Information Security
IRS Needs to Address Pervasive Weaknesses Gao ID: GAO-08-211 January 8, 2008The Internal Revenue Service (IRS) relies extensively on computerized systems to carry out its demanding responsibilities to collect taxes (about $2.7 trillion in fiscal year 2007), process tax returns, and enforce the nation's tax laws. 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 2007 and 2006 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 key financial applications at three IRS data centers; and interviewed key security representatives and management officials.
IRS made limited progress toward correcting previously reported information security weaknesses. It has corrected or mitigated 29 of the 98 information security weaknesses that GAO reported as unresolved at the time of its last review. For example, IRS implemented controls for user IDs for certain critical servers, improved physical protection for its procurement system, developed a security plan for a key financial system, and upgraded servers that had been using obsolete operating systems. In addition, IRS established enterprisewide objectives for improving information security, including initiatives for protecting and encrypting data, securing information technology assets, and building security into new applications. However, about 70 percent of the previously identified information security weaknesses remain unresolved. For example, IRS continues to, among other things, use passwords that are not complex, grant excessive access to individuals who do not need it, and install patches in an untimely manner. In addition to this limited progress, other significant weaknesses in various controls continue to threaten the confidentiality and availability of IRS's financial processing systems and information, and limit assurance of the integrity and reliability of its financial and taxpayer information. IRS has not consistently implemented effective controls to prevent, limit, or detect unauthorized access to computing resources from within its internal network. For example, IRS did not always (1) enforce strong password management for properly identifying and authenticating users, (2) authorize user access to only permit access needed to perform job functions, (3) encrypt sensitive data, (4) effectively monitor changes on its mainframe, and (5) physically protect its computer resources. In addition, IRS faces risks to its financial and taxpayer information due to weaknesses in implementing its configuration management policies, as well as appropriately segregating incompatible job duties. Accordingly, GAO has reported a material weakness in IRS's internal controls over its financial and tax processing systems. A key reason for the weaknesses is that the agency has not yet fully implemented its agencywide information security program to ensure that controls are effectively established and maintained. As a result, IRS is at increased risk of unauthorized disclosure, modification, or destruction of financial and taxpayer information.
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Report to the Acting Commissioner of Internal Revenue:
United States Government Accountability Office:
GAO:
January 2008:
Information Security:
IRS Needs to Address Pervasive Weaknesses:
IRS Information Security:
GAO-08-211:
GAO Highlights:
Highlights of GAO-08-211, a report to the Acting Commissioner of
Internal Revenue.
Why GAO Did This Study:
The Internal Revenue Service (IRS) relies extensively on computerized
systems to carry out its demanding responsibilities to collect taxes
(about $2.7 trillion in fiscal year 2007), process tax returns, and
enforce the nation‘s tax laws. 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 2007 and 2006 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 key
financial applications at three IRS data centers; and interviewed key
security representatives and management officials.
What GAO Found:
IRS made limited progress toward correcting previously reported
information security weaknesses. It has corrected or mitigated 29 of
the 98 information security weaknesses that GAO reported as unresolved
at the time of its last review. For example, IRS implemented controls
for user IDs for certain critical servers, improved physical protection
for its procurement system, developed a security plan for a key
financial system, and upgraded servers that had been using obsolete
operating systems. In addition, IRS established enterprisewide
objectives for improving information security, including initiatives
for protecting and encrypting data, securing information technology
assets, and building security into new applications. However, about 70
percent of the previously identified information security weaknesses
remain unresolved. For example, IRS continues to, among other things,
use passwords that are not complex, grant excessive access to
individuals who do not need it, and install patches in an untimely
manner.
In addition to this limited progress, other significant weaknesses in
various controls continue to threaten the confidentiality and
availability of IRS‘s financial processing systems and information, and
limit assurance of the integrity and reliability of its financial and
taxpayer information. IRS has not consistently implemented effective
controls to prevent, limit, or detect unauthorized access to computing
resources from within its internal network. For example, IRS did not
always (1) enforce strong password management for properly identifying
and authenticating users, (2) authorize user access to only permit
access needed to perform job functions, (3) encrypt sensitive data, (4)
effectively monitor changes on its mainframe, and (5) physically
protect its computer resources. In addition, IRS faces risks to its
financial and taxpayer information due to weaknesses in implementing
its configuration management policies, as well as appropriately
segregating incompatible job duties. Accordingly, GAO has reported a
material weakness in IRS‘s internal controls over its financial and tax
processing systems. A key reason for the weaknesses is that the agency
has not yet fully implemented its agencywide information security
program to ensure that controls are effectively established and
maintained. As a result, IRS is at increased risk of unauthorized
disclosure, modification, or destruction of financial and taxpayer
information.
