HUD Information Systems

The Department of Housing and Urban Development (HUD) has spent hundreds of millions of dollars during the past seven years to develop an integrated financial management system. The system is intended to provide timely and accurate information to management and enable HUD to properly manage its financial resources. Although this effort has not yet been completed, HUD has developed and deployed various modules and systems for 12 of the 14 projects initiated under the 1993 and 1997 financial systems integration strategies. The agency, however, lacks the rigorous processes needed to accurately determine how much more it will cost or how much longer it will take to achieve its financial systems integration objective, whether its efforts so far have achieved expected results, or whether its latest strategy is cost beneficial. Cost increases and schedule delays have been caused by (1) changes to the financial systems integration strategy that were not supported by thorough analyses and (2) inadequate project management and oversight. The Year 2000 computing crisis has also affected the FHA Mortgage Insurance System effort. Moreover, HUD's latest actions to establish new financial systems integration management teams and to increase its project management training program do not address and cannot correct the root cause of the problems--the lack of a data-driven management process to properly oversee and control information technology investments, such as financial systems integration. HUD has yet to implement a disciplined investment management process to select, control, and evaluate financial systems integration projects in accordance with industry best practices and as required by the Clinger-Cohen Act and the Paperwork Reduction Act.

GAO noted that: (1) while HUD's primary FSI objective of implementing an integrated financial management system has remained the same, the underlying strategy for achieving this objective and completion dates have changed significantly; (2) in 1991, HUD approved a plan to replace about 100 financial and mixed systems with nine standard integrated systems, estimating that it would cost about $103 million to develop and deploy the systems by September 1998; (3) in 1993, HUD abandoned its plan to develop nine new systems and significantly revised its FSI strategy; (4) HUD estimated that it would cost about $209 million to develop and deploy the new system by December 1998; (5) in 1997, HUD revised its FSI strategy again, extending the date for fully deploying the core financial management system to October 1999 and incorporating the development and deployment of additional new systems required to meet the department's latest management reforms and organizational changes; (6) the department did not adequately assess the costs or benefits of the 1997 FSI strategy; (7) as a result, HUD has no assurance that it has selected the most cost-beneficial solution to accomplish its FSI objectives; (8) until HUD finalizes its plans and cost and schedule estimates to complete the 1997 strategy, the expected FSI cost will remain uncertain; (9) nine systems included in the 1997 FSI strategy are in various stages of development and deployment; (10) revisions to the systems integration strategy and management and oversight problems associated with individual projects are factors that have contributed to FSI cost increases and schedule delays to date; (11) HUD has not yet fully implemented a complete, disciplined information technology investment management process, which includes selecting, controlling, and evaluating FSI projects and conforms with best practices and related requirements in the Clinger-Cohen Act and the Paperwork Reduction Act; (12) in addition, HUD has not implemented: (a) an adequate process to control information technology products once they have been selected for implementation; or (b) a process to evaluate information technology projects and determine whether they have achieved expected benefits; and (13) HUD's Year 2000 program, a top priority effort that must be completed on time, may further impact the FSI effort.

Recommendations

Our 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.

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