal Revenue Service's (IRS's) comments
on the Government Accountability Office (GAO) draft report, Information
Security. Further Efforts Needed to Address Significant Weaknesses at
the Internal Revenue Service (GAO-07-364).
Thank you for recognizing the progress IRS has made in taking actions
to implement more effective information security controls over key
financial and tax processing systems. The report indicates that the IRS
has corrected or mitigated several of the specific technical weaknesses
that GAO reported as unresolved at the time of your last review. We
understand that effective information security controls are essential
for ensuring information is adequately protected from inadvertent or
deliberate misuse, disruption, or destruction.
The IRS has taken significant steps to create a strong, agency-wide
information technology security program as required by the Federal
Information Security Management Act (FISMA). This was noted in the
recent Treasury Inspector General for Tax Administration assessment of
IRS's progress toward that goal. We established the Mission Assurance
and Security Services organization to bring focus to all security
disciplines. Over the last year, we have made progress in addressing
computer security deficiencies throughout the IRS by focusing attention
in key areas:
* We began an aggressive initiative to complete the full suite of
security certification and accreditation activities for all IRS
computer applications and systems to bring them into compliance with
recently issued National Institute of Standards and Technology (NIST)
security guidance.
* We implemented NIST recommendations for the protection of sensitive
information on laptops and removable media and established a
comprehensive set of data protection initiatives to further safeguard
our sensitive agency information. In conjunction with these
initiatives, policies have been updated and issued; multi-layered
encryption technology has been deployed; and extensive user training
has been provided to our personnel.
* We established an Access Controls Project Team charged with
documenting the appropriate authorization and access to all IRS systems
and applications. We are currently implementing an automated process
that will systematically control the proper authorization for gaining
access; thus, minimizing our risk of unauthorized disclosure of
sensitive information and disruption of service. In addition, system
access privileges are regularly audited using tools that we have in
place, and all security violations are captured and aggressively
pursued.
* We strengthened our IT security program by ensuring that our
personnel have specialized, role-based training to improve the secure
operations of all computing environments.
* We continued our commitment of ensuring that all contractors and
employees with access to our systems, data, or facilities have had an
appropriate investigation commensurate with the level of risk of the
positions they encumber prior to providing access.
* We developed a Physical Security Design Guide and standard operating
procedures to improve the security and control of assets and to enhance
the protections of IRS facilities. By adhering to our corrective action
monitoring plan, the IRS is addressing physical security
vulnerabilities at an enterprise level and monitoring for completion.
* We implemented protections to ensure that our computer and network
infrastructure systems are resistant to external attacks-thus far,
there have been no successful penetrations into any IRS systems by
unauthorized users.
As mandated by FISMA, all IRS senior officials are actively engaged in
fulfilling their security responsibilities for the business systems and
applications in their areas of responsibility. The Chief Information
Officer and Chief, Mission Assurance and Security Services are
collaborating with executives throughout the IRS to ensure security
policies, standards, and procedures are followed across the enterprise.
The IRS takes its security and privacy responsibilities very seriously.
While we have made significant progress, we recognize that continued
diligence is required. The report indicates ten recommendations for
executive action. We will provide a detailed corrective action plan
addressing each of the recommendations with our response to the final
report. We will continue to remedy all recommendations to completion to
ensure the operations of IRS applications and systems adhere to
security requirements.
I appreciate your continued support and the valuable assistance and
guidance from your staff. If you have any questions, or you would like
to discuss this response in more detail, please contact Richard Spires,
Chief Information Officer, at (202) 622-6800 or Daniel Galik, Chief
Mission Assurance and Security Services at (202) 622-8910.
Sincerely,
Signed by:
Mark W. Everson:
[End of section]
Appendix II: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Gregory C. Wilshusen, (202) 512-6244 Keith A. Rhodes, (202) 512-6412:
Staff Acknowledgments:
In addition to the persons named above, Don Adams, Bruce Cain, Mark
Canter, Nicole Carpenter, Jason Carroll, West Coile, Denise
Fitzpatrick, Edward Glagola Jr., David Hayes, Kevin Jacobi, Jeffrey
Knott (Assistant Director), George Kovachick, Joanne Landesman, Leena
Mathew, Kevin Metcalfe, Amos Tevelow, and Chris Warweg made key
contributions to this report.
FOOTNOTES
[1] Information security controls include electronic access controls,
software change controls, physical security, segregation of duties, and
continuity of operations. These controls are designed to ensure that
access to data is appropriately restricted, that only authorized
changes to computer programs are made, that physical access to
sensitive computing resources and facilities is protected, that
computer security duties are segregated, and that back-up and recovery
plans are adequate to ensure the continuity of essential operations.
[2] GAO, Financial Audit: IRS's Fiscal Years 2006 and 2005 Financial
Statements, GAO-07-136 (Washington, D.C.: Nov. 9, 2006).
[3] A material weakness is a reportable condition that precludes the
entity's internal controls from providing reasonable assurance that
material misstatements in the financial statements would be prevented
or detected on a timely basis.
[4] Organizations secure their networks, in part, by installing and
configuring network devices that permit authorized network service
requests, deny unauthorized requests, and limit the services that are
available on the network. Devices used to secure networks include (1)
firewalls that prevent unauthorized access to the network, (2) routers
that filter and forward data along the network, (3) switches that
forward information among segments of a network, and (4) servers that
host applications and data.
[5] FISMA was enacted as title III, E-Government Act of 2002, Pub. L.
No. 107-347, 116 Stat. 2946 (Dec. 17, 2002).
[6] GAO, High-Risk Series: Information Management and Technology, GAO/
HR-97-9 (Washington, D.C.: February 1997).
[7] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[8] This system processed about $3.9 billion in fiscal year 2006.
[9] Phishing is the act of tricking individuals into disclosing
sensitive personal information through deceptive computer-based means.
[10] Cryptography is used to secure transactions by providing ways to
ensure data confidentiality, data integrity, authentication of the
message's originator, electronic certification of data, and
nonrepudiation (proof of the integrity and origin of data that can be
verified by a third party).
[11] This year's background investigation review only consisted of
contractors.
[12] In its fiscal year 2006 FISMA submission, IRS reported that it has
2,476 employees with significant security responsibilities.
[13] GAO, IRS Systems Security: Although Significant Improvements Made,
Tax Processing Operations and Data Still at Serious Risk, GAO/ AIMD-99-
38 (Washington, D.C.: Dec. 14, 1998); and Information Security:
Continued Progress Needed to Strengthen Controls at the Internal
Revenue Service, GAO-06-328 (Washington, D.C.: Mar. 23, 2006).
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site (www.gao.gov). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site.
To have GAO e-mail you a list of newly posted products every afternoon,
go to www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548:
Public Affairs:
Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