What GAO Recommends:
GAO is recommending that the Acting Commissioner take several actions
to fully implement an agencywide information security program. In
commenting on a draft of this report, IRS agreed to develop a detailed
corrective action plan addressing each of the recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-211]. For more information, contact
Gregory Wilshusen at (202) 512-6244 or wilshuseng@gao.gov, or Nancy
Kingsbury at (202) 512-2700 or kingsburyn@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Objectives, Scope, and Methodology:
IRS Has 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 Internal Revenue Service:
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:
January 8, 2008:
The Honorable Linda E. Stiff:
Acting Commissioner of Internal Revenue:
Dear Ms. Stiff:
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 2007 and 2006 financial
statements,[Footnote 1] we assessed the effectiveness of the service's
information security controls[Footnote 2] 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
2007 and 2006 financial statements, we reported that the new
information security deficiencies we identified in fiscal year 2007 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 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. We performed the above audit work
from April 2007 through October 2007 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.
Results in Brief:
IRS made limited progress toward correcting previously reported
information security weaknesses. It has corrected or mitigated 29 of
the 98 information security weaknesses that we reported as unresolved
at the time of our last review. For example, IRS implemented controls
for user IDs for certain critical servers, improved physical protection
for its procurement system, developed a security plan for a key
financial system, and upgraded servers that had been using obsolete
operating systems. In addition, IRS established enterprisewide
objectives for improving information security, including initiatives
for protecting and encrypting data, securing information technology
assets, and building security into new applications. However, about 70
percent of the previously identified information security weaknesses
remain unresolved. For example, IRS continues to, among other things,
use passwords that are not complex, grant excessive access to
individuals who do not need it, and install patches in an untimely
manner.
In addition to this limited progress, other significant weaknesses in
controls intended to restrict access to data and systems, as well as
other information security controls, continue to threaten the
confidentiality and availability of its financial and tax processing
systems and information, and limit assurance of the integrity and
reliability of its financial and taxpayer information. IRS has not
consistently implemented effective controls to prevent, limit, or
detect unauthorized access to computing resources from within its
internal network. For example, IRS did not always (1) enforce strong
password management for properly identifying and authenticating users,
(2) authorize user access to permit only the access needed to perform
job functions, (3) encrypt sensitive data, (4) effectively monitor
changes on its mainframe, and (5) physically protect its computer
resources. In addition, IRS faces risks to its financial and taxpayer
information due to weaknesses in implementing its configuration
management policies, as well as appropriately segregating incompatible
job duties. A key reason for these weaknesses is that IRS has not yet
fully implemented its agencywide information security program to ensure
that controls are appropriately designed and operating effectively.
Until these weaknesses are corrected, the agency remains particularly
vulnerable to insider threats. As a result, IRS is at increased risk of
unauthorized access to and disclosure, modification, or destruction of
financial and taxpayer information, as well as inadvertent or
deliberate disruption of system operations and services. Further, IRS
will not have assurance that the proper resources are applied to known
vulnerabilities or that those vulnerabilities will be properly
mitigated.
We are making recommendations to the Acting Commissioner of Internal
Revenue to take several actions to fully implement a comprehensive,
agencywide information security program. We also are making
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 identification and
authentication, authorization, cryptography, audit and monitoring,
physical security, configuration management, and segregation of duties.
In providing written comments on a draft of this report, the Acting
Commissioner of Internal Revenue recognized that there is significant
work to be accomplished to address IRS's information security
deficiencies, and stated that the agency is taking aggressive steps to
correct previously reported weaknesses and improve its overall
information security program. She further stated that IRS would develop
a detailed corrective action plan addressing each of our
recommendations.
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 maintaining the public's trust is essential. The
dramatic expansion in computer interconnectivity and the rapid increase
in the use of the Internet have revolutionized the way our government,
our nation, and much of the world communicate and conduct business.
Although this expansion has created many benefits for agencies such as
IRS in achieving their missions and providing information to the
public, it also exposes federal networks and systems to various
threats. The Federal Bureau of Investigation has identified multiple
sources of threats, including foreign nation states engaged in
information warfare, domestic criminals, hackers, virus writers, and
disgruntled employees or contractors working within an organization. In
addition, the U.S. Secret Service and the CERT Coordination
Center[Footnote 4] studied insider threats, and stated in a May 2005
report that "insiders pose a substantial threat by virtue of their
knowledge of, and access to, employer systems and/or databases."
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. For example, the
Office of Management and Budget (OMB) cited[Footnote 5] a total of
5,146 incidents reported to the U.S. Computer Emergency Readiness Team
(US-CERT)[Footnote 6] by federal agencies during fiscal year 2006, an
increase of 44 percent from the previous fiscal year.
Our previous reports, and those by inspectors general, describe
persistent information security weaknesses that place federal agencies,
including IRS, at risk of disruption, fraud, or inappropriate
disclosure of sensitive information. Accordingly, we have designated
information security as a governmentwide high-risk area since
1997,[Footnote 7] a designation that remains in force today.[Footnote
8] Recognizing the importance of securing federal agencies' information
systems, Congress enacted the Federal Information Security Management
Act (FISMA) in December 2002[Footnote 9] 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 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.
IRS has demanding responsibilities in collecting taxes, processing tax
returns, and enforcing the nation's tax laws, and relies extensively on
computerized systems to support its financial and mission-related
operations. In fiscal years 2007 and 2006, IRS collected about $2.7
trillion and $2.5 trillion, respectively, in tax payments; processed
hundreds of millions of tax and information returns; and paid about
$292 billion and $277 billion, respectively, in refunds to taxpayers.
Further, the size and complexity of IRS adds unique operational
challenges. The agency 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, integrity, and availability of the
information and information systems that support the agency and its
operations. FISMA requires the chief information officers (CIO) at
federal agencies to be 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. In
July 2007, IRS began undergoing an organizational realignment that
dissolved MA&SS and moved responsibilities for managing the servicewide
information security program to a newly created position--the Associate
CIO for Cybersecurity.
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 information security
weaknesses and (2) whether controls over key financial and tax
processing systems were effective in ensuring the confidentiality,
integrity, and availability of financial and sensitive taxpayer
information. This review was performed in connection with our audit of
IRS's financial statements for the purpose of supporting our opinion on
internal controls over the preparation of those statements.
To determine the status of IRS's actions to correct or mitigate
previously reported information security weaknesses, we identified and
reviewed its information security policies, procedures, practices, and
guidance. We reviewed prior GAO reports to identify previously reported
weaknesses and examined IRS's corrective action plans to determine for
which weaknesses IRS reported corrective actions as being completed.
For those instances where IRS reported it had completed corrective
actions, we assessed the effectiveness of those actions. We evaluated
IRS's implementation of these corrective actions for two data centers,
and one additional facility.
To determine whether controls over key financial and tax processing
systems were effective, we tested the effectiveness of information
security controls at three data centers. We concentrated our evaluation
primarily on threats emanating from sources internal to IRS's computer
networks and focused on three critical applications and their general
support systems that directly or indirectly support the processing of
material transactions that are reflected in the agency's financial
statements. Our evaluation was based on 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.
Using National Institute of Standards and Technology (NIST) standards
and guidance, and IRS's policies, procedures, practices, and standards,
we evaluated controls by:
* testing the complexity and expiration of passwords on servers to
determine if strong password management was enforced;
* analyzing users' system authorizations to determine whether they had
more permissions than necessary to perform their assigned functions;
* observing data transmissions across the network to determine whether
sensitive data were being encrypted;
* observing whether system security software was logging successful
system changes;
* testing and observing physical access controls to determine if
computer facilities and resources were being protected from espionage,
sabotage, damage, and theft;
* inspecting key servers and workstations to determine whether critical
patches had been installed or were up-to-date; and:
* examining access responsibilities to determine whether incompatible
functions were segregated among different individuals.
Using the requirements identified by FISMA, which establish key
elements for an effective agencywide information security program, we
evaluated IRS's implementation of its security program by:
* analyzing IRS's risk assessment process and risk assessments for key
IRS systems to determine whether risks and threats were documented;
* analyzing IRS's policies, procedures, practices, and standards to
determine their effectiveness in providing guidance to personnel
responsible for securing information and information systems;
* analyzing security plans to determine if management, operational, and
technical controls were in place or planned and that security plans
were updated;
* examining training records for personnel with significant
responsibilities to determine if they received training commensurate
with those responsibilities;
* analyzing test plans and test results for key IRS systems to
determine whether management, operational, and technical controls were
tested at least annually and based on risk;
* observing IRS's process to correct weaknesses and determining whether
remedial action plans complied with federal guidance; and:
* examining contingency plans for key IRS systems to determine whether
those plans had been tested or updated.
We also reviewed or analyzed previous reports from the Treasury
Inspector General for Tax Administration (TIGTA) and GAO; and discussed
with key security representatives and management officials whether
information security controls were in place, adequately designed, and
operating effectively.
IRS Has Made Limited Progress in Correcting Previously Reported
Weaknesses:
IRS has made limited progress toward correcting previously reported
information security weaknesses. It has corrected or mitigated 29 of
the 98 information security weaknesses that we reported as unresolved
at the time of our last review. IRS corrected weaknesses related to
access controls and personnel security, among others. For example, it
has:
* implemented controls for user IDs for certain critical servers by
assigning each user a unique logon account and password and removing
unneeded accounts (guest-level);
* improved physical protection for its procurement system by limiting
computer room access to only those individuals needing it to perform
their duties;
* developed a security plan for a key financial system; and:
* updated servers that had been running unsupportable operating
systems.
In addition, IRS has made progress in improving its information
security program. For example, the agency is in the process of
completing an organizational realignment and has several initiatives
underway that are designed to improve information security such as
forming councils and committees to foster coordination and
collaboration on information technology security policies, procedures,
and practices. IRS also has established six enterprisewide objectives
for improving information security, including initiatives for
protecting and encrypting data, securing information technology assets,
and building security into new applications.
Although IRS has moved to correct previously identified security
weaknesses, 69 of them--or about 70 percent--remain open or
unmitigated. For example, IRS continues to, among other things,
* use passwords that are not complex,
* grant excessive electronic access to individuals not warranting such
access,
* allow sensitive data to cross its internal network unencrypted,
* allow changes to occur on the mainframe that are not properly
monitored or recorded,
* ineffectively remove physical access authorizations into sensitive
areas,
* install patches in an untimely manner, and:
* improperly segregate incompatible duties.
Such weaknesses increase the risk of compromise of critical IRS systems
and information.
Significant Weaknesses Continue to Place Financial and Taxpayer
Information at Risk:
In addition to this limited progress, other significant weaknesses in
controls intended to restrict access to data and systems, as well as
other information security controls continue to threaten the
confidentiality and availability of its financial and tax processing
systems and information, and limit assurance of the integrity and
reliability of its financial and taxpayer information. Unresolved,
previously reported weaknesses and newly identified ones increase the
risk of unauthorized disclosure, modification, or destruction of
financial and sensitive taxpayer information.
IRS Did Not Sufficiently Control Access to Information Resources:
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.
Controls for Identifying and Authenticating Users Were Not Consistently
Enforced:
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. The combination of
identification and authentication--such as user account/password
combinations--provides the basis for establishing individual
accountability and for controlling access to the system. The Internal
Revenue Manual requires IRS to enforce strong passwords for
authentication (defined as a minimum of eight characters, containing at
least one numeric or special character, and a mixture of at least one
uppercase and one lower case letter). In addition, IRS policy states
that user accounts should be removed from the system or application if
users have not logged on in 90 days. Furthermore, the Internal Revenue
Manual requires that passwords be protected from unauthorized
disclosure when stored.
IRS did not always enforce strong password management on systems at the
three sites reviewed. For example, several user account passwords on
UNIX systems did not meet password length or complexity requirements.
Allowing weak passwords increases the likelihood that passwords will be
compromised and used by unauthorized individuals to gain access to
sensitive IRS information. In addition, user accounts for servers
supporting the administrative accounting system had not been used in
approximately 180 days, but still remained active at all three sites.
Allowing inactive user accounts to remain on the system increases the
likelihood of unauthorized individuals using these dormant accounts to
gain access to sensitive IRS data. Further, password and associated
user IDs were stored in clear text on an intranet Web site which was
accessible by unauthenticated users. As a result, individuals accessing
this Web site could view these passwords and use them to gain
unauthorized access to IRS systems. Such access could be used to alter
data flowing to and from the agency's administrative accounting system.
Users Were Routinely Given More System Access Than Needed to Perform
Their Jobs:
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 they need to perform their official
duties. To restrict legitimate users' access to only those programs and
files 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 states that the configuration and
use of system utilities are based on least privilege and are limited to
those individuals that require them to perform their assigned
functions.
IRS permitted excessive access to systems by granting rights and
permissions that gave users more access than they needed to perform
their assigned functions. For example, one data center allowed all
mainframe users access to powerful system management functions
including storage management and mainframe hardware configurations. In
addition, the center did not tightly restrict the ability to modify
mainframe operating system configurations. Approximately 60 persons had
access to commands that could allow them to make significant changes to
the operating system, increasing the risk of inadvertent or deliberate
disruption of system operations. Furthermore, IRS did not properly
restrict file permission privileges. Excessive file privileges were
given to an administrative accounting subsystem's file transfer
account. As a result, any user with access to accounts on this server
could gain unauthorized access to other servers within the
administrative accounting system infrastructure.
Sensitive Data Were Not Always Encrypted:
Cryptography 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, such as user ID
and password combinations, transmitted across the network.
IRS did not always ensure that sensitive data were protected by
encryption. Although IRS had an initiative underway to encrypt its
laptops, certain data were not encrypted. For example, at two data
centers, administrator access to a key IRS application contained
unencrypted data logins. These unencrypted logins could reveal
usernames, passwords, and other credentials. By not encrypting data,
IRS is at increased risk that an unauthorized individual could gain
unwarranted access to its systems and/or sensitive information.
Logging Procedures Did Not Effectively Capture Changes to Mainframe
Datasets:
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--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. IRS policy requires that audit records be
created, protected, and retained to enable the monitoring, analysis,
investigation, and reporting of unlawful, unauthorized, or
inappropriate information system activity.
Although IRS had implemented logging capabilities for the servers
reviewed, it did not effectively capture changes to datasets on the
mainframe, which supports the agency's general ledger for tax
administration. Specifically, it did not configure its security
software to log successful changes to datasets that contain parameters
and procedures on the mainframe used to support production operations
of the operating system, system utilities, and user applications. By
not recording changes to these datasets, IRS is at increased risk that
unapproved or inadvertent changes that compromise security controls or
disrupt operations are made and not detected.
Weaknesses in Physical Security Controls Reduced Their Effectiveness:
Physical security controls are essential for protecting computer
facilities and resources from vandalism and sabotage, theft, accidental
or deliberate destruction, and unauthorized access and use. Physical
security controls should prevent, limit, and detect access to facility
grounds, buildings, and sensitive work areas and the agency should
periodically review the access granted to computer facilities and
resources to ensure this access is still appropriate. Examples of
physical security controls include perimeter fencing, surveillance
cameras, security guards, and locks. The absence of adequate physical
security protections could lead to the loss of life and property, the
disruption of functions and services, and the unauthorized disclosure
of documents and information. NIST requires that designated officials
within the organization review and approve the access list and
authorization credentials. Similarly, IRS policy requires that branch
chiefs validate the need of individuals to access a restricted area
based on authorized access lists, which are prepared monthly. To
further address physical security, the Internal Revenue Manual requires
periodic review of all mechanical key records.
Although IRS has implemented physical security controls, certain
weaknesses reduce the effectiveness of these controls in protecting and
controlling physical access to assets at IRS facilities, such as the
following:
* One data center allowed at least 17 individuals access to sensitive
areas without justifying a need based on their job duties.
* The same data center did not always remove physical access
authorizations into sensitive areas in a timely manner for employees
who no longer needed it to perform their jobs. For example, a manager
reviewed an access listing dated March 2007 and identified 54 employees
whose access was to be removed; however, at the time of our site visit
in June 2007, 29 of the 54 employees still had access.
* Another data center did not perform monthly reviews of an authorized
access list to verify that employees continued to warrant access to
secure computing areas; according to agency officials, they perform a
biannual review every 6 months or whenever a change occurs instead.
* The same data center also did not perform a periodic review of
records accounting for mechanical keys used to gain access to sensitive
areas.
As a result, IRS is at increased risk of unauthorized access to, and
disclosure of, financial and taxpayer information, inadvertent or
deliberate disruption of services, and destruction or loss of computer
resources.
Weaknesses in Other Information Security Controls Increased Risk:
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
and segregating incompatible duties. Weaknesses in these areas increase
the risk of unauthorized use, disclosure, modification, or loss of
IRS's information and information systems.
Configuration Management Policies Were Not Fully Implemented:
The purpose of configuration management is to establish and maintain
the integrity of an organization's work products. Organizations can
better ensure that only authorized applications and programs are placed
into operation by 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. 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 NIST,
the practice of 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 always effectively implement configuration management
policies. For example, one data center did not ensure that its change
control system properly enforced change controls to two key
applications residing on the mainframe. The current configuration could
allow individuals to make changes without being logged by the agency's
automated configuration management system. Furthermore, servers at
these locations did not have critical patches installed in a timely
manner. For example, at the time of our site visit in July 2007, one
site had not installed critical patches released in February 2007 on
two servers. As a result, IRS has limited assurance that only
authorized changes are being made to its systems and that they are
protected against new vulnerabilities.
Incompatible Duties Were Not Always Appropriately Segregated:
Segregation of duties refers to the policies, procedures, and
organizational structures that help ensure that no 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 segregate 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,
mainframe system administration functions were not appropriately
segregated. IRS configured a user group that granted access to a broad
range of system functions beyond the scope of any single
administrator's job duties. 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. In addition, at one data center,
physical security staff who set user proximity card access to sensitive
areas were also allowed to determine whether employees needed access or
not, rather than leaving the decision to cognizant managers. As a
result, staff could be allowed improper access to sensitive areas.
IRS Has Not Fully Implemented Its Information Security Program:
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 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;
* periodic testing and evaluation of the effectiveness of information
security policies, procedures, and practices, performed with a
frequency depending on risk, but no less than annually, and that
include testing of management, operational, and technical controls for
every system identified in the agency's required inventory of major
information systems;
* 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.
Although a Risk Assessment Process Was Implemented, Potential Risks
Were Not Always Assessed:
According to NIST, risk is determined by identifying potential threats
to the organization and vulnerabilities in its systems, determining the
likelihood that a particular threat may exploit vulnerabilities, and
assessing the resulting impact on the organization's mission, including
the effect on sensitive and critical systems and data. 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. 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. The six 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 that we identify in this report and did not assess
the risks associated with them. As a result, potential risks to these
systems may be unknown. We have previously identified this weakness and
recommended that the agency update its risk assessments to include
vulnerabilities we identified. IRS is in the process of taking
corrective action.
Although IRS Policies and Procedures Were Generally Adequate, Guidance
for Logging Mainframe Activity Was Unclear:
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 are the important
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.
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; however, guidance for securing mainframe systems was not
always clear. For example, the Internal Revenue Manual does not always
specify when successful system changes should be logged. Further,
although IRS policy provides general requirements for protection of
audit logs, the manual for mainframe security software does not provide
detailed guidance on what logs to protect and how to protect them. As a
result, IRS has reduced assurance that these system changes are being
captured and that its systems and the information they contain,
including audit logs, are being sufficiently protected.
Security Plans Adequately Documented Management, Operational, and
Technical Controls:
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. Furthermore, IRS policy requires that security
plans describing the security controls in place or planned for its
information systems be developed, documented, implemented, reviewed
annually, and updated a minimum of every 3 years or whenever there is a
significant change to the system.
The six security plans we reviewed documented the management,
operational, and technical controls in place at the time the plans were
written, and the more recent plans mapped those controls directly to
controls prescribed by NIST. According to IRS officials, at the time of
our review, they were in the process of updating two of these plans to
more accurately reflect the current operating environment. The
remaining four plans appropriately reflected the current operating
environment.
Although Training Was Provided, Employees with Significant Security
Responsibilities at One Center Did Not Receive the Needed 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 requires that personnel
performing information technology security duties meet minimum
continuing professional education hours in accordance with their roles.
Personnel performing technical security roles are required by IRS to
have 12, 8, or 4 hours of specialized training per year, depending on
their specific role.
Although IRS has made progress in providing security personnel with a
job-related training curriculum, IRS did not ensure that all employees
with significant security responsibilities received adequate training.
For example, based on the documentation we reviewed, all 40 employees
selected at one data center met the required minimum training hours;
however, 6 of 10[Footnote 10] employees reviewed at another center did
not. According to IRS officials, these six employees with significant
security responsibilities were not identified by their managers for the
required training. Until managers identify individuals requiring
specialized training, IRS is at increased risk that individuals will
not receive the training necessary to perform their security-related
responsibilities.
Although Controls Were Tested and Evaluated, Tests Were Not Always
Comprehensive:
Another key element of an information security program is to test and
evaluate policies, procedures, and controls to determine whether 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, as well as reviews to ensure that the security
requirements in its contracts are implemented and enforced.
IRS tested and evaluated information security controls for each of the
systems we reviewed. The more current tests and evaluations had
detailed methodologies, followed NIST guidance, and documented the
effectiveness of the tested controls. However, the scopes of these
tests were not sufficiently comprehensive to identify significant
vulnerabilities. For example, although IRS and GAO examined controls
over the same systems, we identified unencrypted passwords on an
internal Web site that IRS had not. Our test results also showed that
contractors did not always follow agency security policies and
procedures. To illustrate, contractors had inappropriately stored clear-
text passwords and sensitive documents on internal agency Web sites.
Although IRS had numerous procedures to provide contractor oversight,
it had not detected its contractors' noncompliance with its policies.
Because IRS had not identified these weaknesses, it has limited
assurance that appropriate controls were being effectively implemented.
Remedial Action Plans Were Not Always Complete, and Corrective Actions
Were Not Effective:
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. In its annual FISMA guidance to agencies, OMB
requires agencies' remedial action plans, also known as plans of action
and milestones, to include the resources necessary to correct an
identified weaknesses. 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, IRS had identified weaknesses but did not always
identify necessary resources to fix them. Specifically, we reviewed
remedial action plans for five of the six systems[Footnote 11] and
found that plans for four of them had not identified what, if any,
resources were necessary to support the corrective actions. Subsequent
to our site visits, IRS provided additional information on resources to
support corrective actions for three of them.
In addition, the verification process used to determine whether
remedial actions were implemented was not always effective. IRS
indicated that it had corrected or mitigated 39 of the 98 previously
reported weaknesses. However, of those 39 weaknesses, 10 still existed
at the time of our review. Furthermore, one facility had actually
corrected less than half of the weaknesses reported as being resolved.
We have previously identified a similar weakness and recommended that
IRS implement a revised remedial action verification process that
ensures actions are fully implemented, but the condition continued to
exist at the time of our review. Without a sound remediation process,
IRS will not have assurance that the proper resources will be applied
to known vulnerabilities or that those vulnerabilities will be properly
mitigated.
Contingency Plans Were Not Always Complete or Tested:
Continuity of operations planning, which includes contingency 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. It is important that these plans be
clearly documented, communicated to potentially affected staff, and
updated to reflect current operations. In addition, testing contingency
plans is essential to determine whether the plans will function as
intended in an emergency situation. FISMA requires that agencywide
information security programs include plans and procedures to ensure
continuity of operations. IRS contingency planning policy requires that
essential IRS business processes be identified and that contingency
plans be tested at least annually.
Although the systems reviewed had contingency plans, the plans were not
always complete or tested. For example, for three of the six plans, IRS
had not identified essential business processes. Further, the agency
had not annually tested two of the plans, which were both dated
September 2005. IRS informed us that these issues will be addressed
during current certifications and accreditations for those systems.
However, until IRS identifies these essential processes and
sufficiently tests the plans, increased risk exists that it will not be
able to effectively recover and continue operations when an emergency
occurs.
Conclusions:
IRS has made only limited progress in correcting or mitigating
previously reported weaknesses, implementing controls over key
financial systems, and developing and documenting a framework for its
agencywide information security program. Information security
weaknesses--both old and new--continue to impair the agency's ability
to ensure the confidentiality, integrity, and availability of financial
and 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. The financial and taxpayer
information on IRS systems will remain particularly vulnerable to
insider threats until the agency (1) fully implements a comprehensive
agencywide information security program that includes enhanced policies
and procedures, appropriate specialized training, comprehensive tests
and evaluations, sufficient contractor oversight, updated remedial
action plans, and a complete continuity of operations process; and (2)
begins to address weaknesses across the service, its facilities, and
computing resources. As a result, financial and taxpayer information is
at increased risk of unauthorized disclosure, modification, or
destruction, and IRS management decisions may be based on unreliable or
inaccurate financial information.
Recommendations for Executive Action:
To help establish effective information security over key financial
processing systems, we recommend that you take the following seven
actions to implement an agencywide information security program:
* Update policies and procedures for configuring mainframe operations
to ensure they provide the necessary detail for controlling and logging
changes.
* Identify individuals with significant security responsibilities to
ensure they receive specialized training.
* Expand scope for testing and evaluating controls to ensure more
comprehensive testing.
* Enhance contractor oversight to better ensure that contractors'
noncompliance with IRS information security policies is detected.
* Update remedial action plans to ensure that they include what, if
any, resources are required to implement corrective actions.
* Identify and prioritize critical IRS business processes as part of
contingency planning.
* Test contingency plans at least annually.
We are also making 46 detailed recommendations in a separate report
with limited distribution. These recommendations consist of actions to
be taken to correct specific information security weaknesses related to
user identification and authentication, authorization, cryptography,
audit and monitoring, physical security, configuration management, and
segregation of duties.
Agency Comments:
In providing written comments (reprinted in app. I) on a draft of this
report, the Acting Commissioner of Internal Revenue agreed that IRS has
not yet fully implemented critical elements of its agencywide
information security program, and stated that the security and privacy
of taxpayer information is of great concern to the agency. She
recognized that there is significant work to be accomplished to address
IRS's information security deficiencies, and stated that the agency is
taking aggressive steps to correct previously reported weaknesses and
improve its overall information security program. She also noted that
IRS has taken many actions to strengthen its information security
program, such as installing automatic disk encryption on its total
deployed inventory of approximately 52,000 laptops, and creating a team
of security and computer experts to improve mainframe controls.
Further, she stated that the agency is committed to securing its
computer environment, and will develop a detailed corrective action
plan addressing each of our recommendations.
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 [hyperlink,
http://www.gao.gov].
If you have any questions regarding this report, please contact Gregory
Wilshusen at (202) 512-6244 or Nancy Kingsbury at (202) 512-2700.
We can also be reached by e-mail at wilshuseng@gao.gov and
kingsburyn@gao.gov. Contact points for our Office 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:
Nancy R. Kingsbury:
Managing Director, Applied Research and Methods:
[End of section]
Appendix I: Comments from the Internal Revenue Service:
Commissioner:
Department Of The Treasury:
Internal Revenue Service:
Washington, D.C. 20224:
December 14, 2007:
Mr. Gregory C. Wilshusen:
Director, Information Security Issues:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548:
Dear Mr. Wilshusen:
Thank you for the opportunity to comment on the draft report,
Information Security: IRS Needs to Address Pervasive Weaknesses (GAO-08-
211, Public version). While we agree that we have not yet fully
implemented critical elements of our agency-wide information security
program, the security and privacy of taxpayer information is of great
concern to the IRS. We recognize that there is significant work to be
accomplished to address our information security deficiencies, and we
are taking aggressive steps to correct previously reported weaknesses
and improve our overall information security program.
We will review all of the corrective actions the GAO previously
reported to ensure that our actions include sustainable fixes that
fully resolve the weaknesses. We will provide the detailed corrective
action plan addressing each of the recommendations with our response to
the final report.
We do appreciate that your draft report recognizes that the IRS has
made some progress in improving its information security program and
has numerous initiatives underway. Even throughout this audit process
the IRS team worked proactively with your staff to identify solutions
to the issues your staff raised. In fact, this support provided by your
GAO technical team enabled us to implement a number of fixes even as
this audit report was being prepared, which was most helpful.
In 2007, we took many actions to strengthen the IRS information
security program, some of which you acknowledged in your draft report:
* Completed required Federal Information Security Management Act annual
activities, including security testing on 260 applications and systems
* Installed automatic disk encryption on the total deployed inventory
of IRS laptops (approximately 52,000);
* Implemented a data encryption solution for mainframe tapes exchanged
with federal, state, and other partners;
* Issued cable locks for all employees with laptops, to improve
physical security;
* Created a special team reflecting a partnership of security and
computer experts to improve mainframe controls, including controls for
access privileges, and scheduler and dataset changes;
* Implemented a Two-Factor authentication for remote access to IRS
networks by adding a physical password grid card in addition to the
standard user name and password;
* Implemented an enterprise anti-virus Internet gateway solution to
detect and quarantine malicious content from invading systems;
* Established a Security Services and Privacy Executive Steering
Committee to provide oversight over the corrective action plans and
initiatives to improve the security posture of the IRS;
* Established a new executive position reporting directly to the IRS
Deputy Commissioner that is focused on taxpayer privacy and identity
theft;
* Implemented a comprehensive communications strategy to educate
employees on data protection responsibilities and the use of encryption
tools;
In FY 2008, the performance agreements of all IRS executives will
include a specific performance standard focused on resolving security
weaknesses and reporting the security compliance status of all computer
systems connected to the IRS network. Also, the IRS has obtained
additional expert-level technical support to assist in the development
of a comprehensive security analysis of the architecture, processes,
and operations of the mainframe computing center complex in order to
develop a roadmap and strategy to address several of the issues noted
by GAO in the report.
In closing, we want to reiterate that we fully appreciate the
seriousness of these deficiencies and are committed to securing our
computer environment, as we re- evaluate current processes, promote
user awareness, and apply innovative ideas to increase compliance. We
appreciate your continued support and guidance as we work to correct
our deficiencies, and we look forward to working with you further to
develop appropriate measures. If you have any questions or would like
to discuss our response in further detail, please contact Arthur
Gonzalez, Chief Information Officer, at 202-622-6800.
Sincerely,
Signed by:
Linda E. Stiff:
Acting Commissioner of Internal Revenue:
[End of section]
Appendix II: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Gregory C. Wilshusen, (202) 512-6244 or wilshuseng@gao.gov Nancy R.
Kingsbury, (202) 512-2700 or kingsburyn@gao.gov:
Staff Acknowledgments:
In addition to the persons named above, Gerard Aflague, Bruce Cain,
Larry Crosland, Mark Canter, Denise Fitzpatrick, David Hayes (Assistant
Director), Nicole Jarvis, Jeffrey Knott (Assistant Director), George
Kovachick, Kevin Metcalfe, Eugene Stevens, and Amos Tevelow made key
contributions to this report.
[End of section]
Footnotes:
[1] GAO, Financial Audit: IRS's Fiscal Years 2007 and 2006 Financial
Statements, GAO-08-166 (Washington, DC: Nov. 9, 2007).
[2] Information security controls include logical and physical access
controls, configuration management, segregation of duties, and
continuity of operations. These controls are designed to ensure that
access to data is appropriately restricted, that physical access to
sensitive computing resources and facilities is protected, that only
authorized changes to computer programs are made, that computer
security duties are segregated, and that back-up and recovery plans are
adequate to ensure the continuity of essential operations.
[3] A material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood
that a material misstatement of the financial statements will not be
prevented or detected.
[4] The CERT Coordination Center is a center of Internet security
expertise located at the Software Engineering Institute, a federally
funded research and development center operated by Carnegie Mellon
University.
[5] OMB, FY 2006 Report to Congress on Implementation of the Federal
Information Security Management Act of 2002 (Washington, D.C., March
2007).
[6] US-CERT's mission is to protect the nation's Internet
infrastructure. US-CERT coordinates defense against and responses to
cyber attacks by analyzing and reducing cyber threats and
vulnerabilities, disseminating cyber threat warning information, and
coordinating incident response activities.
[7] GAO, High-Risk Series: Information Management and Technology, GAO/
HR-97-9 (Washington, D.C.: February 1997).
[8] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[9] FISMA was enacted as title III, E-Government Act of 2002, Pub L.
No. 107-347, 116 Stat. 2946 (Dec. 17, 2002).
[10] Based on documentation provided, of the 10 employees we reviewed,
3 employees met the required minimum training hours and 6 did not. IRS
notified us that the remaining employee had separated from the agency.
[11] Based on IRS documentation, one of the systems did not require
that a remedial action be developed.
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